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The Subcontractor Who Withdrew Two Hours After Bid Opening

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The Subcontractor Who Withdrew Two Hours After Bid Opening

You are low bidder at $2,310,000 on a Virginia county middle-school renovation. Your bid carried the electrical subcontractor's quote of $148,000. Two hours after the public bid opening the electrical sub calls: its quote omitted $52,000 of switchgear, it will not honor the number, and it is "withdrawing." Your estimate was tight - projected gross margin was 6 percent, roughly $139,000. The bid has been read aloud and your firm is listed as apparent low bidder. The procurement officer wants to discuss award tomorrow. Your estimator confirmed the sub's scope by phone three days before bid day but never received written confirmation of the quote.

1. Can your firm withdraw or modify its bid now that the sub has pulled out? Analyze the Virginia rule and the practical consequences.

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Realistically, no.

Virginia's public procurement statute (Va. Code § 2.2-4330) permits withdrawal of a bid after opening only in a narrow circumstance: the bidder must assert a clerical error - a mechanical mistake such as a transposition or extension error - that is evident on the face of the bid itself, and must give written notice within the statute's very short window after opening. Two elements fail here:

  1. Not evident on the face of the bid. The $52,000 gap exists in a subcontractor's quotation. Nothing on the county's bid form shows the omission; the total is internally consistent and reads as a deliberate number.
  2. Not a clerical error of the bidder. A subcontractor changing its price is a commercial event, not a scrivener's error. Bid-withdrawal relief is not a mechanism for re-pricing after the envelope is opened.

Consequences of trying: forfeiture of the bid bond (commonly 5% of the bid, here about $115,500), potential disqualification, and possible suspension or debarment from county work - a far larger loss than the $52,000 at issue. Your firm is bound to its number and must either perform at that number or default.

Action: notify the procurement officer in writing the same day that a subcontractor pricing issue has arisen and that you are evaluating it, without conceding an inability to perform; award decisions turn on whether the apparent low bidder can demonstrate it will execute the contract and furnish bonds.

2. Do you have a claim against the electrical subcontractor for the $52,000, and what are the practical limits on pursuing it?

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Legal theory. The strongest argument is promissory estoppel / detrimental reliance: the sub supplied a price knowing it would be used to prepare a bid, the general contractor relied on it, the reliance was foreseeable and reasonable, and enforcing the quote prevents injustice. That theory is routinely used in the subcontractor-bid context. Contract law offers less help - a quote is often characterized as an offer that the sub claims it revoked before acceptance, and many quotes are issued subject to written confirmation or contain an expiration.

Weaknesses in this file:

  • No written quote - only a phone confirmation. Proof of the exact scope quoted, and of any assumptions, becomes a swearing contest.
  • The sub's written quote, if one exists, may contain a scope-exclusion page that legitimately excludes the switchgear.
  • The measure of reliance damages may be your actual additional cost (re-bidding the package), not automatically the full $52,000.
  • Litigation cost and time: a $52,000 claim against a sub you may work with again is frequently more expensive than the recovery.

Practical path: quantify the real exposure first (rebid the electrical package, get the delta), then negotiate - a split of the gap, or the sub supplying the gear at cost with no markup, is the usual landing point. Send a written reservation-of-rights letter immediately so the claim is preserved while you negotiate. Do not deduct the amount from a future pay application without following the contract's backcharge notice procedure.

3. Quantify the impact on the job's margin and identify the estimating process failures that allowed this to happen.

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Margin impact.

  • Original projected margin: 6% × $2,310,000 = $138,600
  • Added cost: $52,000
  • Revised margin: $138,600 − $52,000 = $86,600, or 3.75% of the contract price

The $52,000 is 2.25 percentage points of margin - more than a third of the projected profit - absorbed on a public job where the price cannot be renegotiated upward. Performance risk is now material: a single additional overrun of 3.7% wipes the job out.

Process failures:

  1. No written quotes. Verbal confirmation three days out is not a bid. Every trade quote should be in writing, dated, with a signature or verifiable email.
  2. No scope-level comparison. The electric quote was compared as a lump sum instead of line-by-line against the specification's gear schedule, so an omission of a major equipment category went undetected.
  3. No assumptions/exclusions review. Quotes must be checked for explicit exclusions, alternates, and 'by others' notes before the number is carried into the bid.
  4. No bid-day confirmation. A standard practice is to call each major sub on bid morning, confirm the number and scope, and record who confirmed and when.
  5. No contingency for a 6% estimate. A 6% margin on a renovation with unknown existing conditions leaves no room for a single trade error; the estimate should have carried a larger renovation contingency or a lower-risk electrical number.