If you regularly respond to RFPs, you have probably encountered buyers who ask you to submit a letter of intent to bid as part of the response process. While this step in the RFP process is far from universal, it’s important to understand the purpose of the intent to bid letter. Additionally, you can use it as another positive touchpoint for prospective buyers.Whether you’re responding to a buyer that requested a letter of intent and need guidance, or you’re simply looking for new ways to engage with buyers earlier in the RFP process, you’ll find what you need to know here.
First, in this post, you’ll learn the basics about the letter of intent to bid including what it is, who uses them and a few of their benefits. 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 and an intent to bid 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 plan to submit a response or bid to a request for proposal (RFP). Often, a buyer requests or requires 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 sales 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 request before responding.
Who uses the letter?
When The letter of intent to bid can be requested by an RFP issuer (buyer) or offered proactively by a RFP responder (seller or vendor). The document isn’t exclusive to any particular industry. However, you’ll find it most often in government, legal, education and construction RFPs.
When required by a buyer, the procurement manager in charge of the RFP is the person who requests, receives and reads the letters. On the other hand, when offered proactively, the letter of intent to bid is written and submitted by the proposal manager.
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 of the proposal contact
- The name or reference number of the RFP you’re responding to
- A clear statement of your intention to submit a proposal
- Your sign off and signature
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, if this step is part of the process, the buyer will provide a letter of intent to bid template that outlines the information they require. You can see examples of this later in this blog.
When is the letter of intent due?
If an RFP requires vendors to formalize their intention to bid (or decline to bid), the deadline will appear in the RFP timeline. Typically, this step happens after vendors receive answers to any follow-up questions or points of clarification during the Q&A period.
On the other hand, if you’re sending an intent to bid letter as a courtesy (when it’s not required by the buyer) you have more flexibility. In this case, you should send the letter as soon as possible after you’ve done your bid/no-bid discussion and made a decision. Ideally, this is at least two weeks prior to the RFP deadline.
Benefits of the intent to bid letter
You may find yourself wondering why anyone would require a letter of intent to bid. Why add one more step to an already long process? Well, there are a few reasons why an intent to bid letter is a good idea.
1. Ensures sufficient interest and competition
Many organizations have procurement policies that require three valid bids before making a purchase. The letter of intent to bid enables buyers to ensure that a project will have sufficient vendor participation to proceed.
If a buyer doesn’t receive enough affirmative letters of intent to bid from vendors, they may reevaluate the project, even if they have a qualified, under-budget bid. They can extend the RFP invitation to additional vendors, find out why vendors chose not to respond or they can put the project on hold.
Essentially, 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.
2. Defines and streamlines 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.
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 and prepare guidance for stakeholders.
Faster evaluation means faster results. So the buyer can award the contract and you can win business faster.
Tips for how to write a letter of intent to bid
As we’ve discussed above, you can use the letter of intent to bid in two situations: either to meet the stated RFP process requirements or as a proactive courtesy to the buyer.
Sometimes, if a buyer requires an they provide a template to ensure they receive the same information from every vendor. In this case, simply fill out the provided document 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 addressing the necessary information, consider including brief statement on why 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 to bid 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. Offered by Golden Sierra, it is tailored to 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 RFPIO, creating consistent, memorable letters of intent to bid can be done quickly using templates. Automating this process is a great way to save time while also increasing your engagement with buyers.