Letters of Interest (LOI)

A Letter of Interest (LOI) is a preliminary procurement document. A buyer uses it to describe a potential requirement and to ask businesses to indicate their capability, their interest, relevant information or suggestions. It comes before a formal solicitation and is not an invitation to bid.

In Canadian federal procurement, an LOI is treated as a form of Request for Information (RFI). CanadaBuys guidance presents the "Request for information (RFI) or Letter of interest (LOI)" as a single preliminary step. An LOI is not normally a solicitation. It creates no commitment to purchase and does not guarantee a later contract.

What an LOI asks businesses to provide

An LOI sets out a potential requirement and asks businesses to explain their ability to satisfy it. It can also ask them to suggest how a future solicitation could be structured. Buyers use the responses to refine requirements, consider alternative solutions and shape the procurement strategy before any solicitation is issued.

CanadaBuys states that an LOI must clearly identify itself as not a solicitation and must make clear that it involves no commitment to future purchases or contracts. The CanadaBuys buyer's guide sets out these expectations for federal buyers.

How LOIs are published and distributed

LOIs are typically published on the Government Electronic Tendering Service (GETS). A buyer may instead send an LOI directly to selected businesses from a source list. A supplier that is not on the list or watching published notices can therefore miss an LOI entirely.

Federal examples of LOIs in use

• Global Affairs Canada: A 2023 LOI for the Indo-Pacific region sought organizations capable of performing construction work. Respondents had to complete and return a specified questionnaire by the closing date. The LOI stated that it was not an invitation to submit a proposal, that no contract would be negotiated or awarded to respondents, and that the department was not required to issue a later RFP.
• Logistics Vehicle Modernization: PSPC ran an LOI solicitation before the invitation to qualify and review-and-refine-requirements stages.
• Future Fighter Capability Project: PSPC used an LOI solicitation called the Supplier List Invitation.
• Canadian Coast Guard engineering support: An LOI/RFI phase engaged potential bidders and included one-on-one meetings before later procurement stages.

LOI notices have also been used to test the market for set-asides. A federal procurement guide states that an LOI may be used to determine whether Aboriginal suppliers are interested in, or capable of performing, a requirement that might be set aside. If no Aboriginal suppliers respond, the opportunity may be opened to all bidders.

What an LOI means for a supplier

What a supplier must do depends on the individual LOI. Read the stated requirement, answer the questions or complete the questionnaire, provide your capability and interest information, and follow the delivery method and deadline. A response supplies information. It is not a bid or a binding offer.

Responding is still worthwhile. It puts your company in front of the buyer early, when requirements are still open to change, and it can place you on a source list for later opportunities. Failing to respond does not always rule a supplier out of a later solicitation, but it forgoes the chance to shape the requirement and, in some cases, to be contacted directly.