How to Write an Industrial RFQ
The structure, sections and clauses that separate a bankable RFQ from a wishlist — with the specific language funders and EPCs expect to see.
The seven mandatory sections
- 1. Instructions to Tenderers — submission deadline, format, contact, clarification protocol, validity period.
- 2. Scope of Supply & Services — battery limits, exclusions, interfaces with other lots.
- 3. Technical Specification — performance guarantees, applicable standards, quality plan, testing regime, spares & training.
- 4. Commercial Terms — Incoterm, currency, payment milestones, LDs, warranty, price validity.
- 5. Evaluation Criteria — weighted matrix (technical / commercial / delivery / references).
- 6. Contractual Framework — form of contract (bespoke, FIDIC, LOGIC), governing law, dispute resolution.
- 7. Annexes — drawings, site data, standards register, model schedule, spares list.
Writing a performance-based specification
Every technical clause should describe an outcome, not a brand. Instead of 'Danfoss VFD', write 'variable frequency drive, IEC 61800-3 compliant, minimum efficiency IE3, harmonic distortion < 5% THDi at PCC'. This allows any qualified OEM to bid, keeps competitive tension, and protects the buyer if the named brand is delayed or discontinued.
Commercial terms that lenders read carefully
- Payment milestones — no more than 10–15% advance; balance against verifiable milestones (design freeze, factory acceptance test, delivery, mechanical completion, performance test).
- Liquidated damages — delay LDs 0.5% of contract value per week capped at 10–15%; performance LDs capped at 15–20%.
- Warranty — 24 months from taking-over certificate or 36 months from delivery, whichever ends first.
- Retention — 5–10% released against final performance test and warranty bond.
- Bonds — advance payment guarantee (matching advance), performance bond 10% of contract value.
Evaluation criteria that survive audit
The evaluation matrix must be defined before quotes are opened. A defensible split is 60% technical, 30% commercial, 10% references & delivery. Every criterion needs a stated scoring method (pass/fail, ordinal, or points). Weighting the price criterion above 40% is the single biggest source of distress calls to procurement lawyers.
Frequently asked questions
How long should an industrial RFQ be?+
For a mid-sized capex lot (USD 1–10M), 40–80 pages including annexes is typical. Below that, information is missing; above 150 pages usually signals scope that should have been split into multiple lots.
How much time should suppliers get to respond?+
4–6 weeks for standard industrial equipment; 8–12 weeks for engineered systems requiring subcontractor pricing; 12–16 weeks for full EPC packages.
Should we share the target price?+
No — this anchors quotes to the ceiling. Share the capex band only when the RFQ is a design-build competition and pricing envelope defines the technical solution.
What if a supplier proposes an alternative?+
Allow it as a separate 'alternative bid' alongside the compliant base bid — never as a replacement. This preserves apples-to-apples comparison and gives you optionality.
Share a two-line brief and we'll return with the sourcing, structuring and financing route best suited to your capex, geography and timeline — buyer-first, vendor-neutral.
Continue with our commercial resources
Hand-picked next steps for this topic — special purpose machinery and industrial project financing.