Tender requests are the most common way of sourcing products and services, but there are many types so it can be confusing. The term “tender,” which refers to the process of requesting a bid, or your price for delivering goods and services, can be used in several ways. Here’s an explanation of different tender request types.
Expression of Interest (EOI)
An Expression of Interest (EOI) is a request for information sent to suppliers who have the potential to meet specific needs. It’s an effective way to collect data from several suppliers at once, evaluate them and decide which ones will be invited to submit tenders/bids.
An EOI can be used for all types of work, but it’s particularly useful when you don’t know exactly what you need yet.
For example, a Buyer (government or private organisation) requests you express an interest in providing goods and services for a project, such as a construction job. You provide information about your company and its capabilities to complete the project. You have the option of providing a response based on price only (a fixed-price proposal) or one that includes both price and performance specifications (a best-value proposal.)
Request for Quotation (RFQ)
An RFQ is a Request For Quotations from prospective suppliers. In an RFQ, the Buyer (government or private organisation) asks you to provide a cost quote for specific goods or services.
An RFQ is commonly used when comparing the prices of different suppliers. If it is a construction job, RFQ will provide you with a cost comparison from different building suppliers for materials and labour.
Request for Tender (RFT)
A Request For Tender (RFT) is a business document that requests bids from companies interested in supplying goods or services. The RFT is issued by an organisation or person seeking to procure professional services, equipment, supplies, and works on a particular project or job.
In an open RFT, anybody can submit a tender response; however, in some cases, only specific companies are allowed to submit a response because they have been pre-qualified for tender by the client and have been given time to prepare their submission. In other cases where all potential tenderers are encouraged to respond, there may be limits as to how many responses may be received under each category of work specified in the documentation.
Request for Information (RFI)
A Request for Information (RFI) is a formal way of requesting information from potential suppliers. It is not a Request For Quotation, nor is it a Request For Tender. It is used only when the exact nature of the required goods or services has not yet been determined and therefore no purchase order will be issued.
This can occur when seeking ideas about what kind of product or service you need when there is more than one possible solution to a problem, or guidance is required when deciding which solution to select.
For example, you might use an RFI if you’re considering buying new office equipment and want to know what features other companies have included in their systems. This could help guide your decision-making process, saving time and money based on the feedback received through this RFI.
Request for Proposal (RFP)
A Request For Proposal (RFP) is a formal request for you to submit your product or service offerings. It may ask you to provide detailed information about your company, solutions, and capabilities. The request may also include criteria used to evaluate your expertise, experience, and capacity to deliver.
An RFP is used by a company when they want to find the best solution to a problem and select vendors who can deliver those solutions. An RFP is typically sent to multiple suppliers that can partner as part of the company’s growth strategy.
Tenders are used by companies to select suppliers or contractors who can provide the best quality service at an affordable cost. The key is to know the specific type of tender application process required, as each tender has its own criteria and prerequisites. I hope this has helped to explain the differences. I’m always here if you need Tender Advice.