If you are a regular bidder of government tenders, then you must be familiar with the difference between RFP, RFQ, RFI and RFT. However, if you are new to eTendering, it can get rather perplexing to understand how an RFP and RFI are different, or what is a RFQ and if it is the same as an RFT.
Did you get confused?
In the world of government contracts there are several key terminologies used. All these terms have specific meaning and relate to different requirements. Even regular bidders can get confused about RFP vs RFQ vs RFI vs RFT in eProcurement.
The online tendering process in India today is quick, effective and transparent. Government procurement teams need to ensure that when selecting suppliers online, they get the best value and quality of products and hence seek product/service details in numerous ways. So, if you want to leverage new tendering opportunities and get started with tender bidding, let us first understand these common tendering terms and the context in which they are used.
What is the full form of RFP, RFQ, RFI and RFT
|Request for Proposal
|Request for Quotation
|Request for Information
|Request for Tender
Difference between RFP, RFQ, RFI and RFT
In this section let us take a look at the meaning of RFI, RFT, RFP, and RFQ. In general, we understand that the government, when in need to source/procure goods and services, floats tender notices inviting application from eligible suppliers to bid for the tender.
With the tendering process having been taken online, it is easier for bidders to get tender alerts and notifications on the latest tenders published. As such, to determine if you are eligible for a tender, and what they tendering authority is seeking, understand the different forms of requests on the tendering portal.
What is an RFI?
A Request for Information is the stage where the procurement team requests suppliers/vendors for information on their products/services. This basically means that there is a tentative requirement (probably at a later stage), and the team is interested in collecting information about the product/service (e.g., certifications, production capacity, production quality, infrastructure available etc.).
With an RFI document, the procurement team may provide a brief outline of the requirements, specifications, and qualifications for suppliers to respond to with the requested information.
RFIs are a good way to identify potential suppliers, understand product availability, and plan.
What is an RFT?
We next look at a RFT or Request for Tender. Widely used in public procurement, is an invitation to suppliers to bid for supplying particular goods against a tender request.
As can be expected, RFT documents are extremely well defined with meticulous details on every aspect of the tender requirement.
In India, government departments, PSUs, and other organisations are expected to float tender announcements on the publicly available portals – the Central Public Procurement Portal and Government eMarketplace (GeM) portal. To view the details of the RFT request for tender any person can visit the portal and view the details. However, if a supplier wants to bid for the tender request, he/she has to login to the portal and proceed.
Anyone can easier download or view tender documents PDF on CPP portal, and find complete details on the tender request including: Tender ID, opening and closing dates, tender fees, EMD, type of tender, tender eligibility, qualifications, specific requirements, etc.
The RFT process for eProcurement is a detailed one that involves floating invitations to suppliers, receiving tender responses, evaluating them on technical and financial aspects, and finally awarding the tender to the most suitable bidder.
The objective of online procurement through tenders is to enable more businesses (especially MSMEs and emerging businesses) to participate in government procurement. It also ensures that the most competent supplier, offering the best quality of goods, competitive pricing, and value for money is selected, making the process fair and transparent.
What is an RFP?
A Request for Proposal is a method that facilitates purchase decisions. It is an invitation for qualified suppliers to propose solutions to a project idea or problem area with details on timelines, processes, methods, design, technicalities and more. In brief, RFP documents ask for solutions from experts on a project idea, that needs a comprehensive action plan.
What is an RFQ?
A Request for Quotation, as the name suggests, is a request for a pricing quotation to suppliers for purchasing specific products and services. In general, a RFQ response document should include all costing parameters, such as:
- Product quantity
- Product specification including type/grade, size, features, etc.
- Product cost (base price) and additional cost including packaging (material used), transportation cost, materials handling and warehousing cost etc.
- Any other additional expenses (e.g., taxes, compliance)
As a supplier and potential bidder, it is importance to understand how requests for tenders and quotations are different. Tendering refers to the entire process, that includes a section on submitting a cost sheet or quote. RFQ refers to soliciting quotations from suppliers on product costs.
In everyday parlance, these terms are often used interchangeably. You will often come across people using these terms loosely. If you are a potential bidder and trying to bid for government contracts, it is recommended to understand the difference between these terms and understand if you are the right fit for it.
Example of RFI vs RFP vs RFT vs RFQ
Let us consider this fictitious example to understand the how RFI, RFP, RFT and RFQ are different:
Consider a situation where a company (private sector) needs to build a factory shed. Some of the common raw material required for the construction project would be bricks, cement, steel, etc.
- The company wants to seek information on the types and grades of steel available in the market. Such a process would be a Request for Information or RFI.
- Once the company has collected the information, it may want to seek the advice of experts on the supply of raw materials, design of the shed, materials required etc. This is the Request for Proposal or RFP, looking for a suitable action plan on the proposed idea.
- Following this stage, the company may float a Request for Quotation or RFQ to get quotes from suppliers on the proposed cost of the products/raw materials.
- In the final stage, after considering all aspects, it may announce the Request for Tender or RFT which would require bidders to submit technical, design, and financial specifications.
In many cases, these are not four different methods but may be combined into one or two stages, especially RFQ and RFT. In a tender proposal there is a specific format of submitting a tender quote (usually with the BOQ) that includes all pricing and costing details. As such, if you are looking at government eProcurement tenders, always check for the BOQ that includes financial details and needs to be uploaded along with the tender documents.
Snapshot of how RFP, RFT, RFQ and RFI are different
All of the above methods of eProcurement are used across businesses and government departments for sourcing the right products and goods. It is specific, simple, and enables buyers to plan and make purchase and procurement decisions in a systematic manner.
As a supplier/vendor/bidder, here’s a simple table outlining the difference between RFTs, RFPs, RFQs and RFIs to help you understand what’s the requirements and how you can fit in:
|Seeks information only about product/services
|Seeks advise and solutions on a proposed idea/problem
|Seeks bids from eligible suppliers for the supply of goods
|Seeks a price quotation or cost breakdown of products, payment terms etc.
|Initial stage, does not imply purchase intent or tender
|Intermediary stage, with defined project requirements, and search is for the right supplier/solution to it
|Advanced stage with clear announcement and need for supplier to bid for tenders and execute it within proposed timelines when tender is awarded
|Intermediary stage with clear purchase intent, and focus is on finalising a supplier based on projected costs
|Lesser value as it not a decision-making stage and requires multiple next steps
|Increased value as there is clear intent towards decision-making
|Maximum value as it involves awarding the tender and signing the contract
|Increased value as it involves decision-making