Archive for January, 2013

Part 2

RFQ TipsThis post is a continuation of Part one of our RFQ Tips segment.

A RFQ is all about the competitive bidding process however competitive bidding is no guarantee of best value for money. It is important to remember attaining quotes from a RFQ is one stage in the procurement process. In this series we are not going to just assume vendors a) want your business b) will compete with other bidders and c) they are going to submit their best offer upfront or the first time, we will provide some talking points to other scenarios.

As a professional Buyer you have to assume this is not always going to be the case. Other factors do play a role in vendors providing the best price upfront or first time they submit. The vendors might be at capacity and are throwing out a price which if you take then they will gladly supply or they might assume you are just testing the market (looking for information) so the vendor may offer a sub-standard price and not their best. Supplier workload might indicate they do not have time to fine tune their quote so they toss out the price they used in the last quote not even considering your volume and last innovation is not factored. Maybe your potential supplier has experience (innovation) you can leverage to drive down costs and improve productivity and without entering into formal negotiations these factors may never surface.

Your goal as a buyer is to make your vendors work hard for your business. It is during the RFQ and subsequent negotiations where you will start to see the benefits and potential cost savers. Competitive bidding is a good place to start however be prepared to incorporate other techniques to achieve your end objectives.

Footnote: Any time you issue a RFQ it is implied legally that you intend on making a purchase. If it is not your intention to make a purchase and for example if you are only looking at budgetary costs, it is a common or standard business courtesy to indicate such.

Part 1

The RFQ or Request for Quotation is also referred to as a Request for Qualifications. Both procurement forms are used by Buyers when they approach Vendors for goods or services in the Quotation instance and in the Qualifications scenario they are looking for specifics to determine whether you as the Supplier might qualify to complete a requirement the Buyer has identified.

The RFQ for Qualifications might be to determine whether you are able to complete special artwork for a public environment like say a public library for example. In this instance, the Buyer might offer the Supplier a small stipend like $500-1000 to create some form of facsimile of what they would provide as artwork for this public space. From the samples of artwork provided by potential bidders the Buyer would then consider an award.

In general, when talking RFQ’s most vendors would assume you are looking for a price quotation for either goods or services. A RFQ is a great way to get the current pulse or cost in the marketplace for the item(s) you seek. By issuing a RFQ, the vendor understands they have a shot at winning your purchase order or supply contract so they are often motivated to provide the best terms in an effort to gain your business. Not a guarantee however it is an assumption…read on. Read the rest of this entry