How to Write a Professional RFP Rejection Letter (With Examples)

Rejecting a vendor’s proposal can be an awkward and difficult task You likely put time and effort into building a relationship with the vendor and don’t want to damage it. However, proposal rejection is simply a normal part of the request for proposal (RFP) process.

As a buyer you need to be able to professionally reject RFP responses that don’t meet your needs or align with your goals. Handling rejections properly is crucial for maintaining positive vendor relationships and your company’s reputation.

In this comprehensive guide, we’ll walk through how to write a professional, positive RFP rejection letter to vendors.

Why Send a Rejection Letter?

You may be tempted to simply not respond if you don’t select a vendor’s proposal. However, this is unprofessional and reflects poorly on your company. Remaining silent leaves the vendor hanging, wondering if you’re still evaluating their bid or if they were rejected.

Sending a rejection letter is important for:

• Closing the loop – It provides closure for the vendor and clears up any confusion over the status of their proposal. This is simply good business etiquette.

• Maintaining relationships – A thoughtful rejection letter can help maintain positive relationships with vendors you may want to work with in the future.

• Avoiding misunderstandings – Without clear communication, vendors may falsely assume you’re still considering their bid and attempt to follow up with you frequently.

• Brand reputation – Professionally handling rejections portrays your company as an ethical, relationship-focused organization. This strengthens your brand and supports future RFP processes.

• Legal protections – Documented communication showing you formally rejected the vendor can protect you legally in case of any disputes.

How to Reject an RFP Response Politely

Here are some tips for writing a polite, professional RFP rejection letter:

Thank the Vendor

Start the rejection letter by thanking the vendor for their time and effort spent in submitting a thoughtful proposal. Show that you appreciate them taking the time to respond to your RFP.

For example:

“Thank you for submitting a proposal for [project name]. We appreciate the time and effort your team invested in preparing a response to our request.”

Clearly Reject the Proposal

Be direct in clearly communicating that you have rejected their bid. Don’t use vague language or imply that you may still consider their proposal. Being unambiguous avoids confusion and false hope.

For example:

“After careful consideration, we have decided to reject your proposal for [project name].”

Provide a Reason

Explain why you’ve chosen to reject the proposal. However, keep the rejection reason professional, polite, and broad. Avoid overly critical or harsh language.

Some common polite rejection reasons include:

• Your proposal didn’t fully align with our project requirements and specifications.
• Other proposals were better suited to meet our needs at this time.
• We’ve decided to move in a different strategic direction for this project.
• Budget constraints led us to go with a more cost-effective option.

For example:

“Although we appreciated the effort your team put into the proposal, we have selected another vendor whose offering more closely aligned with our specific project requirements.”

Express Appreciation

Reiterate your appreciation for their interest and the work the vendor put into their proposal. This helps soften the rejection and maintain a positive relationship.

For example:

“We appreciate you taking the time to be part of this RFP process. Thank you again for your interest.”

Provide Positive Feedback (Optional)

If there were particular strengths or aspects you liked about the vendor’s proposal, provide some positive feedback. This shows you actively reviewed and valued their submission.

For example:

“Your team’s experience with [area] was impressive. We encourage you to highlight this strength in future RFP responses.”

Extend Future Opportunities

Let the vendor know you would be open to considering them for future projects. This conveys rejection of their current proposal does not necessarily close the door forever.

For example:

“Although we could not move forward with your proposal at this time, we would be interested in partnering with you on future projects.”

RFP Rejection Letter Templates

Here are two RFP rejection letter templates you can use or adapt to your specific needs:

Template 1

Dear [vendor name],

Thank you for submitting a proposal for our [name of project] project. We appreciate the time and effort you and your team invested in preparing a thoughtful response to our request.

After carefully reviewing all proposals, we have decided to reject your bid for this project. We selected another vendor whose offering was most closely aligned with our specific project requirements and goals at this time.

We were impressed by the qualifications and experience of your team, and we appreciate your participation in this RFP process. We wish you the best of luck with your future projects and hope there will be opportunities to partner together down the road.

Please feel free to reach out if you have any other questions. We are happy to provide additional feedback on your proposal if it would be helpful.

Thank you again for your time and interest.

Sincerely,
[Your name]
[Company name]

Template 2

[Date]

[Vendor name]
[Vendor address]

Dear [Vendor contact name],

Thank you for submitting a proposal for [name of project]. We know a great deal of time and effort went into preparing and submitting a response to our RFP.

I am writing to inform you that after careful consideration, we have decided not to accept your proposal. We selected another vendor whose offering was most aligned with our budget constraints and the strategic direction we hope to take this project.

We appreciate you taking the time to participate in this RFP process. Our team was impressed by your experience with [area of expertise] and we encourage you to highlight this strength in future proposals.

Although we could not move forward together at this time, [Company name] would be happy to consider [Vendor name] for future projects that are a better fit. Please keep us in mind.

Thank you again for your time and proposal. We wish you all the best.

Sincerely,

[Your name]
[Title]
[Company name]

Dos and Don’ts of Rejection Letters

Follow these guidelines when drafting RFP rejection letters:

DO:

• Thank the vendor for their participation and effort spent on the proposal.
• Directly communicate your rejection of their proposal early in the letter.
• Explain your reasoning for rejection politely and professionally.
• Reiterate your appreciation for their interest and time invested.
• Leave the door open for future opportunities to work together, if applicable.

DON’T:

• Leave the vendor hanging with no response. This reflects poorly on you.
• Use overly critical or harsh language when explaining reasons for rejection.
• Provide vague rejections that leave room for misinterpretation.
• Wait weeks or months to send the rejection letter. Send promptly.
• Make false promises about future opportunities if you have no intention of working with this vendor again.

Keys to Handling RFP Rejections

Follow these best practices when rejecting vendor RFP proposals:

• Send rejections promptly – Once you have selected a winning proposal, notify rejected vendors quickly. Waiting weeks or months is unprofessional.

• Notify all participants – Let every vendor who submitted a valid proposal know where they stand. Do not leave any vendors hanging.

• Use a consistent process – Reject all vendors in the same manner, on the same timeline, and with comparable letters.

• Customize slightly – While rejection letters should follow the same format and tone, customize parts of each letter to provide specific feedback to that vendor.

• Focus on the positive – Where possible, emphasize positive aspects of the vendor’s proposal. Don’t make rejections overly negative.

• Allow discussion – Be open to answering vendor questions and providing helpful feedback upon request. This can help improve their future proposals.

• Evaluate objectively – Make rejection decisions based on an objective process and concrete selection criteria rather than emotions.

The RFP Process Doesn’t End with Rejections

Handing vendor rejections properly is critical, but your obligations don’t end once you send rejection letters. Here are some additional steps to take:

• Notify the winning vendor and come to an agreement.
• Work collaboratively with the selected vendor to kick off the project.
• Provide payment and feedback to the winning vendor upon project completion.
• Conduct a post-project evaluation to improve future RFP processes.
• Continue nurturing relationships with rejected vendors for future consideration.

While proposal rejections can be uncomfortable, they are a natural part of the RFP process. By following the strategies provided in this guide, you can reject vendors tactfully while maintaining positive relationships and protecting your company’s reputation.