Bidding for government contracts is a tricky but lucrative game. The competition is steep, and the qualifications you need just to vie for a government contract are very strict.
As of 2009, despite there being over 20 million businesses in the U.S. only around 500,000 companies are in a position to compete for a government contract. If your business is qualified to compete for a federal project, you could come away a billionaire. Or you could come away with nothing at all.
To best increase your odds, you have to understand the game. And most of all, you have to know the difference between RFQ vs. RFP, or Request for Quotation or Qualifications vs. Request for Proposal.
What is an RFQ?
RFQ can stand for two things: Request for Qualifications or Request for Quotation.
If a government agency sends out a Request for Qualification, they’re looking for specific information about a bidding company’s track record. For example, if a government agency is looking to buy and install new server towers for a large database, they’ll send out an RFQ looking for tech companies to respond. These tech companies will then provide details about their companies’ expertise, explaining why they’d be best for the job.
This is just a way to pre-screen companies before asking for a quote.
A Request for Quotation is a bit more straightforward. This kind of RFQ is asked for by a government agency when they’re looking for the simple procurement of products. This type of stuff won’t vary by a large degree from company to company.
For example, if a government office was looking to buy large amounts of printer paper, they’d send out a simple RFQ. Here, the qualifications of a company don’t matter as much because printer paper is more-or-less the same regardless of the provider.
What is an RFP?
An RFP, or Request for Proposal is perhaps the most complicated of the bunch. RFP’s are typically sent out when a government agency is looking to contract work for a large-scale project. Because of the scale, the companies providing the service or building the final product will approach them in radically different ways, leading to a radically different final product or service.
For example, if the U.S. government wanted to build a new airport, they’d send out an RFP. In this RFP, a bidding contractor would provide a detailed plan for the project. This plan would include initial schematics and blueprints of the airport, timelines for completion, as well as a detailed explanation regarding the company’s qualifications for the project.
RFPs are difficult to master but to compete with the top earners in government contracts, your RFP needs to be spectacular. To read more about how to write a good RFP, check our other blog post on this topic.
RFQ vs. RFP: The Bottom Line
When determining the difference between an RFQ vs. RFP, the best method may be to just consider the scope of the contract being offered. If it’s an enormous project, it’s most likely an RFP. If you’d just be providing materials for a government agency, it’s most likely an RFQ.
If you have any more questions about the procurement process, or about how we can help you find attainable government bids, check out our FAQ.