Common procurement terminology can sometimes be confusing. Visit our newsletter each issue to learn a few common procurement words and phrases to help you speak like a buyer, or at least understand one.
Request for Information (RFI): This term is used when you are seeking information or determining budget. It is an instrument to conduct a market survey in order to obtain information from the market that can be used to identify available or potential solutions for fulfilling identified needs, which may include information on cost and delivery time.
Request for Quotation (RFQ): This term is used when you have detailed specifications defined and the estimated budget is below $150,000. It is an informal method of solicitation whereby suppliers are requested to submit a quotation for the provision of goods or services. Requests for quotation are normally used for standard items, where the value of the procurement falls below the established threshold for formal methods of solicitation.
Request for Proposal (RFP) – This term is used when you have a concept with a set of specifications or needs for consideration. A formal method of solicitation where prospective suppliers are requested to submit a proposal for the provision of goods, works or services, based on the specifications, scope of work, or terms of reference included in the solicitation documents. Normally used in cases where the requirements are complex; cannot be clearly or completely specified, where detailed technical evaluations are to be performed, and/or where pricing or cost may not be the sole basis of award.
Invitation to Bid (ITB)– This term is used when you know the details, require a specific manufacturer and model specifications and the estimated budget is $150,000 or greater. A formal method of solicitation whereby suppliers are requested to submit a bid for the provision of goods, normally used for standard, off-the-shelf items. Price is the main factor for award.
Want MORE words? Visit our website: https://procurement.unl.edu/glossary