Tuesday, February 9, 2010

Does Failure to Acknowledge Addenda Render a Bid Non-Responsive?

Question:  If a bidder fails to acknowledge all addenda issued for a project, does that automatically render their bid non-responsive?

Answer:  It all depends on the nature of the addenda they failed to acknowledge.  

If the addenda contain material terms that would impact the bidder's price, their understanding of the schedule or the project, then failure to acknowledge the addenda may be considered a material defect, and the bid should be rejected as non-responsive.  However, if the provisions of the addenda are not material, a public agency has the discretion to determine whether to reject the bid as non-responsive or not.  A key factor in determining the materiality of failing to acknowledge the addenda is whether it provides the bidder with an advantage not enjoyed by other bidders.

1st Example:  Suppose that two addenda were issued for a project.  The low bidder acknowledged receipt of the first addendum, but not the second one.  The second addendum changed the requirement for the Payment and Performance Bond from an amount equal to 25% of the award amount to 100% of the award amount.  Because the addendum contained provisions affecting the price of the bid (a 100% Payment and Performance Bond is arguably more expensive than a 25% Payment and Performance Bond), the bid should be rejected as non-responsive.

2nd Example:  If an addendum was issued with a revised bid form for the project and the low bidder failed to acknowledge the addendum, but submitted the revised bid form, it can be argued that the failure to acknowledge the addendum is an immaterial irregularity that should be waived.  After all, by submitting the revised bid form, it is clear that the bidder received the addendum and took its content into account in preparing the bid.

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