RFQ vs. RFP: Understanding the Key Differences

In the complex machinery of business procurement, choosing the correct document can be the difference between a smooth, cost-effective purchasing experience and a drawn-out process full of red tape. Two of the most commonly used procurement documents—Request for Quote (RFQ) and Request for Proposal (RFP)—have key differences and distinct uses, but businesses of all sizes often have difficulty choosing which to use and when.

The differences between RFQ and RFP are more important to understand to help improve your procurement processes and supplier relationships. Research by Professor Carmen Caba-Pérez and others shows that efficient procurement practices account for approximately 11% of GDP in most countries, making it a crucial factor to market movement and business cycles. Whether you’re procuring office stationery or soliciting complex technical requirements for a major IT project, understanding the subtle nuances of each document type and when to use it can be the difference between an efficient procurement process and one that consumes an inordinate amount of time and resources.

What is an RFQ (Request for Quote)?

RFQ is short for request for quote, a document used in the procurement process for soliciting pricing options for a specific product or service from one or more vendors. Companies often use RFQs when they’re certain about what they need from a vendor and either do not require much further information or just want a “head to head” price comparison between competing vendors.

Key Characteristics of RFQs

RFQs are characterized by their standardized, price-focused approach. It’s best to think of an RFQ as a “no-frills” order form. The document clearly sets out the style, size, and design of a product or service’s specifications that are needed. Typical components of an RFQ include:

• Precise product/service specifications & quantities
• Detailed technical requirements
• Delivery location and timeframes
• Payment terms and conditions
• Clear pricing format requirements

When RFQs Are Most Effective

RFQs are commonly used for highly commoditized or general items (will vary by industry), and the best use of RFQs is usually reserved for when procuring standardized items or commodities that have well-defined specifications. Beakers, gloves, or protective eyewear, for example, are often deemed commoditized for companies in the life-science industry. For businesses in food service, this list may include plates, utensils, napkins, and other supplies that vendors often already stock as standard.

RFQs are the preferred approach when:

• Products/services have well-defined specifications
• Price is the most important factor
• Products/services are standardized
• A fast turnaround is required

Case Study

In a case study by Jaggaer, we can see how Rittal has successfully streamlined their RFQ procurement processes for commodity purchasing, and unlocked significant efficiency gains on their standardized procure-to-pay (P2P) programs. They use RFQs for “standardized components” and “commoditized materials.” Rittal’s procurement team says they can be “very specific” in their demands in the RFQ, asking for not just classic information like price, quantity, and delivery date, but also extra details such as country of origin or ISO certifications if needed. By issuing RFQs for their standardized parts purchases, Rittal is able to secure faster response times and more competitive pricing—showing us how useful RFQs can be when requirements are clearly laid out and suppliers are able to compete on price and delivery terms alone for well-specified products.

What is an RFP (Request for Proposal)?

A request for proposal is a type of procurement that is typically more formal than an RFQ. As a general best practice, the degree of flexibility you extend to your vendors should always only pertain to the vendor’s solution (not the presentation format for their proposal).

Key Characteristics of RFPs

RFPs are detailed documents,  typically including information about the duration of a project, its scope of work, and the type of experience you require to complete the work. PMI’s research shows that for complex projects, RFP processes deliver superior outcomes to internally developed solutions. According to research done by PMI, for complex projects, RFP processes result in better outcomes than internally developed solutions. The RFP process encapsulates vendors and consultants in the early stages of scoping out the work, stakeholder interviews, solution concept development and the identification of initial work necessary to move forward. As a result, complex RFP processes need to be strategically managed to meet compliance, regulatory standards, and deep vendor evaluation.

Key elements of an RFP include:

• Detailed descriptions of the project, including specific objectives
• Evaluation criteria, including factors that will be used to assess proposals
• Technical specifications, requirements, or other relevant details
• Timelines and milestones for the project
• Requirements for vendor qualifications or experience
• Budget range or constraints

When RFPs Are Most Effective

Use an RFP when the scope of work is not clear-cut. As mentioned, an RFP is much more specific than an RFQ. When describing a service offering, an RFP outlines all of the terms of the specific package you are looking to buy. You can use RFPs for more in-depth decision-making processes.

RFPs are ideal for situations involving:

• Complex, customized solutions
• Multiple evaluation criteria beyond price
• Long-term strategic partnerships
• Creative or innovative approaches
• Significant project scope and duration

For a deeper dive into RFP best practices and detailed templates, explore our comprehensive RFP guide.

Case Study

In British Columbia, the Joint Solution Procurement program leveraged RFPs to address highly complex challenges that couldn’t be solved with off-the-shelf solutions. Through this negotiated RFP process, ministries completed 10 contracts worth $1.6 billion—covering services from health plan administration to high-speed internet deployment. The BC Auditor General later affirmed that the process substantially met established procurement best practices, demonstrating how RFPs can produce robust outcomes when strategic objectives and compliance are critic

Key Differences

The main difference between an RFQ and RFP is the purpose that it serves. RFQs are used when you already know exactly what you want and what you’re going to be using it for, but you need more information about the price of the product or service. RFPs are used when you’re not sure exactly what products or services you need to complete a project, and you want to shop around before making a decision on a vendor.

When to Use an RFQ vs an RFP

Before deciding whether an RFQ is the right tool, it’s important to clarify its role. An RFQ is most effective when pricing is the primary differentiator, and the product or service being purchased is well-defined. By focusing on cost clarity, organizations can quickly benchmark options and maintain consistency across suppliers.

Use an RFQ When:

• You know exactly what you need: Specifications are clear, standardized, and unlikely to require customization.
• Price is the primary decision factor: When cost comparison is your main concern and the products or services are largely commoditized, an RFQ allows for straightforward price comparison.
• Products/services are standardized: RFQs are particularly beneficial when procuring standardized items or commodities with well-defined specifications.
• Quick turnaround needed: An RFQ should be completed more quickly than an RFP (Request for Proposal), making it ideal when you need rapid procurement decisions. An overview on best practices for RFQ management by Technia shows that RFQs are most effective for high-volume, low-value purchases with standardized specifications.

An RFP works best when solutions aren’t one-size-fits-all. Unlike an RFQ, it invites vendors to showcase expertise, creativity, and tailored approaches. This format gives buyers a deeper sense of how each supplier might solve a challenge—not just how much it costs.

Use an RFP When:

• You need creative solutions: You need vendors to provide a creative solution. You are dealing with a large and complex project. You understand the objectives but do not have well-defined specs.
• Multiple factors beyond price matter: When vendor experience, technical approach, implementation methodology, and ongoing support are as important as cost.
• Complex projects requiring detailed proposals: For projects involving significant customization, integration, or strategic importance to your organization.
• Long-term partnerships desired: You want to select a vendor based on ability, and not cost. The primary goal is to select a vendor that will help you best achieve project objectives based on business needs.

Quick Decision Guide

When deciding between an RFQ and RFP, ask yourself these key questions:

1. Do I know exactly what I need?

• Yes → Consider RFQ
• No → Lean toward RFP

2. Is price my primary concern?

• Yes → RFQ is likely appropriate
• No → RFP allows broader evaluation

3. How complex is my requirement?

• Simple/standardized → RFQ
• Complex/customized → RFP

4. How quickly do I need a decision?

• Fast turnaround needed → RFQ
• Can invest time in thorough evaluation → RFP

5. Am I looking for a product or a solution?

• Specific product with clear specs → RFQ
• Comprehensive solution to a business problem → RFP

Next Steps

Understanding these differences and applying the decision framework outlined will help you select the right procurement approach, ultimately leading to better vendor relationships, more efficient processes, and optimal value for your organization. This MDPI study shows that organizations leveraging strategic procurement approaches achieve enhanced transparency, sustainability, and innovation in their supply chains. Remember that the time invested in choosing the correct document type upfront will pay dividends throughout your procurement process.

Whether you’re sourcing office supplies or implementing enterprise software, matching your procurement approach to your specific needs is essential for achieving the best possible outcomes in today’s competitive marketplace.