Legal Guide

How to Bid on Government Work

Check, check, and check again!

By: Jeffrey Blumstein

"A little neglect may breed great mischief . . . for want of a nail, the shoe was lost; for want of a shoe, the horse was lost; and for want of a horse, the rider was lost."

Ben Franklin, Poor Richard's Almanac

You've been asked by a governmental body in New Jersey to submit a bid for a contract to provide hundreds of thousands, if not millions of dollars worth of goods or services. No one can peek at your price or anyone else's because the bids are required to be secret until they are all unsealed together. Local government agencies must award the contract to the low bidder. State agencies can take factors in addition to price into consideration, but most of the time the low price gets you the contract.

At the appointed moment the bids are opened. The prices are read. Yours is the lowest. You get the contract, right?

Not so fast.

First your bid package will be scrutinized to make sure it conforms to every specification of the contract bid upon. Any omission, error or deviation from the bidding instructions that can be deemed "material" means a bid is nonconforming which is the same as having no bid at all. Unfortunately, what is a "material," as opposed to a non-material or inconsequential mistake, is totally at the discretion of the governmental body. Only an abuse of that discretion can provide the basis for a reviewing court to overturn the decision to reject your bid.

But even if that happens, there is a practical problem: judicial review might not take place until the contract is completely or substantially performed. You cannot get money for the time that someone else performed the contract, even if a court later decides that you should originally have gotten the contract.

That is why it is very important to review, and re-review your bid before submitting it. Low bids for million-dollar plus contracts have been rejected for mistakes that in the everyday business world would be considered trivial and would be waived in favor of getting the best possible price. Bids have been rejected for the failure to initial a price correction; for failing to include attachments to required bonds; and for submitting a document for informational purposes, such as a warranty, where the wording of that document on its face conflicts with other bid proposal requirements.

Even if only a small change would have made the bid conform, you normally aren't allowed to supplement a bid after its submission. And the governmental agency involved cannot remedy the omission or defect by looking to prior contractual dealings it has had with you.

You have to deal with this up front. How? By remembering what Ben Franklin said. Spend the time to thoroughly go over your bid package before submitting it. If you have any questions, call the governmental agency. There is no restriction on their answering your questions before bids are due. Later on, it is too late. If your bid does get rejected, immediately request a hearing or an opportunity to be heard. Your best chance of getting the contract is to convince the agency itself that the defect or omission is non-material and inconsequential.

If you are not the low bidder, ask to review the bid or bids that are in front of you. You have the right to review all bids that are submitted. Government agencies do not always pick up all omissions, errors or deviations in bids. Many bids are ultimately rejected because of protests started by other bidders. If you have taken the time and effort to ensure that your bid was conforming, you are entitled to insist that other bidders be held to the same high standard of meticulous care.

Szaferman, Lakind, Blumstein, & Blader, P.C.
Committed to Excellence