Letters of Interest (LOIs)

A Letter of Interest (LOI) is a procurement notice used when a buyer wants feedback, information or an indication of supplier capability and interest before it decides whether to proceed with a formal solicitation. In Canadian federal procurement, an LOI is not open for bidding. It may come before a future open tender, but it does not award a contract by itself.

The Government of Canada Supply Manual groups the LOI with the Request for Information (RFI). Both are processes for obtaining supplier input that helps a buyer develop or refine a requirement. The Supply Manual glossary on CanadaBuys says the buyer may later reopen or reissue the opportunity as an open tender.

How an LOI differs from a tender

A tender or RFP invites suppliers to submit a bid that can lead to a contract. An LOI does not. The Supply Manual states that an RFI or LOI is not open for bidding, so a response is not a bid and cannot be evaluated as one unless the notice expressly says otherwise.

Global Affairs Canada's LOI for construction work in the Indo-Pacific region shows the wording buyers use. It sought organizations capable of and interested in performing the work, and said a future RFP might be issued if responses showed sufficient capability and interest. It also stated that it was not an invitation to submit a proposal and that no contract would be negotiated or awarded to respondents.

What buyers use LOIs for

An LOI is a tool for early market research and industry engagement. Buyers use it to:

• Test whether capable suppliers or commercially available products exist.
• Develop technical requirements or evaluation criteria.
• Gather industry feedback on a project's requirements.
• Prepare a staged process that leads to an RFP, invitation to tender, standing offer or other formal solicitation.

The term is also common in defence procurement, where the Department of National Defence has used LOIs to examine commercial and military off-the-shelf products and to improve existing equipment requirements.

Examples from federal departments

• Public Services and Procurement Canada (PSPC): An LOI started industry engagement for in-service support of the Government of Canada pay system. The fairness monitoring report describes it as initiating a consultative process and inviting interested suppliers to take part in engagement activities.
• Department of National Defence: An LOI for Arctic Mittens and Cold Wet Weather Gloves informed industry of intended design changes, examined existing commercial and military off-the-shelf products, and investigated products that could support an interim procurement.
• Future Fighter Capability Project: The project used an LOI solicitation, also called a Supplier List Invitation, to identify suppliers with demonstrated capability and to obtain Canadian industry feedback. See the fairness monitoring report.
• Green Products Database Pilot Project: PSPC issued an LOI to engage manufacturers, retailers and suppliers in building a searchable database of environmentally preferable products and clean technologies. The announcement stated that it was not a solicitation and that no contracts would be awarded.
• Commercial marine engines and drives: PSPC published an LOI seeking to qualify additional original equipment manufacturers or exclusive distributors for a possible future standing-offer arrangement serving federal and provincial or territorial users.

What an LOI means for a supplier bidding on Canadian public contracts

What you must do depends on the notice. Read it closely, then submit the requested information, such as capability details, product information, comments or an expression of interest. Meet the stated deadline and use the specified format.

Do not treat an LOI as a bid. Responding does not secure a contract, but it puts your company in front of the buyer while the requirement is still being shaped. Your feedback can influence the requirements, and in some cases, such as the Future Fighter Capability Project's Supplier List Invitation, a response is how a supplier gets identified as capable. Track LOIs on CanadaBuys alongside open tenders so you can prepare before a formal solicitation is released.