A bid proposal is to an organization what a job application is to a job-seeker. It is basically a formal document which one business (otherwise called a contractor) sends out to another business in response to an earlier request for proposal. In its basic form, it contains a detailed plan as well as proposed costs which the company aims to rely on to execute the tasks if accepted. Some bid proposals may also contain other terms of references which the business shall uphold while executing the tasks if picked.
5 Common reasons of proposal rejection
It is not always that a bid proposal is accepted. Indeed, many proposals are turned down than are accepted. The following are the main reasons underlying this:
Most proposals are often pricier than the range of price which the company inviting the bids is comfortable with. Definitely, each company wishes to spend the least realistic amount of money for any project. That is why they generally prefer the cheapest quote.
Apart from pricing, most companies will want their tasks to be completed within certain timeframes. It would normally be that those who send out bids are simply unable to complete the tasks within the stipulated timeframes.
Lack of Necessary Expertise
For any task to be done to perfection, the person or company doing it has to possess the necessary technical expertise. In many cases, the companies submitting the bids lack part or whole of the expertise required.
Possessing the necessary technical expertise in and of itself is never enough. It is also mandatory that the company submitting a bid proposal also possesses some experience. A proposal may hence get rejected if there is an insufficient experience.
Poor Operational Model
Lastly, most companies prefer working with one contractor. These days, it is not uncommon for companies to subcontract their tasks to third parties or freelances. Yet again, the companies submitting the proposals may be rejected by virtue of poor operational model.
How to write?
Drafting a regret letter especially to a trusted company is never that easy. However, you have to do it. While at it, be sure that you maintain some courtesy. Rejecting a bid should not be the end of your relationship with that company at all.
Start off by thanking the company for submitting their bid. State the project in reference and the date when the bid was announced. Needless to say, you have to draft this letter on your official company letterhead.
The general rules for drafting an official letter apply. Write the date at the top of the script. Include the name and address of the bidding company. Use the block writing style to reject the bid. Alight all text to the left-hand side of the page.
Single-space the contents while including some double spaces in between two successive paragraphs. Unless specified, use the ‘Times New Roman’ font as it is the one most in use for official letters. Lastly, address the recipient using official terms like ‘Dear Mr. Duncan.’
What should be the tone?
The tone has to be professional and courteous. Avoid using slang or other derogatory terms in your discourse. Remember, rejecting this particular bid may not necessarily mean the end of your association with this company.
Further, find something positive about the company in question and point it out. For instance, you may say, ‘we admire your consistency in providing outdoor catering services.’ Next, complement the contractor on their proposal, previous tasks or general reputation.
How to decline the proposal?
Now to the crux of the letter. Reject the bid. While at it, get straight to the point. Do not use too many words to drive your point home. Follow this with a candid explanation as to why you inevitably had to reject the bid.
Alternatively, you may also point out a mistake or issue with the proposal which led to its rejection. This will help the contractor to prepare well for future bid proposals. It will also go a long way in dispelling any ambiguities which the contractor might have.
Encourage for future submission
Now encourage the contractor to be on the lookout for future bids. Assure them that this rejection will not in any way compromise their future bids.
In case you have a number of ongoing projects at the same time, make it clear to the contractor that it is this particular bid that you have rejected. They will still be considered fairly and squarely for the pending ones.
How to close the letter?
Now close the letter by stating that you look forward to working with them again in the future. Tell them the sources of information where they may most likely obtain the information if and when the time comes.
Conclude the letter appropriately by using courteous terms like ‘Sincerely,’ ‘Regards,’ ‘Faithfully’ or ‘Yours Truly.’ These terms show some personal touches which go a long way in cementing the bonds that already exist between you two.
Things to include and avoid in your letter
While drafting such a letter, there are things you must incorporate in the letter and those which you may choose to ignore. In this segment, we are going to look into both of them.
a.) Should Include
Date: A date, by all means, has to be in this letter. It is useful for future references and for accurate record keeping.
Salutation: While addressing the recipient, you have to be formal and official. This can only happen if you include the necessary salutation. Examples are ‘Dear,’ ‘Sir,’ and ‘Mr.’
Body: The body of the letter is the most important part. That is because it contains the finer details of the bid rejection. It is as a matter of fact that which forms the bulk of the letter.
Signature: Lastly, you have to incorporate the signature in your letter. The signature yet again goes to enhance the official character of this letter. It gives the letter some credence and authority.
b.) Should not include
Reference: Whereas the reference is used in other official letters, it is not really necessary in a bid rejection letter. Simply ignore it and get straight to the body of the letter.
Disparaging Comments: As stated severally earlier, rejecting a bid need not necessarily signal the end of your association with the affected contractor or company. This is why you desperately want to stay away from any disparaging comments.
Sample bid proposal rejection letter
Tuesday, June 4, 2019
XYZ Contractors Incorporated,
23 Bellevue Drive,
Venice Beach, CA 90291
Dear Mr. Jesse Owens
Many thanks for submitting a bid on behalf of your company to undertake some office block extension services. We are truly appreciative of the time you took to draft the bid as well as your interest in our company.
Unfortunately, after assessing all bids, we regret to let you know that we opted to work with another company. Two reasons underlie our decision. For one, the winning company quoted the least amount of money. But then again we were doubtful of your competence in handling the stated task.
Whereas we had to reject this particular bid, feel free to compete for future ones. Also, do not misconstrue our decision to mean any inadequacies on your part. We believe you are a credible contractor by virtue of having been operational for well over a decade now.
We truly look forward to working with you in the future.