Construction Bidding Court Case #5 – Alternate Prices
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The traditional bidding process for construction projects involves a considerable amount of paperwork and information being shared between owners, contractors, and sub-contractors. Typically, bid documents and various addenda are issued during the bidding process before the bid closing date. Instructions provided in these documents are specific and require each bidder to comply implicitly or their bid submission will be rejected as non-compliant.
At times however, the issuance and distribution of addenda can cause uncertainty or misunderstanding among bidders as to the proper procedure or requirement for completion of the bid form. The following court case illustrates how such uncertainty created by a poorly issued addendum caused the bidders to be non-compliant with the language governing the submission of the bid:
- The Instructions to Bidders required submission of complete package in sealed envelope.
- The project was for the construction of an apartment building
- Bid documents were distributed to the bidders and then various and numerous addenda were issued for both general and mechanical items.
- The instructions to bidders contained the following instructions:
- “Base Bids on strict compliance with Drawings and Specifications and include all costs for the project.”
- “Without limiting the generality of the foregoing, any Bid may be rejected for being incomplete including completion of the Appendices, …, having alternative or separate prices omitted …, failure to use specified materials or systems or installers or installation methods, … or any other non-conforming, non-responsive and conditional Bids.”
- 4 days before bid close two new addenda were issued:
- The first addendum asked to: “Provide alternate pricing for Metal fence that is shown and detailed on the drawings listed above. … List original fence design price in the Itemized Prices section and list the alternative in the Alternative Prices section”
- Mechanical Addendum #1 changed the sanitary risers schematic drawing. In that changed drawing, a note provided:
- BASE BID: INCLUDE UTILITY ROOM FLOOR DRAINS
- ALTERNATE BID: DELETE UTILITY ROOM FLOOR DRAINS
- The problem with the issued addenda is that they did not include changes in the Alternative Prices section of the bid form for the bidders to enter the information required by the addenda for either fence or drains.
- Contractor 1 having not received any bids for the requested alternates wrote “TBA” for prices.
- Contractor 2 did not provide alternate prices either and eventually it was awarded the contract.
- Contractor 1 sued the Owner for awarding to a non-compliant bidder. The Court agreed that the fact that the bid form was not amended to allow for the requested alternate prices did not change the requirement of the bidder to respond to the request and the Owner did award to a non-compliant bidder. However, since Contractor 1’s bid was also non-compliant for failing to include the requested alternate prices there was no legal remedy