Letter of Interest (LOI) Phase

A Letter of Interest (LOI) is a preliminary procurement notice that the Government of Canada uses to gather information from suppliers before a possible future solicitation. The LOI phase is the early stage of a procurement when a buyer tests the market, and it comes before any invitation to bid.

An LOI is not a bid solicitation. It does not create a commitment to purchase anything or to award a contract. CanadaBuys guidance uses the terms Letter of Interest and Request for Information (RFI) interchangeably, and describes the notice as a preliminary step in procurement.

What a Letter of Interest asks of suppliers

An LOI usually describes a potential requirement and invites businesses to respond. Buyers may ask suppliers to comment on the requirements, suggest alternative solutions, explain their ability to meet the need, or offer ideas on how a future solicitation could be structured.

PSPC's buyer guidance treats the LOI or RFI as an information-gathering stage. The buyer and the client department use the responses to finalize requirements, procurement strategy, objectives and deliverables. The same guidance requires every LOI or RFI to identify itself as not a solicitation and to state that there is no commitment to future purchases or contracts. The CanadaBuys Supply Manual glossary adds that a buyer uses an LOI or RFI to obtain supplier feedback, and may later reopen or issue the opportunity as an open tender.

LOIs are typically published on the Government Electronic Tendering Service (GETS), which is now CanadaBuys. A buyer may also send one to a selected source list.

Where the LOI phase sits in a federal procurement

The LOI phase comes first, and later stages vary by project. Several federal processes show the pattern:

• Logistics Vehicle Modernization (DND): the process included an LOI solicitation before the draft and final Invitations to Qualify and a later review-and-refine-requirements stage, as described in the fairness monitor's report.
• CF-188 Avionics Systems In-Service Support: the process began with an LOI published on CanadaBuys and later moved to a Request for Proposals, according to the fairness monitoring summary.
• Department of Justice scanning and coding services: PSPC issued an LOI as the first step toward a possible Request for Standing Offer, and the notice stated that it was not a bid solicitation.
• Canadian Coast Guard engineering support: the process included LOIs identified as Requests for Information.

Other uses of the Letter of Interest

Departments also use LOIs to find qualified suppliers and to explain how a new approach will work. Global Affairs Canada published an LOI seeking organizations capable of performing construction work in the Indo-Pacific region. It said the department might issue an RFP depending on the responses, and that no proposal would be solicited and no contract awarded through the LOI itself.

The Treasury Board Secretariat released a Letter of Interest under its agile procurement initiative to inform industry about upcoming contracting opportunities and explain the intended procurement process. PSPC also issued an LOI to engage businesses in a Green Products Database pilot project.

Letter of Interest is not the NATO Letter of Intent

The abbreviation LOI also appears in a different setting. NATO uses a Letter of Intent in some multinational capability-cooperation projects. Defence ministers sign it to outline a general cooperation idea before a legally binding Memorandum of Understanding, as NATO describes. That is a political document between governments. It is not the Canadian procurement notice that asks suppliers for information.

What an LOI means for a supplier

What a supplier needs to do depends on the individual notice. In general, read the LOI closely and send the requested information, comments, qualifications or capability statement by the stated deadline. A response is not a bid unless the notice expressly says otherwise, and CanadaBuys guidance states that an LOI or RFI is not open for bidding.

Responding gives a supplier a chance to shape requirements and the later solicitation. It does not guarantee a contract or a place in a later process, and the buyer may never issue a follow-on solicitation. Suppliers should monitor CanadaBuys for the next notice, which could be an RFP, an Invitation to Qualify or a Request for Standing Offer.