RFPs and RFIs are two types of requests that are used at different points of the pre-construction phase of a project. RFP stands for Request for Proposal, while an RFI stands for Request for Information. Anyone who has dabbled in the vendor side of a B2B business is familiar with the RFP and RFI processes. Although they are equally important in their own ways, they also have vast differences to help you with different parts of your vendor process. It’s essential that business owners in the construction industry understand when to implement each.
What is an RFP?
In the construction industry, a Request for Proposal (RFP) is used as a bidding process where owners ask for specific information from vendors that will help them complete a project. Proposals typically include details regarding the work, experience, costs required to complete the job, etc. RFPs are more structured and detailed in comparison to an RFI. When submitting an RFP, you should have clear questions and need to define if the potential vendor can effectively perform the job at hand with the resources and employees they have.
What is an RFI?
RFIs are generally more casual than RFPs and are used to gain answers to general questions where the vendor has the opportunity to fully explain their offerings. RFIs have more open-ended questions and clarify any ambiguities as to whether to move forward with the vendor for a project. RFIs are usually followed by an RFP for more detailed information. A typical RFI will include general information like anticipated project challenges, the scope of products or services, and cost expectations. RFIs are not a permanent promise of future business and are used to determine general project criteria and guidelines.
RFP vs. RFI – what’s the difference?
Although they have their differences, neither proposal is technically better than the other; it truly depends on what you’re looking for from a vendor and the amount of information you’ll need to make a sound decision. If you’re in the starting stages, then an RFI would be best to help you get a general overview of vendors and options. While on the other hand, an RFP would be best for those who are close to finalizing a purchase but still open to ideas.
Here are a few things to consider when creating an RFP for vendors:
- Pricing expectations will eliminate any confusion or ‘sticker shock’ upfront.
- Asking a vendor for examples of their past work will help give a clear example of project expectations and fulfillment.
- The more specific you are about requirements will help the vendor determine if they meet the expectations that you need.
- Ask what risks the vendors would typically expect to arise during a project and how they plan on handling it.
When conducting an RFI, it’s important to include the following:
- An objective or summary of the business or project being completed
- An example timeline including milestones of various steps of the project
- Criteria for evaluation
- Payment terms
In addition to RFPs and RFIs, there are RFQs. An RFQ is a Request For Quotation and primarily focuses on the specific costs that are required during a project. This breaks down the costs more than an RFI and RFP and helps the owner set predetermined specs they’ll want the vendor to fulfill. When comparing an RFQ vs. RFP, an RFP is usually favored more since an RFQ is best used in conjunction with an existing system. RFQs don’t require a lot of specific questions to be answered and typically include the following:
- Payment options
As an example, let’s say an owner needs to build a shed; they already know the exact supplies, types of lumber, specialty parts, and dimensions it needs to be. They would send all these specifics over to the potential suppliers or vendors to get the quotes that they need.
Knowing the differences between an RFI, RFP, and RFQ is essential to moving your projects in the right direction quickly and efficiently. Each option invites vendors to elaborate more on their products and services, outlying the overall scope of their work and helping owners narrow down the right vendor for the job. There’s not an all-size-fits-one type of request, making it easier and more flexible for owners to get the kind of information they need before moving forward with a vendor for the job. At the end of the day, it ultimately comes down to who you feel has the right price, experience, supplies, and reputation to fulfill your construction needs.