Five Working Days: A Bid Mistake on a School District Job
Tidewater Construction is the apparent low bidder at $4,180,000 on a school district modernization. Additive Alternate No. 1, gym HVAC at $310,000, was not included. The night before bid opening, Tidewater's estimator read a masonry quote of $620,000 as $260,000 and carried that number into the bid, understating the bid by $360,000. Nothing on the face of the bid reveals the error: unit prices and extensions are internally consistent. The second bidder is at $4,405,000. Tidewater's listed electrical subcontractor, carried at $415,000, let its DIR registration lapse three weeks before bid opening. The bid form requires listing subcontractors for work over 0.5% of the bid and incorporates Public Contract Code section 4100 et seq. Bids opened Monday; today is Wednesday.
1. Can Tidewater withdraw its bid without forfeiting bid security, and may the district simply correct the error?
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Public Contract Code sections 5100 through 5107 give a bidder a narrow escape route. To withdraw without forfeiting bid security, Tidewater must:
- Give written notice within five working days after bid opening. Here that means no later than the following Monday. Miss it and the remedy disappears.
- Show a clerical mistake, not a business judgment error, with verifiable documentation: the masonry subcontractor's actual $620,000 quote, the estimator's worksheet, the takeoff, and the internal review trail showing the transposition.
- Show it would be inequitable to hold the bidder to the bid.
The district may not rewrite the bid. Because the error is not apparent on the face of the bid (unit prices and extensions are internally consistent), the district cannot correct it. Its choices are to hold Tidewater to $4,180,000 or let it withdraw and award to the $4,405,000 bidder. Bid security is forfeited only when an awarded bidder fails to execute the contract, not when a timely mistake claim is granted.
Judgment call: an $360,000 error on a $4.18 million bid is roughly 8% and will exceed the fee and the bond exposure. Send the notice now and lock down the documentation rather than waiting to see whether the district volunteers relief.
2. What must Tidewater do about the listed electrical subcontractor whose DIR registration lapsed, and how does that issue interact with the bid mistake?
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Every subcontractor on a California public works project must be registered with the Department of Industrial Relations at all times (Labor Code section 1725.5). A listed electrical sub without current registration cannot lawfully perform the work, and leaving it on the job exposes Tidewater to withheld progress payments, penalties, and prevailing wage liability as the prime.
The listing is not fatal. Public Contract Code section 4107 permits substitution of a listed subcontractor without that subcontractor's consent and without penalty where the subcontractor fails to meet the registration requirement. The process:
- Send a written substitution request to the district identifying the statutory ground and attaching DIR records for the proposed replacement.
- Obtain the district's written consent and track the response period.
- Do not let the unregistered sub mobilize, and do not self-perform electrical work unless Tidewater itself is both licensed for that scope and DIR-registered.
The two issues are independent: resolving the registration problem does not cure the bid mistake, and withdrawing the bid would moot the substitution. Run them in parallel and keep the district informed in writing so neither problem looks like concealment.
3. From the district's side, how should the award decision be made once Tidewater files its notice?
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The district's obligation is to award to the lowest responsible bidder on the work as bid. It may not negotiate price, and it may not award the base bid to one bidder and re-bid the masonry scope.
Decision tree:
- If Tidewater's documentation supports a clerical error, accept the withdrawal and award to the $4,405,000 bidder. The $225,000 difference is the cost of a clean record and a contractor that will not litigate the contract.
- If the documentation is thin, the district may insist on performance. Tidewater's option is then to execute the contract and pursue a claim; refusing to execute after award forfeits the bid security.
- The alternate is unaffected. Additive Alternate No. 1 ($310,000 gym HVAC) is added to whichever base bid wins, so it does not change the ranking.
- Document the reasoning. A losing bidder or the district's own board may ask why the low bid was not taken; the file should show the statutory basis for the withdrawal and the dates notices were received.
From Tidewater's side, the five-working-day clock drives everything. From the district's side, the calendar and the written record drive everything.