An RFQ or Request for Quotation is a standard business document which is involved in the buying and selling process usually involving public contracts and governmental offices. This is a standard process where the seller is inviting suppliers to send in their quotations as part of a bidding procedure.
In some sectors, the RFQ is known as the IFB or Initiation for Bid which basically means the same thing. RFQs are usually involved in public contracts as it is a way to prove that the awarding of the contract is transparent and to overcome any instances of fraud. In this context, companies in the private sector carry out such practices for the same reason as well.
The RFQ is a very detailed document where it contains information like terms of payment, quality, duration and all other related information. The most important pieces of information here would be the price of the product or service which is being offered where it would usually be the determining factor of who wins the tender.
Before the RFQ is issued by the supplier, the buyer will usually advertise the exact specifications and requirements of what is needed. This is to ensure that the RFQ from all the bidders are standardized and consistent. In some cases, the exact quality and brand of product is named. Once the RFQs are received, the evaluation panel will look into all the submitted tenders and the project will be awarded to the one that offers the best pricing (usually lowest) and fulfilling the requirements stipulated.