Wednesday, June 16, 2010

California City Rejects Bidder as Not Responsible

The City of Ventura, California recently found that the low bidder on a sewer system replacement project was not a responsible bidder, and awarded the contract to the second low bidder at an additional cost of more than $164,000.

Responsibility Criteria in Bidding Documents:  The city included bidder responsibility criteria in the bidding documents requiring that to be a responsible bidder the bidder must 
"have been in business for at least five (5) years providing comparable auger boring with guided boring machine construction method projects, including successfully completing a minimum of two previous projects similar in scope and scale to this project.  The two similar projects shall specifically include auger boring with guided boring machine construction methods, with a construction dollar amount of at least $500,000 per project."
Low Bidder Lacked Years and Type of Work Experience:  The low bidder, JO-SH General Engineering, by their own admission in their appeal letter, has been in business under two business names for five months less than the required five years.  JO-SH argued that the 25 years of similar experience the president of the firm has had should count in meeting the bidder responsibility criteria.  The city rejected JO-SH's argument.  In addition, JO-SH was not able to demonstrated completion of the two projects with "auger boring with a guided boring machine."

Appeal Rejected and Contract Awarded to Second Low Bidder:  On June 7, 2010, the Ventura City Council awarded the project to the second low bidder, Lash Construction, Inc. for $1,156,453.  Prior to the City Council's action, City's public works department rejected JO-SH's appeal of the not responsible determination.  Immediately after the April 13, 2010 bid opening, in which eleven bids were received, Lash Construction filed a protest claiming that JO-SH was not a responsible bidder.

More Information:  For more information about the City of Ventura's action, including the appeal and protest letters, the City's response letters, the detailed bid tabulation, and the recommendation of the public works director to the city manager, click here.

Lessons Learned:  Public agencies drafting bidder responsibility criteria must have clear business reasons for the criteria, and the criteria must not be overly restrictive of the bidding pool.  Contractors should take seriously the criteria before bidding a project.  In Washington State, a bidder who objects to the supplemental bidder responsibility criteria may request a public agency to modify the criteria before the bid submittal deadline.  

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