Work with experienced legal counsel to address issues surrounding construction contract bidding

In construction law, the bidding process is a crucial phase of a construction project, since it is when parties establish the overall cost of the project. For contractors, getting the numbers right is important, not only to ensure the contractor is a competitive bidder, but also to ensure the contractor doesn’t set itself up for failure and financial loss.  

The bidding process for construction projects is different for public contracts and private contracts. Public contracts involve a government agency requesting the bid, while private contracts involve private companies. In private contracts, the bidding process is not as formal as with public contracts, since private contract bidding is not bound by many special rules and regulations outside the ordinary rules of contract law. 

In private contract-bidding, the party requesting bids—either the property owner or the prime contractor—has a significant amount of freedom to set its own process for soliciting and selecting bids. There are some rules that govern the process, but the lack of formality is usually significant compared to bidding on public construction contracts.

For public construction contracts, by contrast, formal rules and regulations must be carefully followed. One particularly important rule that controls bid selection for public construction contracts is that winning bids generally must be chosen based on the lowest responsible bid, or some similar standard. When a government agency fails to carefully follow these rules in accepting a bid, the decision may be subjected to legal challenge.

In our next post, we’ll look at a recent case involving this issue, and comment on the importance of working with experienced legal counsel both to avoid legal issues surrounding contract bidding and to address contract-bidding disputes when they arise. 

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