9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts

http://www.negotiations.com/articles/procurement-terms/ 1/7
Request for...Procurement Processes (RFT RFQ RFP RFI)
by Suki Mhay & Calum Coburn
Detailed explanation to RFT, RFP, RFQ, RFI. Training advice to buyers and
sellers on how to get the most from these procurement and purchasing
processes.
Clients and newsletter readers have asked that we
demystify the meaning behind each of the following
procurement terms: RFI, RFQ, RFT and RFP. These
processes have steadily grown in popularity in
procurement and purchasing, especially amongst larger
buying organisations. Sadly proper training is often not
given on which process to use and in how to effectively use
each process. As a result, in practice you will find these phrases used interchangeably, as
many organisations dont understand the differences sufficiently, resulting in the buyers
missing negotiation advantages. We hear procurement or purchasing clients talk about how
their departments use these purchasing processes on our purchasing training for buyers to
write the rules of the buying game, to successfully side-step negotiation. There is a great
deal that suppliers can do to improve their position. As a starting point, we suggest that
sales professionals understand the differences between these processes. We would be glad
to offer further advice to both suppliers and buyers wishing to get the best deal from these
processes.
RFI Request for Information
An open enquiry that spans the market seeking broad data and understanding.
RFQ Request for Quotation
An opportunity for potential suppliers to competitively cost the final chosen solution(s).
RFT Request for Tender
An opportunity for potential suppliers to submit an offer to supply goods or services against
a detailed tender.
RFP Request for Proposal
Sometimes based on a prior RFI; a business requirements-based request for specific
solutions to the sourcing problem.
Request for Information (RFI)
As the name suggests, procurement uses RFIs to gather information to help decide what
step to take next before embarking on negotiations. RFIs are therefore seldom the final
stage, but instead are often used in conjunction with the other 3 requests detailed in this
article.
An RFI is a solicitation sent to a broad base of potential suppliers for the purpose of
conditioning, gathering information, preparing for an RFP or RFQ, developing strategy, or
building a database which will all be useful in later supplier negotiations about:
The suppliers, including: facilities, finances, attitudes, and motivations
The state of the supply market
Supply market dynamics
Trends and factors driving change
Alternative pricing strategies
Supplier competition
Breadth and width of product/service offerings, by supplier
Supplier strategic focus, business, and product plans
Procurement may use RFIs to include a detailed list of products/services for which pricing is
requested. The pricing should be used for comparative purposes for later negotiation, not as
the basis of negotiators buying decisions. Through analysis of RFI responses, strategic
options, lower cost alternatives, and cost reduction opportunities may be identified.
Request for Quotation (RFQ)
RFQs are best suited to products and services that are as standardised and as commoditised
as possible. Why? Procurement want to make the suppliers quotes comparable before
negotiations begin.
An RFQ is a solicitation sent to potential suppliers containing in exacting detail a list or
description of all relevant parameters of the intended purchase, such as:
Personnel skills, training level or competencies
Part descriptions/specifications or numbers
Reader Comments
Average Rating:
Total Comments: 30
View or Write a comment
Would have liked a longer
course and even more
video review!
Video review and role plays
were great
Featured Articles
Contributed Articles
Q&A
Book Reviews
Cartoons
Case Studies
Definitions
University Seminars
Quotes
Negotiation Newsletter
E-mail
Name
Ask an Expert
Search
. .
Training Clients Resources Experts Services Contact us Call +1 (323) 319 6193
9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 2/7
Back to Negotiation Articles
This page's contents may be re-published in full or part - we ask only that you include an
honest html link back to this site, preferably to our negotiation skills training page.
Quantities/Volumes
Description or drawings
Quality levels
Delivery requirements
Term of contract
Terms and conditions
Other value added requirements or terms
Draft contract
Price per item or per unit of service is the bottom-line with RFQ's, with other dimensions of
the negotiation deal impacting the analysis process as determined by the buyer. Supplier
decisions are typically made by the procurement department following a comparison and
analysis of the RFQ responses for negotiation benchmarking advantage.
RFQs are typically used as supporting documentation for sealed bids (either single-round or
multi-round) and may be a logical pre-cursor to an electronic reverse auction.
Request for Tender (RFT)
An RFT is a procurement open invitation for suppliers to respond to a defined need as
opposed to a request being sent to potential suppliers. The RFT usually requests information
required from a RFI. This will usually cover not only product and service offerings, but will
also include information about the suitability of the business.
It is not unusual for a buyer to put out unclear or vague business requirements for an RFT.
This lack of clarity on behalf of the procurement department can make it challenging for the
supplier to propose a solution. This is not the best use of a RFT. RFTs should only be used
when the buyer is clear on their requirements, and is also clear on the range of possible
solutions that might fit the buyer's needs, giving the buyer a negotiation advantage.
A RFT is often not a very time or cost efficient method for procurement to source supply due
to its lack of defined business requirements and open invitation for suppliers to respond.
Without proper procurement training however, too many buyers issue RFQ's that are in
reality RFT's.
Request for Proposal (RFP)
An RFP is procurement's solicitation sent to potential suppliers with whom a creative
relationship or partnership is being considered. Typically, the RFP leaves all or part of the
precise structure and format of the response to the discretion of the suppliers. In fact, the
creativity and innovation that suppliers choose to build into their proposals may be used to
distinguish one from another. Later negotiations tend to take more time and be more wide
reaching in their impact on the buyer's business.
Effective RFPs typically reflect the strategy and short/long-term business objectives,
providing detailed insight upon which suppliers will be able to offer a perspective. If there
are specific problems to be addressed in the RFP response, those are described along with
whatever root cause assessment is available.
With good procurement training your RFP and RFT should seek specific data, offerings and
quotations, and also seek specific questions about the following to assist your later
negotiations:
The specific items on which the suppliers are proposing
Business requirements
Performance measures
Information
Ideas
Instructions on how to reply
Due date
Technical and other training
How will we evaluate how feedback will work
Describe the process for selection
Request for cost breakdown (sometimes)
Communication: cover letter (sets the stage), calls in advance
Who to contact with questions
Addressee - chosen carefully
Advice
Buyers: to correctly implement these processes requires a level of negotiation skills and
having an organisational infrastructure to support it together with some procurement
negotiation training. Else theyll be used as a token exercise to keep your department happy,
and will be circumnavigated in practice. While The Negotiation Experts does offer clients
advice in this area, our focus is in sales, procurement negotiation training, and other
negotiation courses.
Sellers: how and 'if' you participate in these processes is the first question you need to
address. If you have a company policy, be sure to examine your and the buyer's competitive
style, position and power before participating. Not doing this can end up costing you the
business, or worse: you could win unprofitable business.
9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 3/7
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No

Reader Comments
Average Reader Rating: Comments: 30
share your comment
9 of 14 people found the following comment useful:
THANKS TQPI - 2012 Nov 28
Commentator: Jojo - JAL (Philippines - Davao City)
"Very good... I am satisfied... Without this may be not good business"
8 of 13 people found the following comment useful:
nycvc - 2012 Aug 1
Commentator: Chuck (United States - Ohio)
"Excellent info. Glad I found your website."
10 of 15 people found the following comment useful:
Excels - 2012 May 23
Commentator: Durgesh Joshi (India - Maharashtra)
"A very good and crispy description"
11 of 14 people found the following comment useful:
RFQ etc - 2012 Apr 5
Commentator: Dilip Dasgupta (India)
"EXCELLENT, DETAILED EXPLANATION PROVIDED. VERY USEFUL"
8 of 10 people found the following comment useful:
Very Handy - 2012 Feb 21
Commentator: Chris Enyan (Ghana)
"It helps one to sharpen his/ procurement skills"
4 of 6 people found the following comment useful:
Glad - 2012 Feb 8
Commentator: Gladson Rakesh (Oman)
"Excellent Explanation...thanks"
5 of 7 people found the following comment useful:
Thanks - 2011 Dec 6
Commentator: rcp (Philippines)
"Very helpful"
14 of 18 people found the following comment useful:
Very good - 2011 Apr 16
Commentator: Mohd. Ehtesham Parve (India)
"Very good specially for persons new to job"
9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 4/7
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
20 of 24 people found the following comment useful:
Excellent!!! - 2011 Mar 30
Commentator: Arturo Chang (Venezuela - Distrito Federal)
"This is an excellent explanation of terms that are frequently confused."
14 of 17 people found the following comment useful:
Good - 2011 Jan 12
Commentator: Ketan (India - Maharashtra)
"very good info"
11 of 15 people found the following comment useful:
necessary procurement document - 2010 Dec 21
Commentator: sumit (India - Delhi)
"its really very helpful. keep it up"
8 of 14 people found the following comment useful:
Where to submit our RFPs? - 2010 Nov 30
Commentator: Chris (United States - Utah)
"Great post. For those of us looking to submit RFPs, RFQs, etc. Where are the best
places to look? (i.e. on the web or in the U.S.)"
16 of 18 people found the following comment useful:
RFI - 2010 Nov 4
Commentator: Shafiq Khan (United States - California)
"Useful explaination, woud also help if a general template is provided"
13 of 15 people found the following comment useful:
RFT RFQ RFP RFI - 2010 Oct 22
Commentator: kranti (India - Andhra Pradesh)
"Very good Explanation"
12 of 15 people found the following comment useful:
"Extremely helpfull for the freshers in the field". - 2010 Aug 14
Commentator: Kiran Sharma (India)
""Extremely helpfull for the freshers in the field"."
4 of 9 people found the following comment useful:
thanks - 2010 Aug 10
Commentator: Sharif Uddin Ahmed (Bangladesh)
"yea its really helpfull.... Thanks"
14 of 18 people found the following comment useful:
Helpful and Easy to Understand for Bigners.thanx - 2010 Mar 19
9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 5/7
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Commentator: Rakesh Sharma from R (India - Maharashtra)
"Pubish New commercial issue on the same site, really it would be better for the all
users."
12 of 18 people found the following comment useful:
Thanks - 2010 Feb 11
Commentator: WendyAng (Malaysia - Melaka)
"Thanks..very helpful!!"
7 of 12 people found the following comment useful:
Peter T. - 2010 Feb 3
Commentator: Peter (Bolivia)
"This content is very helpful!! Thanks!!"
8 of 16 people found the following comment useful:
Ok but... - 2009 Oct 20
Commentator: HealthcarePM (United States - New York)
"The content of this article was helpful, although the misspellings caused me to
question it."
10 of 16 people found the following comment useful:
Thanks, very good. - 2009 Jul 19
Commentator: E.D Bhudi (Indonesia - Jawa Barat)
"clearly helpful and useful"
9 of 15 people found the following comment useful:
Thank you - 2009 Jul 10
Commentator: Linda (United States - Missouri)
"Very Helpful and Easy to Understand"
12 of 18 people found the following comment useful:
Very Helpful - 2009 May 14
Commentator: Rebecca (United States - New York)
"VERY HELPFUL "
7 of 17 people found the following comment useful:
Well Explained - 2009 Apr 21
Commentator: Rajesh Jakka (India - Karnataka)
"Very well explained ..Thanks Much"
9 of 16 people found the following comment useful:
Excellent Explanation - 2009 Mar 15
Commentator: Raja S Mohankumar (India - Tamil Nadu)
"Excellent "
9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 6/7
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
Useful Comment? Vote: Yes No
*Your name
*Your e-mail
*Your friend's name
*Your friend's e-mail
*Your message
9 of 15 people found the following comment useful:
Hebat - 2009 Mar 3
Commentator: SC (United States - Kentucky)
"Good explanation!"
15 of 22 people found the following comment useful:
Learning the system - 2008 Dec 12
Commentator: Gina Giles (United States - Virginia)
"Excellent comparison for a new person!"
9 of 15 people found the following comment useful:
:-) Thanks - 2008 Dec 7
Commentator: BB (United Kingdom - West Midlands)
"Found this extremely useful"
51 of 55 people found the following comment useful:
Bravo - 2008 Jul 15
Commentator: Bridget Naidoo (Canada - Ontario)
"It's about time someone who knows their Procurement stuff clarified the differences
between these most popular procurement processes. As someone who's worked in the
profession for 12 years, and a savvy web user, I've been surprised to come up empty
handed when searching for articles explaining when to use each procurement process.
Now I simply send this url to new recruits and internal clients who want to know more.
I expect this to save me a ton of time over the course of a year, and make the
questions that come back that much more interesting to answer."
47 of 59 people found the following comment useful:
Very good - 2008 Jun 27
Commentator: Sibichan (United States - California)
"Very clear, liked the layman language used to explain the differences."
Invite friends to read this page
* Required fields
*
Can't read the word? click here
Send Our Privacy Policy

9/24/2014 RFQ RFT RFP RFI - Training in Procurement Processes | Negotiation Experts
http://www.negotiations.com/articles/procurement-terms/ 7/7
111
Copyright 1996 - 2014 Negotiation Training | E-mail us
Privacy Policy | Terms | Negotiation Guarantee | Site Map