Construction is known for its lingo and acronyms: OSHA, ITB, RFI, RFP, and RFQ to name a few. Most contractors think RFIs, RFPs, and RFQs are the same thing: ways to request information and pricing from contractors. But the truth is they serve different purposes and can signal to the contractor where the customer is in their buying process. Knowing what these acronyms mean can help contractors decide how much information to provide and how aggressive they need to be in their pricing.
Let’s start by defining each of these three terms, then we’ll look at the differences and what they mean for contractors.
Request for information (RFI)
Requests for information (RFIs) are just what they sound like: the owner has a problem they need fixed and doesn’t know how to fix it, so they’re asking for recommendations. There’s probably not a design or specification of how the work is to be performed, because the owner doesn’t know yet.
The RFI will include open-ended questions to gather information from potential contractors. Contractors can provide suggestions on how to fix the problem and information about their company to try to convince the owner to use them. Pricing may or may not be requested at this point.
Request for proposal (RFP)
If an owner has a solution in mind, either after requesting an RFI or consulting with a design expert, they may issue a request for proposal (RFP) to several contractors. There’s usually some drawings or sketches included, or at least some information detailing the work that’s to be performed.
An RFP will probably include questions about the contractor’s experience and skills, and the owner often scores the responses to help them choose amongst them. Pricing may or may not be part of the request and may not be the only factor in selecting a contractor.
Request for quotation (RFQ)
A request for quotation (RFQ) is all about getting a price for the work. The request usually includes detailed information about the work that needs to be completed and the materials that the owner wants to be used. This type of request is sometimes sent to material suppliers with a list of what the owner needs and quantities for them to price.
Contractors who respond to a request for quotation won’t provide a lot of information about their company or its qualifications. The owner has usually done their due diligence to select a small pool of contractors to bid on the work.
Differences between RFIs, RFPs, and RFQs and what they mean for contractors
Location in the buyer’s attorney
Which of the three types of proposal requests an owner selects can show where the owner is in their buyer’s journey, which is the path a potential customer takes before going to contract. RFIs are issued to gather information, so the owner hasn’t chosen what type of work needs to be done. RFPs are issued after a solution has been selected, and the owner wants to choose a contractor based on qualifications and price. RFQs are sent to select contractors or material suppliers when the scope of work is clearly defined. So based on the type of request sent, contractors can determine whether their potential customer is ready to start work or is just gathering information.
Design and documents
RFIs usually don’t include any sort of design or construction documents. At this point all the owner has is a problem that needs to be solved. RFPs and RFQs will usually include design or specification documents so that contractors know how to price the work. The more detailed and complete the design documents, the more accurate the pricing can be. If the design documents aren’t complete or have gaps that need to be filled, the owner may be shopping to get a budget before proceeding with the work.
Price matters
RFIs are the only requests where prices aren’t part of the selection process. The owner is looking for ideas from contractors, so it’s like a brainstorming session where all solutions are accepted. The RFI may request a budget to help the owner decide amongst the options presented. Since contractors don’t have a whole lot of information about the problem, even providing a budget number can be difficult. If the owner is looking for a hard bid price without documents or design, that could be a red flag. Contractors should caution the owner about bidding the work without specifications or quantifying the work.
Experience and references
RFPs are the only requests that will ask for experience and references (occasionally an owner may request company information in an RFI). The owner is usually trying to decide between multiple contractors and wants as much information about them as they can get. While price is often a determining factor on who gets the job, experience and references are often heavily weighted as well, so don’t leave them out. If the owner issues an RFI, they’re probably just looking for suggestions and aren’t ready to decide yet. If they issue an RFQ, they’re probably only looking for pricing.
Streamline RFP Creation & Discovery with PlanHub
If you need specific work done by a subcontractor in the industry, then one of the most common ways you outline the nature of that project is by creating a Request for Proposal (RFP). An RFP’s purpose is to let any subcontractor or company who might be bidding on a job know exactly what that specific project might entail. In short, general contractors outline and describe what they need from subcontractors so they can decide whether this is a job they should be applying for, or if what the general contractor needs is outside their area of expertise.
Details to Include in a Request For Proposal
When putting together a Request for Proposal, it’s important to include all the necessary details about the project that your subcontractor is going to need to know in order to evaluate their fit for your project. For instance, the RFP should have what needs to be done and to what extent (pipe replacement, bathroom remodeling, foundation repair, landscaping, etc.), where the project is located, the start date, and the expected completion time. In short, it’s essential to have all factors in place so that subcontractors who bid on a job can accurately estimate how to complete it and what it will cost them to do so.
The Importance of Creating RFPs
As a general contractor, it’s essential for you to describe the job in question, and what you need done, with the greatest level of accuracy possible in order to receive the replies and estimates that will be the best fit. If you leave key details out, or the job is actually much bigger or complicated than your RFP would lead one to believe, then you’re going to end up with subcontractors who can’t actually do the job with the skills and tools they have on-hand. Or, if they can actually complete the job, they certainly won’t be able to do so for the price they originally quoted when all the details weren’t present.
RFPs, Keywords, and Construction Jobs in The Modern Day
RFPs are crucial for both general contractors and subcontractors alike. If you’re a construction company looking for new projects to bid on, then RFPs and bidding software are your friend when it comes to finding new business in today’s construction landscape. With so many available jobs out there, it really pays to be able to search through projects using keywords to help separate the wheat from the chaff, ensuring that you can find all the jobs in a certain category at the push of a button. Time is money, and the longer it takes you to come across a job the greater the chances are that another company’s proposal will be accepted.
PlanHub is an online bidding software that provides subcontractors with the access they need in order to find the projects that fall within their specified search terms. PlanHub helps you sift through all the available RFPs and focus on the ones you should actually be bidding on. Whether you want to search based on a geographic area, or if you’re limiting your search to concrete pouring for driveways, electrical installations, or bathroom remodeling, PlanHub can help you narrow your search for fresh RFPs to ensure that you’re not wasting valuable time you could be spending on a batch of fresh jobs.
Knowledge is power
Contractors who know the differences between RFIs, RFPs, and RFQs can tailor their responses to what the owner is looking for. By giving just the information the owner requests, contractors have a better chance of being selected for the job.
Subcontractors who would like more leads should contact us for demo of our digital plan room and project search features.
