Sunday, March 3, 2013

Not All Bidding Irregularities Are Created Equal

Bidding irregularities fall into two main categories: material and immaterial.

Material vs. immaterial:  A material irregularity is one that provides a substantial benefit or competitive advantage to one bidder not enjoyed by other bidders. Material irregularities must be rejected as non-responsive.  Immaterial irregularities, on the other hand, do not provide one bidder with a substantial benefit or competitive advantage not enjoyed by other bidders.  A public agency has discretion whether to declare a bid responsive or non-responsive if it has an immaterial irregularity.

Case-by-case:  Actually making the determination of whether a particular irregularity is material or immaterial is generally a case-by-case analysis, because the facts in each situation may vary to result in a different answer.  Public agencies should consult with their attorneys to make this decision.

Bidding documents:  If the bidding documents have specific language indicating that bids will be declared non-responsive if certain things occur or don't occur, a public agency will generally be bound by that mandatory language.  This could result in bids being declared non-responsive that otherwise might only contain an immaterial irregularity.  On many issues, it is better to state in the bidding documents that failure of the bidder to take a certain action "may result in the bid being declared non-responsive."  This preserves an agency's flexibility to examine the specific facts and assess whether the irregularity is material or immaterial.

Bid Opening:  The role of the person reading bids at the bid opening should be to disclose to those in attendance what has been submitted, not submitted, signed, or not signed.  If there is something read or noted at bid opening that constitutes an irregularity, the person reading the bids should note that the bid will be evaluated after bid opening to determine whether it is responsive or non-responsive, rather than attempting to make a decision during bid opening.  At bid opening, all of the facts may not be known and there has not been adequate time to evaluate the circumstances.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

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