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Avoid pitfalls on public projects

By Eric Grasberger
Dolan Media Newswires

Portland, Ore. — There is a world of difference between bidding on public projects and on private ones.

Public projects and those paid for with stimulus money will provide at least some relief to the struggling construction industry in 2010. Newcomers and experienced contractors alike should consider the following tips and traps when bidding for public projects.

1. Low bid vs. best bid: Not all public projects are awarded to the lowest bidder. Some are awarded to the “best bidder,” meaning the bidder that provides the best overall offer (usually referred to as a “proposal” rather than a “bid”) in terms of price, experience, personnel, schedule and even financial strength. The best bidder in this process will not necessarily offer the lowest price, but it will achieve the highest score from the public agency’s review committee when considering all factors.

Contractors should identify the selection criteria, clarify the criteria with the agency if necessary and focus bid or proposal efforts accordingly.

2. Take no exceptions: A fundamental rule of public bidding is that bidders must take no exceptions to all requirements of the solicitation. Requirements include agreeing to supply the full scope of work requested and agreeing to all legal terms and conditions of the offering document. Contractors must be sure to dot every “i” and cross every “t,” or risk bid rejection.

3. Confirm licensing, insurance and bonding: Bids or proposals must come from responsible parties.

Contractors can be found nonresponsible because of improper licensing, bonding or insurance, or for criminal convictions or unsatisfactory performance on prior public contracts. Licensing and insurance issues are particularly troublesome.

4. Become familiar with agency rules: Another common mistake is failing to learn an agency’s contract rules. These rules govern the solicitation and bidding processes, and failure to adhere to them can lead to bid or proposal rejection.

5. Clarify often/protest seldom: Litigation by aggrieved bidders is not for the faint of heart or faint of resources. Oregon statutes provide that the winning party is entitled to recoup its legal fees. And there are several legal presumptions that favor public contracting agencies, including the presumption that the agencies (and not the courts) are better suited to determine which contractor best meets the evaluation criteria.

Eric Grasberger is a member of Stoel Rives LLP and is chairman of the firm’s construction and design section.

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