Determining the Low Bidder

On a public works construction project, frequently a public agency will request bids for not only the base bid, but for additive work that may be awarded in the event that the bids come in below the estimate and budget for the project. The question then arises as to how to evaluate which bidder is the low bidder. Should it be based on the base bid only, or the base bid plus the additive bids the owner intends to award?

While some agencies will base the award decision only on the base bid amounts, I think that probably violates the competitive bidding laws that requires award to the low bidder. Another bidder could very easily argue that if the owner is awarding additives that may actually change the order of who is the low bidder.

For example, see the following scenario, in which the low bidder on the base bid is at $100,000. If the owner bases the award decision only on the base bid and only the base bid is awarded, Bidder 1 is the appropriate low bidder. But if the owner awards Additive 1 also, Bidder 2 becomes the low bidder. If Additive 2 is the only additive awarded, Bidder 1 would be the low bidder. If Additive 1 and 2 are both awarded, Bidder 3 would be the low bidder. Thus, to determine the low bidder only based on the base bid when other additives are awarded is not consistent with competitive bidding requirements.

	Bidder 1	Bidder 2	Bidder 3
Base Bid	$100,000	$102,000	$105,000
Additive 1	$20,000	$15,000	$13,000
Additive 2	$6,000	$5,000	$3,000
Total:	$126,000	$122,000	$121,000

My advice is to evaluate the bids based on the base bid plus any additive bids to be awarded to determine which bidder actually has the low bid. The potential negative of this approach is that an agency may be tempted to manipulate what bidder is the low bidder and actually award the project based on which additive bids are accepted and awarded.

One way to mitigate against this is to prioritize the additive bids in the bidding documents and award the additive bids in that order. This, of course, limits some flexibility of the agency, but does help to preserve the integrity of the bidding process and the perceptions of treating bidders fairly.

Even without prioritized additive bids, awarding just based on the base bid isn't fair or consistent with the intent, if not the letter, of the law that requires award of public works construction projects to the low bid submitted by a responsible bidder.