Letter of Intent (LoI)

A Letter of Intent (LoI) is a non-binding preliminary document from a buyer indicating the intention to enter into a formal procurement contract with a particular bidder. While it is not legally enforceable as a full contract, it serves to communicate to the supplier that they are the preferred candidate. A LoI often allows suppliers to begin preparatory work or reserve essential resources while final contract terms, approvals, or administrative formalities are being finalized.

In EU public procurement practice, LoIs may be used to manage timing and mitigate risks when contract formalization is delayed due to complex approval processes or legal checks. However, because the LoI is not binding in full, it must be carefully worded to avoid implying enforceable obligations—especially when performance or payment may be expected before contract signature. Proper drafting and disclosure of intent are essential to maintain compliance with transparency, equal treatment, and legal certainty principles.

Practically, a Letter of Intent offers flexibility to both parties: it enables the supplier to mobilize resources earlier than would usually be possible, and provides the authority with a way to secure performance readiness pending formal contract conclusion. Still, both sides should clearly agree that any work performed before contract execution is at risk and subject to later approval. This ensures clarity on risks, liabilities, and expectations during the interim period, reducing misunderstandings and maintaining procurement integrity.