Construction RFP vs RFI vs RFQ: What’s the Difference?
The construction industry involves many different types of projects that include residential, commercial, municipal, and government projects. Due to the complexities surrounding the construction of any building, there are some guidelines that must be followed if you want the project to be completed without issue. For instance, subcontractors will need to follow the building plans precisely to make sure that the completed structure passes inspection.
During the construction process, there are three types of requests that you might need to make, which include a request for proposal, a request for information, and a request for quotation. Understanding the differences between these requests should help you avoid making mistakes. Before construction begins, it’s also important that you obtain the permitting that’s necessary for this process.
Request for Proposal (RFP)
A standard building permit must be obtained before you can even begin development on the building in question. If you want this permit to be given to you, the first step in this process involves applying for a permit with the LADBS. Keep in mind that building plans must be submitted alongside the application to ensure that the proposed structure adheres to local building codes. Most sizable construction projects will also require separate electrical, mechanical, and plumbing permits. This article takes a closer look at the differences between the three requests that are made in most construction projects.
A request for proposal is a standard business document that’s used to announce and detail a project along with soliciting bids from reputable contractors to take on the project.
Many construction projects will begin with a request for proposal, which is necessary before hiring contractors and subcontractors. When you write an RFP, you will be directly responsible for assessing each bid to determine how feasible it is. The bidder’s expertise as well as the financial health of the company must be taken into account before deciding which contractor will win the bid.
Because an RFP includes a comprehensive explanation of what the project will entail, the construction companies that bid on the project will be able to provide clear answers that accommodate every facet of the guidelines listed in the RFP. While an RFP isn’t used for every construction project, the majority of complex construction projects that depend on subcontractors will submit these requests. Keep in mind that this type of request outlines the tasks that the contractors are expected to complete as well as the estimated project timeline.
Examples of an RFP in Construction
A request for proposal has several different uses within the construction industry. However, the main reason to submit an RFP is when you’re beginning a construction project and want prospective contractors to submit proposals on how they will reach the goals that you’ve laid out. You can then review submissions from contractors to determine which one is right for the job. Most developers aim to select a contractor with the best understanding of the project. You shouldn’t always choose the contractor with the lowest bid.
Construction RFP Best Practices
If an RFP is necessary for your construction project, there are some tips and best practices you should adhere to when formulating an effective RFP. Make sure that you:
- Include due dates for submissions
- Provide a sample contract with project documents, legal terms, and insurance info
- Consider requesting input from contractors on onsite utility requirements, equipment requirements, and storage requirements
- Provide all project documents for review
- Request expected timeline and duration from contractors
Request for Information (RFI)
A request for information is a document designed to seek clarification from vendors on specifications, agreements, drawings, and plans in order to close information gaps in the primary construction documents.
Even though the process of submitting an RFI and obtaining an answer is supposed to be straightforward, these requests usually add delays to project timelines. It’s even possible for lengthy conflicts and serious legal claims to arise from these requests. Because of the problems that can occur from a request for information, it’s important that everyone involved in the construction process understands what an RFI is and how to use one.
Once a request for information is made, the developer or contractor who responds to this request should provide a thorough and prompt response to make sure that delays don’t occur. Answering these requests quickly also means that subcontractors won’t make mistakes when constructing the building. There are three reasons that a request for information is made, which include:
- When someone suggests an alteration or substitution
- When someone notes a deficiency or problem
- When someone requires additional clarification or information
Examples of an RFI in Construction
When working on a construction project of any size, there are a couple of reasons why you might want to create and submit an RFI. One example of a request for information occurs during the bidding process. A contractor could submit a request for information to obtain clarity on some of the project details before they submit a bid. Another example that’s much more common is when a contractor wants clarification on a specification or drawing.
Construction RFI Best Practices
While an RFI isn’t exactly difficult to write, there are some tips and guidelines that you should follow if you want your submission of this document to produce the intended result. It’s highly recommended that you:
- Outline RFI procedures in the contracts you provide
- Manage these requests with digital tools
- Categorize these requests by their importance
Request for Quotation (RFQ)
A request for quotation is used to obtain pricing information from vendors and subcontractors that are capable of fulfilling specific needs.
These requests can be made to different people and companies. Along with making this request to contractors and subcontractors, you can also send requests to vendors that supply materials. With this request, the information you gain should help you better estimate total project costs.
Keep in mind that some of the responses you obtain from contractors or vendors could come with time limits. Let’s say that you submit a request for quotation to a vendor that’s set to provide you with roofing materials. These materials can quickly shift in price, which is why many vendors will use time limits when providing quotes. In many cases, the quotes you receive will be legally binding.
Examples of an RFQ in Construction
Although not used as often as an RFP or RFI, a request for quotation can be submitted for several reasons, the primary of which is when you want to know the price of a specific material. Some of the items that are commonly placed in a request for quotation include:
- Safety provisions
- Fasteners and hardware
- Raw building materials, which can include everything from masonry to lumber
Construction RFQ Best Practices
If you need to make an RFQ for your construction project, it’s highly recommended that you stick to some of the recognized best practices for creating this document. These requests are relatively straightforward, which means that it’s difficult to make a costly mistake. A few best practices to keep in mind include:
- Consider providing vendors with product data sheets that they can reference if you’re requesting pricing information on a specific item or product.
- You should always include quantities when writing an RFQ form. Keep in mind that larger item quantities could result in lower prices per item.
- Make sure that the lead time and delivery costs are identified in the request.
RFP vs. RFI vs. RFQ: Conclusion
Even though all three of the aforementioned requests are regularly used in construction projects of all shapes and sizes, they are considerably different from one another. A request for proposal is typically sent out when you want to obtain bids for a construction project that’s about to begin. These bids can help you determine which contractors and subcontractors may be right for the job.
As for an RFI, requests for information are exceedingly common in larger construction projects that involve numerous subcontractors. If an aspect of the building plans are unclear, a subcontractor may make a request for information to reduce the likelihood that they make a mistake during the construction process. If you’re the main developer or project lead, you will likely receive numerous requests for information throughout the construction phase, all of which should be answered promptly.
Even though a request for quotation is simpler than the other two documents, obtaining a response can be highly important when seeking to purchase materials. If you need help with any of the above for your next construction project, feel free to contact Crest Real Estate. We can guide you through the permitting process and help manage the entire project.
Jason Somers, President & Founder of Crest Real Estate
With over 15 years of professional experience in the Los Angeles luxury real estate market, Jason Somers has the background, judgement and track record to provide an unparalleled level of real estate services. His widespread knowledge helps clients identify and acquire income producing properties and value-ad development opportunities.
Learn more about Jason Somers or contact us.