Nothing is Insignificant or Waivable
Based on the analysis of a recent Louisiana Supreme Court case, public entities should thoroughly review the requirements outlined in their advertisements for bids and bid forms. When it elects to place certain requirements in its advertisement for bids and on its bid forms, the public entity is bound by those requirements and cannot choose to waive them after bids have been submitted. More importantly, the public entity cannot circumvent these established requirements by simply reserving in the bid proposal the right to reject any and all bids.
In Hamp’s Construction, LLC v. City of New Orleans, a bid dispute arose between the city and the second low bidder on a demolition project. Besides other attachments, the bid form required that the bidder attach a copy of the City’s Invitation to Bid issued for the project in order to constitute a complete bid proposal. Additionally, the Invitation to Bid contained the following telesmatic language: “The City reserves the right to reject any and all bids and to waive any informalities.” Naturally, the low bidder did not attach a copy of the City’s Invitation to Bid for the project to its submitted bid, while complying with all of the other requirements of the bid form and the advertisement for bid.
The City argued that the failure to attach the Invitation to Bid to the bid constituted a waivable and non-substantive deviation from the requirements of the bid form. Hamp’s argued that the 2001 amendment to the Public Bid Law eliminated a public entities’ ability to waive any deviation from its bid requirements; thereby changing the law and effectively overruling prior appellate decisions that analyzed whether or not the deviation was of substance (non-waivable) or of form (waivable).
The Public Bid Law currently states that “the provisions and requirements of [the Public Bid law], those stated in the advertisements for bids, and those required on the bid form shall not be waived by any public entity.” In reviewing this language, the Supreme Court reasoned that the amendments to the Public Bid Law emphasized that bid requirements cannot be waived under any circumstances, regardless of whether they could be viewed as informalities. Once the public entity establishes a requirement, that requirement must be uniformly followed by all bidders. If the bid is deficient in any way, it will be considered non-responsive.
For a copy of the Court's full opinion in Hamp's Construction LLC v. City of New Orleans, click here.
Written for The Legal Blueprint, Issue 1.
