We will now take off from where we stopped in Part One, the previous week.
Invitation to Tender (ITT)
An invitation to tender (ITT) is the initial step in competitive tendering, in which suppliers and contractors are invited to provide offers for supply or service contracts, the ITT is one process in IT procurement.
An ITT document specifies all requirements of the organization, including goods, services and timelines, as well as the evaluation process that will be followed. Invitations to tender are often used by public sector organizations, which are legally obligated to offer contracts for goods or service requirements by that process in many countries.
Invitation to Bid (ITB)
An invitation to bid, also called an invitation for bid or sealed bid, is a call to contractors to submit a proposal on a project for a specific product or service. It is usually for requirements over $100,000. While an ITB is very similar to an RFP (request for proposal), it is concerned with the pricing more so than the conceptual ideas of the project. Similar to all other types of bids, an invitation to bid is generally awarded to the contractor who submits the lowest bid.
Keep in mind, though, that this isn’t always the case. There are other factors that come into play, such as the quality of products or expertise needed to carry out a certain project.
Request for Quotation (RFQ)
A Request for Quotation (RFQ) is a standard business process used to invite suppliers to participate in the bidding process for specific products or services. It is a document that is created in order to obtain detailed pricing information.
An RFQ is typically the final document created to solicit cost information from a supplier for particular products or services. The RFQ should be completed after some level of due diligence has been met. Experts recommend that it be produced following the completion of a Request for Proposal (RFP).
For example, RFQs are typically used following the buying company’s determination that all work-related issues and questions have been answered to its satisfaction. It knows the precise requirements of the requested services and products, and whether the provider meets financial, professional and capacity-related concerns.
Request for Proposals (FRP)
What is a ‘Request for Proposal – RFP’
A request for proposal (RFP) is a type of bidding solicitation in which a company or organization announces that funding is available for a particular project or program, and companies can place bids for the project’s completion. It outlines the bidding process and contract terms, and provides guidance on how the bid should be formatted and presented. A request for proposal for a specific program may require the company to review the bids to not only examine their feasibility but also the health of the bidding company and the ability of the bidder to actually do what is proposed.
A request for proposal typically includes background on the issuing organization and its line of business. The request sets out specifications describing the solution it seeks and evaluation criteria disclosing how proposals are graded. Requests for proposals may include a statement of work describing tasks to be performed by the winning bidder and a timeline for providing finished work.
What is the difference between an RFP and an RFQ?
Similar requests include a request for quotation (RFQ), whereby the vendor may simply be looking for a price quote, and a request for information (RFI), where the customer needs more information from vendors before submitting an RFP. An RFI is typically followed by an RFP or RFQ.