Can Contractor "Correct" Their Bid Price?

Here's my quick analysis of the bid dispute over a $100 million public works project at John Wayne Airport in Orange County, California after reviewing some of the documentation published online by the Orange County Board of Supervisors.

The low bidder, Whiting-Turner submitted a bid of $89,996,795. After bid opening, they claimed that they had transposed the number (in both words and numbers) and it should have been a bid for $98,996,795. The next low bidder's bid is just under $101 million. In support of Whiting-Turner's assertion that this was just a transposition and their bid should be awarded at the $98 million price, they noted that when you add up the two alternate prices (2A and 2B), both listed separately, you get the $98 million figure. I couldn't locate a copy of the complete bid form to verify this, but did find part of the bid form that shows that the contractor wrote in words and numbers the $89 million figure for the following: "Total Alternate bid (730 days) including Additive or Deductive Bid Items to Alternate Bid (2A+2B)." The heading to this bid total is important as will become clear below.

Whiting-Turner cites language from the Instructions to Bidders as follows: "At the time of opening bids, the County will evaluate the total amounts stated as the Total base Bid (821 Days) including Additive or Deductive Bid Items (1A +1B) and the Total Alternate Bid (730 Days) including Additive or Deductive bid Items (2A +2B). The County will determine the lowest bidder based on the Total Base Bid (821 Days) including Additive or Deductive Bid Items (1A +1B) and the Total Alternate bid (730 Days) including Additive or Deductive bid Items, whichever is lowest."

Whiting-Turner goes on to state that "This indicates that JWA [John Wayne Airport] would evaluate the bids based on items 1A and 1B, and items 2A and 2B, not on anything else."

From what I read in the Instructions to Bidders, it is the total that the airport will evaluate, not the component parts of the totals as Whiting-Turner appears to incorrectly assert in their letter. Thus, based on the language in the Instructions to Bidders, I think the airport is correct in stating that the contractor's bid is the $89 million figure, that it may not be corrected, and that the $89 million figure is consistent with how the Instructions to Bidders states that the bid will be evaluated. Nothing in the bidding documents that I've read suggests that the airport will evaluate the bids based on the component parts (2A and 2B) in the event of a discrepancy between the component parts and the total bid.

Take a look at the documents and various letters for yourself, and see what you think. The Orange County Board of Supervisors is scheduled to make a final decision on this matter at their meeting of July 14, 2009.

In dealing with bid errors, public agencies will be held to the standard for evaluation and correction of bids noted in the bidding documents. Often there is language in bidding documents granting the public agency the right to correct mathematical errors (multiplication of unit prices times quantities in favor of unit prices instead of the extension, and addition of extensions instead of the total written).

If Whiting-Turner does not want to perform the project at the $89 million figure, they can formally submit a claim of error and request to be relieved of liability for their bid and not have their bid bond taken by the County.