Procurement Documents Flashcards
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What is an RFQ?
An RFQ or Request for Quotation is a document that explains the details of the goods or services that the organization plans to procure. In response to the RFQ, the prospective suppliers are expected to quote their prices. Typically, an RFQ is issued when the company is looking at sourcing goods or services that are standard, and wants the lowest price for its requirements.
What is an RFI?
RFI, short for Request for Information, is a medium through which an organization can collect information about the prospective suppliers, their solutions, and how their products and services can help a company grow. As the name suggests, it is a request for information from the suppliers during the procurement and sourcing planning stage.
What is an RFP?
An RFP or Request for Proposal is a document that asks for a comprehensive proposal from the prospective suppliers that includes documents like a company profile, a proposal for delivering goods or services asked for, a client list, and financial details. An RFP is issued when the organization plans to evaluate the vendors on factors beyond pricing and find the best vendor to work on a project.
Difference in purpose
RFI, RFP, RFQ
Purpose To collect the information about prospective suppliers when you are not sure about the solution that you are looking for
To evaluate the vendors on factors that range beyond price
To evaluate the vendors based on the price quoted for goods or services
Advantages of each RFI, RFP, RFQ
An RFI is fast and easy to execute. It helps a business figure out the possible solution to business challenges
An RFP offers a fair comparison between vendors, and a business can judge the best possible vendor based on its capabilities
An RFQ provides a chance to reduce the overall costs incurred on sourcing a particular product or service
Adam, a project manager, is working on a project with a tight deadline. He needs a specific IT solution that can be implemented quickly. What procurement document should he use?
a.Request for Information (RFI)
b.Invitation for Bid (IFB)
c.Purchase Order (PO)
d.Request for Quotation (RFQ)
Given this case, the RFQ is suitable as Adam knows what he wants and needs quick responses from vendors for specified goods or services with the exact stuff, quantities, and delivery dates.
During a project, a project manager is tasked with evaluating and selecting a vendor for a critical component. What is the most appropriate procurement document to use?
a.
Procurement statement of work (SOW)
b.
Request for proposal (RFP)
c.
Invitation for bid (IFB)
d.
Request for information (RFI)
An RFP is the best choice for evaluating and selecting a vendor based on a combination of factors such as price, qualifications, and technical capabilities. It allows for negotiation during the vendor selection process.
Mark is working on a construction project. To find the best vendor for raw materials, he needs to consider quality, price, and delivery timeline. What procurement document should he use?
a.
Request for Proposal (RFP)
b.
Request for Information (RFI)
c.
Purchase Order (PO)
d.
Invitation for Bid (IFB)
In this case, the RFP is right because it allows Mark to consider multiple factors (quality, price, delivery timeline) instead of just the cost. Thus, it provides a comprehensive overview of potential supplier offerings.
Jane, a project manager, is working on a project that needs a highly specialized piece of equipment, what procurement document should Jane most likely use to maintain flexibility of requirements?
a.
Invitation for Bid (IFB)
b.
Request for Information (RFI)
c.
Request for Proposal (RFP)
d.
Purchase Order (PO)
The correct answer is Request for Information (RFI).
When the requirements are not precise, an RFI allows for flexibility and gathers information from potential suppliers, which can later be used to define the requirements better.
A project manager received multiple bids for a time-sensitive project. What is the best course of action to expedite the evaluation?
a.
Conduct an in-depth analysis of each bid
b.
Evaluate bids based on price alone
c.
Interview every bidder
d.
Develop a weighted scoring model
A weighted scoring model allows the project manager to evaluate bids quickly by assigning weights to different criteria. This will enable them to make an informed decision and expedite the evaluation process.
Liza, a project manager, is looking to purchase a standard software for her project. She wishes to compare prices from various vendors. What document should she use?
a.
Purchase Order (PO)
b.
Request for Information (RFI)
c.
Request for Proposal (RFP)
d.
Invitation for Bid (IFB)
For the acquisition of a standard product where the requirements are clearly defined, and price is the major determining factor, IFB is used.
