Request for Quotation (RFQ)

A Request for Quotation (RFQ) is a streamlined procurement method used for lower-value purchases where the full open tender process would be disproportionate. The government contacts a limited number of suppliers, requests price quotes for defined goods or services, and awards to the lowest quoted price.

What is an RFQ in government procurement?

Under GFR 2017, purchases between Rs 25,000 and Rs 2.5 lakh are to be made by obtaining quotations from at least three suppliers, this is the classic RFQ scenario. For amounts just above this range (up to Rs 25 lakh), a limited tender invitation to at least three known vendors serves a similar purpose.

An RFQ is simpler than a Notice Inviting Tender: there is no mandatory newspaper publication, no requirement for DSC-based e-portal submission, no EMD, and no two-cover system. The buyer prepares a brief description of the requirement, specifies delivery terms, and sends it to a shortlist of capable suppliers by email, letter, or in person. Suppliers return their quotes by a specified deadline. The buyer awards to the L1 (lowest) quoter, subject to the quote being reasonable.

On GeM, the RFQ concept is built into the platform for purchases between Rs 25,000 and Rs 5 lakh: the system automatically selects three sellers from the category, requests quotes, and the buyer can award to the lowest. This is GeM's formal RFQ mechanism and has replaced the manual three-quotation process for goods available on the platform.

For goods or services not on GeM, departments still use manual RFQs. The Central Vigilance Commission has cautioned against splitting requirements to keep them within the RFQ threshold, a practice that attracts audit scrutiny.

Why it matters for bidders

RFQs represent a significant volume of government spending that is largely invisible on public portals. If a buyer does not find your firm on their list of known suppliers, you will not receive the RFQ in the first place. Vendor registration with government departments, empanelment on approved lists, and active GeM catalogue listing are the routes to being in the RFQ pool.

GeM's structured RFQ mechanism is transparent: sellers registered in the relevant category are eligible to be system-selected. Keeping your GeM catalogue updated with accurate specifications, competitive pricing, and valid certifications ensures you remain a credible candidate when the system selects three sellers for an RFQ.

For non-GeM RFQs, building and maintaining relationships with purchase officers in your target departments is the practical route to being included.

Example

A district collector's office needs 50 office chairs worth approximately Rs 80,000. Since the amount is below Rs 2.5 lakh and the item is available on GeM, the purchase officer uses GeM's RFQ tool. The system selects three registered sellers. Each submits their quoted price within 48 hours. The seller quoting Rs 1,450 per chair (total Rs 72,500) is lowest and receives the purchase order directly through GeM.

Key rules / thresholds

• Up to Rs 25,000: direct purchase from local market permitted (GFR Rule 144), no quotation required.
• Rs 25,000 to Rs 2.5 lakh: minimum three quotations required (GFR Rule 145).
• Above Rs 2.5 lakh: open tender (NIT) is required (GFR Rule 146), making the RFQ route unavailable unless the competent authority approves limited tender with documented reasons.
• Splitting of requirements to stay within RFQ thresholds is prohibited and is a common subject of CVC audit observations.