Supplier and procurement letters, from award to damages

Eight letters along the life of a purchase

At the start, a contract award letter tells the winning bidder it has won, the value and the conditions to meet before signing, and a manufacturer authorization letter lets a dealer bid with the maker's warranty behind it. During supply, a discount request asks a supplier for a specific price in return for committed volume and faster payment, and a purchase order cancellation stops an order before dispatch under the clause that allows it. When things go wrong, a notice of delay claims an extension of time inside the contract's notice window, a non conformance letter records parts outside tolerance and asks for an 8D report, and a letter of indemnity lets a carrier release cargo without the original bill of lading. At the end, a liquidated damages letter applies the agreed daily rate to the days a project ran late.

Why the numbers carry the weight

Every letter shows its arithmetic. The award letter works out the 5 percent bond. The cancellation repeats the order lines and total. The discount request shows the supplier's revenue still rising at the lower price. The delay notice and the damages letter show the dates, extensions and days in a form a superintendent can check. A commercial reader acts on figures, and a figure the reader has to calculate is a figure that gets disputed. The two contract letters also say plainly whether they bind, reserve costs or leave a right to dispute, because those sentences decide what happens next.

Using them

Read your contract or terms first and quote its clause numbers exactly. Replace the figures with your own records, then check every total and date. Send by the method the contract requires, and keep the letter with the order or contract file. If a letter is going to a party you will keep working with, such as a regular supplier, keep the tone factual and leave the door open for the next order; most of these letters do exactly that in their last line.

Every page in this collection

• Contract award letter with the conditions to meet before signing

  A contract award letter tells the winning bidder it has won, states the contract and its value, and sets out what must happen before work starts. This one page letter from a water authority awards a $1,284,500 relining contract and lists three conditions, the contract documents and a pre-start meeting.

• Discount request letter offering volume and faster payment

  A discount request letter asks a supplier for a specific price and offers something back, such as more volume, a longer commitment or faster payment. This one page letter from a four cafe group asks its coffee roaster for 8 percent off in return for a 3,600 kg commitment and 14 day payment.

• Letter of indemnity for delivering cargo without the bill of lading

  A letter of indemnity lets a carrier release cargo without the original bill of lading in return for the requesting party's promise to cover any loss that follows. This two page letter from a grain exporter asks a shipowner to deliver 3,000 tonnes of barley to a named receiver while the original bill is still in the bank chain.

• Liquidated damages letter for late practical completion

  A liquidated damages letter applies the contract's agreed daily rate to the days a project finished late and says how the amount will be recovered. This one page letter from a developer works out 21 days late on a six townhouse project after two extensions of time, and deducts $25,200 from the next progress payment.

• Manufacturer authorization letter for a tender bid

  A manufacturer authorization letter proves to a tender buyer that a dealer may offer the maker's goods, with the maker's warranty behind them. This one page letter from a medical device maker authorises its distributor to bid for 40 infusion pumps, lists the models and states warranty, spares and validity.

• Non conformance letter to a supplier with an 8D request

  A non conformance letter tells a supplier exactly what failed against which requirement, and asks for containment and a root cause by a date. This one page letter from a pump maker records 38 of 400 impeller castings outside a bore tolerance of 0.05 mm, quarantines them and asks for an 8D report in 10 working days.

• Notice of delay letter claiming an extension of time

  A notice of delay puts the cause, the effect and the days claimed in writing inside the contract's notice window, because a late notice can lose the claim. This one page letter from a builder to a school's superintendent claims nine working days for rock found at footing depth, five business days after it was found.

• Purchase order cancellation letter sent before dispatch

  A purchase order cancellation letter names the order, cites the term that allows it to be cancelled and asks the supplier to confirm in writing. This one page letter from a joinery cancels a $5,340 plywood order before dispatch under its standard terms, and asks for confirmation that no invoice will follow.