If you regularly respond to RFPs, you have probably encountered the letter of intent to bid. While this step in the RFP process is far from universal, it’s common enough to merit exploration. Whether you’re responding to a buyer that requested a letter of intent, or you’re simply looking for ways to engage and serve RFP issuers, you’ll find what you need to know here.
First, in this post, you’ll learn what a letter of intent to bid is and why they are useful to buyers. Then, I’ll offer some quick tips about how to write a letter of intent. Finally, I’ll share sample letters of intent to bid to inspire your own template.
What is a letter of intent to bid?
Letter of intent to bid definition
A letter of intent to bid is a formal way for prospective vendors to communicate their desire to submit a response to a request for proposal (RFP). Often, a buyer will request a letter of intent from interested vendors as part of the RFP process.
A small distinction: Letter of intent to bid vs letter of intent
The letter of intent or letter of interest, abbreviated as LOI, has other applications outside of the RFP and procurement process. For example, job seekers, grant applicants and legal agreements may also use letters of intent. So, be sure to understand the context of the LOI before responding.
Explore more procurement and proposal industry definitions, in our RFx glossary.
Who uses the letter?
The letter of intent to bid isn’t exclusive to any particular type of procurement project. Indeed, it is commonly used in government, legal, education and construction RFPs. The procurement manager or the primary RFP issuer contact requests, receives and reads the letters. On the prospective vendor’s side, the proposal manager creates and submits the letter.
What is in the letter of intent to respond?
The intent to bid letter is usually very brief. Indeed, it follows the standard business letter format and fits on a single page.
Your letter of intent to bid should include:
- The name of your company name
- Name of the proposal contact
- The name of the RFP you’re responding to
- A clear statement of your intention to submit a proposal
In addition to the above, you may choose to include more information. For example, you may wish to offer a brief statement about why you believe you’re a fit for the business. You may also highlight your relevant experience or confirm that you meet or exceed the minimum RFP requirements.
In many cases, the buyer will provide a letter of intent to bid template that outlines the information they require.
When is the letter of intent due?
If vendors must formalize their intention to bid, the deadline will appear in the RFP’s timeline. Typically, this step happens after vendors have received answers to any follow-up questions or points of clarification.
Additionally, vendors may proactively send the letter to communicate their intention to bid even if it is not required by the RFP issuer. In this case, vendors should send the letter two weeks prior to the RFP deadline.
3 ways the intent to bid letter helps buyers
1. Ensures vendor participation requirements are met
Buyers are busy. Certainly, they don’t want to waste your time or their own. Therefore, many procurement teams require a letter of interest at the beginning of the RFP process to ensure the project has sufficient vendor interest to proceed. Indeed, many organizations have to meet minimum participation requirements. Typically, in this situation, the procurement team must receive and evaluate at least three RFP responses.
The letter of intent saves a procurement manager weeks of waiting and hoping they’ll have the necessary number of bids when the RFP deadline arrives. If the project doesn’t have enough interest, the buyer has three options. They can extend the RFP invitation to additional vendors, find out why their selected vendors chose not to respond or they can put the project on hold.
2. Defines communication paths
The purpose of an RFP is to exchange information between buyers and sellers in an organized way. In an ideal world, the process would be straightforward. However, in the real world, it’s rarely that simple.
It’s not uncommon for a buyer to have a few updates after issuing an RFP. For example, there may be amendments to the requirements, changes in scope or clarifications of the RFP questions. In this case, the buyer needs to know who to contact.
Thanks to the letter of intent, they know exactly who to reach out to. Not only that, but the procurement manager avoids sending unnecessary emails to suppliers that have indicated they will not be submitting an RFP.
Download a decline to bid letter template here.
3. Enables a faster RFP evaluation process
After the intent to bid deadline, the response period begins. While you and your team write a winning RFP response, the buyer begins preparing for the RFP evaluation process.
Because they already know the number of participating vendors, the procurement manager can prepare more thoroughly. For example, they can set up proposal scoring, prepare stakeholders who are involved in the process and determine if a shortlist, second round of bidding or RFP presentation is needed.
Tips for how to write a letter of intent to bid
When it comes to the letter of intent to bid, it is used in two situations: either it is required by the buyer as a part of their process, or you can provide it proactively as a courtesy.
Sometimes, if the LOI is required, the buyer will provide a template to ensure they receive the same information from every vendor. In this case, simply fill it out and resist the urge to add more detail.
The letter of intent to bid template is usually included at the beginning of the RFP or as an attachment at the end. However, if the buyer doesn’t offer a template or you wish to create a letter of intent to connect with the buyer, there are a few things to keep in mind.
LOI best practices
• After your decision to bid or not to bid, write and send the letter as soon as possible.
• It’s best to address the letter to the procurement manager or company contact specified in the RFP. Try to avoid a generic greeting like, “To whom it may concern.”
• Begin the letter by clearly stating your intention to bid and basic company information.
• Include contact information for the person who will manage the proposal process. This is the person the buyer should contact if they have questions, need more information or want to begin negotiations.
• After the necessary information has been addressed, consider including a high-level overview of why you believe your company is the right fit for this opportunity. In addition, you could briefly mention past successes, differentiators, references and expertise.
• Remember, keep it short. Save the details for your RFP response.
• Avoid asking follow up questions, because they’ll likely get overlooked if you include them in the body of your LOI.
• Apply RFP response best practices to your letter: be concise, use active voice and review for grammar and spelling.
• Conclude your letter by expressing gratitude for the opportunity and offering any necessary assistance.
Letter of intent to bid samples
Now, if you’re considering adding an LOI step to your proposal process, you may want to see some real-world examples. Below you’ll find a few samples of letters of intent requested by a buyer. Then, you can compile your favorite parts to create your own template.
Construction letter of intent to bid sample
This letter of intent template, provided by Hard Hat Hunter, is specific to the construction industry. It is very short and to the point with just the basics: the vendor’s information, the project name and when the buyer can expect to receive the RFP response.
Employment agency letter of intent template
Contact information, the name of the RFP and an acknowledgement of the RFP criteria are included in this sample letter of intent to bid from Golden Sierra, an employment and job training agency.
Municipality letter of intent to respond form
In this letter of intent to bid example, from the city of Seabrook, New Hampshire, the city asks that all vendors respond. Consequently, the form allows vendors to select their intent to submit nor not submit a bid.
Ultimately, sending a letter of intent is just one more way to connect with and serve your potential customer. When competition is tough, every gesture matters and clear communication is crucial.
For organizations that use RFP360, vendor and buyer communications are all centralized in the platform. Because our RFP software empowers both issuing and responding, the need for a letter of intent to bid is eliminated.
RFP issuers can review proposal progress in dashboards and vendors can automate their responses from a knowledge library. It’s just one way that RFP360’s RFP management platform makes the process more efficient and effective for everyone.