Bid Error, License Scope, and Permit Risk in a County Annex
A Georgia low-voltage contractor submits a $148,000 bid for access control, CCTV, and fire-alarm wiring in a 60,000 sq ft county annex. The bid includes a 120 V circuit to a new camera power supply and a fire-alarm device relocation. The contractor plans to use a licensed electrician for the 120 V work but an unlicensed helper for the fire alarm, and to pull the permit under the general contractor's name. After award, the contractor discovers it omitted $22,000 of conduit and that the fire alarm scope requires a licensed alarm contractor. The owner's representative says the bid is firm and refuses a change order. The contractor has not signed a contract but has a letter of intent; the project is in an Atlanta suburb. The contractor asks whether it can walk away or back-charge the GC.
1. Classify the work by license and permit responsibility. What must the contractor verify before signing or starting?
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The 120 V circuit to the camera power supply is electrical contracting work and must be performed under the appropriate electrical license and permit. The fire-alarm relocation is not ordinary low-voltage work; it requires the alarm contractor license or certification recognized by the AHJ and a fire-alarm permit. Access control and CCTV may fall under a low-voltage contractor license, but the scope must be checked against the Georgia licensing classifications and local requirements. Pulling the permit under the general contractor's name is not a substitute for the responsible licensed contractor of record.
Before signing, verify the contractor's own license classification and expiration, the fire-alarm subcontractor's license, the electrician's license, and the local AHJ permit requirements. Confirm insurance and workers' compensation for every sub. Get the permit matrix in writing: who pulls each permit, who calls for inspections, and whose license is on the application. Do not start work on a verbal assurance that the GC's license covers the scope. If the contractor is not licensed for a portion, either subcontract it to a properly licensed firm or exclude it in writing.
2. Can the contractor withdraw because of the $22,000 omission or back-charge the GC? Analyze the bid and letter of intent.
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A unilateral bid error generally does not let the contractor walk away after the owner has relied on the bid. A letter of intent may create enforceable obligations depending on its wording, so the contractor should not assume it is free to abandon. The contractor should promptly notify the owner in writing of the specific clerical error, provide the bid worksheets, and request reformation or a change order. If the owner knew or should have known of the error, or if both parties were mistaken, there may be a legal basis to rescind or reform, but that is a fact-specific legal question for Georgia counsel.
Back-charging the GC is not available unless a contract or subcontract gives that right and the GC caused the added cost. Here the omission is the contractor's own estimating error, so a back-charge is weak. The practical path is to negotiate: accept the base scope, add the omitted conduit by change order, and exclude or subcontract the fire-alarm work. Do not abandon the project without counsel's advice; that can expose the contractor to delay and default claims.
3. What project controls should the contractor put in place to prevent this on the next bid?
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Use a written scope matrix that lists every system, the license required, the permit required, and the responsible party. Perform a pre-bid site visit and verify existing conditions, conduit quantities, ceiling access, and fire-alarm device compatibility. Have the fire-alarm and electrical subs confirm their scope and price in writing before the bid is submitted. Include a contingency for omitted conduit and unknown conditions, and identify long-lead equipment.
Before award, verify all licenses and insurance certificates, and require a signed subcontract before work starts. Use a change-order procedure that requires written direction and pricing before extra work. Send preliminary lien notices or other required notices under Georgia law, and confirm the deadlines with counsel. Keep RFIs and bid clarifications in the project record. Finally, have a contract review process that addresses bid mistakes, scope gaps, delay, payment, and termination. These controls are cheaper than absorbing a $22,000 omission or losing a license over unlicensed fire-alarm work.