Generally, public entities in California are required to put significant construction contracts out for competitive bidding and to award the contract to the lowest responsive and responsible bidder. A bidder is responsible if it can perform the contract as promised. A bid is responsive if it conforms to the specifications and the bidding instructions. A bid which fails to conform may not be accepted, but a bid which substantially conforms to the bidding instructions may be accepted if the variance between the bid and the bidding instructions is inconsequential.
The First Appellate District of the California Court of Appeals recently considered in Bay Cities Paving & Grading v. City of San Leandro (2014) 223 Cal. App. 4th 1181 whether the failure to attach the first page of a surety bond to a bid was an inconsequential error in the bid. The City had issued an invitation for bids for a construction of a pedestrian interface project. Prospective bidders were informed that they should submit their bids on the City-provided standard form along with a bid deposit securing their bid. The bid deposit could be in the form of cash, a cashier's or certified check, or a bidder's bond executed by an authorized surety company. The invitation for bids provided a copy of the City's standard bid form and a copy of the City's standard form for a bid bond.
When the City opened the bids, it awarded the contract to the low bidder with Bay Cities being the second lowest bidder. However, on closer examination, the low bidder's bid did not include the first page of its bid bond which used the City's standard form. That bid did include the second page of the bid bond which had notarized signatures from the surety and the low bidder's president. The low bidder then submitted the first page of its bid bond after the bids were opened.
Bay Cities filed a bid protest with the City, arguing that the winning bid was non-responsive because of the omission of the first page of the bid bond. Counsel for the low bidder responded, noting that the omission of the page was inadvertent error and that the irregularity in the bid was minor and waivable by the City. The City later notified Bay Cities that its bid protest was rejected because the low bid was accompanied by an enforceable bond and that the omission of the first page was an inconsequential bid defect. The City ultimately awarded the contract to the low bidder.
Bay Cities then filed a writ of mandate and complaint with the Alameda County Superior Court challenging the award of the contract to the low bidder. The trial court denied Bay Cities' writ petition, finding that the omission of the first page of the bid bond was a minor irregularity not affecting the amount of the bid or providing the low bidder with an advantage over any other bidder. Bay Cities then filed an appeal with the First Appellate District.
On appeal, the court agreed with the City and the trial court finding that the low bidder did supply a bid bond with the winning bid. The court noted that there was substantial evidence to support a finding that the winning bid had used the City-provided bid bond form and that page two of that form was sufficient to establish that a bid bond had been submitted with the winning bid. The court held that the omission of the first page did not afford the low bidder with an advantage over any other bidder. Accordingly, the court affirmed the trial court's judgment denying Bay Cities' writ petition.
While the Bay Cities decision continues to support the law in California that inconsequential errors in competitive bids will not jeopardize an award of a contract, the prudent contractor should take precaution to verify that its bid contains all of the necessary information and documents required by the invitation for bids, request for proposals, or specifications. By undertaking such efforts, the successful bidder can, hopefully, avoid the costs generated by a bid protest and the potential of losing an award if a bid protest finds that the bid error was not inconsequential.