RFQ vs RFP vs purchase order: what is the difference?

Compare the three documents

The choice depends on how clearly the requirement is defined and what decision remains to be made. This comparison is a practical guide rather than a substitute for your organisation's procurement policy.

Use an RFQ when the requirement is defined

When the buyer can specify the part, quantity and delivery requirement, an RFQ helps gather offers against a consistent scope. Suppliers may still identify deviations or offer different pack sizes. Those differences need review before prices are compared.

Include enough detail for suppliers to price the same thing: specification and revision, quantity and unit, destination, required date and charges. State what information is needed in the response.

Use an RFP when the approach is part of the answer

An RFP can be useful when the buyer knows the outcome but wants suppliers to propose how to achieve it. Responses may vary in design, delivery approach, service scope and price. Evaluation therefore needs to consider more than a single unit cost.

For example, a business seeking a new workshop extraction system might describe the operating need and constraints, then ask suppliers for proposed equipment, installation and support. It should define the evaluation criteria and review responsibilities before inviting responses.

Use a purchase order after the buying decision

A purchase order identifies what the buyer intends to order, typically including supplier, items, quantities, prices, delivery details and applicable terms. Whether and when it creates a binding contract depends on the terms and circumstances; do not assume every organisation's process is identical.

A draft PO is not the same as an approved and issued order. Keep the review, approval, issue and receiving stages distinct. This helps prevent a draft appearing to be a supplier commitment.

Putting the documents in sequence

For a specified component, a team may send an RFQ, compare the responses, approve a choice and issue a PO. For a more open problem, it may start with an RFP instead. Some straightforward purchases follow a different process entirely; internal policy and applicable obligations determine the route.

Recon's development build supports local RFQ preparation, quotation capture and controlled draft purchasing. It does not send RFQs automatically, and it should not be assumed to provide a general RFP management module.

Avoid common handover errors

One common error is treating a quotation as an order. A supplier's price response is evidence for a decision; it does not necessarily mean the buyer has placed an order. Conversely, an internally drafted PO should not be described as issued until the organisation's approval and issue steps have actually taken place.

Another error is to compare an RFP response as if it were only a price list. When suppliers propose different approaches, record what each offer includes, any assumptions, exclusions, responsibilities and the evaluation criteria. A lower headline price may cover less work or require a different implementation approach.

Use references that make the chain easy to follow: requirement, enquiry or proposal, decision and order. The actual terms, acceptance and approval requirements depend on the transaction and the parties' agreements. Ask an appropriately qualified adviser when the contractual position matters.

Worked example: a fixture for a machining job

Imagine that a workshop already has an approved drawing for a standard fixture plate and knows the required material and quantity. It can ask suppliers for a quotation against that defined specification. The buyer compares compliant responses, checks delivery and freight, and proposes a supplier for approval.

Now imagine a different job where the workshop needs a complete holding solution but has not decided how the fixture should work. A request for proposal can describe the outcome, workpiece constraints and evaluation criteria, while asking suppliers to explain their design approach. Responses may not be directly comparable by unit price because the proposed scopes differ.

After the applicable technical and commercial reviews, the buyer prepares an order for the selected scope. The purchase order should identify the supplier, agreed items or services, quantity, delivery details and applicable terms. Internal approval and issue are separate from simply creating a draft.

Neither example dictates your purchasing policy. Public-sector and private-sector procedures can differ, and terms such as RFQ, RFP and invitation to tender may be used differently. Check the instructions and contractual terms that apply to the actual purchase.

Frequently asked questions

Further reading

• Government Commercial Agency: request for proposal glossary