In the Sourcing process (search for supplier/vendor/service provider), Procurement staff will be familiar with the following terms and concepts:

  • RFI (Request For Information), ROI (Registration Of Interest), EOI (Expression Of Interest), RFP (Request For Proposal), RFO (Request For Offer), RFQ (Request For Quotation), RFT (Request For Tender), ITT (Invitation to Tender) and ITB (Invitation to Bid)

RFI (Request For Information)

The main function of this document is to obtain information from vendors/suppliers/service providers about their data and business capacity. Usually used for the supplier/vendor registration process into the company's Vendor Management System for future needs.

There is no commitment to make a purchase in this process. When the supplier/vendor sourcing process will be carried out, other appropriate documents will be sent.

ROI (Registration Of Interest)/EOI (Expression Of Interest)

In principle, the same as the RFI above, but this type of document is often used to find out whether the supplier/seller wants to participate in the sourcing for goods/services to be carried out or whether they meet the basic criteria of the process to be carried out. This step is very efficient if according to applicable regulations, the Procurement Department is required to invite all suppliers/vendors registered in the Vendor Management System. With this document, an initial filter can be carried out so that suppliers/sellers who are really interested and pass the basic criteria can be involved.

There is no commitment to make a purchase in this process. When the supplier/vendor sourcing process will be carried out, other appropriate documents will be sent.

RFP (Request For Proposal)/RFO (Request For Offer)

This document is used for the process of finding vendor/supplier, especially in the service sector. No detailed and specific Scope of Work is included due to limited data, information and the ability of user to describe and explain these services. For this reason, with a general Scope of Work, it is expected that the vendor/supplier can submit a proposal that can meet the requirement of the user.

The sourcing process with this document is more flexible than the RFQ/ITT/ITB document (explained later). Users can choose the proposals sent with the desired requirements. In the selection process, in general, quality criteria dominate more than economic criteria. Usually, this process is used to search for professional services (consultants, instructors), software, new technology applications and similar services.

Contractual agreement will generally accommodate the concepts of the bidders, although in the negotiation process these conditions may change.

There is a commitment to purchase the proposed goods/services. However, with certain criteria, conditions, and the proposals received, this process can be used as the first step to create a more detailed and clear Scope of Work, then the actual sourcing process will be carried out with more precise processes and documents.

RFQ (Request For Quotation)

In general, it is used for purchasing goods/services in small scale, and it is only done with one time Purchase/Service Order (Work Order/Services).

The scope of work is well defined and clear. In the selection process, the price criteria are emphasized because in general, the minimum technical and quality criteria will be met by the bidders (bidders).

There is a commitment from the company to buy goods/services

RFT (Request For Tender)/ITT (Invitation to Tender)/ITB (Invitation to Bid)

In general, it is used for the purchase of goods/services on a large, complex scale, with a period of work agreement in which the delivery of goods or the implementation of services is carried out repeatedly. Construction works or projects also use this document.

The scope of work is well defined, detailed and clear. The period of the agreement is explicit. Alternative quantities of goods or scope of services are also explained from the beginning, so that variations in supply must be anticipated and taken into account with clear criteria. Contractual agreement is also included with comprehensible criteria.

In general, bidders are also asked to propose alternatives or processes that can improve work efficiency or the usability of the goods to be purchased. For this reason, the selection process is carried out by combining quality and economic issues. Sometimes, with certain and clear criteria, the quality aspect gets more weight.

There is a commitment from the company to buy goods/services

Sometimes, the model of RFQ and RFT/ITT/ITB document do not differ in application and can be carried out with the same purpose, because it depends on how the company uses the term. In general, these documents are used for the process of selecting a service provider for complex services with a large volume and value of agreement

In the process of selecting suppliers/vendors/service providers, it is important to include the proper documents of agreement that will be used, according to the type of business relationship. In addition, the selection criteria must be clear. Errors or omissions in this process can lead to a protracted process and may result in unexpected additional costs.



The following table can be used as a reference