What is a "letter of intent" in construction procurement?

A "letter of intent" in construction procurement serves as a preliminary agreement that indicates the parties' intentions to enter into a formal contract. This document is often used in the early stages of a project when the details are still being negotiated. It outlines the basic terms and understandings that both parties intend to pursue, signaling their commitment to move forward.

The letter of intent helps facilitate the project by allowing work to commence while the final contract is still being developed. It can establish key elements such as timelines and responsibilities, thus providing a framework to guide initial activities and collaborations. This is particularly useful in situations where time is of the essence, allowing the parties to start preparations for construction while formalizing the contractual details.

In contrast, the other options represent different concepts in construction procurement. A final agreement would be a detailed contract that outlines all terms, while a document that formally initiates construction is usually a notice to proceed. A request for proposal is a solicitation for bids rather than an indication of intent between parties.