For many small and mid-size contractors, the award of a single public contract can make or break their business. Because of this, it is important for a contractor to know and understand the requirements and processes involved when bidding on a public construction contract. A contractor must first make sure the contract is worth the time and money spent in preforming the contract. Knowing whether you, as a contractor, can perform the contract and provide all requested information is vital in determining whether you should bid on a specified contract. In addition, meeting specified deadlines is extremely important for the response to be accepted. In order for a contractor to navigate this bidding process, knowledge of the process is elemental.
Section 255.20, Florida Statutes, expressly requires counties to engage in a competitive bidding or proposal process when undertaking new projects A county, municipality, special district, or other political subdivision of the state seeking to construct or improve a public building, structure, or other public construction works must competitively award to an appropriately licensed contractor. In Duval County, construction projects over $300,000 and electrical projects over $75,000 must be competitively awarded. The term “competitively award” means to award contracts based on the submission of sealed bids, proposals submitted in response to a request for proposal, proposals submitted in response to a request for qualifications, or proposals submitted for competitive negotiation.
Competitive bidding statutes are enacted for the protection of the public. These statutes create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. Reciprocal benefits and reciprocal obligations are conferred upon the contractor and the public entity. You, as the contractor, are assured fair consideration of your offer, and are guaranteed the contract if your offer is the lowest responsible offer. In return, the public entity is afforded the opportunity of purchasing required goods and services at the best price obtainable. Under this system, the public entity may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference.
The competitive bidding process usually involves public advertisement for the submission of sealed bids, the public opening of bids, and the award of contracts to the lowest responsible bidder that is responsive to the solicitation for bids. This process is almost exclusively governed by statute. Therefore, you must first know where to look in order to find solicitations made by the public entity. The public entity must notify the public that they intend to purchase the services of a contractor. This can be done by advertising the solicitation on their website, in local newspapers, trade publications, and/or specific Internet based notification sites.
The notice to the public will provide a contractor with quite a bit of information. It is important that you read the entire notice to determine if the project is a fit for you and your company. The notice will identify the service being sought and provide you with certain deadlines. It will also identify a method for you to obtain more information or ask questions. In addition, a point of contact for the solicitation will be listed. Lastly, the notice will specify what type of solicitation is being sought and whether there will be a pre-bid meeting. Types of solicitation include a request for proposal (RFP), request for qualifications (RFQ), and an invitation to bid. It is extremely important to know which type is being sought to determine whether the solicitation is right for you. It is also extremely important to abide by the deadlines, as your response will not be accepted if received late.
After all responses are received, the public entity will open all bids and identify all bidders at a designated time and place. The public entity will ultimately select the lowest responsible offer. To achieve this, your bid response must be responsive and responsible. Responsive means you provided all information the public entity requested. The consequences of failing to provide all information can be harsh. Something as simple as either failure to sign a form or failure to include a specified form are grounds for your entire bid being rejected. To determine if you are responsible the public entity will look to see if you have a history of failing to perform previous contracts or completing projects late. Past criminal convictions and other infractions play a role in being responsible. Remember, the public entity is looking for the lowest, responsible offer.
Government contracts provide a remarkable business opportunity for the construction industry. With so many different agencies and perpetual projects, the government project arena offers a lot of opportunity to the right bidder. So what does it take to win a government contract? The answer: knowledge of the bidding process and the specific requirements for particular government agencies. This includes a working knowledge of the methods of pursuing a contract, specifications for each type of agency, and awareness of paths to disqualification. The process varies depending on the type of contract, the value of the contract, and the specific government agency pursued, so it is important to be aware of the rules governing the type of contract you seek.
The process of bidding on government construction contracts varies per agency, however there are certain steps that a business should follow in order to seek and secure a government contract. Generally, the steps include: identifying opportunities; procuring copies of pertinent bid documents and bid terms; pre-bid meetings and/or inspection of existing public facilities; assessing whether your business can meet the bid terms; negotiations and the final agreement.
Many times agencies operate websites that list pending solicitations or they will utilize privately operated services that advertise the solicitations and receipt of bids. Once an opportunity has been identified a bidder should procure a copy of bid documents and become familiar with bid terms. Becoming familiar with the terms and specifications demonstrates to the agency that you are a “responsible” bidder. This action shows you are concerned with meeting their terms and performing the work properly.
Additionally, it allows a bidder to properly assess whether or not they can meet the bid terms. Many times bid terms will require a pre-bid meeting and inspection of the public facilities. If inspection is permitted, be cognizant of any public records limitations on the knowledge you acquire through inspection (often due to public safety considerations).
After receipt and review of the bidding documents, next the bidder must calculate what price to bid and what terms the contractor should include in their proposed agreement. Common requirement/terms include:
- Submittal deadlines;
- License requirements, and attachment of any required forms;
- Insurance, indemnification, and bonding;
- Time for completion of the work;
- The time which the bid and pricing must remain open for acceptance;
- Materials specified, and whether alternatives are permissible or required;
- The cost of permits or other charges by the agency or agencies with jurisdiction over the project; and
- Failure to supply all required information, such as relevant prior experience.
Many times bidders will be disqualified for failure to submit prior to a deadline, failure to include a price or proper signature, failure to specify subcontractors, or failure to provide licensure. Make sure you do not fall prey to these rookie mistakes, because even if you have the lowest price bid, the agency will likely reject it. Agencies have broad discretion in soliciting and accepting their bids. The process by which a contractor is selected is determined by the law applicable to each agency; frequently, protestors make challenges when they find an agency working in violation of these policies. Challenges to agency awards are often made on both substantive and procedural grounds. Protestors should note that there are usually administrative protest procedures with limited filing deadlines. In sum, while agency discretion is not unlimited and may be challenged, it is best to heed the policies and procedures for submittal in order to best secure the contract.
A selection committee then evaluates the responses based on criteria that were listed in the solicitation document as the final step in the process. The highest ranked bidder will be awarded the contract and will be notified by telephone, email, letter, or at public meetings. You must make sure that you provide up to date and correct contact information in your bid response. If your contact information changes during the evaluation process, reach out to the point of contact and provide the new information. Once the contract has been awarded, the winning bidder must either enter into a contract or negotiate a contract. So be prepared and only respond to solicitations that you are absolutely certain you can and will perform.
Once you have made your bid it is important to understand that if it is accepted, an agreement will be formed. A government contract can easily be formed and binding without execution of an independent writing. If a bid is submitted, accepted by the agency, and the contractor was notified, it will likely be established as a binding contract. Id. In other words, Florida courts have found that a bidder’s mistake in its price was binding upon the acceptance by the public agency. Bidders may be relieved of this mistake, but the circumstances justifying such relief are limited.
As evidenced, the process for submitting a bid to a public agency and landing a contract is a detailed process. While the government contract arena is a tremendous opportunity for contractors, it is a process that a contractor should be well versed on before participation. Should you have any questions regarding this process or find yourself in a bid dispute, it is advisable to contact a board certified construction lawyer with knowledge of these issues to guide you through this challenging practice.