Articles / Sourcing
Tender, RFQ or RFP? How to choose the right way to buy
Three notice types cover most purchases. Knowing which to use saves weeks, keeps competition fair and gets you better offers.
When a buyer decides to go to market, the first question is how. Most organisations use three standard instruments: the tender, the request for quotation and the request for proposal. They look similar from a distance, but they answer different questions.
The three instruments
Tender, or Notice Inviting Tender (NIT). A formal, open invitation for any qualified supplier to bid against fixed requirements. The buyer publishes the specification, the eligibility rules and the scoring criteria in advance. It is the standard route for larger or regulated purchases, especially in the public sector. In some countries the same thing is called an invitation for bids (IFB) or an open tender notice.
Request for Quotation (RFQ). A short, fast request for prices on something that is already well defined: a quantity of laptops, a standard service, a known spare part. There is little to debate except price, delivery and terms, so price carries most of the weight.
Request for Proposal (RFP). Used when the buyer knows the problem but not the best solution. Vendors do not just quote a price. They propose an approach, a team and a plan. Experience and the quality of the proposal count for much more than price alone.
A quick way to choose
| Question | Points to |
|---|---|
| Is the requirement fully specified, and is it mostly about price? | RFQ |
| Is it a formal or high-value purchase, or do rules require open competition? | Tender (NIT) |
| Do you need vendors to design the solution? | RFP |
| Is the value below your formal threshold? | RFQ |
| Will the quality of the approach matter more than the lowest price? | RFP |
Many organisations set value thresholds, for example RFQ up to a limit, tender above it. Check your own policy, and for public buyers, the procurement law that applies to you.
What every good notice contains
- A clear scope. What is needed, how much, where and by when.
- Eligibility rules. Who may apply: category, experience, location, registration.
- Scoring criteria, published in advance. Say how price, delivery and experience will be weighted. Do not change the rules after offers arrive.
- A closing date and time. With a time zone, because bidders work across borders.
- A reference number. So that every question, offer and award can be traced.
- Where to find the documents. A link to the full specification, drawings or terms.
Why open advertising matters
Publishing a notice where any eligible vendor can see it widens competition. More bidders usually means better prices and better quality, and it reduces the risk of favouritism. For public bodies it is often a legal duty. For companies it is good governance.
Good notice boards also publish pre-bid clarifications. When one vendor asks a question, the answer goes to everyone, so no bidder has an information advantage. After the decision, a contract award notice shows who won and at what value, which builds trust in the process.
Writing criteria that work
- Weight what matters. An RFQ might score price 80%, delivery 20%. An RFP might score price 40%, delivery 20% and experience 40%.
- Keep it measurable. Scores should come from facts in the offer, not impressions.
- Score relative to the best offer. The lowest price gets full marks and others are scaled against it, so one extreme outlier does not distort the result.
- Record the evaluation. Keep the scores and the reasoning, in case a bidder asks.
Common mistakes
- Using an RFQ for something complex, then discovering that the cheapest quote misses half the need.
- Running an RFP when the requirement is simple, which wastes everyone's time.
- Setting a closing date that is too short for a quality response.
- Answering vendor questions privately.
- Choosing the winner by price when the published criteria say otherwise.
The bottom line
Pick the instrument that matches how well you understand your need. Quote it when you can describe it exactly, run a tender when formal competition is required, and ask for proposals when you need the market to bring ideas. Whichever you choose, publish clear rules, answer questions openly and announce the result.
This article is general information, not legal advice. Thresholds and mandatory procedures differ by country and organisation.