ConstructionPro Week, Volume: 2 - Issue: 37 - 09/13/2013

Can Financial Information Be Effectively Updated in Time for Award?

By Bruce Jervis

Public contracts are supposed to be awarded to the low responsible bidder. A key element of bidder responsibility is financial capacity. This is not the bidder’s faded financial history or future financial expectations. It is the bidder’s current financial condition at the time of contract award. This poses a problem.

Finances can change quickly. It is not always feasible for bidders to provide “real time” financial information. And, project owners need an opportunity to process the information they receive before making contract award. These dynamics were displayed in a recent Illinois case.

The bid solicitation required bidders to submit a financial statement which would be used to rate each bidder’s capacity to take on additional uncompleted contract work. The information could be updated and supplemented prior to contract award, but no information submitted less than 30 days before award would be considered.

The low bidder received an inadequate financial rating. The bidder obtained an increased line of credit and submitted an updated financial statement. The municipal project owner said the statement had to be audited. The low bidder complied. The owner awarded the contract to the second low bidder 16 days later. The low bidder subsequently received a financial rating more than adequate to perform the contract.

The problem here is that the bidder has no control over the date of contract award and may not know when that date might arrive. Ideally, a bidder should submit complete, current financial information with its bid. But is this always feasible? What practices would you recommend? I welcome your comments.

COMMENTS

awesome thanks
Posted by: Anderton - Wednesday, October 2, 2013 10:26 PM

is this a true story
Posted by: Dupuy - Wednesday, October 2, 2013 10:32 PM

werd. agreed
Posted by: Rosenbaum - Wednesday, October 2, 2013 10:32 PM

good read
Posted by: Holmes - Wednesday, October 2, 2013 10:32 PM

wondering what else you write about
Posted by: Dixon - Wednesday, October 2, 2013 10:34 PM

werd. agreed
Posted by: Tullipan - Wednesday, October 2, 2013 10:34 PM

thx
Posted by: Francisco - Wednesday, October 2, 2013 10:36 PM

good read
Posted by: Curnow - Thursday, October 3, 2013 7:42 AM

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I am neutral about this.
Posted by: Demarco - Friday, October 4, 2013 7:37 PM