A request for information (RFI), request for proposal (RFP), and request for quotation (RFQ) are all different yet important documents that property owners may need to utilize during the pre-construction phase of a project. Furthermore, understanding which and at what time one should use each of these documents is key to ensuring a project’s success as well as avoid unnecessary risk. Below is a list of differences between RFIs, RFPs, and RFQs, as well as a detailed description of each of these documents.
Differences Between RFI, RFP, and RFQ
A property owner uses a request for information when they want information from multiple contractors. This document is commonly used when the property owner does not know exactly what work must be completed. Thus, the property owner will want different contractors to provide their individual and unique solutions to a specific problem.
A request for proposal is used when a property owner wants to receive offers from contractors to start the bidding process. When using a request for proposal, the owner will know exactly what work needs to be completed and is simply looking for the right contractor who will complete the work for a fair price.
Finally, a property owner will use a request for a price quote when looking to compare contractor prices. Because the document is simply looking to compare prices, the request will include very specific details about the work that needs to be completed so that the contractors can give an accurate price.
Request for Information
A property owner will typically use a request for information when they have a problem either in a current piece of property or before they begin work on a project. If a request for information is utilized by a property owner when they already have a building, it is likely because they have encountered a structural issue that will be complex and expensive to fix. Finally, when creating initial blueprints and discussing logistics for a project, a property owner may need a subcontractor with special knowledge to figure out a vital logistical issue.
No matter the reason why a property owner is using a request for information, when putting this document out, there is usually not any current design documents. Instead, there is simply a brief description of the problem with a few open-ended questions. Because RFIs are used to solve specific problems, this document will only be sent to specialists who have the skills necessary to potentially solve the problem.
For example, a property owner may need a building to meet certain city requirements yet because of the land, achieving these safety requirements is an issue. Thus, a property owner may send out an RFI to three different contractors who specialize in structural issues. From the responses the contractors give the property owner, the property owner can then make a decision about which contractor to hire or which idea to utilize when moving forward with the project. Another common occurrence is that property owners will receive responses from contractors about the issue yet because the cost or difficultly associated with implementing the idea is too high, the property owner may choose to abandon the project. Finally, if a contractor likes the ideas they receive from contractors, they may invite the contractor to submit a response to an RFP.
RFI Basics
Below is a list of information to include on a request for information form:
- First, you should absolutely list the initial research you did for the project. However, ask for the contractor’s opinion, and give them the ability to challenge the research you have done.
- Make sure you state that you are only seeking opinions at this point. This is important as you do not want contractors to think that they will definitely receive work.
- Don’t spend a ton of time creating this document as it should simply be focused on gathering general information.
- Finally, because you are looking to solve a problem, ask for the contractor’s perspectives on how to remedy the issue.
Request for Proposal
A property owner will use a request for proposal when an owner has a set idea for a project and would like to contact contractors to see how much the project will cost to complete. To receive an accurate bid, a property owner will provide contractors with drawings, sketches, and any other materials necessary to fully determine the scope of work.
While an RFI can be sent to anyone, property owners will likely require a contractor to have certain prerequisites as the RFP process is more formal and likely to result in work. To ensure that a contractor is qualified, a property owner will likely ask detailed questions about a contractor’s skills and experience as well as ask for references from past projects and resumes or bios for their main staff.
One can use each of these tools to ensure that a contractor is qualified. However, often, the most important factor in hiring a contractor will be the price of the project. Thus, if two contractors have similar experience and skills, the deciding factor will be the project price these contractors give.
RFP Basics
If you feel you are ready to utilize a RFP, here is a few things to include in the document:
- Ask for examples and references for past work. Additionally, if you require specialized service, ask for pictures or plans of similar jobs that the contractor has worked on.
- Require a comprehensive pricing plan so there is no confusion on either side.
- Ask for as much information as you feel you need. This ensures that both parties are comfortable working on the project and with the other party.
- Finally, if you are still unsure about hiring the contractor after all this, ask for project examples, certifications, and references. If you are still uneasy about the contractor, it may be a good idea to move on from them.
Request for Quotation
A request for quotation is similar to an RFI and RFP yet this document is much more price-focused. If a property owner wants to use an RFQ, they will already have a preferred method for completing a job. Thus, they are simply looking for a qualified contractor who will do the work for the cheapest price. Instead, of asking for references, an RFQ will instead ask about pricing, payment options, and delivery timelines.
Another scenario where an RFQ is useful is when a property owner is looking to purchase their own construction materials. In this case, a property owner will have the kind and quantity of materials they need. Once they have this information, they can send an RFQ to product suppliers. From the pricing information the property owner receives, they will be able to make a decision.
RFQ Basics
When writing a request for quotation, you should always include the following information:
- A list of products, features, and functionality required
- Quantity or duration of products or services required
- The date that you must receive the materials or services by
- Finally, give expected payment terms
Contact Our DC Law Office for More Information
Finally, for more on when to use an RFI, RFP, and RFQ for a construction project, contact us at 202-803-5676. You can also directly schedule a consultation with one of our skilled attorneys. Additionally, for general information regarding construction law, check out our blog.