A request for quote (RFQ), also called a request for quotation, is a request sent to several vendors asking them to price a product or service you have already defined. Because the specification is fixed, responses can be compared like for like, mainly on price and commercial terms. In IT and telecom buying, RFQs are common for well-understood purchases such as internet circuits at known addresses, license quantities or specific hardware.
At a glance
- An RFQ prices a defined specification; it does not ask vendors to design the solution.
- Responses are compared mainly on price and commercial terms, using a format the buyer sets.
- It works best when the options are close to interchangeable and the requirement is clear.
- Install timelines, contract length, SLAs and renewal pricing belong in the request, not just the headline price.
- It often follows an RFI or RFP once the buyer knows what it wants.
What problem it solves
Vendors quote in different ways. One bundles installation and equipment, another lists them separately; one quotes a three-year term, another a one-year term; one includes a service level, another doesn’t. Comparing those quotes takes time, and the cheapest-looking one may not be the cheapest over the contract.
An RFQ fixes the comparison by setting the specification and the price format up front. Every vendor prices the same bandwidth, quantities, locations, term and service levels, in the same columns. That makes the decision faster and easier to justify to finance or leadership, and it gives the buyer a documented record of a competitive process. It also signals to incumbents that the business is testing the market, which can sharpen renewal pricing.
How it works
Define the specification. The buyer writes down exactly what it wants priced: services, quantities, addresses, bandwidth or license tiers, contract term, required service level agreement (SLA) terms, and delivery or install expectations. Ambiguity here is the main reason RFQ responses stop being comparable.
Set the price format. A template with set columns for one-time charges, monthly recurring charges, taxes and fees, and renewal or escalation terms keeps quotes on the same basis.
Select vendors. The buyer invites a short list of qualified providers. A technology advisor may help identify providers that serve the locations or run the process.
Issue, answer questions, collect quotes. Vendors may ask clarifying questions; sharing answers with all bidders keeps the process fair. Quotes usually carry a validity period and may depend on site checks or credit approval.
Compare and award. The buyer compares total cost over the term, including install and renewal terms, and checks for exceptions or assumptions. The winning quote then becomes a contract and a service order.
For connectivity purchases, our internet access page covers what to put in a specification so quotes from different providers line up.
When it matters for buyers
- Buying connectivity for known sites. A defined bandwidth at fixed addresses suits an RFQ well.
- At renewal. Getting comparable quotes from the incumbent and alternatives tests whether your current price is competitive.
- Buying licenses or hardware. When the product is chosen, an RFQ compares resellers on price and terms.
- When procurement rules require competitive bids. Many organizations need documented quotes above a spending threshold.
- After an RFP. Once a solution design is chosen, an RFQ can price it across vendors.
Questions to ask vendors
- Does your quote match our specification exactly, and where does it differ or make assumptions?
- What one-time charges, monthly charges, taxes and fees are included or excluded?
- How long is the quote valid, and what could change the price before contract?
- What are the install or delivery timelines for each location?
- What service levels and credits apply, and are they in the contract or only the proposal?
- What happens to price at renewal, and is any increase capped?
- Are there site checks, credit approvals or other conditions on this quote?
How it differs from a request for proposal (RFP)
A request for proposal (RFP) describes a need and asks vendors to propose how they would meet it, so responses differ in design and approach and are scored on several factors, including price. An RFQ starts where an RFP’s design work is done: the specification is fixed and vendors only price it. A request for information (RFI) comes earlier still, gathering market information before requirements are set. Many buyers use them in sequence: RFI to learn, RFP to choose an approach, RFQ to price it competitively, though smaller purchases often go straight to an RFQ.