RFP vs RFQ: What’s the Difference and When to Use Each?

‍Have you ever paused to ask, What’s the real difference between RFP vs RFQ? 

Many vendors and bid teams mix them up, resulting in wasted time and missed deals. In U.S. businesses, inefficient procurement systems cost an estimated $1.5 billion annually due to slow or mismatched procurement methods. 

Misapplying RFQs when a complex solution needs an RFP or vice versa can hurt bid quality and lead to rejection. This confusion fuels inefficiencies in both procurement and sales cycles. Knowing when to use an RFP vs RFQ helps teams respond correctly and saves time. 

This guide clarifies the key differences, shows when each process works best, and explains how decision-makers can align procurement and sales efforts more effectively.

Key Takeaways

• RFPs seek detailed solutions and assess vendor proficiency, while RFQs focus on pricing.
• Knowing RFP vs RFQ differences helps bid managers qualify opportunities better.
• RFPs suit complex projects like software implementation or system integration.
• RFQs work best for standardized products with clear specifications.
• Understanding both improves proposal quality, resource planning, and win rates.

What is an RFP?

An RFP, or Request for Proposal, is a document sent by companies to gather detailed proposals from vendors. It asks vendors to explain how they will deliver a service or solution along with pricing, approach, and expertize.

Companies use RFPs when they need complex solutions. For example, a healthcare provider needing a new patient data system sends an RFP to shortlist the best software vendors. The RFP details all technical, security, and integration needs so vendors can draft customized responses.

In tech, an RFP might ask for a cloud migration plan. In government, it could seek bids for city-wide Wi-Fi. RFPs help buyers assess vendors not just on cost but also on quality, process, and fit.

Also Read: Top RFP Software Features That Maximize ROI

Understanding RFPs sets the stage to differentiate them from RFQs and respond with precision.

What is an RFQ?

An RFQ, or Request for Quotation, is a document used to ask vendors for exact pricing on specific products or services. It focuses only on cost and delivery terms, without detailed solution proposals.

Companies use RFQs when they know exactly what they want. For example, a hospital needing 500 units of a standard syringe sends an RFQ to suppliers to get the best price and delivery time. In tech, an RFQ might ask for bulk hardware pricing. In government, it could request quotes for office supplies.

RFQs are short, direct, and compare vendors mainly on cost. Unlike RFPs, they do not evaluate detailed approaches or solutions.

Understanding RFQs helps bid teams respond with accurate pricing and fulfill buyer expectations confidently before comparing them with RFPs in detail.

RFP vs RFQ: 10 Key Differences

Many vendors respond to bids without fully understanding the difference between an RFP and an RFQ. This confusion leads to missed opportunities, wasted resources, and lower win rates. Knowing the difference helps bid managers prepare the right type of response and prioritize efforts effectively.

Here is a clear comparison to guide your decisions:

Understanding these differences ensures your bid team prepares accurate, competitive, and customized responses that meet buyer expectations.

Now, let’s understand when bid managers should choose between RFP and RFQ.

How Understanding RFP vs RFQ Helps Bid Managers?

Bid managers must know the difference between RFP vs RFQ to guide their teams effectively. It ensures they qualify opportunities correctly, plan resources better, and build strong win strategies. When bid teams know what buyers need, they submit accurate, confident responses that build buyer trust.

Knowing which to use ensures fewer wasted hours on bids that don't match business goals. It also allows proposal teams to focus on opportunities with higher chances of winning.

When to Use an RFP?

Use an RFP when:

• The buyer needs a complex solution or service.
• The buyer seeks to compare vendor approaches and capabilities.
• The project involves integration with existing systems.
• Buyers want to assess technical background and value addition.
• Buyers require detailed implementation plans and methodologies.

For example, a hospital choosing an AI-based patient management system issues an RFP to assess solution fit, integration methods, and vendor skills before awarding the contract.

For more information, read our blog here: RFP Automation Checklist for Sales Success

When to Use an RFQ?

Use an RFQ when:

• The buyer knows exactly what product or service is needed.
• The requirement is standardized with fixed specifications.
• Buyers seek competitive pricing and faster procurement.
• The decision is price-driven with minimal evaluation of the approach.
• The goods or services are simple and repeat purchases.

For example, a hospital buying bulk gloves or syringes issues an RFQ to multiple suppliers to get the best price and delivery terms without needing detailed proposals.

Understanding when to use RFPs or RFQs helps bid managers qualify opportunities, save time, and guide their teams with confidence towards better win rates. But how to write an effective response? Let's find out.

How to Write Effective Responses for RFQ and RFP?

Responding to an RFQ  or RFP is more than filling out forms. Powerful responses showcase understanding, proficiency, and value. Here’s a practical, detailed example to illustrate these principles:

Example: RFP Response for Hospital IT System Upgrade

Scenario: A hospital issues an RFP seeking a vendor to upgrade its electronic health record (EHR) system, with requirements around security, integration with existing systems, staff training, and ongoing technical support.

Step 1: Understand the Requirements

What to do: Thoroughly review the RFP to capture key technical specifications (e.g., data encryption standards, interoperability needs, compliance with healthcare regulations like HIPAA), integration requirements, training expectations, and support needs.

How to respond: Our proposed solution complies with HIPAA standards, ensuring 256-bit AES encryption for all patient records. We have supported smooth integration with lab and pharmacy systems for three major hospitals in the past year alone.

Step 2: Demonstrate Fit and Expertize

What to do: Reference relevant projects. Highlight industry certifications or specialized team experience.

How to respond: Our dedicated healthcare IT team holds certifications in both HL7 and FHIR integration protocols. Recently, we completed an EHR migration at ABC Medical Center, reducing patient record retrieval times by 30% and earning client commendation.

Step 3: Be Specific and Transparent

What to do: Lay out a clear timeline and cost breakdown. Address potential risks and your mitigation strategies.

How to respond:

• Phase 1 (Weeks 1–4): Requirement gathering and data mapping
• Phase 2 (Weeks 5–10): System configuration and pilot testing
• Phase 3 (Weeks 11–14): Full rollout and staff training. 
• Total project cost: $200,000, inclusive of three-year support. We proactively schedule system backups and disaster recovery drills to minimize downtime risk.

Step 4: Highlight Value, Not Just Cost

What to do: Explain your approach’s unique advantages.

How to respond: In addition to upgrading your EHR, our system includes predictive analytics to identify high-risk patients, improving care outcomes and operational efficiency.

Step 5: Personalize Every Proposal

What to do: Reference the client’s specific needs and context.

How to respond: We recognize your hospital’s recent focus on telemedicine. Our platform integrates secure video consultations, aligning with your digital health initiatives and supporting remote patient care.

By creating responses that are customized, concrete, and client-focused, vendors address every item in the RFP and demonstrate professionalism, build trust, and significantly improve their chances of winning the contract. Now, let’s discuss how Inventive AI helps sellers with top-notch RFP responses.

How Inventive AI Supports Better RFP Responses?

Once you understand whether to use an RFP or RFQ, tools like Inventive AI can accelerate your proposal responses—especially for RFPs. 

It drafts responses faster, manages content in one place, and ensures every proposal reflects accurate and updated information.

Here is how Inventive AI helps bid managers and sales teams:

• Faster draft creation (10x): Inventive AI’s proprietary AI system drafts first responses 10 times faster than manual processes. It gives bid teams more time for reviews and strategic refinements.
• Single hub for knowledge: All your knowledge sources are stored in one central hub. Upload previous RFPs, integrate Google Drive or SharePoint, and access updated content instantly.
• Fighting stale content with an AI content manager: Its AI Content Manager flags outdated or conflicting information, ensuring only current, relevant content is used in responses to avoid compliance errors.
• Win Themes for higher proposal conversion: Inventive AI analyses RFPs to identify content gaps and builds winning themes by gathering information from Slack, emails, and calls, improving proposal conversion rates.
• AI agents enhancing productivity and competitive edge: Built-in AI agents support research, draft improvements, and competitor insights, giving your team a sharper competitive edge. 
• Here is what our client say about our product:
• Future of RFP/RFI/security questionnaire responses! Saves our team a ton of time.
• Lots of great features. User experience is extremely intuitive and the team is very responsive.
• - Ben Hou, Head of Solutions at Outreach

Conclusion

RFP vs RFQ decisions shape how vendors prepare their bids and win deals. RFPs seek detailed solutions and expertize, while RFQs focus only on pricing for defined products or services. Knowing the difference helps bid managers qualify opportunities better, plan resources wisely, and build confident win strategies.

Using Inventive AI’s AI RFP Agent makes responding easier and faster. Its AI-powered RFP response software automates draft creation, manages content updates, and improves proposal quality. AI RFP Automation ensures teams spend less time on repetitive work and focus more on strategic win themes and building strong client relationships.

Frequently Asked Questions

1. What is the main difference between an RFP and an RFQ?

An RFP asks vendors for detailed solutions, approaches, and pricing for complex needs. An RFQ asks vendors for exact prices on known products or services with set specifications. RFPs evaluate capability and fit, while RFQs focus mainly on cost comparisons.

2. Can a company use both RFP and RFQ together?

Yes. Companies often use an RFI to gather information, then issue an RFP for detailed proposals, and finally an RFQ to get exact pricing from shortlisted vendors. This structured approach ensures quality solutions at competitive prices.

3. Which is better for software procurement: RFP or RFQ?

For software procurement, RFP is better as it assesses vendor capability, integration approach, support, and security compliance. RFQ suits standardized off-the-shelf software with fixed specifications where price is the main decision factor.

4. How does understanding RFP vs RFQ improve bid outcomes?

It helps bid managers qualify bids correctly, draft responses aligned with buyer needs, plan resources effectively, and focus only on opportunities they can win. This avoids wasted effort on bids that don’t match business capabilities.

5. Does Inventive AI support RFQ responses?

Inventive AI focuses on helping vendors respond to RFPs efficiently with faster drafts, updated content, and AI-based strategy support. It is not built for managing simple RFQ responses that only require price quotes.