Public Works Contracting
Lowest responsive, responsible bidder
The award goes to the lowest bidder who is both responsive (the bid conforms to the invitation - addenda acknowledged, bid bond included, subcontractors listed, DIR registration active) and responsible (licensed, financially capable, experienced). Bids are opened publicly, and the agency may reject all bids. Protests must follow the agency's procedure and deadlines.
Once awarded, public contracts typically require a performance bond and a payment bond, each for 100 percent of the contract price, along with insurance and prevailing wage compliance. Changes must be authorized in writing, and retainage is capped at 5 percent. Prompt payment statutes set deadlines for paying contractors and subcontractors.
The Subletting and Subcontracting Fair Practices Act governs listed subcontractors: substitution requires a written request, an agency determination, and generally a hearing, with limited statutory grounds such as failure to perform or loss of license.
Trap: substituting a listed subcontractor without consent exposes the prime to penalties and license discipline. Another trap: a bidder who refuses to execute the contract after award forfeits the bid bond.
Rule of thumb: responsiveness is pass/fail and is judged as of bid opening; after opening, only clerical errors that give no advantage may be corrected.