Public Bid Withdrawal After a Missed HVAC Addendum
Prairie Ridge Builders is bidding a $6.2 million public school addition in Kearney. Bids are due Tuesday at 2:00 p.m. On Sunday at 8:00 a.m., the architect issues Addendum 3 changing the rooftop HVAC units from 40-ton to 50-ton and adding a 12-inch curb. Prairie Ridge's estimator is on vacation; the bid is submitted without acknowledging Addendum 3. The bid is $180,000 below the second bidder. The owner's bid form requires acknowledgment of all addenda and a 5% bid bond. Prairie Ridge's bid includes an alternate for a gym floor at $95,000 and a unit price of $1,200 per door. On Wednesday, the owner asks Prairie Ridge to honor its bid; the estimator discovers the missed addendum would add $145,000. The bid bond is $310,000.
1. Can Prairie Ridge withdraw its bid without forfeiting the bid bond? Show the financial and legal reasoning.
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The first step is immediate written notice to the owner before award or acceptance. A bid mistake can support withdrawal only if it is a material, clerical error that the owner knew or should have known, and if the bidder acts promptly; a judgment error in pricing is harder. Here the missed addendum is documented and changes scope, so it is a strong clerical/omission argument. Financially, honoring the bid means absorbing about $145,000. Withdrawing risks the 5% bond, $310,000, but the owner's actual damages may be the difference between the low bid and the next bid, about $180,000, not the full bond. The owner may also reject the bid as nonresponsive for failing to acknowledge Addendum 3. Prairie Ridge should not submit a revised bid after opening unless the owner requests it. It should compare: negotiate a mutual mistake rescission, honor with a documented cost claim if the owner wants to proceed, or accept bond forfeiture only after legal review. The best immediate move is a written reservation of rights and a request for relief, not silence.
2. What should the estimator do about the alternate and unit prices, and how should the company prevent recurrence?
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The alternate and unit prices are part of the bid and can be used by the owner to adjust scope; they should not be used to mask the addendum error. If the owner accepts the base bid, Prairie Ridge must perform the addendum scope unless it obtains a written change order. The estimator should rebuild the estimate from the addendum, confirm the HVAC curb and structural implications, and issue a written notice of the discrepancy. For prevention, the company should use an addendum log, require acknowledgment on the bid form, assign a backup estimator during vacation, and set a bid-closing checklist with a second reviewer. The bid bond amount should be verified against the owner's form. The unit price of $1,200 per door should be checked against actual cost; if it is unbalanced, it can create risk if quantities change. The lesson is that bid day controls and addendum tracking are not clerical details; they are risk allocation.