Wednesday, February 25, 2015

What is the difference between RFQ and RFP?

What is the difference between RFQ and RFP?

 The difference between RFQ (Request For Quotation) and RFP (Request For Proposal) is that the former is used in the procurement process of a product, while the latter is used when trying to buy a service.

An example of an RFQ is that you want to buy 50 PCs. You send a hardware store your RFQ of 50 PCs (based on your specifications), and they will send you something called a "Quote", containing the individual pricing, the specifications (that sometimes are not an exact match to your specifications), and finally the total price of all your products.

For RFP it's a different story. Let' say your company's website is old, and you want to make a newer one. You send an web company an RFP, telling them that you want a new website and explaining what you need from this website (for example, you need a shopping cart, you need the design to be targeted at the professional audience, etc...). The web company will study your RFP and then will send you a Proposal, listing all the work that will be done, estimating the labor and the project management fees for your new website, and giving you the total cost of your project.

Both the RFQ and RFP are non-binding (so you may send an RFQ and not buy anything, you're just asking how much the price is).

Again, the RFQ is to request the price of a product (note that the product can be non-physical, for example, you're buying MS Office), the RFP is to request the cost of a service.

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