Sample Letter of Intent (LOI) or Letter of Understanding (LOU)

Letter of Intent-LOI or Letter of Understanding-LOU:

For larger contracts or big dollar supply agreements, some corporations prefer to start a relationship by issuing a letter of intent (LOI) to the successful bidder of a tender. In essence, it is an acknowledgement by both parties of their intent to carry out the offer at hand. As a buyer, you are informing the Vendor or Supplier of your intention to proceed with the commercial arrangement proposed in the bid and this is the start of the formal documentation process.

This following sample LOI can be used to get the ball rolling until formal contract documents are drawn up and executed by the involved parties.

This particular sample letter of intent or letter of understanding covers a technical supply agreement used to purchase bulk commodities with prices that might be tied to a published index or indice.

Feel free to download and use this free sample letter of intent or letter of understanding when awarding your RFP or RFQ.

Download PDF file here >>> RFQ6 – Letter of Intent

It is a little cramped as we wanted it to fit onto a single page…Note: all RFQPro.com purchased downloads include edit friendly Microsoft word templates.  If you are looking for a specific sample Letter of Intent (LOI), or LOU template we have included them in our Premium Pack and it is available for purchase by selecting the download button in the margin.

award letter

Award Letter for RFQ | RFP

Award Letter for RFQ or RFP:

award letterOut of all the letters a Buyer will pen during a work day, the Award Letter for an issued RFQ | RFP is the most enjoyable. Advising a successful bidder they are about to receive the contract for your business is always a pleasant task. Unfortunately, the rejection letters for the remaining bidders should also be issued around the same time. If you are looking for an example of an Award Letter you can use to notify the successful bidder they have been selected or awarded the work please see below.

You can download this free sample award letter here>>> RFQ14 – Award Letter

Visit our special offers page to purchase this template as well as a rejection letter and other everyday  documents in an edit friendly version of Microsoft Word.

What is a RFQ (Request for Quotation)

RFQ-Request for Quotation:

RFQ is the acronym for Request For Quote or Request For Quotation. An RFQ is a request a company tenders when they have a material or service requirement; the RFQ is basically their way of encouraging Vendors to provide a bid for their requirement. The purpose is to provide a fair evaluation for all bidders and to provide the candidates with the evaluation criteria against which they will be judged. A secondary intention, is to encourage competition amongst the bidders which will help the buyer achieve the best possible bid and cost that suits their existing requirements. The company that issues an RFQ then selects one of the bidders to complete the material or service requirement. In today’s business world it is not always about the price, other factors such as quality and delivery often take precedence over cost. Another angle or use for a RFQ is when a business includes a RFQ form on their website. This allows potential customers to contact them to request prices on services or products. An online RFQ form may help to encourage viewers to make a purchase, as it solicits action instead of passive Internet browsing.

Another term frequently used is Request For Proposal, or RFP. Although the difference in terms can be confusing, an RFP and an RFQ are basically the same: an invitation for a potential supplier or vendor to submit a bid. Although the idea of an RFQ is fairly simple, it is still a business document, and as such is divided into several important sections:

  1. Section One of the RFQ is basically background information on you or the company issuing the RFQ.
  2. Section Two of the RFQ is often called “Required Deliverables.” This section describes the material requirement in detail, the scope or the desired end product if it is a service requirement. The RFQ should detail any special requirements the company is wanting.
  3. Section Three of the RFQ is the Assumptions and Agreements section. This section describes the terms and conditions of the tender, items such as a project budget, a bid limit, safety and regulatory requirements, what types of travel expenses or per diem the company will provide, the process used to approve the product or materials, and so on. By submitting a bid, the contractor is agreeing to abide by the terms and conditions of the tender. An RFQ also provides information for suppliers and vendors to use to submit their bid. This information may include a bid submission deadline, a bid form, bid requirements or information that the bid proposal must include to be considered, and the selection criteria or factors that will determine which bid the company chooses.

There are many free RFQ template examples available online. It is best to attempt to find one that is industry specific which will carry more pertinent terms and conditions relating to your field and to your needs.

Quoting Software

Quoting Software:

Our RFQ software or quoting software has been released. Visit RFQPro  Software. We do understand that you might be looking for other forms of quote software, however if you are a buyer looking for an easier way to issue a tender then you are in the right spot.

  1. RFQPro Software is web-based technology. It allows users to create RFQ’s on the go which you can access anywhere there is an internet connection. Start the quote at the office, release the bid later from home and award it from your hotel room or wherever you happen to be next.
  2. A sample set of Terms and conditions templates is built into the program. You can customize defaults by editing existing templates or simply cutting and pasting in your your own. Multiple sets of conditions can be archived in order to expedite the process of generating your quote for different commodities or families of goods.
  3. Solicit bids from suppliers. Vendors login, price, add commercial terms and submit their quotation. No more faxes, no more filing. Bid history and success rates encourage your Vendors to be competitive.
  4. Bids are aggregated at time of closing and displayed in a spreadsheet.
  5. One click and our system delivers award and rejection notifications. All parties involved receive formal correspondence from the Buyer. Our automated communication system is unique in the industry and saves both parties time and money. This time saver will encourage buyers to request more quotations which in turn will generate further savings for your organization.
  6. All audit friendly history is retained. Reporting for both the Buyer and Vendor is included.

Our web-based software can be set-up to accommodate a single or multi-user department within your corporation. RFQPro can also provide custom installations. Contact our help desk for further details and or a quotation.