Letter of award
A letter of award, also known as an award letter, is sent by a client/employer as written confirmation that a tenderer has been successful and will be awarded a contract.
The letter forms part of the contract award, which is the process of formally notifying a tenderer that they have been selected as the supplier for a particular contract. It will usually be sent out together with letters to unsuccessful tenderers.
The letter will typically contain details of the amount of the award, the date of the award, and when the contract will be signed. A notice to proceed may also be included detailing the date on which a contractor may begin work.
On public projects, the despatch of a letter of award signifies the start of the Alcatel (standstill) period in the procurement process. This allows unsuccessful tenderers the chance to obtain more information on the award of the contract so they can take appropriate action if they believe they have been unfairly treated.
As such it may be necessary for a letter of award to avoid committing to accepting the tender, since this can be taken to be binding. Rather, the aim of the letter is to give the successful bidder reassurance, and to allow them to begin preparations, whilst refraining from any commitment to legally binding obligations.
As a result, a letter of award may be referred as a 'letter of intent to award' or it may include caveats.
NB A letter of intent is a document expressing an intention to enter into a contract at a future date but creating no contractual relationship until that future contract has been entered into. This may be necessary when suppliers are incurring costs and overheads and can be used as an interim arrangement prior to a formal contract being executed. For more information see: Letter of intent.
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