Writing a Refusal Letter
Good business etiquette dictates that you should notify all interested partners of your final decision, regardless if their bid was selected or not.
Dear Ms. Jane Doe,
Thank you for submitting your company's bid, which was carefully considered by our staff. Unfortunately, we must decline the offer because the price per unit was too expensive. Instead, we have selected another offer.
I hope to keep the lines of communication open in the future and possibly find an opportunity that works for both of us.