Sunday, November 21, 2010

California City Rejects All Bids on Multi-Million Tennis Court Project

The City of Mission Viejo, California rejected all bids on a controversial multi-million dollar tennis center renovation project and voted to re-advertise the project.  

Claim of Error:  The action occurred after the low bidder claimed error, having left out $300,000 of lighting for the project on their $3.2 million low bid.

Bid Irregularities with Second Low Bid:  After evaluating the second low bid from Horizons Construction, the City's staff concluded that Horizons' bid, which was $250,000 more than the low bid, "was not satisfactorily completed."   In the public hearing before the City Council, staff commented that there were "irregularities in the bid" of Horizons, but offered no further explanation of the nature of the irregularities.  Horizons did not speak at the Council meeting and presumably wasn't present.

Hope for Better Prices on Re-Bid:  With the current competitive bidding environment for construction services, the City Council voted to reject all bids and re-advertise the project, with revised bidding documents, breaking the project into phases to assist with budgeting issues.

Community Controversy:  While there was next to no discussion about the recommendation to reject all bids or the irregularity in Horizons' bid, testimony at the heated November 15, 2010 City Council meeting revealed that the project is a controversial one, with residents testifying about delays in the project, and Council members questioning the project as well as additional designer costs.  For more information, read the article in the Orange County Register.

Things to Remember:
  • Claims of Error:  Public agencies who receive claims of error from contractors, based on either mathematical/clerical errors or errors of judgment, may be best served by accepting the claim of error, rather than denying the claim and entering into a contract with a contractor who will start the project losing money.
  • Non-Responsive Bids:  In rejecting bids based on "irregularities," it is important to determine whether the irregularity was material or immaterial.  A material irregularity is one that provides an advantage or benefit to one bidder not enjoyed by other bidders.  Public agencies should be careful to manage the evaluation of bids in an open, fair, and transparent manner, that increases the public's confidence in the integrity of the bidding process.
Mike Purdy's Public Contracting Blog 
© 2010 by Michael E. Purdy Associates, LLC

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