One of the less frequent occurrences that may result in the “rejection or withdrawal” of a bid is where the bid calling authority recognizes an obvious error in a bid or a bidder notifies the bid calling authority of an error which they have discovered in their bid prior to the award of a Construction Contract (Contract-B). In this case as CCDC-23 states, if the bid calling authority is satisfied that the error is genuine, the bid should not be accepted and the bidder should not be penalized. Even though an Owner may have a legal right to accept a bid known to contain errors or omissions, forcing a bidder to perform the Work at a loss substantially increases the risk to the Project that the Contractor will perform poorly, the project schedule may be negatively impacted, and the construction may be of sub-standard quality.

Where a bid calling authority accepts a bid as being compliant and the bidder in turn withdraws their bid or refuses to enter into a contract, the Bidders Bid Bond may be called for the amount equal to the difference between the withdrawn bid and the next lowest compliant bid, or to the maximum value of the bid bond, whichever is less. Bid Bonds are the topic of another CCAC Article.

A more common condition that results in the rejection of bids is a substantially “non-compliant” bid. It is important that bid requirements be specific and detailed in the Instructions to Bidders and that conditions that will constitute a non-compliant bid be clearly defined.  As the CCDC-23 document notes, “the Principles of the Law of Competitive Bidding suggests that only compliant bids may be considered for award and that non-compliant bids must be rejected.”

During the bid analysis, bids are analyzed for compliance with the Bid Documents and any irregularities need to be evaluated to see if the irregularity results in the bid being non-compliant.  Some bid irregularities may not result in a non-compliant bid. In such cases, the Owner should be advised to consult with their legal counsel in order to determine whether an irregularity renders a bid as non-compliant where the irregularity isn’t defined in the Bid Documents.

It used to be that bids were considered either formal or informal. Any irregularity could render a bid informal. This led to abuses such as the owner rejecting bids because a 't' wasn't crossed in order to award a contract to the desired contractor, and to contractors at public openings scrutinizing competing bids to see if they could have them declared informal for the most trivial irregularity. The current situation makes these kinds of abuse less likely, but makes determining substantial compliance less black and white.