| S.No. | Field / Checkpoint | Reference | Status |
|---|---|---|---|
| A. INTENT TO AWARD | |||
| A1 | Reference NIT + Bid Opening Date + Comparative Statement Acceptance: Tender committee approval cited | Award basis explained | OK NC NA |
| A2 | Bidder identified as L1 + accepted bid value Acceptance: Net contract value stated | L1 ranking confirmed | OK NC NA |
| A3 | Conditions precedent — PBG, agreement signing, mobilisation Acceptance: Deadlines stated | Within 7-15 days typical | OK NC NA |
| B. INTENT TERMS | |||
| B1 | Scope summary + completion period Acceptance: Scope unambiguous | As per NIT | OK NC NA |
| B2 | Performance security amount + timeline Acceptance: Within 14-21 days of LOI | 5-10% of contract value | OK NC NA |
| B3 | Contract signing requirement + LOA issue subject to PBG Acceptance: LOA follows on conditions met | Standard CPWD sequence | OK NC NA |
| C. SIGNATURE + ACKNOWLEDGEMENT | |||
| C1 | Signatory + designation + date issued Acceptance: On letterhead | Competent authority | OK NC NA |
| C2 | Bidder acknowledgement — return signed copy Acceptance: Acknowledged copy on file | Within 7 days | OK NC NA |
The Letter of Intent (LOI) is a conditional acceptance of the bidder's offer — it confirms that the owner / employer / tender authority has identified the bidder as L1 (lowest evaluated bidder) and intends to award the contract, subject to fulfilment of conditions (typically Performance Bank Guarantee submission, agreement execution, mobilisation timeline).
The LOI is not the Letter of Award (LOA) and is not a contract by itself. It is a pre-contract instrument that: - Locks the bidder to the bid (so they can't withdraw) - Locks the owner to award (so they can't move to L2 unfairly) - Gives the bidder a paper trigger to start mobilisation activities (mobilise PBG arrangements, line up resources) - Buys the owner time to complete final award formalities (file-tracking, approvals, signature workflows)
In CPWD / state PWD / PSU procurement, LOI → PBG submission → LOA → Agreement is the standard four-step award sequence.
Required content for a defensible LOI:
Header: - Reference NIT / tender number + date - Bid opening date + comparative statement reference - Tender Committee approval reference (file noting / minutes)
Award identification: - Bidder identified as L1 - Accepted bid value (gross + net of discounts / rebates) - Currency + GST treatment
Conditions precedent (the "intent" remains conditional until): - Performance Bank Guarantee submission (typically 5-10% of contract value, valid for contract period + 6 months) - Acceptance of LOI in writing within 7-15 days - Signing of formal agreement on stamp paper of state - Submission of insurance policies (CAR / Workmen's Compensation / TPL) - Mobilisation arrangement (advance request, if applicable)
Scope + duration: - Brief scope summary referenced to NIT - Completion period (in months, from defined effective date) - LD / penalty rates referenced
Closing: - Statement that LOI does not constitute contract; LOA + Agreement do - Signatory designation + delegation reference (e.g., "per powers delegated under CPWD Works Manual") - Bidder's acknowledgement copy required
CPWD typically issues LOI within 30 days of bid opening; LOA within 14-21 days of PBG submission.
1. LOI treated as contract — bidder mobilises fully before LOA; owner cancels; bidder claims mobilisation cost. Courts: LOI is not a contract unless explicit.
2. No bid validity check — LOI issued after bid validity expired (typically 90-180 days). Bidder can refuse without forfeiture of EMD.
3. Conditions precedent vague — "submit PBG soon" instead of "within 14 days". Disputes on what "soon" means.
4. L1 evaluation challenged — disqualified bidders file representation; LOI issuance challenged at court / tribunal; project delayed.
5. Scope changed in LOI — different scope from NIT ("plus additional works"); bidder can refuse or seek price revision.
6. Signatory not authorised — LOI signed by junior officer without delegation; LOA later signed by senior officer; courts question the LOI's standing.
7. LOI silent on price escalation / variation — bidder later claims missed clauses from NIT; owner pulls bid documents to defend.
8. PBG bank not approved — bidder's PBG from a non-scheduled bank; CPWD has approved-bank list; rejection delays award.
9. GST treatment unclear — bid quoted inclusive vs exclusive of GST; LOI doesn't clarify; reconciliation disputes at first RA bill.
10. No acknowledgement received — bidder doesn't return signed copy; LOI status ambiguous; owner has no choice but to allow extra time or risk re-tender.
Companion formats: - Letter of Award LOA (FMT-TND-014) — formal award - Performance Bank Guarantee (FMT-TND-015) — PBG specimen - Comparative Statement (FMT-TND-011) — bid evaluation matrix - Pre-bid Query Register (FMT-TND-009) — clarifications - Vendor Empanelment (FMT-TND-018)
Standards + references: - CPWD Works Manual 2019 — Chapter on tender process + award procedures - GFR 2017 (General Financial Rules) — government procurement rules - Manual for Procurement of Works 2022 — Ministry of Finance, GoI - PWD Works Manuals — state-level variants (each state has minor procedural variations) - Indian Contract Act 1872 — Sections 4-10 (offer + acceptance principles applied to LOI)