The City of New Albany, Indiana rejected the low bid on a citywide paving project because the low bidder failed to acknowledge an addendum, declaring the $795,000 bid of Sedam Contracting as non-responsive. The addendum, which Sedam claims they did not receive, specified a particular type of material to be used in the asphalt. Sedam acknowledged that their bid did not include the cost of the material specified, and estimated that the material would cost an additional $60,000. Sedam further went on record agreeing to provide the material specified at the cost bid. The lack of factoring in the cost of the material into their bid “doesn't change our bid,” Sedam asserted.
Nevertheless their bid was rejected, and the city's Board of Public Works then awarded the contract to the second low bidder at a cost of $56,800 more.
Should the city have rejected Sedam's bid as non-responsive? The general rule of thumb is that a public agency must reject a bid as non-responsive if there is a material irregularity in the bid. The generally accepted definition of what constitutes a material irregularity is one that gives a competitive advantage not enjoyed by other bidders. A public agency has a choice of rejecting or not rejecting a bid as non-responsive if it contains an immaterial irregularity.
Not only did Sedam fail to acknowledge the addendum, they didn't even have the addendum when bidding. They essentially bid on a different project than the other bidders, even though they agreed after the bid submittal deadline to honor their bid price and include the material specified in the addendum.
Did Sedam have an advantage that other bidders didn't have? The short answer is "yes," and I believe the city was correct in rejecting their bid as non-responsive. Sedam had the option of deciding after the bid submittal whether to accept the project at the price bid or not. In other words, they had the choice of claiming that their bid was non-responsive and therefore must be rejected for failure to acknowledge the addendum (that they claim they didn't receive). They also had the choice, after all the bids were disclosed, of deciding that they would take the project at the price bid.
In determining whether a bid is responsive or non-responsive for failure to acknowledge an addendum, it is important to look at the content and substance of the addendum. Any addendum that impacts the price of potential bids leans toward being a material addendum, and thus failure to acknowledge the addendum should result in the bid being declared non-responsive.
Click on the website of The Evening News & The Tribune to read the account by Daniel Suddeath of the bid rejection.
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1 comment:
Excellent analysis.
These solicitations REQUIRE that bids be submitted acknowledging and accepting all addendums as were issued. The onus of the vendor is to ensure they are submitting a bid in accordance with the solicitation specifications, terms and conditions. The City was right and so are you.
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