As a general contractor, you're probably looking for ways to gain more public contracts. And why wouldn't you? Working on public projects is generally well-paid and looks great on your résumé.
But how can you make sure you win the projects you bid on? Perhaps the most frequently adopted strategy among contractors is to become the lowest responsible bidder, i.e., to submit as low a price as possible. But the truth is that the lowest responsible bidders don't always get the job. Read on to find out why that is and when you can protest a public entity's decision.
What Defines "Lowest Responsible Bidder"
First, here's a small clarification: to be the lowest responsible bidder, it's not enough to submit the lowest bid.
According to the Business Dictionary, seven factors describe the lowest responsible bidder: "Contractor, supplier, or vendor, qualified on the basis that it (1) has adequate financial resources to perform a contract, (2) can comply with the associated legal or regulatory requirements, (3) can deliver according to the contract schedule, (4) has a history of satisfactory performance, (5) has a good reputation regarding integrity, (6) has or can obtain necessary data, equipment, and facilities, and (7) is otherwise eligible and qualified to receive the award if its bid is chosen."
If you have had to post contract bonds before, this sounds like the requirements for bid bonds.
Why Lowest Responsible Bidders Don't Always Win
It makes sense for a public project to be awarded to the lowest responsible bidder. After all, this doesn't only let the government save taxpayer money but also increases competition while ensuring transparency rather than favoritism.
The law says that the lowest responsible bidders should win the contract when competitive bidding is used, but there are two things to remember here.
The first one is that not all projects are subject to competitive bidding. Such is the case, for example, when the price of the whole project is below the threshold required to be subject to competitive bidding by law or when repairs are needed urgently.
The second thing to remember is that it is not enough for a bid to be "responsible" — it must also be "responsive."
Responsive Bids: The Missing Piece
To have a responsive bid, you first need to be? Responsible bidder. To borrow a definition from the Business Dictionary one more time, a responsive bidder is a "responsible bidder whose solicited bid is determined to be in substantial conformance with the conditions, completion or delivery requirements, and specifications detailed in the invitation-to-bid (ITB), request for proposals (RFP), request for quotations (RFQ), or request for tenders." In other words, it concerns whether all the paperwork attached to your proposal is done correctly and without mistakes. You may think this is a silly mistake; only a careless person would submit a non-responsive bid, but this happens more often than you think for various reasons (such as tight deadlines).
The public entity's job is to decide whether your bid is responsive. If they decide the bid is not responsive, they must determine whether the irregularities are "material" or "immaterial." In the former case, they are obliged to turn down your bid; in the latter, they can accept or reject it.
So to sum it all up, your bid is responsible if your reputation is clean and you are deemed capable of doing a good job, and it is responsive if all the documentation you submitted is in good order.
When and How You Can Protest a Decision
Typically, you can protest if you believe your bid was rejected unfairly on the grounds of responsibility or responsiveness. Keep in mind that, depending on the state, deadlines for protesting are bid are very short, typically just a few days after the bid rejection.
If your protest is rejected, you can file a writ and have the superior court review your case. If the project awarded loses the writ, they can either award the bid to you or reject all bids and start the project bidding process again from the beginning.
Have you ever had a bid rejected? On what grounds? How did the case resolve? Share your experience with fellow contractors below.
