Request for Quotation

RFQ Full Form in English, letter by letter

RFQ is a document a buyer sends to suppliers asking each to quote a price for a clearly specified product or service.

RFQ Full Form in Indian Languages

Before any supplier names a price, someone sends them a document: an RFQ, short for Request for Quotation. Here is what goes into one, how it differs from the RFP, and where the same letters mean something else.

What an RFQ contains and when a buyer uses one

The full form of RFQ is Request for Quotation. It is a formal invitation asking suppliers to state their price for a clearly defined item or service. It sits in the middle of procurement, after the need has been approved and before an order is placed, and it usually goes to two or more suppliers at once.

It only works when the buyer already knows exactly what is wanted. A proper RFQ spells out the specification, quantity, delivery date and place, warranty, payment terms, the last date for submission, how long the quoted price must stay valid, and the basis on which the quotes will be compared.

Every shortlisted supplier receives the same document, so the replies can be laid side by side. Price and commercial terms decide the outcome, not who comes up with the cleverest approach.

Typical users are manufacturers buying components, retailers ordering packaging, hospitals buying consumables and contractors sourcing cement, pipes or cable, where the standard is already written and there is nothing left to design.

RFQ, RFP and RFI are three different documents

An RFP, Request for Proposal, is used when the requirement is complex or the solution is not yet defined: a new software system, a consultancy, a design competition. Suppliers propose how they would do the work, and price is only one of several criteria.

An RFI, Request for Information, comes earlier still. It simply asks what the market can offer, with no commitment to buy anything.

A rough rule: RFI to learn what exists, RFP to choose an approach, RFQ to buy something already decided. Many large purchases use all three in that order, though a routine repeat purchase may need only the RFQ.

Do not confuse an RFQ with a quotation itself. The RFQ is the buyer's request. The quotation is the supplier's reply, and it only becomes binding when the buyer accepts it with a purchase order.

The same letters in construction tenders and share trading

In construction and infrastructure tenders, RFQ is often used for Request for Qualification. This is a pre-qualification round that shortlists capable bidders, on experience, turnover and equipment, before technical and financial bids are opened. Read the first page of the document to see which one it is.

In securities dealing, the abbreviation appears a third time as request for quote, where an institutional trader asks several dealers to price a large block before committing to it. This is common in bond and foreign exchange markets.

All three uses share one idea: someone asks for a price or a qualification from several parties before deciding. Only the context tells you which expansion applies.

How an RFQ round runs in practice in India

Quotes come back by email, through a procurement portal or on the company's supplier platform, and then go into a comparison sheet: unit price, taxes, freight, lead time, payment terms and any discount for volume.

The lowest evaluated bidder is normally selected and a purchase order follows. Delivery schedule, penalties and retention are fixed there, since nothing in the RFQ itself was open to negotiation.

Government buyers follow the same shape of process. Departments and public sector units buy through GeM, the Government e-Marketplace launched in 2016, or through the Central Public Procurement Portal, and the lowest responsive bidder is called L1. The exact route for a given purchase depends on its value and on the General Financial Rules and the department's own manual, so check the tender notice instead of assuming.

Tenders may also demand an earnest money deposit, a bid validity period and proof that the supplier is current on GST and provident fund dues. This paperwork knocks out more bidders than price does.

Writing and answering an RFQ without disputes

A useful RFQ states the evaluation basis up front: whether the lowest price wins or whether best value after technical scoring decides. Ambiguity there is what produces disputes after the order.

Suppliers should read the delivery and penalty clauses before quoting. A price that cannot meet the date, or a warranty the factory will not honour, is not a competitive price at all.

Buyers should compare total landed cost rather than the invoice figure: freight, installation, after-sales support and the cost of switching later usually outweigh a few per cent on unit price. A worked example: Supplier A quotes ₹98 per unit but charges ₹6 freight and delivers in 30 days. Supplier B quotes ₹100 with free delivery in 10 days. B is cheaper in rupees and faster.

Keep the file. The issued RFQ, the quotations received and the comparison sheet form a record that answers any auditor or court asking why one supplier was chosen over another.

An RFQ, a Request for Quotation, is the point where a defined need turns into a priced offer. Fix the specification and the evaluation basis on paper first, and the comparison afterwards takes minutes instead of arguments.

RFQ Full Form: Common Questions