# RFP / RFQ

Source: https://contracko.com/glossary/rfp-rfq

# RFP / RFQ

Formal documents inviting suppliers to propose solutions (RFP) or quote prices (RFQ) for a defined need.

## Definition

A Request for Proposal (RFP) asks suppliers to describe how they would solve a problem, with approach, quality and price all weighted in the assessment. A Request for Quotation (RFQ) seeks competitive prices for clearly specified goods or services. Both structure the sourcing process so bids stay comparable and the award can be justified.

## Example

> A retailer issues an RFQ to three logistics providers for a fixed pallet volume, then an RFP for a multi-year warehouse fit-out.

## Why this is a business risk

A poorly scoped RFP or RFQ produces incomparable bids, making a fair award impossible to justify and exposing the process to challenge. Key risks are underspecifying requirements, which invites scope creep after award, and failing to document the evaluation, which leaves the organisation vulnerable in audits or disputes.

## How to manage it

- Define requirements precisely before issuing the document so all suppliers respond to the same scope.
- Use weighted scoring criteria and document the evaluation scores to support the award decision.
- Store the issued document, all supplier responses and the award rationale together in one place.
- Ensure the resulting contract reflects the winning proposal to avoid misalignment at execution.

### How Contracko helps

Once the awarded contract is signed, Contracko stores it as a searchable record with extracted obligations, delivery milestones and payment terms, so the commitments made in the winning proposal are tracked through to execution rather than forgotten in a shared drive.

## Relevant for

[Manufacturing](https://contracko.com/industries/manufacturing)[Retail & Wholesale](https://contracko.com/industries/retail-wholesale)[Logistics & Distribution](https://contracko.com/industries/logistics)[Government & Public Sector](https://contracko.com/industries/government)

## Related clauses

- [Letter of Intent (Heads of Terms)](https://contracko.com/clause-library/letter-of-intent)
- [Service Level Agreement (SLA)](https://contracko.com/clause-library/service-level-agreement)

## Related terms

- [Tendering](https://contracko.com/glossary/tendering)
- [Supplier evaluation](https://contracko.com/glossary/supplier-evaluation)
- [Procurement strategy](https://contracko.com/glossary/procurement-strategy)
- [Negotiation strategy](https://contracko.com/glossary/negotiation-strategy)

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## Frequently asked questions

Common questions about this term.

- **Q:** What is the main difference between an RFP and an RFQ?
  **A:** An RFQ seeks a competitive price for a fully specified item; an RFP asks suppliers to propose how they would solve a less-defined problem, with approach and quality weighted alongside price.

- **Q:** Does issuing an RFP legally bind you to award?
  **A:** Not automatically, but the document should state whether award is guaranteed. In public procurement, specific principles of equal treatment and transparency apply once an RFP is issued.

- **Q:** How many suppliers should receive an RFP or RFQ?
  **A:** Internal policy and procurement thresholds usually dictate a minimum, commonly three. A broader invite is advisable where market depth is high or the purchase is high-value.

- **Q:** Can supplier responses be kept confidential?
  **A:** Private buyers are free to keep responses confidential. Public bodies must balance confidentiality with transparency duties and disclose key award criteria and scores on request.

- **Q:** What happens if the awarded contract deviates from the winning proposal?
  **A:** Material deviations can undermine the basis of the award and give rise to scope disputes during performance. Obligations in the proposal should be incorporated explicitly into the contract text.

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