I met with a mechanical contractor recently who was being sued for a lot of money because he made a mistake on a bid he submitted to several general contractors. He caught the mistake and corrected it, but the general contractor said that he didn’t receive the corrected bid from the sub in time to correct his own bid.
The unfortunate, but pretty much universal, rule is that the burden is on the bidder to get the bid in on time and to make sure it is correct. On the timing issue, you’d think that the law would be clear, especially on public bids, yet problems continue to arise:
If the Instructions to Bidders tell you that the bids have to be received on the 13th floor of the state office building by 2 p.m., and the elevator stops between floors, you cannot expect to be given an extension.
If the computer goes down on the Army post security system, preventing you from even getting to the building where the bids are to be opened, tough luck.
If you choose to fax your bid in directly, and the fax line is busy, you are not entitled to any relief.
If you fax in the bid but have to depend on a government official to carry it to the bid-opening room, the government won’t be liable if its employee doesn’t get there in time. In a recent decision by the comptroller general of the United States, a roofing contractor ran in with his bid when the clock on the wall read 3:58 p.m. He “forced” the girl sitting behind the counter to write that time on the envelope, which was too thick to fit into the time-stamp machine.
The comptroller general determined that since “it is the offeror’s responsibility to deliver its proposal to the proper place at the proper time,” the bidder had the burden of proving that the wall clock was accurate, which he didn’t do, and he was out of luck. In. re. States Roofing Corp., B-286,052 (11/8/2000).
The government has a lot of leeway to accept late bids but very little obligation to do so.
For private and subcontractor/ supplier bids, the rules are generally the same as for making and withdrawing any other offer to make a contract. Unless otherwise specified, offers can be withdrawn or changed in the same manner in which they were originally submitted. Offers have to be left open for a “reasonable” period of time. And an offer can be changed or withdrawn at any time as long as the recipient has notice before he relies on the bid to his detriment.
In the situation I discussed at the beginning of this column, the sub originally called in his bid to all the generals and confirmed it with a fax. When he found the error, he again went through this same process. His fax was not received by the general who won the contract until 1:56 p.m., probably making it impossible for the general to have changed his own bid before the cut-off time.
He had a record of his long distance call to the general showing a two-minute conversation at 1:45 p.m. All the other generals would testify that they got his price in time to adjust their prices.
In light of this evidence, I think the mechanical contractor has a good chance at winning — but thank God and long distance that he has a record of when he made the phone call.
Bidding is a process full of opportunities for errors. I always caution owners and generals that forcing someone to perform based on a bid that is mistaken is a good way to invite problems. Human nature frequently causes people to cut corners if they are losing money.
Nevertheless, people preparing bids need to know that they will generally end up with the fuzzy end of the lollipop if they make a mistake, so it is in their interests to be extra careful.