A Request for Quotation (RFQ) is a document a contractor or buyer sends to suppliers or subcontractors asking for a firm price against a clearly defined scope, such as a quantity of material or a single trade package. It differs from a Request for Proposal (RFP), which asks bidders to propose how they would approach an open-ended piece of work; an RFQ assumes the scope is already fixed and treats price as the main point of comparison. Contractors usually send the same RFQ, with identical specifications and quantities, to several suppliers so the responses can be compared like for like.
A worked example
A contractor needs 400 matching internal doors for a housing scheme and sends an RFQ, with the same specification, quantity and delivery date, to three joinery suppliers. Supplier A quotes £185 per door, for a total of £74,000. Supplier B quotes £172 per door, for a total of £68,800. Supplier C quotes £190 per door but can deliver two weeks earlier, for a total of £76,000. The original budget Allowance for doors was £75,000, so accepting Supplier B's quote brings the committed cost £6,200 under that allowance, and the earlier delivery from Supplier C isn't worth the extra £7,200 on this job.
Where RFQs show up in the budget
An accepted RFQ becomes the basis for a Purchase Order (PO) or Subcontract. Once that order is raised, the line's committed cost in the Project Cost Breakdown moves from an estimate or allowance to the quoted figure, closing the gap between budget and actual spend before any invoice arrives. Keeping the losing quotes on file also gives a record that the package went to competitive tender, which matters to owners, auditors or lenders who expect more than one price per package.
Related terms: Purchase Order (PO), Supplier, Bill of Quantities (BoQ) (BOQ).
Planyard lets contractors build an RFQ straight from a budget line, send it to as many subcontractors or suppliers as needed, and compare the bids against the budget in one view before awarding. See Subcontractor-bidding-software">construction subcontractor bidding software.
FAQs
What should be included in an RFQ?
An RFQ should state the exact specification, quantity and unit of measure, the delivery or completion date, and the date by which quotes are due. A vague specification is the most common reason quotes come back impossible to compare.
How does an RFQ differ from an RFP?
An RFQ is used when the scope is already defined and price is the main variable. An RFP is used when the buyer wants bidders to propose their own approach, so it asks for more than a price, such as methodology, experience and schedule.