If you’ve been in the construction industry long enough, you know that tendering on projects isn’t as simple as throwing out a number and hoping for the best. Done right, an RFQ (Request for Qualifications or Request for Quote) can set a project up for success, filtering out underqualified firms, ensuring fair competition, and ultimately leading to better project execution. Done poorly, it can result in mismatched contractors, budget overruns, and serious delays.
Let’s break down how to use RFQs strategically, avoid common pitfalls, and ensure you’re either issuing or responding to RFQs in a way that gives you a competitive edge.
What Is an RFQ in Construction?
The term RFQ gets thrown around a lot in construction, but it’s important to distinguish between its two main uses:
- Request for Qualifications (RFQ): This is all about vetting contractors. Before even discussing pricing, project owners issue an RFQ to assess a firm’s capabilities, experience, safety track record, and financial stability. The goal? To filter out underqualified players and ensure that only the best firms are invited to bid.
- Request for Quote (RFQ): When the project scope is clearly defined, this type of RFQ is used to gather cost estimates. Whether it’s for materials, subcontractor work, or specific project elements, this RFQ ensures competitive and transparent pricing.
Both serve different but crucial roles in project procurement. Understanding when and how to use each type can mean the difference between a smooth project and a logistical nightmare.
Best Strategies for Managing Construction RFQs
1. Separate Qualifications from Pricing When Needed
In public construction, qualifications-based selection (QBS) is often mandatory. Laws like the U.S. Brooks Act require agencies to first select the most qualified firm before negotiating price. But even in private projects, separating qualifications from pricing is a smart move, especially for high-risk or technically complex jobs.
Pro Tip: If your project involves intricate engineering, hazardous work, or regulatory hurdles, use an RFQ to screen for qualifications first. This prevents you from getting stuck with the lowest bidder who lacks the expertise to execute properly.
2. Provide Construction-Specific Technical Details
Generic RFQs lead to confusion, bad bids, and change orders down the line. Every RFQ should include:
- Detailed scope of work (materials, techniques, and deliverables)
- Preliminary drawings or schematics
- Site constraints and logistics (access issues, environmental concerns, laydown areas)
- Required safety protocols and compliance regulations
- Insurance and bonding requirements
Example: A commercial developer issues an RFQ for a high-rise in a dense urban setting. The RFQ includes site logistics, tower crane requirements, and noise restrictions—helping bidders assess feasibility upfront and avoiding surprises later.
3. Emphasize Relevant Experience and Safety Record
Construction is a high-liability industry. You wouldn’t trust a residential GC to build a hospital, nor should you evaluate a bridge contractor the same way you would an interior fit-out firm. RFQs should ask for proof of:
- Similar project experience (detailed case studies, not just a list of projects)
- Safety metrics like EMR (Experience Modification Rate) and OSHA recordables
- Certifications (OSHA 30, specialized rigging, LEED credentials)
Pro Tip: If you’re responding to an RFQ, go beyond just listing your past projects. Demonstrate problem-solving skills, risk mitigation strategies, and how you successfully delivered similar work.
4. Use a Two-Stage Approach for Complex Projects
For large-scale infrastructure or specialized projects, a two-step process often yields better results:
- Issue an RFQ for qualifications—Shortlist only technically competent, financially stable, and safety-compliant firms.
- Issue an RFP (Request for Proposal) to shortlisted firms—Once you have a pool of qualified bidders, get into pricing, scheduling, and execution strategies.
This prevents wasting time evaluating dozens of unqualified proposals and ensures the final bidders truly understand the project’s requirements.
5. Define Phased Schedules and Milestones
Construction projects rarely happen in a single phase. Staging, material lead times, and subcontractor availability all impact timelines. RFQs should include:
- Preliminary schedules with key milestones
- Labor force expectations (how many workers, what trades, at what phases?)
- Coordination with other trades (who’s responsible for what?)
Why it matters: If a contractor doesn’t have the workforce or supply chain in place, their bid—no matter how competitive—is useless.
6. Address Volatile Material Prices
Material costs fluctuate, especially for commodities like steel, lumber, and concrete. Without safeguards, contractors may either overinflate bids to hedge against potential increases or submit unrealistically low prices that later lead to disputes.
Best Practices for RFQs:
- Include price-escalation clauses to allow for adjustments based on industry indices.
- Specify locked-in pricing periods (e.g., prices must be held for 30-60 days).
- Request alternative bid structures (e.g., with and without price contingencies).
Pro Tip: If you're responding to an RFQ, clearly outline how price volatility will be managed. Owners prefer transparency over surprise cost overruns.
7. Clarify Payment Terms and Retainage Policies
Many RFQs fail to address how and when payments will be made. Delayed payments can cripple cash flow for contractors and subs, leading to project delays. Clearly state:
- Progress payment schedules
- Retainage percentage and release terms
- Conditions for milestone-based payments
8. Require a Bid Bond and Performance Bond
To weed out unserious bidders and protect against default, requiring:
- Bid bonds ensure a contractor stands by their price.
- Performance bonds guarantee project completion according to the contract.
9. Implement a Pre-Bid Conference and Site Visit
Pre-bid meetings help ensure all bidders are aligned on project requirements, reducing discrepancies in bid proposals. Site visits let bidders assess:
- Terrain challenges
- Access constraints
- Utility connections
10. Incorporate Dispute Resolution Terms
Construction disputes are common, but a well-crafted RFQ can mitigate conflicts by defining:
- Mediation or arbitration procedures
- Steps for handling scope disputes
- Payment dispute resolution processes
11. Address Subcontractor and Supplier Vetting
An RFQ should require general contractors to submit:
- A list of key subcontractors and suppliers
- Proof of subcontractor qualification and experience
Final Takeaways for Construction Professionals
✔ Vet Contractors Before Pricing: Use RFQs for qualifications first to avoid unqualified bidders wasting time.
✔ Provide Detailed Project Information: The more clarity upfront, the fewer surprises later.
✔ Prioritize Safety and Experience: Choose partners who understand risk and compliance.
✔ Plan for Market Fluctuations: Price-escalation clauses prevent disputes.
✔ Use Technology to Streamline the RFQ Process: AI, automation, and centralized bid tracking improve efficiency.
✔ Be Transparent and Fair: Clearly state evaluation criteria to build trust and attract strong bidders.
✔ Manage Timelines Realistically: Rushed RFQs lead to incomplete bids and higher costs.
✔ Cover Payment, Bonds, and Dispute Resolution: These often-overlooked elements can prevent major issues later.
How Planyard Can Help Your Business Improve RFQ Management
Planyard streamlines the RFQ process by automating bid collection, simplifying comparisons, and ensuring transparent procurement workflows for construction companies. Instead of relying on fragmented spreadsheets and emails, Planyard centralizes all submitted bids, allowing project managers to compare vendors side by side, spot cost variances, and select the best-qualified contractors with confidence.
With built-in budget tracking and approval workflows, Planyard ensures that awarded contracts align with project finances, helping construction teams maintain cost control and prevent overages. The system also enhances collaboration by enabling multiple stakeholders to review bids, track RFQ rounds, and automate follow-ups—significantly reducing the administrative burden and speeding up decision-making.
Key Features Planyard Offers:
- Automated Bid Collection – Subcontractors submit bids via a structured portal, eliminating manual data entry.
- Side-by-Side Bid Comparisons – Highlights the best price per line item, helping teams make data-driven decisions.
- Budget Integration – Automatically updates project budgets when bids are approved, preventing misalignment.
- RFQ Round Management – Allows easy re-issuing of RFQs for revised quotations or additional bidders.
- Approval Workflows – Ensures selected bids go through proper internal validation before awarding contracts.
- Document Centralization – Stores all RFQ-related documents, bid templates, and submitted proposals in one place.
- Customizable Views – Lets users adjust comparison tables, highlight cost overruns, and analyze bidder performance.
- Subcontract & PO Integration – Convert winning bids directly into subcontracts or purchase orders, streamlining procurement.
- Automated Reminders – Sends bid submission reminders to ensure timely responses from contractors.
- Compliance Tracking – Helps verify vendor qualifications, ensuring only compliant contractors participate.
If you're looking to eliminate manual RFQ hassles, speed up bid evaluation, and gain full financial control over your construction projects, Planyard is the solution you need. With its automated bid collection, budget integration, and seamless subcontract conversion, you can streamline procurement, reduce errors, and make smarter, data-driven decisions—all while saving time and improving project profitability.
Request a demo or try Planyard 14 for free and start simplifying your RFQ process today!