What an RFQ is, and when it works best

A Request for Quotation (RFQ) helps organizations gather comparable prices for clearly defined needs. RFQs are particularly effective when procuring standardized goods or services with well-specified requirements.

  • Use an RFQ when you have clear and specific requirements that are measurable and unambiguous.

  • Avoid using an RFQ for ambiguous scopes or innovative works where flexibility or creativity is required.

  • With RFQs, expect accelerated cycles and concise, targeted responses from vendors.

RFQ, RFI, or RFP: choose the right path

  • RFI: Gather information on the market and build a list of potential suppliers. Use this at the early stages.

  • RFQ: Request firm pricing based on a precise specification. Use when requirements are well-defined.

  • RFP: Assess different approaches and solutions. Use for more complex needs where tradeoffs are involved.

Choose the most suitable process for your need. Using multiple formats at once can result in supplier confusion and diluted outcomes.

The essential anatomy of a strong RFQ

Include these sections

  1. Scope and objective: A concise paragraph defining what success looks like.

  2. Specifications: Detail units, tolerances, and clearly defined acceptance criteria.

  3. Quantities and breaks: Specify volume tiers and minimum order quantities (MOQs).

  4. Delivery terms: Include incoterms, delivery locations, and required delivery windows.

  5. Service levels: Set clear expectations on uptime, response times, and remedies for issues.

  6. Compliance: List required certifications and audit expectations.

  7. Pricing format: Indicate line items, surcharges, and opportunities for discounts.

  8. Assumptions: List any assumptions vendors may use for accurate quoting.

  9. Submission template: Provide a form or spreadsheet with all required fields.

  10. Timeline: Clearly define the Q&A window, submission deadline, and award notification period.

  11. Contact channel: Assign a single point of contact for all supplier questions.

Clearly state the criteria you will evaluate. When the scoring parameters are explicitly defined, vendors can tailor their quotes accordingly for a closer fit.

Specs that produce comparable quotes

Ambiguity can lead to bloated costs. Clear, specific requirements enable accurate pricing and comparable bids from suppliers.

  • Units: Define the unit of measure (UoM) for each line item.

  • Tolerances: Establish acceptable ranges for key specifications.

  • Packaging: State packaging and labeling requirements.

  • Warranty: Clarify coverage, duration, and claims procedures.

  • Lead time: Request standard and expedited delivery options.

  • Price breaks: Ask for pricing tiers covering different volume scenarios.

  • Change control: Specify procedures for handling deviations and approvals.

Tip: Encourage all questions to be raised in one designated forum. Then, publish clarifications to all bidders at once for transparency and fairness.

Scoring model: make tradeoffs explicit

Set scoring weights before receiving bids and communicate your evaluation model to suppliers.

  • Price: 50%

  • Quality and spec fit: 25%

  • Delivery and capacity: 15%

  • Risk and compliance: 10%

Use a simple 1–5 scoring scale for each criterion. Multiply by weights and sum the results for total scores.

Criterion

Weight

Vendor A

Vendor B

Vendor C

Price

0.50

4

5

3

Quality

0.25

5

3

4

Delivery

0.15

3

4

4

Risk

0.10

4

3

5

Document the scoring process and calculations. Keep your evaluation logic straightforward, transparent, and defensible.

Total cost of ownership, not just price

Lowest unit price can obscure additional downstream costs. Evaluate the complete picture to make informed decisions.

  • Freight and handling costs for each delivery.

  • Setup, tooling, and onboarding expenses.

  • Yield losses and scrap rates that affect total value.

  • Warranty claims, potential returns, and their financial impact.

  • Payment terms and effects on your cash flow.

  • Costs of switching suppliers or contract exits.

Ask vendors to price all extras separately. This keeps your cost comparisons fair and meaningful.

Run the RFQ as a project, not an email chain

Treat managing the RFQ as a structured short-term project. Assign owners, define stages, and set clear deadlines throughout.

Recommended stages

  1. Define your need and establish success metrics.

  2. Draft comprehensive specifications and pricing templates.

  3. Route documents for internal approval.

  4. Issue the RFQ to your shortlist of qualified suppliers.

  5. Centralize all Q&A and clarification exchanges.

  6. Collect bids and verify underlying assumptions.

  7. Score, shortlist, and enter negotiations as needed.

  8. Finalize the award and document your decision process.

Centralize supplier records within your CRM or project management platform, including past performance and potential risk indicators.

Many teams leverage integrated workspaces. You can explore the pros and cons of all-in-one workspaces compared to specialized project tools to refine your process stack.

Teams can use project management tools like Routine, Notion, or Monday.com to map RFQ stages to tasks seamlessly. Link communications and key documents directly to each supplier record for traceability.

Supplier communication that drives clean bids

  • Distribute one version-controlled RFQ package to all bidders.

  • Issue clarifications and updates in a single, shared communication.

  • Do not accept late scope changes unless you reissue to all suppliers.

  • Request supporting evidence for specific claims, like test reports.

  • Confirm and document all supplier assumptions before scoring begins.

understanding-rfqs-vendor-selection

We will evaluate price, quality, delivery, and risk per the weights shared. State this upfront in your RFQ communication.

Governance, fairness, and audit trails

This section provides protection for your team and ensures the integrity of the bidding process.

  • Segregate duties between the person making the request and the final approver.

  • Disclose and record any conflicts of interest, and recuse involved parties as needed.

  • Time-stamp every vendor communication for a complete audit trail.

  • Disseminate identical information to all bidders to guarantee fairness.

  • Store all bid submissions and scoring documents for potential future audits.

This article does not constitute legal advice. Always confirm requirements for your jurisdiction before issuing an RFQ.

When not to use an RFQ

  • The desired outcome hinges on a creative or unique approach.

  • Specifications are likely to evolve during delivery.

  • The market is unfamiliar, fragmented, or not well-understood.

  • You need initial discovery or consultation before defining requirements.

In these situations, consider using an RFI or RFP first. Revisit the RFQ approach once your scope and needs are stabilized.

Seven pitfalls and fast fixes

  • Vague specs: Add tolerances, technical drawings, and concrete examples for clarity.

  • Hidden extras: Require comprehensive line-item pricing to uncover all surcharges.

  • Unclear volumes: Specify ranges and include a forecast error band.

  • One winner bias: Always maintain a qualified backup supplier in your roster.

  • Short timelines: Build in a dedicated Q&A period before final deadline.

  • Complex templates: Minimize and streamline required fields for efficiency.

  • Price-only awards: Evaluate total cost of ownership and risk, not just the initial price.

Templates you can copy into your stack

RFQ header

  • Project name

  • Line items and units of measure (UoM)

  • Volume tiers

  • Delivery terms

  • Pricing format

  • Submission deadline

Supplier submission fields

  • Unit price per tier

  • Tooling and setup costs

  • Lead time (standard and expedited)

  • Warranty details

  • Certifications

  • Assumptions

Sample email line: Please complete the attached template and return it by 5:00 PM in your local time zone on the specified deadline date.

Final takeaways

  • Clearly state your requirements and use structured pricing templates.

  • Publish your scoring methodology and apply it fairly and consistently.

  • Model the total cost of ownership to minimize post-award surprises.

  • Manage the RFQ as a structured project, integrating PM, CRM, and knowledge management tools.

By adhering to these steps, you are more likely to receive precise quotes from vendors. Your team will make smarter, faster, and more confident selection decisions.

FAQ

When should I use an RFQ instead of an RFP?

Opt for an RFQ when your requirements are crystal clear and standardized; save RFPs for scenarios demanding flexibility and creativity. Mixing approaches can result in confusion and watered-down vendor responses.

What can go wrong if I ignore total cost of ownership in RFQs?

Focusing solely on the lowest price can backfire with unexpected costs like higher handling fees, tooling expenses, or warranty claims. A cheap upfront price often masks costly long-term complications.

Why should I avoid using RFQs for innovative projects?

RFQs lock down specifications, stifling creativity and customization—exactly what's needed for innovative projects. Forcing a rigid structure leads to poor vendor responses and stunted project outcomes.

How do I ensure fairness and transparency in the RFQ process?

Document every interaction, keep communication open and identical for all, and rigorously time-stamp submissions. Inconsistencies breed distrust and third-party audits can reveal flaws in your process.

What are the risks of not having a clear scoring model in RFQs?

Avoid an unclear scoring model; it leads to biased selection and misaligned vendor expectations. Clear evaluation metrics ensure precision and defensibility, preventing disputes and second-guessing.

Can RFQs help with unexpected future changes in requirements?

No, RFQs are poorly suited for evolving needs. They rigidly define specs up front, leaving no room for adjustment without a costly reissue.

Why should I be cautious of using complex submission templates?

Overly complex templates drown vendors in paperwork, increasing submission errors and slowing responses. Keep it straightforward to get accurate, timely quotes without overwhelming suppliers.