Oops -- My mistake

This article comes from Athol, Maine, and is a perfect textbook hypothetical procurement quiz question, played out in real life. It involves a bid error, and seeks to find a way to deal with it. The facts of mistake are always at the core of a problem such as this. But the clarity of the law would help its resolution.

I've set out the whole article as presented, but for our purposes, let's just pretend it is a test question. How would you analyze the problem and solution?

State AG’s office denies Kenefick bid protest

The attorney general has denied a protest by Kenefick Corp., which submitted the low bid to the town for the Queen Lake Dam rehabilitation project. Bids were opened Jan. 31, and the hearing was held March 9.

Kenefick’s bid of $268,150 was the lowest of the 11 bids received, but the town rejected it because the document was not properly filled out. Kenefick argued that the $60,435 error on the form was obvious and should have been corrected by the town.

On the form, Kenefick wrote the total bid price was $268,150. There was a unit price schedule attached to the form. Bidders were asked to provide a unit price for approximately 20 items. The bidders were expected to multiply each unit price by the estimated quantity to derive a total bid amount. Bidders were further instructed to write the extended price for each item in words.

Instead of listing the extended price for each item in words, Kenefick expressed its unit prices in words. The total of the amounts in written words equaled $207,715, which conflicted with the total bid price of $268,150. The town said it made Kenefick’s bid obscure, mandating the rejection.

In the town’s rules relating to bids, in case of a discrepancy between words and figures, the amount expressed in words governs.

Kenefick was notified that its bid read as $207,715. Project Engineer David Lenart told the selectmen this week that, “Kenefick was told to take the bid for the lower amount, or withdraw it. He filed a protest.”

Kenefick maintained the error was obvious, and the town should have corrected it.

The town argued that Kenefick’s bid was obscure because of its $60,435 discrepancy, and also that Kenefick is not a responsible bidder, because it does not have experience with three dam projects, which was called for by the bid specifications.

The company’s lack of experience was also a concern, the town said. Lenart said, “Kenefick could only come up with two projects, which were not comparable” to the scope of the work needed on the Queen Lake project.

State Assistant Attorney General Deborah A. Anderson wrote that the town was under no obligation to correct Kenefick’s bid price, noting if a bidder’s error makes the price or scope of work ambiguous, the bid must be rejected. She further stated the town did not abuse its discretion by failing to correct Kenefick’s error.

Anderson ruled, “I find that Kenefick’s error was an obvious one, even though Kenefick’s bid price could be read as either $207,715 or $268,150. The town had the discretion to correct this error, but it chose not to do so. This was not an arbitrary decision.’

Anderson said as protestor, Kenefick did not meet its burden to prove that its rejection was arbitrary. She said the town was rightfully concerned about allowing Kenefick to choose which bid price was the correct price, thus giving Kenefick ”two bites of the apple.” Also, she said the town followed its own rule. For those reasons the protest was denied.

The second-lowest bidder, R. Bates & Sons, who bid $270,540, made similar, though fewer, errors on the bid forms. He was informed of the same issue.

Selectmen signed two documents prepared by the town’s attorney, officially rejecting the Kenefick and Bates bids. Selectmen then voted to award the bid to the third lowest bidder, Edward Page Corp., which came in at $319,069 ($50,919 higher than the Kenefick bid).

Chairman Thomas Brouillet and John Telepciak signed the contract saying Page “did everything right, and has good experience.”

The project involves the demolition of the dam’s existing spillway and outlet conduit, and construction of a new concrete spillway and gate structure, outlet gates, trash racks, low level outlet pipe, riprap slope protection, gravel crest and landscaping.

Representing the town at the Boston hearing were Thomas McEnaney (town counsel) who filed a response to Kenefick’s protest, and David Lenart, the project engineer.

Work on the dam will begin after Labor Day.

So, what happened here? Kenefick presented a bid with itemized unit prices. In accordance with bid requirements, Kenfeck's bid amount was provided for each itemized line item, but was spelled out in word form. The total amount of all bids was then provided, in Arabic numerals.

Setting aside the question of Kenefick's responsibility for the moment, because the article makes it look like its bid was rejected on grounds of responsiveness, not responsibility, its bid was rejected because the bid "was obscure because of its $60,435 discrepancy" between the total bid price and the mathematical total of the itemized prices. Kenefick argued it was an obvious mistake, but the State Assistant Attorney General held that the town was under no obligation to correct the bid, on the ground that, if a bidder's error makes the price ambiguous, the bid must be rejected. She said the town did not abuse its discretion by failing to correct Kenefick's error.

That may well be the applicable law in Athol, which evidently has a rule that, "in case of a discrepancy between words and figures, the amount expressed in words governs." But this blog is about the ABA Model Procurement Code, and more particularly the Guam procurement law, which follows the ABA MPC, and there is no such law in that context. Remember, we are treating this article as a hypothetical factual situation for our analysis purposes.

MPC § 3-202(6) states that "correction ... of inadvertently erroneous bids before or after award ... shall be permitted in accordance with regulations. This is the same language in Guam law, 5 GCA § 5211(f).

The pertinent ABA MPC regulation is in R3-202.11 ("Mistakes in Bids"), in particular R3-202.11.4(b)("Mistakes where intended correct bid is evident"), which states, "if the mistake and the intended correct bid is clearly evident on the face of the bid document, the bid shall be corrected to the intended correct bid and may not be withdrawn. Examples of mistakes that may be clearly evident on the face of the bid document are ... errors in extending unit prices, ... and arithmetical errors." 

It might be the case that the town did not consider this to be a "clearly evident" mistake. But the AAG was certain it was a clearly evident mistake: "I find that Kenefick’s error was an obvious one...."

The AAG also said "the town was rightfully concerned about allowing Kenefick to choose which bid price was the correct price, thus giving Kenefick 'two bites of the apple'.” Again, I do not question the AAG's statement of applicable Maine law. But the "two bite at the apple" old saw is irrelevant in the MPC regulation, which says such a mistaken bid "shall be corrected ... and may not be withdrawn.

Moreover, there is another element here. Both bites of Kenefick's bid were the lowest prices bid. "Kenefick’s bid price could be read as either $207,715 or $268,150." The next lowest bid, at $270,540, was higher than both of those bids, if we assume, for argument, they were intended to be two separate bids. Even if the totaled low bid written in words,$207,715, the total bid expressed in Arabic numerals, $268,150, remained the low bid. For some reason, “Kenefick was told to take the bid for the lower amount, or withdraw it. He filed a protest."

I hope that there was a stronger reason to reject the bid because of issues of responsibility, though there is not much in this article that would help an analysis of that issue. This bid was rejected before it was evaluated from all appearances, even though it was the lowest bid. It was reported only that "Kenefick is not a responsible bidder, because it does not have experience with three dam projects, which was called for by the bid specifications." 

In the ABA MPC regulations (R3-401.10), it is not necessary to actually have all the experience at the time of bid if it can be obtained (R3-401.03) after bid evaluation, for instance by subcontractors or other professionals available for hire. This regulation requires a separate inquiry to determine responsibility after bid opening, so long as the low bidder's responsibility is determined to the satisfaction of the procurement officer before award (R3-401.04). There was evidently here no finding that Kenefick was nonresponsible (see, R3-401.05), merely "a concern".

And what did the town get from this? The obligation to pay $50,000 more for the next available bid, about 20% more than Kenefick's stated total bid.

It might be asked, why is the ABA MPC so lenient on allowing low bidders to correct bids? It would seem, unless the low bidder has determined to be nonresponsible, that government should be allowed the opportunity to take a low bid, notwithstanding technical mistakes in it that do not prejudice the competitive standing of other bidders. Here, correction of the bid, even to the higher amount, would not improve the competitive position of any of the other bidders.  

It is one of the foundation purposes and policies of the MPC, and Guam's procurement law, "to maximize to the fullest extent practicable the purchasing value of public funds". (MPC § 1-101(2)(f); 5 GCA § 5001(b)(5).)  It is mandated that the procurement law is to be construed and applied to promote its purposes and policies.  (MPC § 1-101(1); 5 GCA § 5001(a).)

Georgia city is living in a material world

'Cause everybody's living in a material world

And I am a material girl

You know that we are living in a material world

And I am a material girl

Living in a material world

And I am a material girl

You know that we are living in a material world

And I am a material girl

-- Madonna, Material Girl (Source)

Again, the articles, cases and other materials cited in this blog are usually sliced and diced by me to render a teaching moment, not news. I omit parts, paraphrase and make other distortions and edits to suit the goal of this blog, to provide fact-based lessons concerning government contracting, what those of us in local government operating under the ABA Model Procurement Code call procurement. 

Please, click the article's title link and read the original article at the link for clarity and full understanding of the intent of the author of the article cited.

Bid defects pricey for taxpayers

A paperwork error may have cost Augusta taxpayers $1.3 million dollars. At issue before the Augusta Commission for two weeks has been a Butler, Ga., utility construction contractor’s challenge of being disqualified from a job moving massive amounts of earth at the city landfill for a paperwork error.

Angela Peed Lance told commissioners Tuesday that her father, Peed Bros. Inc. chairman Lester Peed, had signed a return mail receipt on the second addendum to the landfill bid package. The firm incorporated the addendum’s minor changes into its bid total, Lance said. “We did price it correctly; we failed to acknowledge in the bid addendum No. 2,” she said.

Peed’s base bid of $3.8 million was substantially lower than the next lowest, Cooper Barnette and Page, which bid $5.2 million. But Peed did not get the bid, and the City paid the next higher bidder another $1.3 million for the job.

The defects Procurement Director Geri Sams pointed to in disqualifying Peed were two: On a form signed by Lester Peed, a checkbox indicating receipt of each addenda was missing a check mark, and a bid bond form acknowledging receipt of each addenda hadn’t been dated. Sams told commissioners Peed’s lower bid stood apart from the “cluster” of higher bids, making it suspect and susceptible to change orders.

The omissions come despite compliance director Kellie Irving’s assertion that vendors are given detailed information during pre-bid meetings about the requirement, and the office makes itself available to answer any questions.

City officials maintain a decade-old strict “materiality” provision remains the best way for Augusta to avoid liability, whether it saves taxpayers or not. The city procurement department has historically been the target of litigation, including a spate of suits filed after the city made “materiality” a requirement of bids. The requirement means a bid can be disqualified for the slightest technical error, whether in the number of copies provided, a missing seal or blank or a notarization error.

Suits filed in 2008 and 2009 alleged the procurement office wasn’t holding firms to the same standards and some vendors were allowed to correct errors. Augusta lawyer Robert Mullins wrote a 2013 law journal article claiming the provision wasn’t truly objective and could be used to throw any vendor out.

More recently, the commission upheld a protest by a vendor who didn’t certify a good-faith effort to use a local small business to install office furniture. The same omission is costly to taxpayers in a bid award going before a city committee Tuesday.

Augusta procurement has streamlined several processes in recent years to make doing business with the city easier, but protects the city through its strict application of the rules, Environmental Services Director Mark Johnson said. “Procurement is consistent in how they applied the rules,” Johnson said. “That limits our liability and legal exposure.”

Commissioner Marion Williams said vendors should expect to go through multiple hoops to do business with the city, but added loopholes allow some existing contractors to bypass the procurement process altogether. “When you come to the government, you’ve got to go through a process because it’s taxpayers’ money,” Williams said.

I have to say, this is a rather blinkered way to conduct procurement. You have to stay on track, but you can take off the blinkers and still have a fair race.

The ABA Model Code and its regulations do not penalize every little error. Rather, errors are analyzed in terms of, first, when in the solicitation process did the error occur, second, how "big" they are, and, third, whether the error resulted in prejudice to other bidders. Only "big" errors that cause prejudice to other bidders are material enough to cause a bid to be rejected, on the basis that the bid is nonresponsive to the solicitation.

Guam regulations track the ABA Model Code. It's provision concerning "Mistakes" is found in 2 GAR § 3109(m), with particular reference to this situation in 3109(m)(B)(4). The General Rule for all mistakes is

Correction or withdrawal of a bid because of an inadvertent, nonjudgmental mistakes in
the bid requires careful consideration to protect the integrity of the competitive bidding system, and to assure fairness. 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.

The rule for Mistakes Discovered After Opening but Before Award, which is the situation in this article, is

Minor informalities are matters of form, rather than substance evident from the bid document, or insignificant mistakes that 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.

Examples include the failure of a bidder to: ... (3) acknowledge receipt of an amendment to the Invitation for Bids; but only if: (i) it is clear from the bid that the bidder received the amendment and intended to be bound by its terms; or (ii) the amendment involved had a negligible effect on price, quantity, quality, or delivery.

Not every little nonconformity is fatal to a bid. Only material nonconformities require a bid to be rejected. The government should not be boxed into paying a higher price to a bidder who was not prejudiced by the negligible error -- which is an error in which the effect on price, quantity, quality, delivery, or contractual conditions is negligible. 


In this regard, it is important to distinguish between contractual conditions and solicitation instructions. The requirement to acknowledge amendments is not exactly a contractual condition as an bid instruction. 

There are instances in which failure to acknowledge an amendment can result in a bidder's refusal to sign an awarded contract on the basis that the bidder never saw or agreed to the amended provision, to be sure. But not every failure to acknowledge can lead to that result if there are other facts or circumstances which would refute the refusal of a bidder to contract.

For more posts on this topic, click the "materiality" and "mistakes" and "bidder prejudice" label at the end of this post or in the header of the blog.

If you are living in an immaterial world, you don't sweat the small stuff.

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.

Distinguishing bid defects from bidder instructions

This post concerns a recent decision by the Guam Public Auditor. I'll start with a rendition of the Decision (bearing in mind I selectively cut, paste, rearrange, paraphrase, etc., so read the Decision at the link to get the true version).

In the Appeal of J&B Modern Tech, OPA-PA-14-001.

J&B asserts in this appeal that JRN's failure to attend a December 10, 2013 site inspection of Southern High School rendered JRN a nomesponsive bidder who should have been disqualified from consideration of the IFB award. J&B asserts that it should be awarded the bid.

John Leon Guerrero of GDOE Facilities and Maintenance requested a cost proposal from JRN for duct work to be performed at Simon Sanchez High School, Southern High School, and Upi Elementary School. To prepare the requested cost proposal, JRN personnel conducted site inspections. Upon completing the site inspections at the three schools, JRN's Project Engineer informed Mr. Leon Guerrero that the scope of work for which the cost proposal was requested amounted to more than $100,000.00 and should be opened for bids.

GDOE issued GDOE IFB 005-2014. The IFB sought proposals for the furnishing and installation of Air Conditioning Exterior Duct System for four high schools.

The IFB stated that "The Contractor must conduct pre site inspections to determine existing conditions and any special needs/requirements for execution of the project. Site inspection and field verification of existing layout is mandatorv." The GDOE Supply Management Adminsitrator issued Amendment No. 1 advising bidders that a pre-bid coμference and site inspection would take place on December 6, 2013. The site inspection got to three of the four schools on that date, but the inspection of the 4th school was postponed. A JRN representative was present for the inspection on December 6 inspection, but did not attend the postponed inspection of the 4th school.

J&B and JRN submitted their bids on December 17. JRN's bid was about $95,000 lower than J&B's. Given the price discrepancy, GDOE confirmed (via email) with Dan Gomez of JRN that JRN conducted a site inspection of Southern High School prior to December 6, 2013, that JRN understood the scope of work at Southern High School, and that JRN confirmed its bid price. On February 5, 2014, GDOE issued a Bid Status notification to J&B stating that J&B was not selected due to higher price offered.

J&B filed its Protest to GDOE asserting that JRN's failure to attend the mandatory site inspection of Southern High School on December 10, 2013 rendered JRN's bid nonresponsive and disqualified from consideration for award.

JRN did conduct a pre site inspection of Southern High School to determine existing conditions and any special needs/requirements for execution of the project, albeit before the IFB was issued. Consistent with the IFB requirements, JRN assumed full responsibility to ensure that all proposed equipment meet or exceed existing quality and specifications, i.e., material specifications, dimensions, configuration, mechanical requirements, mounting and installation requirements, etc.

The manner and timing in which JRN conducted its site inspection of Southern High School did not prejudice J&B and is a minor informality which GDOE could and apparently did waive. Minor informalities are mistakes found in bids after opening but prior to award and are matters of form rather than substance that can be waived or corrected without prejudice to other bidders; that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible. (2 GAR § 3109(m)(4)(B).)

Irrespective of whether or not GDOE determined that JRN's pre-IFB issuance site inspection of Southern High School was a minor informality which was waived or not, the Public Auditor concludes that GDOE's determination, that the site inspections while deemed "mandatory" were not deemed conditions precedent for "responsiveness" of bids, was not in error. A "responsive bidder" is a person who submitted a bid which conforms in all material respects to the Invitation for Bids. 5 G.C.A. § 520 l(g). RN's bid was responsive to the requirements of the IFB.

A quick read of the Decision, with its focus on waiver of mistakes, might lead to the conclusion that this was the basis of the Decision. But it was not, and should not have been.  The decision did not find a minor informality in J&B's bid; it found that the bid was responsive.

The failure to attend a "mandatory" pre-bid conference and site inspection was not a mistaken element of JRN's bid.  Attendance was a procedural instruction to bidders to assure that all bidders were properly informed of the nature of the work, its scope, and what would be required of bidders to complete the installation of the duct work.

As the decision implied, the fault alleged in the bid process here was not material; it was not a condition precedent to being qualified to bid.  JRN's bid was responsive because it conformed in all material respects to the IFB.

The reference in the Decision to waiver of a minor mistake is a reference to a bid mistake, not a procedural requirement for consideration of a bid submission. The reference is to the regulation dealing with "Mistakes in Bids". (2 GAR § 3109(m).)  The regulation's subparts describe variously the consequences of mistakes in bids in general, mistakes made or discovered before bid opening, mistakes after opening but before award, and those after award. The waiver of a "minor informality" is in the subpart dealing with mistakes in a bid found after opening but before award. (§ 3109(m)(4)(B)).)

The decision discussed the nature of minor informalities, and then found that the bid was responsive.  It described both: a minor informality is one that is negligible therefore does not prejudice other bidders in terms of , and a responsive bid is one that is material in all respects.  Connecting the dots, the decision implies that, when analyzing responsiveness (which must conform in all material respects), an immaterial matter is one that does not prejudice other bidders because it does not affect price, quantity, quality, delivery, or contractual conditions.  (And note, "contractual" conditions are ones that are part of the ultimate awarded contract, not conditions of submitting a bid.)

The regulation on mistakes in bids actually refers to two distinct kinds of mistakes collectively called a "minor informality"; one mistake is a "matter of form", and the other is called an "insignificant mistake". "Minor informalities are matters of form, rather than substance evident from the bid document". On the other hand, "insignificant mistakes" are those mistakes "that can be waived or corrected without prejudice to other bidders; that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible."  This mistake is insignificant because, whatever its nature (even if it is denominated a "mandatory" requirement), the  failure does not cause prejudice to other bidders.

Thus, waivable insignificant mistakes go beyond mere matters of form. "Examples include the failure of a bidder to: (1) return the number of signed bids required by the Invitation for Bids; (2) sign the bid, but only if the unsigned bid is accompanied by other material indicating the bidder's intent to be bound; or (3) acknowledge receipt of an amendment to the Invitation for Bids; but only if: (i) it is clear from the bid that the bidder received the amendment and intended to be bound by its terms; or (ii) the amendment involved had a negligible effect on price, quantity, quality, or delivery."

The significant feature of this rule is that mistakes that do not prejudice other bidders can, and should if the state is not prejudiced, be waived. Further, the provision is significant because it describes what is meant by "prejudice other bidders".  

Finally, it becomes significant because it also bears on the question whether a nonconforming aspect in an IFB might be considered immaterial and therefore not rise to the level of a nonresponsive.  As the cases hold, not all nonconforming bids are nonresponsive.  Only a material nonconforming bid is nonresponsive.

An error by a bidder or in a bid does not prejudice other bidders if "the effect on price, quantity, quality, delivery, or contractual conditions is negligible." Failure to attend a site inspection does not prejudice or disadvantage another attending bidder, but it could certainly disadvantage the bidder who fails to attend. That is no concern of other bidders.

This is expressly allowed by Guam procurement law. "Correction or withdrawal of inadvertently erroneous bids before or after award ... shall be permitted in accordance with regulations.... After bid opening, no changes in bid prices or other provisions of bids prejudicial to the interest of the Territory or fair competition shall be permitted." (5 GCA § 5211(f).)

Although there is no specific law on Guam dealing with abnormally low bids, it is the usual case around the world that they are to be questioned (see, The price is not always right). The discrepancy in price here (nearly 25% lower than the other bidder) obviously raised that question, and GDOE is to be commended for confirming with the low bidder that it understood the scope of work and confirmed its bid price.

This case can stand for the proposition that not all matters in an IFB which are declared to be mandatory are material or prejudicial, and can be overlooked, or "waived". 

Where, as here, other bidders were not prejudiced by a waiver of a bid requirement ("that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible"), and the territory's concern to get a price that understood the requirements and risks are met (the fourth school had, in fact, been recently inspected for the very factors pertinent to the bid), even a so-called mandatory bid requirement is not really mandatory at all.