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« Implied Obligations in Design and Construction Contracts | Main | USGBC Announces Winners of Green Building Education Recognition Awards and Incentive Grants »

11/04/2009

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In public work I suggest no waiver on the bidder’s form be accepted. Review the bid form with all potential bidders so there is no mistakes on bid day. This eliminates challenges from a protest circumstance.

Owners and or Architects that perform a lot of bidding should have a consistent bid form. If a change in your form is made make sure you review this change with all bidders at the pre-bid meeting.

I believe a public entity has a right and responsibility to accept the bid that is in the best interest of that entity. If waiving a bid irregularity will result in the best value to a City and its taxpayers, the City should be obligated to do so.

There could be an Errors and Ommisions penalty that the low bidder could forfeit if there company has create an acceptable error. In the case that a low bid has one of these acceptable errors (an agreed upon list open to the public) this amount should be taken off of the low bid. This will give the low bidder a chance to get the project after they have spent many hours / resources bidding the project and allow the township to save money by keeping the low bid and enforcing the penalty.

By accepting an irregularity such as this, the owner would in effect by allowing the contractor two bites at the apple. For the sake of argument, assume that the changes lowered the bid by $100K. If he was low by $50K, he can argue the the irregularity can be waived. But if he was low by $150K, couldn't he then argue that the owner has to ignore the changes?

I think it is important that the agency live by the bid requirements to the letter if they are to avoid protests.

What is suppose to happen in the bid process when a specific product is specified and lets say four people bid. Three people bid per the specifications and one decides that they will be a lesser product. If the end user accepts their bid then in my estimation the bid process becomes a sham, as the other three bidders lose simply because they bid what was in the specifications. It would seem to be fair that if the end user is willing to accept a lesser product the other three bidders should be given the opportunity to bid that product. They may well still not be the low bidder but at least they had a fair oppurtunity.

My test of whether or not it can be waived or not is whether it's a minor irregularity. I define that as one that does not give the bidder with the irregularity a competitive advantage over other bidders. If it does, it's material and cannot be waived.

An irregularity in a bid is generally deemed to be material if it affects price, quantity, quality, or delivery. Also, if the bidder could refuse to perform the contract and back out, having its bid security returned based upon asserting the irregularity as a mistake, the irregularity is a material deviation and may not be waived. In such event, the bidder can only be relieved by claiming mistake and withdrawing the bid, assuming the mistake is clerical in nature and not the result of an error of judgment. In reality, however, it doesn't much matter, because public entity boards, councils, and procurement bodies routinely do what costs them the least, regardless of what the law says. They realize that courts go to great lengths to defer to their discretion, and that it is extremely expensive for disgruntled bidders to pursue judicial remedies like writs of mandate. Courts are also loathe to enjoin the letting of a contract to the chosen bidder, because the public entity always claims the project delivery is needed now. Even if they ultimately lose in court, the prevailing party unsuccessful bidder is not awarded its lost profits, but rather its cost of preparing its bid, which makes the whole process not economically feasible. Bottom line is that you must do everything you can to win bid disputes at the administrative level.

In the case described here, the lack of initials seems to be a non-substantive clerical omission. If the bid complies in all other substantive ways, then the low bidder should simply be asked to initial the document.

In a case where a low bidder has proposed an alternative that deviates from the specifications yet is acceptable to the public agency and saves significant taxpayer money, then the other bidders should be given an opportunity to bid as well on that less expensive option. I have had personal experience of being unable to propose a significant cost savings on a public works project. In effect, I was told, "We don't care about cost savings - just stick to the specifications". That is unfair to the taxpayers.

About this deviation and irregularity of lower bid, I think there shall be two aspects to be concerned:
First, technical, which is of specification, drawing and SOW. The comparison in the end has to be apple to apple. If any bidder raise an alternative technical option which lower the cost significantly, all other bidders shall be advised the alternative options as well.
Second, commercial, which is of all other contractual terms apart from price. It is case by case. Say, in some case, the maintenance is exclusive to the owner. Then the relevant terms shall be strictly complied. If there’s any deviation on this of lower bid, purchaser shall drag it back to the required term even if the price will increase accordingly. But for something else, like payment term, sometime is quite flexible to the owner, the deviation of bid on this could be acceptable if the cost is in the favour of owner.

The lesson for owners is: Be careful what you ask for. Mandatory provisions should be kept to a minimum.

If the Bidder has a better idea he should submit an ALTERNATE proposal to the Government alongside their per plans and specs proposal.

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