Addendum 3, a Transposed Unit Price, and a Verbal Roofing Quote
Valencia Construction is bidding a 42,000 sf pre-engineered metal building for a school district. Bid opening is Friday at 2:00 p.m.; a 5% bid bond is required.
Addendum No. 3, issued Tuesday, changes the roof from 24-gauge to 26-gauge standing seam and adds six skylights, and its second page requires bidders to acknowledge all addenda on the bid form. The estimator has a verbal $52,000 quote from a roofing subcontractor for the original roof scope and never calls back. Thursday night he transfers figures from his worksheet: the skylight line reads $1,850 each, but he types $185 each for six units. His final bid is $3,682,000 - $286,000 under the engineer's estimate and $212,000 under the apparent second bidder. He shows gross receipts tax as "included" when the form requires it as a separate line, and the bid form does not acknowledge Addendum 3.
1. Classify each defect as (i) a correctable clerical error, (ii) a nonresponsive bid item, or (iii) an unpriced risk the contractor must simply absorb. What should the estimator do before 2:00 p.m. Friday?
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Skylights - clerical error. $185 versus $1,850 is a demonstrable transposition, provable by arithmetic: the correction is $9,990 and is evident on the face of the worksheet. Critically, correcting it raises the bid to $3,691,990, still $202,010 below the second bidder, so the correction gives the bidder no competitive advantage - the test most owners apply when deciding whether to allow a correction rather than force a withdrawal.
Roofing - an absorbed risk. Pricing from a verbal quote for a scope superseded by Addendum 3 is a judgment error, not a clerical one. The contractor owns it. Correct move Thursday night: get a written 26-gauge quote and price it, or accept the number and the margin hit.
Unacknowledged addendum - nonresponsive. A bid that does not acknowledge a material addendum is rejected; it cannot be cured after opening. This is the defect that would actually disqualify the bid.
GRT not on its own line - likely a minor informality if the amount is computable from the bid and does not affect price or competition, but it is a fight the contractor should not choose to have.
Before 2:00 p.m.: re-price the roof, fix the skylight figure, acknowledge all three addenda on the form, and show GRT separately. Do not submit hoping to "fix it after opening."
2. If the bid is opened as described and the company wants out, what must it prove, and what is at risk?
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Forgetfulness and thin margin are not grounds. A bidder seeking relief must submit a written request to the owner before award, with clear and convincing documentation that a clerical or mathematical mistake occurred, that the mistake was material, and that relief will not prejudice the other bidders or give the withdrawing bidder an unfair advantage. The typical proof package is the takeoff worksheet, the subcontractor's written quote, the estimator's time-stamped files, and the arithmetic showing the error.
The honest admissions in this scenario undercut the request. The roofing number is a business judgment, and owners routinely reject "we forgot the addendum" as a plea. If the only true clerical error is the $9,990 skylight transposition, the owner may simply correct the bid upward rather than release the contractor - and the contractor stays bound.
At risk if it walks away: the bid bond is 5% of $3,682,000 = $184,100. The surety pays, then pursues the contractor for indemnity. Beyond money, an unjustified refusal to execute can lead to suspension or debarment from public work and damage the company's bonding relationship - a far larger cost than the roofing margin.
3. Name three concrete changes to the estimating process that would have prevented all of this.
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Addendum control. Log every addendum on receipt, assign each to the estimator who owns the affected scope, and build the bid-form acknowledgment into the final submission checklist. No bid form leaves the office without a signature line confirming every addendum number is entered. A bid-addendum matrix printed and taped to the bid folder costs nothing and prevents the one defect that disqualifies a bid outright.
Written quotes only, with scope dating. No verbal number is entered in a bid. Each quote is recorded with date, specification, revision, and exclusions, and any quote predating the latest addendum is flagged. This is not about distrust of subcontractors - it is about being able to prove, hours later, what was priced.
Independent back-check and price reconciliation. A second person re-multiplies unit price × quantity for every line above a threshold (say $5,000) and compares the total to the engineer's estimate and to similar past jobs. A bid that comes in 8% under the estimate should trigger a review, not a celebration. Add a GRT line and a bond/insurance line to the standard bid recap so neither can be omitted or silently "included."