Being the bearer of bad news is never an enjoyable thing to do. However, it’s an important part of running a business. Sending a bid rejection letter to another company or individual to inform them that their bid was unsuccessful is a necessary task many business owners need to complete. While writing a bid rejection letter can be uncomfortable, you can still maintain a business relationship with that company if you remain courteous and honest.

Write a Courteous Bid Rejection Letter

It’s vital to establish a polite and considerate tone when writing your bid rejection letter. Whether it’s a regret letter for a quotation or a rejection letter to a response for an RFP, make sure that your letter is respectful and well mannered. Be sure to send the rejection letter as soon as you have made a decision and finalized your plans.

Write your letter in formal business language. Use block style and format your bid rejection letter so that all the text is aligned to the left side of the page. Single space your content and include a double space between paragraphs. Address the recipient of the rejection letter formally using “To” or “Dear,” followed by their name.

Be Direct with Your Reasons

Avoid including complicated excuses in your bid rejection letter. It’s better to be direct and honest and provide specific bid rejection reasons for why your company cannot accept their bid. Don’t assume the recipient knows why their bid was rejected. Instead, provide a clear reason such as cost, scope or schedule. This helps the recipient to better prepare their bid for the next time.

For example, “We are not able to accept your bid for front-of-store signage as the cost is considerably higher than the other bids we received,” tells the reader of the bid rejection letter why your company cannot do business with them. Now that they have a better idea of your budget, their next bid to you may be less pricey and within your cost limits.

Maintain Business Relations

Even though you are rejecting a bid, you can still maintain a cordial relationship with the company. There is no need to sever ties completely. After all, networking in business is vital to success. Making contacts in other industries is beneficial. When you expand your business network, you expand your potential market. That company could end up providing you with important business connections that lead to future sales.

Invite the recipient of the letter to bid on future projects your company may do. This tells them that you value them as an organization and are not opposed to working with them in the future. For example, you can say, “While this bid was unsuccessful, we invite you to bid on future projects for our company.” If you know you will be inviting additional bids at a future date, you can include that information in the letter so the company can prepare for the next round.

Contract Rejection Letter Sample

Dear Josie Matthews,

Thank you for your company’s bid to provide office cleaning services for our business. We appreciate the time you invested in preparing such a well-constructed plan.

After considering all our options, we have decided to work with another company to procure cleaning services, as their bid was more in line with our organization’s budget. The other company was also willing to work within our tight schedule that we need to maintain due to our complex operations.

While this bid was not accepted, we welcome you to bid on our other locations as they will require cleaning services in the future. A Request for Quote will be posted in the coming weeks.

Thanks again for your time,

Sami Smith