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.
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.
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