Municipalities are still having major issues disqualifying contractors over non-compliant bids. As a matter of fact, we all know that in order to be considered for the award of a contract, a bid must be compliant.
The award of a contract to a non-compliant bidder is almost always actionable in any case in which contract “A” rights arise.
Even in the absence of these rights, such an award will do much to compromise the credibility of the municipality’s bidding process and thus may impair the ability of the municipality to attract competitive bids in the future.
In a RFP, an initial assessment as to compliance is often made prior to the commencement of the bid evaluation process — often shortly after the proposals are opened.
Such a preliminary assessment is less common in the case of a tender, but is still not rare.
The preliminary assessment is in no way binding. Where some non-compliant feature of the bid is discovered during the evaluation process, the bid must still be rejected.
More rarely, a bid initially assessed as being non-compliant may on a subsequent review be determined to be compliant.
While care must be taken resurrecting a bid in this manner, it is quite possible that the evaluators will be in a better position to assess the materiality of some perceived defect than the individual carrying out the initial assessment.
As one court has observed, the assessment of the compliance question starts with the express terms of the tender document. In some cases, whether a bid is compliant with the tender call will be relatively obvious.
However, even the most obvious defect may not ultimately render a bid non-compliant; it is open to the owner to allow for the creation of irregular or even some forms of non-compliant contract A’s in the tendering documents. The reserved right manifested in the “discretion clause” permits an owner to waive irregularities, informalities and, if clearly expressed, forms of non-compliance in the evaluation process.
Later the court continued: With respect to analyzing materiality, the court must look more generally and objectively at the impact of the defect on the tendering process and the principles and policy goals underlying it.
Materiality must be considered against the backdrop that a defective bid may expose the owners to an action brought by a compliant bidder or give the bidder a competitive advantage regarding overall price, thereby impacting both the reasonable expectations of the parties and undermining the integrity of the tendering process — the twin principles that underlie the tendering process.
Compliance criteria must be applied on a non-discriminatory basis.
Non-compliant bids include any of the following:
- a bid that fails to conform to the essential requirements of the invitation for bids;
- a bid that does not conform to the applicable specifications;
- a bid that fails to conform to the delivery schedule;
- a bid that offers non-permissible alternatives to the goods specified in the request for tender;
- a bid that imposes conditions that would modify requirements of the tender or limit the bidder’s liability to the government; or
- a bid that does not include some requisite form of security, such as a bid bond or performance bond.
- A bid is also non-compliant where it is received from a contractor who does not satisfy some condition on eligibility to bid.
This situation may arise when the contractor has not been pre-qualified and there is no reserved right to allow new bidders into the tender, or where some qualifying condition (e.g., some affirmative action criteria) is not satisfied by the contractor, or where the contractor has been suspended or barred from participation, for instance, where they were guilty of some past wrongdoing in relation to a municipal contract.
Stephen Bauld is a government procurement expert and can be reached at email@example.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.