What is an RFQ in procurement?

RFQ stands for Request for Quotation and is used as a part of the strategic sourcing process to obtain competitive pricing from multiple suppliers. An RFQ is a formal document that invites a group of selected suppliers to submit a quote for supplying specific goods or services within a stipulated timeframe.

Before an RFQ is created, the buyers need to have a clear and well-defined understanding of their exact needs, from specifications and quantity requirements to delivery terms and conditions. RFQs are usually used when the buying requirements are clear and the only differentiating factor between suppliers will be the price and payment terms.