Is a Bid Guaranty Required on Small Works Roster Projects?

Washington state authorizes some public agencies to solicit competitive bids for public works construction projects less than $300,000 without advertising the project in the newspaper.  Instead, the invitation to bid is sent to firms on a Small Works Roster maintained by the public agency.

Bid guaranty requirements:  Many types of public agencies have requirements for a bid guaranty (usually 5% of the amount of the bid) to be submitted with the bid.  Bid guaranties come in the form of either a bid bond, cashier's check, certified check, or cash.

May the bid guaranty be waived?  A project bid under the Small Works Roster process of RCW 39.04.155 is not required by state law to have a bid guaranty submitted.  This is supported by the following:

• Different procedures:  RCW 39.04.155 notes that the Small Works Roster is "in lieu of other procedures to award contracts."  Thus, even if the state law governing a particular agency type requires a bid guaranty on public works projects, the Small Works Roster procedures may be different.

• Electronic bids:  It is permissible under the Small Works Roster requirements for a public agency to accept telephone or electronic bids from contractors.  If a public agency follows this practice, it would be impossible to accept an enforceable bid guaranty over the telephone or electronically.  In other words, a photocopy of a bid bond, cashier's check, certified check, or cash would not be enforceable!

Should telephone or electronic bids be accepted?  Even though it is permissible to accept telephone or electronic bids for Small Works Roster projects, without proper controls and documentation, this can be a problematic practice.  If an agency does accept telephone or electronic bids under the Small Works Roster process, they should automatically waive the bid guaranty requirement.  If the bid guaranty requirement is important to an agency, then bids should be submitted in hard copy format.

Mike Purdy's Public Contracting Blog 

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