When businesses determine the need for acquiring materials or contracting repairs, the purchasing agent or owner will request a bid – or a cost estimate of supplies and / or a specific scope of work. It is customary for the owner or agent to request a bid from several competing companies in order to locate the best vendor. When the winning contractor is chosen, it is professional courtesy to notify unsuccessful bidders of your intentions. Keep in mind you may want vendors to bid on your future projects.
The first process in obtaining a quote, known professionally as a request for quotation (RFQ), is to outline the scope of work. As the purchasing agent reviewing and rejecting submitted bids, you will need to be aware of exactly what job is to be performed and what the expected outcome is, so the information can be relayed to the submitting company.
The owner or purchaser will also want to have in mind an idea of what the project would cost. If you research and estimate that a roof repair on a county jail should cost under $350,000, and the bids all return at over $500,000 – you should review the details. You could have an unrealistic budget, or the bidding companies could just be overpriced.
The Rejection Letter
If the bids are too high, turn them down. Remembering that you may want to do business with these companies in the future, you don’t want to leave them wondering. It is professional and courteous to send a standard form rejection letter.
The Request for Re-Bid
There may be times when a proposal is submitted that is off the mark. Maybe the sales representative or contractor misunderstood the scope of work, or maybe you have decided to eliminate a portion of the job. Send a proper letter requesting a re-bid. In your document, offer suggestions, clarification or modifications to the bidder.
On occasion it is possible all the bids will come in too high. When this happens, you should send a letter to all bidders notifying them all quotes are being declined and advise them of a date when new submissions will be accepted.
Elimination Due to Specification
Some companies, especially nonprofit organizations, must adhere to a very detailed proposal process. The University of Tennessee, for example, requires bidders submit their proposal in an envelope identified with the bidder's name, address, request for quotation number and contractor licensing information. When quotes are received that lack pertinent information as outlined, simply return the submission with a short form letter explaining the submission process was not followed correctly.