ConstructionPro Week, Volume: 1 - Issue: 2 - 05/17/2012

Should Mistaken Bids Be Corrected After Bid Opening?

By Bruce Jervis

 

Correction of a bid mistake after bid opening poses some difficult questions. If a low bid can be corrected, still leaving the bid as low, isn’t this advantageous for the project owner? The alternative is to allow withdrawal of the mistaken bid, to which the bidder would clearly be entitled, and award of the contract at a higher price to the second low bidder. But isn’t any change in a bid price after disclosure of all bid prices contrary to the fundamental principles of sealed competitive bidding?

 

First, let’s clarify the type of mistakes we are discussing. They are not mistakes in business judgment, inaccurate cost assumptions, or misunderstandings of the contract requirements. These are not “mistakes.” They do not even entitle the bidder to withdraw its bid. A mistaken bid results from a clerical or arithmetic error; mistakes which can be documented in the bid preparation worksheets. The most common example is an error in transposing a subcontractor or supplier price onto the bid spreadsheet. That is what happened in a recent Minnesota case.

 

A low bidder discovered its transcription error after bid opening. The mistake resulted in the omission of $619,200 of costs. The upward correction of the bid would still leave the bid as low. There would be no change in the order of the bidders, and the public project owner would still get the lowest available price. Minnesota law, however, prohibits a change in bid price after exposure of all bid prices, protecting the integrity of the competitive bidding process. The low bidder could withdraw but not correct. It is interesting to note that in the federal contracting arena, an upward correction of the mistaken bid would be allowed under these circumstances.

 

What do you think? Is any change in bid price after bid opening fuel for mischief and an assault on the integrity of the sealed bidding process? Or are there circumstances where bid correction can be beneficial to the project owner while still being fair to all bidders? I welcome your comments.

 

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