How to Write a Bid Rejection Letter

Though it is never easy to turn a contractor or company down for a job, politely notifying them of the situation is the appropriate thing to do. Writing a letter is a professional yet non-confrontational way of communicating with the company. The tone of the letter should be courteous and explain why the bid was turned down. Keep the relationship amicable by indicating a hope for future collaboration despite this particular situation not working out.

1. Format the letter with a professional tone and structure. Use company letterhead, place the date on top and include the bidding companies name and address. Write an appropriate greeting, such as "Dear Mr. Jones."
2. Thank the company for their bid. Indicate the project and date of the particular bid. If you have several projects going at once, some companies may have submitted numerous bids. Make sure they understand the specific bid that is being denied.
3. Complement the contractor on their proposal, past work or reputation. Find something nice to say about the company so that the letter remains courteous and positive.
4. Reject the bid. Explain the reason for the rejection, such as the estimated cost was too high or that another company had more experience with the particulars of the project. You may also say if there was something wrong with the bid, which can help the contractor to avoid making the same mistake in the future. For example, the bidding company may use several layers of subcontractors, a factor that did not work well for you.
5. Close the letter by saying that you look forward to possibly working together in the future. It can be good business practice to always keep the door open to future opportunities; you never know when this particular contractor will be perfect for an assignment down the road.
6. End the letter with a proper closing, such as "Sincerely." Sign the letter to make it official, as well as to show a personal touch.