The Procurement Glossary » Request for Quotation (RFQ)
Request for Quotation (RFQ)
Sourcing & RFx
Also known as: RFQ
Definition
A sourcing document that asks multiple suppliers to price the same clearly-specified requirement so their bids are directly comparable.
Explanation
An RFQ is used when the requirement is well defined and price is the main variable. Because every supplier quotes against an identical specification — item, quantity, delivery and terms — the responses can be evaluated like for like, giving the buyer genuine competitive leverage and an audit trail.
Example
A facilities team issues an RFQ to five janitorial suppliers for 2,000 litres of floor cleaner delivered monthly, then awards to the lowest compliant bid.
Related terms
- Request for Proposal (RFP) — A sourcing document inviting suppliers to propose how they would meet a requirement, evaluated on approach and value — not price alone.
- Request for Information (RFI) — A preliminary questionnaire used to gather information about the market and potential suppliers before running a formal RFQ or RFP.
- Reverse Auction — A live, competitive sourcing event in which pre-qualified suppliers bid the price down in real time to win the buyer's business.
- Bid — A supplier's formal priced response to a sourcing request, stating what it will supply, at what price and on what terms.
- Sourcing — The upstream procurement activity of finding, evaluating and selecting the suppliers a business will buy from.
Related concepts
- Request for Quotation (RFQ) — The competitive sourcing document that asks multiple suppliers to quote against one clear specification so bids are directly comparable.
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Frequently Asked Questions
What is Request for Quotation (RFQ)?
A sourcing document that asks multiple suppliers to price the same clearly-specified requirement so their bids are directly comparable. An RFQ is used when the requirement is well defined and price is the main variable. Because every supplier quotes against an identical specification — item, quantity, delivery and terms — the responses can be evaluated like for like, giving the buyer genuine competitive leverage and an audit trail.
Can you give an example of Request for Quotation (RFQ)?
A facilities team issues an RFQ to five janitorial suppliers for 2,000 litres of floor cleaner delivered monthly, then awards to the lowest compliant bid.
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