Submitting a project proposal, on the side of the project bidders, is an experience filled with sweat and jitters, but who would have thought that, on the side of the receivers, selecting among the proposals is just as hard?
Companies often conduct bidding for various benefits. It promotes healthy competition and ensures that the company will be getting only the best. When a certain company has made a decision from a pool of bidders, they will be informing this bidder through an awarding contract letter. You may also see Letter Samples.
Elements of a Good Awarding Contract Letter
The process of formally informing a bidder that they have been chosen as the contractor for a certain project or contract is called contract awarding. To formally inform this successful bidder, an awarding contract letter is made. This type of letter has the following elements:
1. Successful Tenderer: This is the individual, company, or entity that you have chosen to award a contract out of the pool of bidders. In the awarding contract letter, this is the receiver.
2. Contract Provider: This is the individual, company, or entity that confers the contract to the successful tenderer. This can be you as the writer and sender of the letter.
3. Contract Affirmation: This is the line or paragraph of the awarding contract letter that explicitly confirms the bidder that their company has been chosen to be the official contractor. It also contains the details regarding the bid.
4. Reason of Acceptance: This is the part of the letter that mentions why the tenderer has been chosen to be awarded with the contract.
5. Contract Arrangements: This part of the contract awarding letter supplies the information on how the successful tenderer and the contract provider can discuss the terms of the contract. In some cases, the provider will have already been done with the contract and will attach it on the letter.
12+ Awarding Contract Letter Templates
Awarding Contract Letter Template
Contract Award Approval Sample
Contract Awarding Letter to Subcontractor
Contract Awarding Sample Letter to Consultant
Contract Award Letter Sample to Tenderers
Contract Award Notice Example
Contract Award Recommendation Sample
Homeowner Awarding Contract Letter Example
Letter of Contract Award Sample
Notice of Contract Award Sample
Service Provider Awarding Contract Letter
Standard Contract Award Letter Template
Steps to Make a Great Awarding Contract Letter
1. Complete the letter staples first: Before starting the body of the letter, fill in the letter staples first. This means that you need to write the date you will be sending the letter, followed by the inside address, which contains the name and the business address of your successful tenderer, and then the salutation following the business format. Take note of the colon at the end of the salutation.
2. Writing the content of the letter: The body of the letter is where you will provide the details as well as the confirmation that your receiver has indeed been chosen to be the partner for the contract.
- First Paragraph: The first paragraph states the purpose of the letter. It contains the date that the bidder has submitted its proposal followed by the words of affirmation that the bidder is being selected as the successful contractor. This part only goes two to three sentences long.
- Second Paragraph: The second paragraph mainly states the reason or reasons why the bidder has been chosen. It also details the selection process in which you can state what method of selection you used in coming up with the winner.
- Third Paragraph: The last paragraph establishes a mode of contact between the bidder and your company. This sets up a meeting to discuss the contract. You can leave your contact number here or state the time and place you are free for the contract discussion, and possibly signing. After that, complete your letter with a complimentary close, space for your signature, your name, and position respectively in that order at the bottom of the letter.
3. Proofread: Read your letter again and cite for errors in grammar and inconsistencies from the business letter format. Make sure that you have clearly expressed your message and you got all the details correct. If you already have a contract then don’t forget to attach the contract on your letter. Spending mere minutes of reviewing your letter will spare you from doing major re-dos and worries if ever it gets sent.
Tips for a Great Awarding Contract Letter
- Keep it short and simple: Cliche as it may seem, the KISS (Keep It Short and Simple) rule typically applies in an awarding contract letter. It should be concise as you are only informing the successful bidder of your contract. There is no need for any dramatic flair of an introduction or a compelling call-to-action conclusion as this type of formal letter only serves to inform, and it should be able to do it directly.
- Consider a second option: There is a chance that your chosen contractor will back out before the contract is signed. List another bidder on your waitlist to serve as your backup plan for such circumstances. Of course, you will only inform your backup contractor if your first choice would pull out and you also do not need to let this bidder know that they were only a second choice.
Types of Awarding Contract Letters
Awarding contract letters are classified according to the method used in choosing the winner of a bid. There are four most common methods, and they are:
- Least Price Bidder: This is the type of contract selection where the contractor with the least or the “best” price offered is chosen for the project. This form of choosing the bidder is said to be the oldest method of all and are still being used today because of its simplicity.
- Best Price For Value: Sometimes, the bidder offering the least price for its service might not be the most economically advantageous. Under this method, the bidder’s offers are evaluated according to their price for value and are graded according to from it. The bidder with the highest price for value gets to be awarded the contract. When it is a construction service project that is being put into a bid, the contractor that takes the least amount of time to complete it usually gets the highest grade and, consequently, the contract.
- Average Value Bidder: Under this type, the contract is given to the bidder that offers the amount that is closest to the mean value of all the proposals. This method is employed when a company is choosing among a wide range of proposals and it wants to choose a value that represents the market, hence the need to make it as close to the mean value or the average.
- Exclusions of the Extremes: This method in determining the successful bidder involves two stages. In the first step, the proposals that are way too far from the mean value or the average values are removed from the selection process, these proposals are known as the extremes. In the second stage, the selection committee uses the other three methods mentioned to determine the bid winner.
Awarding Contract Letter Template Sizes
Awarding contract letter templates come in documents with standard sizes of A4 (8.27 inches by 11.69 inches), US letter (8.5 inches by 11 inches), and US legal (8.5 inches by 14 inches).
Awarding Contract Letter FAQs
How long should I wait before sending out my awarding contract letter to the successful bidder?
As long as you think you have made a carefully-weighted decision on the bidder that you will be entering a contract with, then it is safe to send out a letter informing them that they are the chosen ones. Usually, companies take around 90 days to take in proposals and finalize their decision, so you might also want to observe that kind of length in deliberation.
If I’m sending an awarding contract letter to my successful bidder, should I also send a letter to my unsuccessful bidders notifying them that they were not chosen?
Sending a letter to the bidders that you have not chosen for the contract is not really recommended as you want to keep them open for other opportunities in your company. In the instances where you and your chosen bidder will suddenly not agree with the contract, then you still got the other bidders welcoming the contract offer from your hands. Only send a letter when the contract has been signed by you and your chosen contractor, as there is already a sense of finality in this stage.
Take note that a contract awarding letter is not the contract itself, so it is not binding and the receiving party can refuse the offer stated in the letter. However, once both parties have signed the contract, they will both be legally bound and backing out entails a complicated and expensive legal service. When choosing your contractor, make sure that you have weighed and evaluated the different factors and so as not to take a hard toll on your company in the end.