The answer to this question cannot be folded into one paragraph. To understand the difference between these two terms, you must know what both of them represent. Many people may get confused because they do share a lot of similarities. However, there are some different points that you need to be mindful of.
It is important to learn how to differentiate these two terms and when you can use each one of them. RFI and RFP are very similar abbreviations, and both of them are used in the bidding process, but their essence is different. This is why we are starting by explaining each one of these documents.
What Is an RFI?
An RFI or Request for Information is a document submitted by an investor, where he is, in a formal way, seeking some general information from potential vendors. They represent a more casual document form than an RFP, simply because they are not binding in any way, and there is no template to follow.
RFI is offering a wider image to the investor because they are not a too strict and too formal request - the potential customers are supposed to give their overall opinion about the matter described in the RFI.
The investors, i.e., the potential customer, are supposed to describe the issue they are facing and ask detailed questions where the potential suppliers will have the freedom to express their view of the matter in a wider scope. With an RFP, the vendors usually have a template to fill in to analyze the gathered data better (this is one of the differences that will be explained later in more detail).
An RFI is usually the first step in the process which an RFP and so on later follow. It is supposed to give the investors a better understanding of the current situation on the market. Based on that, they can decide what will their next steps be and in which direction they are moving with the project.
Although all industries can use a request for information, it is most commonly used in the construction industry when the project hits the wall. This can happen if the contractor is missing some crucial information, contradictory information, or technical expertise to form a general opinion of the matter.
What Is an RFP?
An RFP or Request for Proposal is a more formal document than the first one described and of more complex content. Sometimes an RFI is followed by an RFP, but this doesn’t have to be the case all the time. An RFP can be issued as a standalone document.
RFP is used when investors have a clear image of the problem and the solution, so they are looking for someone who can execute that solution and drive them towards the goal. Sometimes, the purpose of an RFP is to find someone who will create a way to reach the objective that has been set.
RFPs go into more detail and share more information with the potential vendor and the whole purchasing process in general. If you are the one who’s issuing the RFP, you can choose between four RFP types - open bid, sealed bid, invited bid, and reverse auction.
If you are the vendor, you will most likely have to write an RFP response, where you will have to state basic information about your company and the solution you are suggesting. This is usually done by following the template given in the RFP itself.
Since RFP responses can be more complex than RFI ones, you will usually have an instruction manual on how to answer some key questions from the RFP and how you are supposed to submit them. Again, this is to ease up the process for the investor, making the proposals easily comparable.
Request for proposal (RFP) is often confused with Request for pricing (RFQ - request for quotation). The abbreviation of the latter term was established to avoid confusion with the request for proposal, so just bear this in mind.
What Are the Main Differences Between RFI and RFP?
Both RFI and RFP share the same starting point - their goal is to inform the public of the issue they are facing and gather information about the possible solution and the company that’s offering that solution. However, four main things differentiate an RFI from an RFP.
The main purpose of an RFI is to collect information about the possible interest sides. This way, the investor is creating a base of potential partners, which they can access to analyze them and find the best fit.
Also, an RFI describes a problem that needs to be solved, so in the bottom line, they are also collecting opinions from various potential partners on that matter. They are not binding, and they are not expecting the vendors to propose a detailed solution - only their personal and objective opinion on whether the problem can be solved and how.
You would normally start this process with an RFI and then issue an RFP because the RFI typically covers more areas than an RFP. An RFI is collecting data about some general topic that doesn’t necessarily have to go into specifics.
On the other hand, an RFP states the exact problem and looks for a solution for that specific issue. Hence, their area of interest is minimal, and no vague questions would be included. As a result, much fewer companies can share their opinions on the topics covered in an RFP.
Once the company gathers some general information from an RFI, they can narrow down their search and issue an RFP to further elaborate and find the solution.
As aforementioned, an RFI is issued when the project is in its early stages or hasn’t even been written yet. Therefore, when you are still thinking about all the major topics your project should cover, issue an RFI is the time.
An RFP is issued later on once you have established a solid ground for your project. This means that you can issue an RFP only once you have defined the problem, made a timeline, set some deadlines, etc.
The last difference between an RFI and RFP is reflected potential in how the potential vendors respond to them. Since the nature of these two documents is very different, and they look for different information, it is natural to think that the responses will be different as well.
A response you will write to the RFI will be less filled with details and more with your general opinion on the topic. The response itself doesn’t have to be connected to the issuer of the RFI in any way - you are supposed to provide an unbiased opinion on the matter.
On the other hand, a response to the RFP must be highly individual and customized to the investor’s needs. This is because the investor is looking for a solution to his specific problem. Therefore, he wants the potential solutions to be tailored to his needs, and how you satisfy these needs will determine the success of the vendor selection process.
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