Negotiation Types

RFI

RFIs are used to qualify suppliers and their goods and services for subsequent procurement activities. RFIs are used more for gathering information on the goods and service provided by a supplier than related to a particular price information. Therefore, RFIs typically don’t make reference to item price or quantity.

RFIs identify important item criteria on which the buyer needs information. The supplier responds by answering the buyer’s questions. The buyer uses supplier responses to identify the group of suppliers who should be included in the subsequent negotiation. RFIs can be (and typically are) taken to multiple rounds until the buyer has enough information to identify supplier(s) with which to deal. At the conclusion of the RFI cycle, the information contained in the RFI can be copied into an RFQ or buyer’s auction.

RFQ

RFQ is a document that an organization submits to one or more potential suppliers eliciting quotations for a product or service.

RFQs enable buyers to collect quotes from suppliers for complex and hard to define items or services, such as made-to-order manufacturing or construction projects. The RFQ process is generally the longest of the negotiation processes.

After the suppliers have submitted an initial round of proposals (quotes), the buyer has the power to fine tune the RFQ and initiate detailed negotiations, as necessary. This process may go through multiple rounds of negotiations and quotes.

RFQs can be blind (buyer can see the quotes during the RFQ, but suppliers can’t) or sealed (neither buyer nor suppliers can see the quotes until the RFQ is closed and the quotes are unsealed), so suppliers can never see each other’s quotes while the negotiation is in progress.

Auction

A type of negotiation where suppliers can place competitive bids within a designated time frame.

Auctions enable buyers to solicit bids for goods and services that are clearly defined, such as office furniture or memory chips. Buyers can discover new suppliers or buyers and get competitive pricing or improved service. Buyers can tailor each auction to control who can see bids during the auction, whether multiple rounds of bidding are possible, and whether partial bids are allowed.

Many different items can be included in an auction. If permitted by the buyer, suppliers can view all bids submitted while the auction is open. This information generates competition and encourages suppliers to submit their best possible price. After the auction is completed, suppliers are immediately notified of the auction results through online notifications.

The table lists the features’ matrix in relation with the negotiation types. Based on your feature requirements, you can select the required negotiation type.

Features	RFI	RFQ	Auction
Restrict supplier participation	Supported	Supported	Supported
Two-stage RFQ	Not Supported	Supported	Not Supported
Autoextend	Not Supported	Not Supported	Supported
Prebid submissions	Not Supported	Supported	Supported
Large negotiation	Supported	Supported	Supported
Staggered closing	Not Supported	Not Supported	Supported
Proxy bidding	Not Supported	Not Supported	Supported
Mass price reduction	Not Supported	Supported	Supported
Monitor negotiation	Not Supported	Supported	Supported