Request for Quotations (RFQ) is by far one of the most popular methods of procurement used in public procurement.
The RFQ method of procurement is provided for under section 34 of the Public Procurement and Disposal of Public Assets (PPDPA) Act (Cap 22:23), and it entails a process in which the procuring entity solicits at least three competitive quotations for its procurement requirement from reputable suppliers.
The RFQ is a procurement method usually used for small-value purchases of readily available off-the-shelf goods, small-value construction works and small-value services.
Section 25 of the PPDPA Act is pertinent when a procuring entity is deciding on the packages of procurement. Slicing and dicing of tenders must not be done to avoid a particular procurement method that would be applicable in the event the requirements were aggregated.
Section 94 of SI 5 of 2018 actually criminalises such actions. The process is simple; it does not require the preparation of tender documents in the manner required for high valued procurement.
This procurement method is competitive and is advertised in line with Section 17(1) of the Public Procurement and Disposal of Public Assets (PPDPA) (General) Regulations (SI 5 of 2018) by way of a notice board, email and the procuring entity’s website.
There is no limit as to the number of bidders that can participate, subsection 1 of Section 17 of the SI 5 of 2018 provides that quotations may be sourced from as many bidders as practicable and what is specified is the minimum of at least three competitive bidders that should be considered.
Section 10(1) of SI 5 of 2018 provides the thresholds for RFQ method as follows;
Below USD 20 000 for construction works
Below USD 10 000 for goods
Below USD 5 000 for non-consulting services
Procedures for application of the RFQ method
Section 17 of SI 5 of 2018 provides procedures for use of RFQ method. A procuring entity is required to clearly state the requirements in terms of the minimum required quality and quantity of the goods, works and services.
The entity is required to specify the minimum terms and conditions of the contract together with the time delivery is required. This also includes any special requirements such as packages, delivery address or any requirement for reverse logistics.
In addition to specifications and other terms and conditions of the contract, the RFQ must specify the period for which bids are required to be valid and that period is specified to be at least 30 days in line with Section 17(2)(a)(ii) of SI 5 of 2018. Procuring entities are required in line with Section 17(2)(b) of the same regulations, to provide bidders adequate time to prepare and submit their offers. That period, according to the law, is not supposed to be less than three working days.
Each bidder, in line with Section 17(2)(c) of the General Regulations, is only permitted to submit a quotation which may not be altered or negotiated. The procedures for submitted quotations is specified in Section 17(2)(d) of the General Regulations.
The quotations must be:
- i) submitted in sealed envelopes and deposited in a tender box
- ii) the sealed envelope must be deposited in the tender box before the expiry of the bidding period
iii) quotations submitted by e-mail or any other electronic form before the expiry of the bidding period shall be printed by the recipient and deposited in the tender box before the expiry of the bidding period.
At the end of the bidding period, to ensure the integrity of the process, the procuring entity’s procurement management unit and internal audit section or by any senior office appointed by the entity’s accounting officer shall open the tender box.
The quotations taken from the tender box shall be stamped and signed by the officers appointed to preside over the opening.
Quotations received in response to a RFQ are then evaluated for compliance with the specifications and the terms and conditions of supply to establish the quotation that provides the lowest price meeting the delivery and other requirements of the procuring entity in line with Section 17(2)(f) of the General Regulations.
Advantages of using the Request for Quotations method
The procurement cycle is significantly short since the bidding period is only three days.
The method to approach the market is simple.
Disadvantages of using the Request for Quotations method
Where a procuring entity does not follow fully the advertising requirements, the market can be skimmed at the detriment of competition.
Request for quotations are prone to abuse by splitting requirements into smaller sizes in order to justify applying this method of procurement.