RFP vs RFQ: what's the difference and when to use each?

Why the acronyms matter

RFP, RFQ, EOI, ROI, RFT and RFI look interchangeable and are often used loosely — but they describe distinct steps in the procurement funnel. Each has different information needs, different legal effect, and a different expectation of what the supplier is submitting. Getting the label wrong is more than a semantic problem: it changes what the supplier is offering and what the buyer is bound by.

The procurement funnel

Think of procurement as a funnel that starts wide (many potential suppliers, little detail) and narrows to a signed contract. The acronyms describe where you are on that funnel.

1. RFI — Request for Information. Market scoping. No offer, no shortlist. The buyer is gathering data on what is available.
2. EOI / ROI — Expression / Registration of Interest. Prequalification. Suppliers submit capability information; the buyer builds a shortlist.
3. RFP — Request for Proposal. Solutioning. Shortlisted suppliers propose an approach and price against a stated outcome.
4. RFT — Request for Tender. Formal offer against a settled specification. Common in government procurement.
5. RFQ — Request for Quotation. Price against a defined scope. The specification is not up for discussion.
6. PO / Contract. Award.

RFP: outcome-led

An RFP is used when the buyer knows what it needs to achieve but not exactly how. Suppliers are asked to propose an approach, methodology and price. Evaluation is qualitative and quantitative — often 60/40 or 70/30 in favour of the technical response.

Typical RFP contents:

• Statement of objectives (not a hard specification)
• Mandatory requirements (must be met to remain compliant)
• Evaluation criteria and weightings
• Conditions of participation (probity, communication rules, confidentiality)
• Draft contract or key contract terms
• Response template

RFQ: price-led

An RFQ is used when the specification is fixed. The buyer is not asking the supplier to solve a problem — it is asking for a price to deliver a defined scope. Evaluation is dominated by price plus a compliance check.

RFQs are typical for:

• Commodity goods
• Purchases under a panel deed or standing offer arrangement
• Recurring services under an existing contract
• Small-value spot buys below the buyer's tender threshold

The legal effect: offer, invitation to treat, and process contract

In Australian contract law, a request for offers (however labelled) is generally an invitation to treat — not an offer capable of acceptance. The supplier's submission is the offer. A binding supply contract is formed when the buyer accepts the offer in the manner specified in the request.

However, the procurement process itself can create a separate process contract — an implied contract between the buyer and each compliant respondent to conduct the evaluation in accordance with the stated rules. If the buyer departs from the stated evaluation methodology or considers undisclosed criteria, a compliant respondent may have a claim in contract, even where no substantive supply contract results. The Australian High Court's approach in Hughes Aircraft Systems International v Airservices Australia (1997) 76 FCR 151 remains the touchstone.

What each document should cover

For buyers

• Reserve rights clearly. Right to shortlist, negotiate, invite BAFOs, reject any or all, and not award. Rights not reserved are rights given away.
• State the evaluation methodology. Weightings, mandatory requirements and how price will be scored. Then follow it.
• Nominate a single point of contact. All communications through one channel — an approach mismanaged is a probity breach in the making.
• Attach the draft contract. Do not run an RFP where the contract terms are negotiated after preferred-supplier selection. That is where cost blowouts hide.

For suppliers

• Read the conditions of tender before the specification. The rules of the game matter more than the game.
• Flag departures explicitly. Silence is deemed compliance. If your response departs from a mandatory requirement, say so and explain why.
• Do not extend the offer validity casually. Every extension is a fresh commercial commitment on stale assumptions.
• Watch the "no contract until execution" clause. It cuts both ways — the buyer is not bound either, so preferred-supplier status is not an award.

Panels and standing offer arrangements

Many organisations — particularly government agencies — buy through prequalified panels or standing offer arrangements. The head deed contains the master terms and the RFQ (sometimes called a work order or Statement of Work) is issued only to panel members. The RFQ price and short form response supplement the head deed rather than replace it, so a panel supplier who ignores the head terms will find they still apply.

Where Envision Legal fits in

Envision Legal drafts and reviews RFPs, RFQs and RFTs for buyers, and reviews and negotiates tender responses and resulting contracts for suppliers, across private and public sector procurement. For advice on a specific procurement, get in touch.

This article contains general information only and does not constitute legal advice. Envision Legal accepts no liability for any loss arising from reliance on this content. You should seek independent legal advice tailored to your specific circumstances.