Monday, July 16, 2012

How One Agency Managed Tied Low Bids

It doesn't happen very often, but occasionally a public agency will receive tied low bids for a public works construction project.  Here's how one agency recently handled the situation on an $85,000 re-roofing project.  

Award by chance:  After determining that both bidders were responsible bidders, the agency chose to follow the federal regulations on Equal Low Bids (FAR 14.407-6) to make the award decision by "a drawing by lot."  The project was not federally funded, but the agency viewed the federal regulations as providing good guidance. 

Attendees at the drawing:  In attendance at the drawing were three representatives from the agency, one of the low bidders, and other interested bidders who were curious about the process - having never seen a tied low bid before.  The other low bidder was unable to attend in person due to a conflict, and so they participated via a telephone connection during the drawing.

The process:  The contracting officer wrote the name of each of the two low bidders on a separate sheet of paper, folded and stapled them, and placed both papers in a hat.  Another representative of the agency then came into the room, and randomly drew one of the papers from the hat.  The name of the winner was then announced.  To maintain transparency, the contracting officer took the name of the other bidder out of the hat, opened the folded document, and showed everyone that the name of the loser was, of course, in the hat. 

Transparency:  Going through a deliberate process as described above takes time, but it helps to reduce the risk of a bid protest.  The agency was complimented by all of the attendees for conducting such a fair and transparent process.

Bidding documents:  Check the language of your bidding documents to see if they address how your agency will handle a tied bid.
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC

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