Awarding Authority Can Overlook Bid DiscrepanciesJune 12, 2012
More than 40 years ago, the Massachusetts Supreme Judicial Court recognized that “hurried, last-minute calculations and compilations” often go hand-in-hand with competitive bidding. Bidders on public construction projects frequently refine and improve their bids even up to the final seconds before settling on a final bid price and submitting what they believe is their most competitive bid for the project. This time crunch leaves little room for error. Bidders run the risk that last-minute changes can render an otherwise competitive bid fatally ambiguous. What happens if there isn’t enough time to write out the final bid prices in both words and numbers, as is often required? Or, what happens if the prices written in words do not match the final bid prices spelled out in numbers? Can the awarding authority still accept the bid?
In a recent case handled by Hinckley Allen attorneys, the Massachusetts Superior Court addressed this scenario in a case involving a statewide bridge maintenance contract for the Massachusetts Department of Conservation and Recreation (“DCR”). DCR’s instructions to bidders stated that if there were any discrepancies between bid sums expressed in words and bid sums expressed in figures, the sums expressed in words “shall control” unless DCR were to determine that the intention of the bidder was clearly otherwise. The low bidder’s submission contained handwritten changes to eight unit price items. Each of these items had originally been written out in both words and numbers. When the changes were made, the low bidder crossed out the prices written in numbers and inserted new prices written in numbers. The low bidder did not, however, cross out the prices that had originally been written in words and did not write out the new prices in words. As a result, a given unit price item would have appeared as follows:
Five thousand dollars no cents
The low bidder had initially written its total bid price in numbers only. After the changes were made to the eight unit price items, the low bidder crossed out its original final numerical bid price and replaced it with a new final bid price written in both words and numbers. The sum of the unchanged unit price items and the eight changed unit price items equaled the final total bid price. DCR accepted this low bid.
The second low bidder filed suit seeking to stop an award of the contract to the low bidder. The second low bidder argued that the low bid was ambiguous, and that DCR failed to comply with its own instructions that prices written in words would control over prices written in numbers.
The Superior Court rejected these arguments. The court determined that the total bid price of the low bid, written in words, controlled. As a result, because the sum of the unchanged unit price items and the eight changed unit price items equaled the total bid price, the court concluded that there was “only one mathematical approach” that was consistent with the controlling bid price. Therefore, even though the low bid contained discrepant words and numbers, it was nevertheless subject to only one reasonable conclusion, which allowed DCR to accept the bid. The court concluded that the manner in which the low bidder decided to submit the bid – including the order in which entries were made on the bid form – was left to the bidder. There was no doubt that the low bidder had submitted the bid at issue, and that the low bidder’s president had signed the bid as well as the bid bond. As a result, the court concluded that DCR’s acceptance of the low bid was not arbitrary or capricious.
This case illustrates the potential pitfalls inherent in last minute bid changes. The court in this case expressly acknowledged that if there were more than one way to read the words, numbers, and stricken numbers in the low bid, then the exercise of DCR’s discretion “might well create the opportunity for favoritism and post-bid manipulation that the bid laws prohibit.” Bidders must be careful to ensure that any last-minute changes do not leave their bids open to different meanings. However, as this case teaches, slight bid discrepancies may not be fatal, so long as there is only one reasonable way to read the bid.PDF