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How to prepare an effective request for quotation in software development

Published on 
August 7, 2020
Danil Vilkhovskiy

The request for quotation (RFQ) can be regarded both as a procedure of choosing a vendor for a software project and a paper that contains an invitation to bid. For software outsourcing companies, it stays as a formal ask «What will be the price if I handle over my software project to you?». Here, we will guide you on how to write an effective RFQ.

Why do you need to prepare an RFQ

First of all, it is worth to mention, in software development an RFQ is not only for big companies with formalized business processes and the cost as the main deciding factor. This request serves well for small or medium-sized businesses and is suitable even if you go to a freelance platform with your software project.A good RFQ hits two goals simultaneously:

  • First, it gives software development companies a clear understanding of your needs and requirements, both considering a solution you target for and terms and conditions of your partnership
  • Second, it acts as a tool to filter inappropriate vendors and provides you with a tool for comparison

However, note a request for quotation is not a counterpart of a request for proposal (RFP), where software development outsourcers shall provide more details regarding the solution you need, including feasibility study and technical research.

What items to include in an RFQ

As every formalized paper, a request for quotation has its structure. To clarify, this enables to organize information in the most readable way. Moreover, this enables you to use RFQ templates and examples and easily adapt them to your exact project.


The aim of this section is to give a brief company background and describe your business environment and the challenges you need to overcome. For example, mention the industry your company operates in, why do you need this software.

Project overview

Here, you give a brief explanation of what software you need to have developed. Set your project goals and end-users here as well. For example, if you need a CRM system, this is the right place to denote it.

Project description in details

In this section, you need to describe what functionalities and features the product must have. In other words, here you provide user stories to implement in the solution. For example, for a CRM system, you may start with briefing negotiating, corresponding, notification, user interaction facilities. Then, you need to disclose each of these functionalities so that your outsourced developers have a complete picture of what should be the input and output for every feature.

Project scope and expected deliverables

Here, you define a minimum viable product you expect to get and prioritize tasks. Also, it is a good idea to provide your assessment of your project scope so you can have a comparison base right here when the time comes. For example, you can specify you want to have corresponding facilities first, notification facilities second, and user monitoring functionality third. And that you expect your project will take around 500 man-hours, for instance.

Required technology stack

In this section, you specify what technologies your project requires. It includes the programming languages and frameworks both for the front end and back end, libraries, a database, cloud services if required. For example, if you want to hire React JS developers, state React JS in this section. If you see your product on the MySQL database, state it as well.

Quality requirements for targeted deliverables

Here, you need to touch both functional and non-functional aspects of the solution you need to get. For instance, it can be enhanced security as a functional quality aspect. Better, if you can define metrics you are going to use. For instance, it can be assigning a priority and/or severity to bugs, using such metrics number of vulnerabilities and time to resolution.

Project milestones and deadlines

Here, you set deadlines for a minimum viable product (MVP) and milestones for each iteration. This way you help IT companies understand your expectations and whether they can meet them. For example, you can set deadlines in the form of the exact date or a period within a project pipeline.

General terms and conditions

This is where you disclose your expectations about a pricing model for your software project, your budget, intellectual property protection requirements, delivery terms, etc. For instance, state your targeted project budget if you want to contract on a fixed-price basis, of a maximum hourly rate if you are going to use a time and material pricing model. If you insist on signing an NDA, make it clear in this section of the RFQ template. If you want your outsourced software development team to send their results on GitHub, state it here as well.

Point of contact

Here, you specify a person who you designate to answer vendors’ questions and negotiate project details. Also, you need to provide contacts and preferred communication methods. For example, if you send your RFQ via a vendor’s website, give an email where he can send his bid. If you communicate via freelance platform or directory listings, make it clear vendors can message right there.

Pricing template

To have vendors’ bids more detailed and simplify your comparison and negotiation procedure, you can include in your software RFQ this clause. For example, you can state their bids shall be provided by filling up the template you provide in an attached file. The pricing template may include a table with such columns as the tasks, scope of work, hourly rates, etc.

Prequalification requirements

Here, you state your conditions on vendors’ opportunity to have their bids regarded by you. For example, you may state a vendor shall have at least 10 software developers on board, at least one successfully completed project in the targeted domain. Or that they need to have experience in running a project of at least six-month duration. Also, you can declare you allow (or not allow) junior developers to be assigned for your project.

RFQ deadlines

State the last date you receive bids so vendors can understand their timeframes. For example, for a small project of less than $10,000, one week is an appropriate timeframe.To conclude, it is worth to mention a well-prepared request for quotation will shorten your negotiation path and help you to shortlist vendors, negotiate the contract, and make your choice easier.So, if you need to build software that is fully customized to your exact needs, send us your RFQ with the above-mentioned details. We will be happy to work on your software project!