How Long Should Bid Prices be Valid?

Public works bidding documents should specify how long after the bid submission deadline the contractor must agree its bid price will remain valid.

Factors to consider:  What factors should go into a pubic agency's decision on how many days to require that the bid remain valid? 

• How long will the award evaluation process take?  In making a decision on the number of days, factor in how long it will take to: 

1. Evaluate whether the bid is responsive 
2. Address any claim of error by the bidder
3. Review and tabulate the accuracy of unit price extensions and the total for all bidders
4. Evaluate the certainty of funding for the bid amount including any additive or alternative bid amounts
5. Review any criteria in the bidding documents to determine whether the bidder is responsible
6. Address any potential protests or appeals
7. Obtain internal approvals from management and elected officials to award
8. Obtain approval from any funding sources or grant providers (if required)

If you establish a number of days that is too short, the bid price might expire prior to completing some of the steps above.

• How much risk is it reasonable to ask the bidder to take?  If the bidders are required to hold their prices for too long, the bid prices may come in high, as the bidders will be forced to factor in unknown risks related to subcontractor or supplier price increases.

• What state, local, or grant regulations apply?  Verify whether there are any state, local, or grant requirements governing the length of time a bid must be valid, or whether there is an agency policy for determining this period of time.

• What is the impact on the project's schedule?  If the project is on a tight time schedule, a shorter period of time may be appropriate for the bid validity period.

How much time is reasonable?  The shortest period of time for bid validity that I've typically seen is 30 days.  This seems to provide sufficient time for most projects to go through the bid evaluation process.  Sometimes, I've seen 45 or 60 days if there are other factors involved.  The longer the time period, the more risk in the bidding process.

Obtain an extension of prices:  In the event that the bid evaluation process takes longer than anticipated, or there is a bid protest, pay attention to the clock.  If the bid prices are set to expire, contact the bidder(s) and request a written extension of their bid price through a specific date.  Include language in your bidding documents that you reserve the right to request this.  The bidder, of course, is not obligated to extend their prices.  If the bids expire for whatever reason, the project will need to be re-advertised.

Mike Purdy's Public Contracting Blog 

© 2012 by Michael E. Purdy Associates, LLC 

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