Procurement Process Documents: Finding the Right Fit
Procurement process documents are used to help a business or government narrow their focus and determine what vendor best meets their needs. Going from learning about an industry, segment, or space, to signing a contract with a preferred vendor can be complex; fortunately, using the right documents helps significantly.
In this article, I want to review three key procurement documents that help identify what vendor makes the most sense for your needs.
Scroll Down to:
Types of Procurement Documents: RFI, RFP, RFQ
The three most common types of procurement process documents are Request for Information (RFI), Request for Proposal (RFP), and Request for Quotation (RFQ). Each document serves a different purpose. You might not need to use all three for any given procurement project; however, it’s likely that you’ll need to use each document type at some point.
Request for Proposal is the most common document type as it acts as a catch-all for the others. We’ve seen companies issue an “RFP” that requests information or a request for quotations.
There are subtle but important differences between each of the request types that impact when a buyer uses, and how a seller responds to, each document.
Request for Information (RFI)
The first document type is the Request for Information. These are typically used when a buyer has limited experience and access to an industry. Take enterprise CRM as an example; if you as the buyer have never used a CRM and have a limited understanding of what CRMs are, you may issue an RFI to get a better handle on the industry.
Here are some key defining features of when a buyer should use an RFI and what a seller should expect to provide in response:
- Used to get high-level information about vendor capabilities, general industry landscape, competitive landscape, etc.;
- Asks general questions to invite a wide range of responses; and
- Lists broad criteria.
- Shorter, faster response time;
- A broad overview of your products/services and company capabilities; and
- Prove your expertise and leadership position in the industry.
The result of the RFI process is that a buyer should have a long list of potential vendors identified for their project and can move on to issuing an RFP or RFQ.
Request for Proposal (RFP) and/or Request for Quotation (RFQ)
The second step in the procurement documentation process is the Request for Proposal or Request for Quotation. These two documents aren’t interchangeable, but there are cases where you can jump right to the RFQ.
If the Request for Information process gave you enough information to determine your exact needs, then you may directly use a Request for Quotation.
With an RFQ, the buyer is telling the sellers exactly what they want: “provide me with a quotation for the following items.” A RFP, however, asks the seller to propose how they will resolve or address the buyer’s needs: “provide me with your proposal on how to solve my problems.”
Request for Proposal:
- Seller-side driven – seller provides direction and guidance on how to complete the project; and
- Buyer is responsible for outlining what their needs and project requirements are.
Request for Quotation:
- Buyer-side driven – buyer provides direction on everything they need and asks sellers for pricing on meeting the requirements; and
- Seller is responsible for packaging their service/product to buyer specifications.
Completing the Procurement Process: Getting to Contract
In many cases, the procurement process will unfold from Request for Information through to Request for Proposal, to Request for Quotation, and then finally to contracting. At each point, the funnel of potential vendors gets smaller as the buyer gains better insight into their needs and preferred working relationships.
If you’ve framed your RFI properly, it’s possible to pull out enough information to identify a shortlist and jump right to the quotation process.
The RFI process may help you identify what your wants and needs are, which allows you to develop a more strategic RFP. From there, you can move right to the contracting process if vendors respond to the RFP with a proposal that meets your needs.
From the buyer perspective, we find that the procurement and tender process is most successful when there’s an RFI followed by either an RFP or RFQ. In cases where the buyer already has experience with the procured products/services, then we would recommend skipping the RFI process.
From the seller perspective, you’re more likely to win a contract when you put effort into responding at each level. Get your name in front of the buyer early, provide as much information and education up front as you can, and validate your standing with testimonials/references. Even when your offering can’t match the RFP/RFQ requirements perfectly, it’s important to put a full bid package together that addresses every area under question.
Invest in the Procurement Process
If you have limited procurement experience from either the buy or sell side, you’re going to see diminishing returns. From the buyer’s side, you may not be able to articulate exactly what you want, be specific enough (or be too specific), or outline criteria for the responses. This impacts the interest from vendors as well as the quality of submissions.
Your goal, as the buyer, is to identify as many qualified sellers as possible. From the sell side, you need to make your bid packages stand out amongst the crowd.
If you enjoyed this article consider subscribing to our weekly newsletter for updates on government funding, business resources, and success stories.
Awesome stuff, l must say thanks for sharing.
Regards Courtney Mcally.
Thanks for the kind words, Courtney!
Thank you for sharing i really appreciate it
You’re quite welcome, Firdaus. Thanks for stopping by and reading our content!
Great piece and guidance
Thanks so much
Keep on educating us
Quite insightful. Thanks for sharing.
Thanks, Chetachi! We appreciate the kind words.
Well simplified and very helpful. thanks for putting this out there.
Thanks for the kind words, Becca. We’re glad you found value in it.
Thanks so much, This is very important for me as the beginning learner and especially starting my duty in my company.
We’re glad to hear that you found it helpful!
Thank you, Tope!
Easy to process and understand. Kudos!
Thanks for the feedback, Millie. We hope it helped!
It is so educative I need more
Very good article, well detailed
wow. thank you
Very interesting and Educative especially for someone like who would like to learn more about the procurement processes.
I understand, the three processes i.e RFI, RFP and RFQ originates from the buyer side, so is there specific names given to the response to the three processes by the seller?
If so, how are they (the replies to the three Requests by the buyer) called?
Otherwise, its really so generous of you to share these with the entire World.
Hi Motuna – Thanks for the kind words Typically the submissions from the potential sellers are referred to as “proposals”, “quotes”, or “applications”. It’s up to the buyer on their specific terminology.
Educative hence very interesting
thanks for well explained and useful content.
I read this post as your post is so nice and very informative post. Thanks for sharing this post
This is what I was looking for, now I am clearly understood the exactly meaning as well as procurement procedures from start to the final stage.
Thanks in advance
Hey, great, very insightful, am doing project management as a course and procurement of goods works and services is one of the unit am tackling, after understanding this RFI,RFP and RFQ now i see things differently as far as procurement is concerned, i would like you to continue and help us understand what is Bidding, submissions and other terminologies that goes along with procurement process,
We’re glad that you found the content useful. You can receive future updates by following us on social media (social media icons/links at the top of our website) or subscribe to our newsletter.
Good content, thank you.