Letter of Interest (LOI) Phase

A Letter of Interest phase sits at the beginning of your procurement journey, before you've committed to a full solicitation. It's where federal departments test the waters—asking potential suppliers to express interest in a requirement that might be complex, innovative, or just plain uncertain. The responses you get back shape whether you move forward, how you structure the eventual RFP, and what technical specifications make sense for the actual market.

How It Works

Here's the thing: the Government of Canada Supply Manual doesn't explicitly define an "LOI Phase" as a formal procurement stage. But the practice exists. You'll find it referenced obliquely in the Directive on the Management of Procurement, particularly in section 4.4.5.2 around procurement planning, where it mentions using expressions of interest to assess market capacity and determine if mandatory requirements can be met.

In practice, departments like PSPC or DND use this approach when they're dealing with emerging technology requirements or when they genuinely don't know if enough qualified suppliers exist. You publish an informal request—sometimes called an Expression of Interest (EOI), Letter of Interest, or Request for Information—asking suppliers to describe their capabilities. No bids. No pricing necessarily. Just information.

The responses tell you whether you've got a competitive field, whether your technical specs are realistic, and whether you need to rethink your procurement strategy entirely. Sometimes you discover you've specified something impossible, or that only one supplier can deliver, which sends you back to requirements definition before you waste everyone's time with a formal solicitation.

This isn't the same as the phased bid compliance process that kicks in for solicitations over $2 million—that's about correcting missing information after bids close. An LOI phase happens much earlier, while you're still in the planning stage. Chapter 4 of the Supply Manual covers solicitation processes but leaves room for these preliminary market consultations.

Key Considerations

• No binding commitments: An LOI doesn't obligate the government to proceed. You can cancel the entire procurement based on what you learn, consolidate requirements, or completely change direction.

• Information only: Suppliers who respond to your LOI get no preferential treatment when the actual RFP drops. Everyone starts fresh at the formal solicitation stage.

• Timeline impacts: Adding an LOI phase extends your overall procurement timeline by weeks or months, but it can save you from a failed solicitation later when you discover insufficient competition or unrealistic requirements.

• Supplier engagement limits: You need to balance getting useful market intelligence against creating perceptions of bias. Document everything. The Directive on the Management of Procurement emphasizes that opportunities for supplier collaboration must be managed appropriately during planning stages.

Related Terms

Request for Information (RFI), Expression of Interest (EOI), Market Engagement, Procurement Strategy, Pre-Solicitation, Phased Bid Compliance Process

Sources

• Government of Canada Supply Manual

• Directive on the Management of Procurement - Treasury Board of Canada Secretariat

• Procurement Practice Review of Public Services and Procurement Canada - Office of the Procurement Ombudsman

If your requirement involves anything novel or you're unsure about market capacity, an LOI phase can save you from a solicitation that produces one bid—or worse, none at all.