A bidding process is one of the best methods for leveraging a company’s (the customer’s) negotiating ability and purchasing power with suppliers. There are different ways the customer can get pricing and a whole lot more from vendors when they want a system.
The request process brings structure to the procurement decision and allows the risks and benefits to be identified clearly up front.
TERMINOLOGY USED IN THE REQUEST PROCESS
IFB (invitation for bid) is an invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service. If not stated otherwise, the supplier with the lowest bid is awarded the contract, provided that they meet the minimum criteria for the bid.
An RFP (request for proposal) typically leaves all or part of the exact structure and format of the proposal response to the suppliers’ discretion. The creativity and innovation that suppliers choose to build into their proposals may be used to judge supplier proposals against each other.
An RFP typically involves more than a request for the price. Other requested information may include basic corporate information and history, financial information about the supplier to ascertain they will be able finish the project they start, professional references and other projects of a similar nature the supplier has already completed. It also may include detailed product information if an ‘equivalent’ has been offered; product availability and estimated completion date.
RFQ (request for quote) is a standard business process whose purpose is to invite suppliers into a bidding process to bid on specific products and/or services. An RFQ typically involves more than the price per item. Information like payment terms, quality level per item or contract length are possible to be requested during the bidding process.
RFQs often include the specifications of the items/services to make sure all the suppliers are bidding on the same item/service.
The suppliers have to return the bidding by a set date and time to be considered for an award.
RFQ allows different contractors to give the quotation and among that, the best quote will be taken.
A Request for Information (RFI) is a standard business process whose purpose is to collect written information about the capabilities of various suppliers. Normally it follows a format that can be used for comparative purposes.
So a RFI is primarily used to gather information to help make a decision on what steps to take next.
A Request for Tender, commonly abbreviated to RFT, is a structured invitation to suppliers for the supply of products and/or services. The majority of RFT’s are published by government sector
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