Original Source: The Negotiation Experts

 

“What’s The Difference Between Contract RFT RFQ RFP RFI?

 

Contract negotiation training graduates often ask us to explain four key terms: RFI, RFQ, RFT, and RFP. These processes have grown in popularity in procurement and purchasing. This is especially so in larger buying organizations.  Only the best negotiation training teaches how to select the most suitable process. Further, to use each process well, having expert training is key. In practice, you may find people wrongly use these phrases to mean the same thing. This is because many organizations don’t know the differences well enough. Lack of proper training can result in buyers missing negotiation advantages. On our contract purchasing training for buyers, clients tell us how their departments use these purchasing processes to “write the rules” of the buying game to side-step negotiation. There is a great deal that suppliers can do to improve their position. As a starting point, we help students on our procurement sales negotiation training courses to get to grips with the differences between these processes:

 

RFI – Request for Information

 

An open inquiry that spans the market seeking broad data and knowledge.

 

RFQ – Request for Quotation

 

A chance for potential suppliers to competitively cost the final chosen solution(s).

 

RFT – Request for Tender

 

A chance for potential suppliers to submit an offer to supply goods or services against a detailed tender.

 

RFP – Request for Proposal

 

Sometimes based on a prior RFI, a business needs-based request for specific solutions to the sourcing problem.

 

Request For Information (RFI)

 

As the name suggests, procurement uses RFIs to gather information. In turn, this helps decide on the next step before contract negotiations begin. Thus, RFIs are usually not the final stage. Instead, procurement often uses RFIs along with the three requests above. An RFI is a solicitation that procurement sends to a broad base of potential suppliers. Its purpose is for conditioning, gaining information, preparing for an RFP or RFQ, forming a strategy, or building a database. These facets are useful in later supplier negotiations about…”

 

http://www.negotiations.com/articles/procurement-terms/

Contributors: Open Source
Categories: Industry Articles, SIG U Resource
SRC Type: eSourcing and Tools, Procurement Operations