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Monday, December 19, 2016

Minor post-bid mistatkes

Protests arise following Shop Road extension contract award
The Richland County Council has spoken on a contract for a $25 million road project aimed at sparking industrial development. However, one of the firms that lost out is still fighting to overturn the decision.

On Friday, attorney Kathleen McDaniel for Richardson Construction Company, a Richland County-based company, went to court in a last ditch effort to win a contract of at least $22 million dollars. She says the contract was wrongly awarded to another bidder. “We believe this is not consistent with Richland County's procurement ordinance.”

McDaniel admits Richardson made a minor and easily correctable mistake on its bid proposal. However, that mistake could cost taxpayers about $2.9 million if the contract goes to McClam and Associates - the highest bidder and the one approved by a 9-2 majority of the county council.

“The county has a concern that if they permit any type of revision to a bid, post-bid I think, that would be inconsistent with the county procurement code. I think we just have a different interpretation of what the procurement code permits and that's why we will be filing a protest with the Richland County procurement review board,” McDaniel said.

It won't be easy for Richardson to prevail, however. Richland County Council's Torrey Rush and others in county government are worried about setting a precedent for other bidders to try to change their proposals after submitting them. County government is also concerned that overturning the decision could cause construction delays and problems for development of another project dependent on the road.

Read more and more accurately at the link.

In a related article, Construction company suing Richland County over Shop Road project, it is reported:
The plaintiff, Richardson Construction Co. of Columbia, says it was the lowest bidder for the project by $3 million but made what it considers a minor mistake in its bid that caused the county not to consider the company for the job. Richardson’s complaint was filed Thursday in the Richland County Court of Common Pleas.

County administrator Gerald Seals has told County Council the county’s procurement laws do not require the county to allow bidders to correct errors in bids once the bids have been opened.

Read more and more accurately at the link.
The American Bar Association procurement law and regulations have provisions that speak to this situation, and could aid Attorney McDaniel if the same or substantively similar rules apply in Richland County and the facts are amenable.

Guam's procurement law is based on the ABA model, so I will refer to the Guam version.  Guam has a regulation dealing with mistakes in bids, generally, and with mistakes made in various stages of the solicitation process. 2 GAR § 3109(m)(4) particularly deals with mistakes made after bid opening but before award.

Generally speaking, the rule distinguishes between mistakes of judgment and other non-judgmental mistakes. "If the mistake is attributable to an error in judgment, the bid may not be corrected. Bid correction or withdrawal by reason of a nonjudgmental mistake is permissible, but only to the extent it is not contrary to the interest of the territory or the fair treatment of other bidders." (§ 3109(m)(1).)

A nonjudgmental mistake made after opening but before award may consist of a minor informality or a matter of substance that is insignificant. Such insignificant mistakes "can be waived or corrected without prejudice to other bidders; that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible. The Procurement Officer shall waive such informalities or allow the bidder to correct them depending on which is in the best interest of the territory." (§ 3109(m)(4).)

This regulation is specifically backed up by statute: "Correction or withdrawal of inadvertently erroneous bids before or after award, or cancellation of awards or contracts based on such bid mistakes, shall be permitted in accordance with regulations...." (5 GCA § 5211(f).) The corresponding ABA Model Procurement Code cite is §3-202(6) and the Model Regulation is §R3-202.11.

As an aside, regulation § 3109(m)(4) incidentally provides a guide to what is meant by the term "bidder prejudice", indeed it is the only reference in the Model Code and Regulation that comes close to specifically defining the term. 

Insignificant mistakes, the regulation tells us, can be waived or corrected "without prejudice to other bidders; that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible". Thus, a claim of bidder prejudice must be based in something in the bid that has an effect on price, quantity, quality, delivery, or contractual condition which is more than negligible. For instance, bidder responsibility is based on factors concerning the nature of the bidder, not the nature of the bid. This can be a handy guide to distinguishing between what constitutes an issue of responsiveness and what constitutes a matter of responsibility.

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