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eQuote/RFQ v. RFP?
What's the difference - I want it now!
by Donna Bertrand
Procurement is perceived as a great black hole in governmental agencies. The end-user requests a product or service; sends a requisition/AGS to the buyer; and then the nightmare for the end-user begins. Questions, and more questions – What exactly do you want? When do you want it? Can this item be substituted instead? It seems easier to use the yellow pages and call a few vendors yourself and get the best price. However, State Law prohibits a casual approach to buying.
When products or services costing $5,000 or more in a fiscal year are purchased from one or more vendor for the same or related service, a formal (documented, auditable) process must be conducted in order to provide evidence, if challenged, that the process was fair and reasonable. Maintaining integrity and a level playing field for all vendors is the goal of this process. It avoids the appearance of cronyism and favoritism.
RFQs and RFPs are the most commonly used solicitation methods. Understanding these processes will hopefully defuse the mystery of government procurement and shrink the "Black Hole".
Request for Quotes (RFQ) has been considered the preferred method for soliciting goods and services by government for many years. The trend is beginning to change towards obtaining the "best value" instead of the lowest price. With RFQs, qualified vendors are selected based on the lowest quote offered, if they meet all the qualifications and requirements stated in the bid, including satisfactory reference checks, financial standing and on-site visits, if applicable. It is typically used when the agency has clearly defined, precise requirements for the scope of work or commodity being purchased. Consequently, pricing is the only factor that the buyer would need to evaluate. Processing time for an RFQ is dependant on the estimated value of the purchase, which determines the length of time a solicitation must be posted for public notice.
An eQuote is an electronic version of a Request for Quote (RFQ). DOAS requires use of the eQuote system for purchases that do not exceed $100,000. eQuotes are recommended for simple, straightforward, open market purchases, where the product or service requirements are easily defined.
Currently, State agencies must submit RFQs of $100,000 or more to the Department of Administrative Services (DOAS) – State Purchasing Division for approval. Beginning July 2009, State agencies and universities will have unlimited authority to independently conduct RFQ solicitations. This increased delegation is contingent on continued purchasing staff attendance at State purchasing classes leading to a certification. Solicitations valued above our delegated purchasing authority are issued and awarded by DOAS. This approval process can prolong the solicitation by three to six weeks.
Request for Proposals (RFP), is one method for obtaining “best value”. It seeks to obtain the creativity and knowledge of business organizations to solve a unique problem. The most qualified vendor is selected by using a combination of lowest cost and best proposed solution. DOAS recommends that agencies use an RFP “if the project does not lend itself to the creation of a clear and accurate Statement of Work and the objective of the solicitation is to identify a vendor who can offer the best possible solution to your problem at the most reasonable cost”. All RFPs must be approved, issued and awarded by DOAS – State Purchasing Division, unless the authority is delegated to the University. Currently, delegation is issued on a case by case basis, upon request. DOAS has advised that, effective 7/1/09, all agencies/institutions will have the authority to issue RFP’s up to $250,000 and as purchasing staff become certified by the State/DOAS, this delegation will increase to $500,000.
On average, per DOAS, a Request for Proposal takes seven months to complete. Therefore, early planning is advisable since the seven month timeline is based on every step going according to plan, without any hiccups. This is rarely the case. It’s important as the new fiscal year begins that planning for complex projects begin in July if they are to be awarded in Fiscal Year 2010.
Liaise with John Kreeger, Procurement Manager at jkreeger@kennesaw.edu or 770-420-4347 regarding RFP development. Procurement is using Microsoft Project Management software to track projects. These schedules will be published on the Financial Services/Business Services website in order for the campus to see the status of each project/RFP.
Editor's Note: Update & Reprint of a September 2008 Article.
by Donna Bertrand
For the month of May, Procurement issued 140 purchase orders totaling approximately $2.5 million, of which 50 percent were on existing contracts.
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