When your company sends out requests for proposal (RFPs), you’ll receive multiple proposals in return–but you can only award the contract to one supplier. Still, all the other vendors have spent a lot of time and effort putting together their proposals, so it’s professional to let them know you appreciate their efforts but have chosen to go a different way. Rather than leaving them hanging, an RFP rejection letter politely informs them that they haven’t been chosen. But the question is how do you write an RFP rejection letter to a vendor?
Read on to learn more about types of RFP rejection letters, why you should send them, their components, and general tips for writing them. We’ve also included a general template and several examples to make the process simpler for you.
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What Is an RFP Rejection Letter?
An RFP rejection letter is a type of official communication from your company to a vendor. It formally notifies them that you are declining their proposal and have chosen a different supplier for the project.
RFP rejection letters are sometimes called bid rejection letters, non-award notices, unsuccessful bidder letters, and vendor rejection letters. They’re generally drafted and sent out by the person managing the procurement process. This person is usually in charge of following up with any questions the vendors have after receiving their rejection letters as well.
Regardless of when you choose to reject a vendor and the reasoning behind the rejection, it’s crucial to write a rejection letter to every vendor that sent you a proposal but wasn’t ultimately chosen for the project.
RFP rejection letters are traditionally sent as physical letters through the mail, but in recent years, it’s become more commonplace to send them through email or RFP management software.
Why You Should Send Out RFP Rejection Letters
There are several reasons why sending out RFP rejection letters is standard practice. It may seem tedious and unnecessary to do so, especially when customizing each letter, but consider how many people had to come together and complete hours of work to send the proposal in the first place.
Respect Vendors’ Investment of Time and Offer Clarity
Putting together a proposal can be a considerable investment for vendors–one they don’t know will pay off. Therefore, it can be extremely frustrating and disheartening not to hear back from you about the project. Sending a rejection letter offers vendors clarity so they know to move on from this particular project and focus on other opportunities.
Exercise Effective Business Communication
Clear, effective communication is essential in business, and it forms the foundation for strong business relationships and supplier relationship management.
Allow for Future Opportunities
You never know what the future may hold. A vendor you rejected for this particular project could be an excellent choice for a different contract down the line. Sending out a courteous and professional rejection letter now may hold the door open for opportunities to work together later.
Network with Salespeople
A good rejection letter can help you network with vendor salespeople. Yes, they’ll continue to try to earn your business, but they’ll also likely stay in touch to alert you to potential savings, let you know about innovative solutions, and inform you of current trends. These communications from vendors can ultimately benefit your organization while also keeping you informed.
Protect Your Organization from Risk
The RFP process is specifically designed to make procurement and vendor selection as fair, objective, and data-driven as possible, protecting your organization from risk. Sending out RFP rejection letters proactively provides information to vendors regarding why they were not chosen or why a different vendor was ultimately awarded the opportunity.
Types of RFP Rejection Letters
Understanding the essential elements of an RFP is important before defining the types of RFP rejection letters. Although most RFP rejection letters are quite similar, there are a few different types to be aware of.
Unsuccessful Bidder Rejection Letter
This rejection letter informs the vendor that they weren’t selected for the project. It may or may not go into the reasons behind your company’s decision.
Price Negotiation Rejection Letter
If the pricing proposed by the vendor is not acceptable, their costs aren’t within your budget, or you can’t negotiate a different price, you’ll likely send a price negotiation rejection letter. In this letter, you could let the vendor know that you can’t accept their proposal due to the cost, or you might ask for a discounted price if you’re still interested in working with them. You can also communicate that you’re open to future proposals from this vendor if they lower their prices or if your budget for future projects is larger.
Noncompliance Rejection Letter
You’ll send a noncompliance rejection letter when you receive a proposal that is incomplete, irrelevant, or didn’t follow the correct format laid out in your RFP. In this letter, you can remind the vendor of the rules you’ve established and give them a chance to resubmit their proposal if there’s enough time. By doing this, you can earn more useful proposals to consider for your company.
Remember that the RFP process is meant to save time and make proposals simple to compare, so when vendors don’t follow the instructions you’ve established, it can complicate things. In some cases, however, you might consider noncompliant proposals as they may offer creative, out-of-the-box solutions you hadn’t thought of previously.
Rescinding Request Rejection Letter
There may come a time when your company isn’t satisfied with any of the proposals it receives. Similarly, you may decide to change your plans for the project entirely after receiving proposals. Whenever you’re in no-win situations like these, you can send a rescinding request rejection letter to take back your company’s original request for proposal.
You can express that you’re doing so because of a change in priorities, a project scope revision, a need to step back, or a delay or suspension of the project.
Generally, you can send out this type of rejection letter as a mass email rather than an individualized notification. If you’re rescheduling the project, you can specify a date for vendors to reach out to you again.
Notification of Award Rejection Letter
Suppose you don’t have time to send out personalized rejection letters (although we highly recommend making time to do so). In that case, you can send all non-chosen vendors a notification or award rejection letter. This reads more like a general bulletin or notice addressing everyone who submitted a proposal but was not chosen. It usually announces the winner or, at minimum, states that the contract has been awarded.
Sometimes, this type of rejection letter goes into some detail regarding differentiators that influenced your company’s decision. Government agencies often use this kind of rejection letter because it ensures transparency by providing the same information to everyone who sent in proposals.
RFP Rejection Letter Components
There are four simple components to every RFP rejection letter. A good rejection letter begins with appreciation for the proposal, followed by a rejection of the offer, further explanation of the rejection, and a professional closing.
Appreciation for the Proposal
First, it’s essential to express your appreciation for the proposal. Start by addressing the vendor politely, either speaking to the business as a whole or using the name of the person you’ve been working with (if applicable). Acknowledge the time and effort spent on the proposal, making it clear that you took the time to read and consider it. Remain professional and respectful as you thank the vendor.
Rejection of the Offer
Next, clearly and unambiguously state that you are rejecting the vendor’s proposal. Don’t hedge or beat around the bush; this may seem “nicer,” but it leaves too much room for interpretation. You don’t want the vendor to finish reading the letter and think they still have a chance of winning your business for this project. Make it as clear as possible that you are rejecting their proposal.
Explanation of Your Reasoning
It’s not always necessary to explain why you’re rejecting a proposal, but it can be helpful for vendors to know where they went wrong or where their proposal didn’t align with your vision for the project. You could state in a short sentence or two why you chose to go in a different direction and let them know if there’s a specific area where they could improve. If appropriate, you could also share a couple of the high points of their proposal.
Professional Closing
Finally, wish the vendor the best and let them know if you’re interested in working with them in the future. Then, sign off with your name and include your contact information if you’re open to answering any questions the vendor may have.
General Tips for Writing RFP Rejection Letters
As you draft your RFP rejection letters, here are several tips to keep in mind.
Keep It Short and Sweet
There’s no need to drag things out. Your rejection letter should be less than a page long; a few paragraphs of about two to three sentences each are plenty. Keep things straightforward and concise.
Leave the Door Open
Avoid burning bridges. Instead, keep the door open for future business opportunities. If there’s any chance you might work with a rejected vendor in the future, you could ask them to reach out at a later date, connect with them via professional social media accounts, or establish another way to reconnect later on.
Use a Template
While personalized RFP rejection letters are much better than vague, generalized ones, that doesn’t mean you can’t use a template to save time. Creating a general template and then filling in the details can streamline this process.
Send It at the Right Time
You should always send RFPs to potential vendors that might fit your business. If noncompliance or pricing is the reason for the RFP rejection letter, send it as soon as possible to give the vendor time to revise their proposal if they wish to do so. In addition, if there are any vendors you’re 100% certain will not be a good fit for your current project, send out their rejection letters sooner rather than later.
However, for any vendors that are serious contenders, wait to send out rejection letters until you’ve made your final selection and awarded the contract. It’s crucial to maintain your leverage in Telecom Procurement by always having other options available as you’re negotiating and redlining the contract.
Reject the Proposal, Not the Vendor
Nobody enjoys getting rejected, but you can soften the blow by wording your letter so that it’s clear you’re only rejecting the proposal, not the vendor.
Refer to Your Original RFP
It can be helpful to refer to your original request for proposal for information like project scope, qualifications, and scoring criteria to support the reasoning behind the rejection.
Offer Additional Feedback
If it’s feasible for your company, you can offer to provide more specific feedback upon request. While this may not be possible for large enterprises working with a massive pool of vendors, this can be beneficial for small and medium-sized companies.
By giving constructive (not critical) feedback to vendors who are interested in hearing it, you can make them more competitive. In the future, they may offer better rates and service in order to win your business.
Maintain Professionalism
Even if you receive a proposal that was clearly thrown together with no effort to follow the guidelines you laid out, always be polite. Never discuss a vendor’s proposal in a derogatory way, even if you’re thoroughly unimpressed by it.
Rejection Letter Template and Examples
Below, you’ll find a template and examples of different types of RFP rejection letters.
General Template
Feel free to adjust this template as you see fit; this can serve as a basic outline or starting point for RFP rejection letters. Scroll down to see examples of different types of rejection letters to vendors.
Dear [Company or name of the person you’ve been communicating with],
[Sincerely thank the vendor for their proposal. You may mention specific features of the proposal that you liked here.] [In the last sentence of your first paragraph, unambiguously reject the vendor’s proposal.]
[Start the second paragraph by expressing your regret or offering condolences that you could not move forward with the proposal. You may provide a short explanation as to why you’re rejecting the proposal here.]
[If you’re interested in potentially working with the vendor in the future, say so here. If not, simply wish them the best.]
[Offer a final thank you.]
Sincerely,
[Your name]
[Your job title]
[Your company name]
[Your contact information, if you’re open to further questions about the rejection]
Unsuccessful Bidder Rejection Letter Example
Dear Ms. Brown,
Company XYZ has evaluated all of the proposals that were submitted in response to the RFP for telecom services.
Although we greatly appreciate the time you spent on your proposal, we are sorry to inform you that we have chosen to award the contract to another vendor.
Thank you for your interest in working with our organization, and we look forward to reviewing future proposals from your firm.
Please contact me at [Your Mail] with any further questions.
Sincerely,
Bob Smith
Price Negotiation Rejection Letter Examples
Dear Vendor ABC,
Thank you so much for your interest in working with Company XYZ. We appreciated the creative solutions you suggested in your response to our RFP. Unfortunately, we’ve decided not to move forward with your proposal at this time.
Although we were impressed with the quality of your service offerings, we have selected a vendor that matches our budget more closely.
We wish you all the best in your business endeavors and hope to have the opportunity to work together in the future.
Thank you for your time, and please reach out if you have any further questions regarding the rejection of your proposal.
Sincerely,
Bob Smith
Procurement Manager
Company XYZ
[Your Mail]
Dear Vendor ABC,
Thank you so much for your interest in working with Company XYZ. We appreciated the creative solutions you suggested in your response to our RFP. Unfortunately, we’ve decided not to move forward with your proposal at this time.
Although we were impressed with the quality of your service offerings, we are interested in proposals that fit our budget more closely. If you are willing to amend your pricing, we’d be happy to reconsider your proposal.
We wish you all the best in your business endeavors and hope to have the opportunity to work together in the future.
Thank you for your time, and please reach out if you have any further questions.
Sincerely,
Bob Smith
Procurement Manager
Company XYZ
[Your Mail]
Noncompliance Rejection Letter Example
Dear Vendor ABC,
Thank you for your interest in working with Company XYZ. After reviewing your proposal, we were impressed with your work. However, we’ve decided to reject your proposal as it does not follow the guidelines laid out in our RFP.
If you’re open to reformatting your proposal to fit the stated guidelines, we’d be happy to reconsider our decision, although we cannot guarantee that you will be awarded the contract. Please reach out to [Your Mail] with any further questions.
We appreciate you taking the time to respond to our request for proposal and wish you the best in all business endeavors.
Best,
Bob Smith
Procurement Manager
Company XYZ
[Your Mail]
Rescinding Request Rejection Letter Example
Dear Vendor ABC,
We appreciate your interest in working with Company XYZ. However, we must reject your proposal.
After reviewing all the responses to our RFP, we’ve decided to postpone this project until a later date. We plan to revisit this project in April of next year. If you are still interested in working with Company XYZ, please resubmit your proposal at that time.
Thank you very much for your time. Please reach out to [Your Mail] with any further questions regarding the rejection of your proposal.
Sincerely,
Bob Smith
Procurement Manager
Company XYZ
[Your Mail]
Optimize Telecom and IT Procurement with TPG
Whether you’re having a hard time evaluating vendor proposals, writing RFP rejection letters, or forming a clear strategy for your telecom or IT procurement process, TPG is here to make your life easier.
We offer telecom procurement strategy consulting and IT procurement services as well as telecom expense management and wireless expense management, RFP management, wireless expense reduction, and telecom contract negotiation.
For more information, call us at 1-888-449-1580, email us at info@TPG-llc.com, or fill out the simple form on the Contact Us page. We look forward to working with you!
