Wednesday, February 5, 2014

The Risk of Accepting and Keeping a Late Bid

Public agencies have different practices about what to do with a bid that is submitted late.  Here are some of the options:

Don't accept the late bid:  Under this option, a public agency would refuse to accept a bid that was submitted after the bid submittal deadline.  In my opinion, this is the best practice to follow.

Return the late bid:  However, sometimes a bid will arrive late through the mail, or via a delivery service.  In a case like this, the public agency has "accepted" the bid, but should then return the bid unopened after first making a photocopy of the face of the envelope with the notation of what time the bid was received.

Keep the late bid in the file:  Some public agencies will accept a late bid (whether in person, mail, or delivery service) but not open it.  Instead, they keep the late bid sealed in their file.  The risk of this option is that as long as the late bid is in the public agency's control, the bidder may protest the agency's rejection of the late bid, which may significantly delay the project.  Once the bid is outside of the agency's control and has been mailed back to the bidder, the risk of a bid protest drops significantly.  

To accept or not to accept:  If a bid is late, the best practice is to not accept it or consider it.  Some public agencies tend to treat late bids on a case-by-case basis.  One of the basic principles of public bidding and contracting is that all bidders are provided with the same opportunity to submit a bid and all operate under the same rules.  Bidders are expected to make appropriate arrangements to ensure their bid is received on time by the public agency.  Accepting and considering a late bid undermines the confidence of the public in the integrity of the bid process.
Mike Purdy's Public Contracting Blog
© 2014 by Michael E. Purdy Associates, LLC

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