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Strict adherence to bidding policies required for public contracts

Strict adherence to bidding policies required for public contracts

In a recent Fourth Circuit case, two unsuccessful bidders on a project filed separate actions seeking injunctive relief against the city regarding the bidding process for the Harrison Avenue Streetscape Project public contract. Command Const. Indus., L.L.C. v. City of New Orleans, 13-0524 (La. App. 4 Cir. 10/23/13), 126 So. 3d 716, 720. The unsuccessful bidders alleged that the successful bidder should not have been allowed to amend an accounting error on their bid after the bidding period was opened pursuant to the bid documents and the provisions of Public Bid Law (La. R.S. 38:2212).

Accounting Error Obscures Lowest Bid

Essentially, due to the accounting error, the winning contractor’s bid appeared to be higher than other bidders although a review of the entire bid document revealed that it was in fact the lowest bid. After the bidding period was opened, the contractor corrected this mistake via an amended bid. The Court held that the city was required only to consider the initial bid (including the accounting error) and therefore the bid was improperly awarded.

In reaching their decision, the Court reviewed other cases which stressed that even seemingly inconsequential irregularities in bid forms may not be ignored. Issues which resulted in rejected bids included failure to attach the invitation to bid, arithmetic errors, failing to initial corrections or alterations made in the bid proposal, and failure to attach entire bid package.

Public entities have no discretion in reviewing bid for public contracts.

In summary, public entities have no discretion in evaluating bids for public works. Thus, the provisions of the Public Bid law and the bid solicitation must be strictly followed.   If your company bids on public contracts, be sure to dot all of your I’s and cross all of your t’s because there is absolutely no room for error.

Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.