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Mistakes happen in competitive construction bidding. Instructions often are confusing, and bids are evaluated by contracting authorities whose expertise varies greatly. Contractors also frequently receive pricing from subcontractors and suppliers only minutes before the bid deadline, leaving no time to verify work items or check assumptions and calculations. That is why it is critical to develop a strategy for catching and responding to mistakes.

Responsiveness

Only “responsive” bids can be considered for award. To be responsive, a bid must comply with all essential requirements of the invitation to bid; those typically affect price, quality, quantity or delivery.

Bid invitations often come with other requirements (for example, “bidders shall attend a pre-bid conference”). Although compliance may have nothing to do with price, quality, quantity or delivery, noncompliance could lead to rejection by the contracting authority or a protest by another bidder on grounds of responsiveness.

Contracting authorities may waive bid requirements or mistakes if a bidder wouldn’t gain an unfair advantage (for example, a bidder’s failure to return the required number of signed bids). Clerical errors may be corrected if the error is obvious and the bidder confirms the correction in writing.

Other bidders may protest waivers and argue that the use of mandatory language instead of permissive language in the invitation to bid (using “shall” instead of “may”) made the requirement one that cannot be waived. Unless a disappointed bidder can show substantial prejudice, courts will usually defer to the contracting authority’s decision on such issues.

Bidding traps

Every mandatory requirement in a bid invitation that is seemingly unimportant is a trap. “Bids shall be completed and signed with black ink” and “bidders shall sign in at the pre-bid conference” are perfect examples.

Other traps are more difficult to spot. For instance, a bid invitation may say that only someone identified in a prequalification form can sign bids for a bidder.

Another may require the bid bond to be in a form substantially similar to a sample bond form included in the bidding instructions. Despite the sample form, sureties sometimes supply their own bid bond form or attach a rider to the sample. At first glance, the forms and riders appear harmless, but a close reading frequently reveals provisions substantially different from those in the sample form. Savvy contracting authorities will find those differences and declare the bid nonresponsive.

Most traps can be avoided. Maintain a checklist of all mandatory requirements and confirm that all documents provided by others satisfy the invitation’s requirements. Do not assume that documents provided by others – even sureties – are suitable.

Mistakes justifying withdrawal

When a mistake makes a bid substantially less than it should be and the rules preclude correction, a bidder may try to withdraw its bid without forfeiture of its bid bond. Before the deadline, bids may be freely withdrawn – which is of little help because bids are rarely submitted early and pricing mistakes often become apparent only when compared to other bids.

After the bid deadline, contracting authorities typically will not allow withdrawal for errors in judgment, such as underestimating necessary labor or equipment, selecting a deficient work method or failing to apply reasonable productivity estimates.

Withdrawal is allowed for mathematical and clerical errors, omission of pricing for a required item, misplaced decimals and errors in transferring numbers between forms. A bidder must immediately inform the contracting authority upon discovery of the mistake because withdrawal may be prohibited after the contracting authority relies on the bid.

A bidder also must clearly and convincingly show that the mistake was inadvertent. If the bidder’s bid worksheets do not show a mistake, the contracting authority has no way of knowing whether the “mistake” was really an intentional gamble – perhaps to take advantage of suspected quantity errors in the contracting authority’s bid forms. Contracting authorities and courts will not permit withdrawal and release a bid bond if a bidder cannot prove that a mistake was unintentional.

To avoid costly disputes over bid mistakes, bidders must understand rules and act quickly. Bid mistakes are always subject to the applicable rules of each situation. Bidders can reduce risk and impact of a bid mistake by paying attention to detail.

John Hickey, a professional civil engineer and an attorney, is one of several dual-professionals in Jordan Schrader Ramis’ Dirt Law practice group. He provides legal services to contractors, design professionals, developers and other members of the construction community. Contact him at 503-598-5578 or [email protected].