Articles >> These Things Considered: Uniform Bid Form

Louisiana AGC Action News April 2010 - Russel W. Wray

The economy is a paramount concern these days keeping many of us up at night. The Governor is pushing state agencies to economize in anticipation of a $3 Billion drop in state revenue. This is not the time for state government in Louisiana (or elsewhere) to waste taxpayer dollars in procurement of public works. The Public Bid Law is designed and intended to obtain the best price for public work through open competitive bidding, and to avoid fraud and favoritism at taxpayer expense. Competitive bidding depends upon the scope of work as well as the terms and conditions being the same for all bidders, the price being the sole distinguishing factor.  Uniformity is critical to the competition.

When the economy turns sour, the number of bidders on public projects dramatically increases, and invariable, bid disputes erupt.  During the economic downturn in the early 1980's, the Public Bid Law was amended in La. R.S. 38:2212 A(1)(b) to quell bid disputes and provide a bright-line rule to preclude waiver of bidding errors that could allow for mischief by public officials. Let’s face it, bid disputes are costly to all parties involved, not the least of whom is the taxpayer.

Over the 25 years since it was first enacted in 1984, Section 2212 A(1)(b) has been clarified several times, most recently in 2001.  Currently, it provides:

“The provisions and requirement of this Section, those stated in the advertisement for bids, and those required on the bid form shall not be waived by any entity.”

During that time, several appellate courts continued to employ the traditional substance vs form analysis to allow waiver despite the clear language of 2212 A(1)(b). The ability to waive minor errors allowed public agencies spending taxpayer dollars to pick and choose the “low bidder” who was not always the least expensive choice for the work.

After many writ applications were denied, the Louisiana Supreme Court, in 2005, granted writs in Hamp’s Construction, L.L.C. v. City of New Orleans, 2005-0489 (La. 2/22/06), 924 So.2d 104. In that case, the bidder at issue merely failed to attach a copy of the invitation to the bid form, an error that under the law prior to 2212 A(1)(b), would not only have been waivable, but would not likely have been just cause to reject the bid. Thus, the issue of the proper scope of interpretation of 2212 A(1)(b) was squarely before the court in Hamp’s. The High Court in Hamp’s, quoting from their 2004 decision in Broadmoor, L.L.C. v. Ernest N. Morial New Orleans Exhibition Hall Authority, 2004-0211 (La. 3/18/04), 867 So.2d 651, said:

Thus, we reaffirm that language from the majority opinion in Broadmoor and hold that La. R.S. 38:2212A(1)(b) mandates that “when a public entity elects to place certain requirements in its advertisement for bids and on its bid forms, that entity is bound by those requirements and may not choose to waive them at a later date.” As stated by Justice Weimer in his dissent in Broadmoor:

This prohibition against waiver furthers the public interest because it expressly prevents a public entity from specifying certain requirements in a bid and later changing those requirements to accept alternate or substitute proposals. In this sense, the law severely curtails the discretion of the public entity, thereby insuring a level playing field for all bidders and a fair and equitable means by which competing bids might be evaluated to determine the lowest responsible and responsive bidder. One bidder cannot be provided with an advantage over another bidder due to a waiver.

The court concluded that the most recent amendment to the statute serves to emphasize that these requirements cannot be waived under any circumstances, regardless of whether they could be considered as informalities. Accordingly, the public entity should not include any requirements in its advertisement for bids or bid form that it considers insignificant or waivable, because once included, these requirements are nonwaivable as a matter of law.

So now what? Bidders were given the “level playing field” they wanted but in the form of an unyielding rule requiring rejection of their bid for any error on the bid form. Rejected bidders were upset and some didn’t see the big picture.  Moreover, the lowest prices offered were lost in favor of higher bidder sometimes due technical errors. In response, the legislature passed an amendment to 2212 in 2009 to make the bid form uniform for all public works, and instructed the Division of Administration to promulgate a uniform bid form. The bid form on all public works can now include only:

“Bid Security or Bid Bond, Acknowledgment of Addenda, Base Bid, Alternates, Bid Total, Signature of Bidder, Name, Title and Address of Bidder, Name of Firm or Joint Venture, Corporate Resolution and Louisiana Contractors License Number, and on public works projects where unit prices are utilized, a section on the bid form where the unit price utilized in the bid shall be set forth.”  La. R.S. 38:2212 A(ii)(aa).

All other information requested is to be supplied at a later time by the bidder (which includes such things as DBE form, financial information, and the non-collusive affidavit, etc.). The uniform bid form was officially promulgated August 20, 2009. The purpose is to simplify the process and minimize the opportunity for errors requiring rejection of the bid.

Despite that, public agencies have continued to impermissibly require other information with the bid form. The Division of Administration itself has done so, and other public entities for various reasons have also done so. This leaves unresolved issues as to whether doing so invalidates the process and require all bids be rejected. The better solution is to treat the bid form (which forms parts of the contract) to be considered much like a statutory bond. Whatever is added that’s extra is read out.  La. R.S. 8:2216 M provides:

Any term, provision, or condition of any contract for public works which is contrary to or in violation of the provisions of the Public Bid Law, Chapter 10 of this Title, is against public policy and shall be invalid and unenforceable. When a contract contains a provision which is invalid and unenforceable under this Subsection, that provision shall be severed from the other provisions of the contract and the fact that the provision is void and unenforceable shall not affect the other provisions of the contract.

Thus, errors in extraneous forms should not be ground for rejection based upon 2212 A(1)(b), under the Hamp’s standard. 

The courts and the industry will continue to grapple with the issues and, despite the legislature’s best efforts to do away with bid disputes, such disputes continue today. Courts will also need time to accept that the legislature said what they meant and apply the law as written.  Hopefully, that won’t take them another 28 years!

Russel W. Wray is a partner in the firm of Wray & Pierce, L.L.P., in Baton Rouge, Louisiana. Questions or comments can be directed to Mr. Wray at P. O. Box 3238, Baton Rouge, Louisiana 70821-3238, telephone (225) 334-9200, fax (225) 334-9288; and email: russwray@wraylaw.com.