RFQ What is that?
RFQ stands for "Request for Quotation". It is a management technique which is used for purchasing items and services where there is significant usage by the enterprise. This technique should be introduced on an experimental basis. The process is designed to expand the number number of potential vendors to the enterprise. All existing vendors should be formally notified of the fact that your enterprise is trying a new purchasing process and they will be a part of this trial.
Potential vendors and existing vendors are provided, in writing, with the specific nature of the item or services to be purchased. The length time of the agreement with the provider should be specified. The agreement should be of 18 to 24 months in duration. A copy of the proposed agreement should be provided to quoting organization. An appropriate time to prepare the response by the potential vendors should be provided. It is a good practice to informally advise existing that you will be beginning the new program as of a certain date, This can be done in person before the information is made public. The same process should be followed when the formal invitation to bid documents are ready to be sent to potential vendors.
The introduction of this process normally results in a small to medium size reduction of cost to the enterprise which uses it. In some instances, large savings are afforded.
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