Request for Quotation

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A Request for Quotation (referred to as RFQ) is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products and/or services.

An RFQ typically involves more than the price per item. Information like payment terms, quality level per item or contract length are possible to be requested during the bidding process.

To receive correct quotes, RFQs often include the specifications of the items/services to make sure all the suppliers are bidding on the same item/service. Logically, the more detailed the specifications, the better the quote will be accurate and comparable to other suppliers.

The suppliers have to return the bidding by a set date and time to be considered for an award. Discussions may be held on the bids (often to clarify technical capabilities or to note errors in a proposal). The bid does not have to mean the end of the bidding. Multiple rounds can follow or even a Reverse_auction can follow to generate the best market price.

The RFQs are often done by sending out a word/Excel document. But nowadays the usage is moved more to an online version as part of the E-procurement process.