Tuesday, July 16, 2013

Electronic Glitch in Sending Out Addendum Leads to Bid Protest

A bidder has protested that a computer snafu resulted in them not receiving a critical addendum to an almost half billion dollar tunneling project in Seattle - an addendum that could have positively impacted the contractor's cash flow and enabled them to submit a lower bid price.  

What did the addendum say?  The addendum notified bidders that Sound Transit would not withhold 5% retainage on progress payment in order to comply with regulations on the federally funded project to bore 3.4 miles of twin transit tunnels from the University of Washington to Northgate.  

Bidder didn't receive notification of addendum:  The joint venture of Traylor Frontier-Kemper (TFK), whose bid of $465 million was $25 million more than the low bid of JCM Northlink LLC, was declared non-responsive for failure to acknowledge receipt of the addendum.  TFK argued that Sound Transit's electronic addenda notification system failed, the result of an upgrade to the eBid Systems software just days before bids were due.

Disputed facts:  Whether any employees of TFK actually received the addendum is unclear.  Some records indicating receipt of the addendum may have been inaccurate based on information from eBid Systems noting that some messages sent from the system "were inaccurately displayed as 'sent' in the log."

Relief sought:  TFK appealed last week to Sound Transit CEO Joni Earl, seeking to have the agency reject all bids and readvertise the project. 

Lessons learned:  The computer glitch in notifying bidders of addenda issued is a good reminder that public agencies must have a clear and reliable process for notifying bidders of addenda.  
  • Review your procedures to ensure that all potential bidders are notified of changes. 
  • If your agency posts changes to your website or to a third-party website, consider placing the responsibility on the bidders to check the website prior to submitting a bid.
  • Have a method to verify that addenda notification has been sent to all potential bidders.
  • Test and verify that software upgrades are working properly and that all bidders are being notified of addenda.
More information:  Click here to read an article from the Seattle Times about the Sound Transit bid protest.
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC 

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