An Administrator's Guide to California Private School Law

Chapter 17 – Construction

Bid invitations should clearly describe the work prospective bidders will perform and set forth how the bidders may inspect the plans and specifications. Schools may require prospective bidders to participate in a job walk at the project’s location. Schools may also want to include a form construction contract in the bid documents to ensure contractors are aware of the School- prepared contract’s terms and conditions, but schools should note that the finance agreement will be negotiated by the parties. Schools are not required to accept the price submitted by a bidder simply because it used the bid process. Schools are free to negotiate a better price with bidders after submission of the bids. 2321 A school should, however, only use the bidding process if it truly is interested in determining the best-qualified or lowest-priced contractor for the work. The school may face liability if it uses the bidding process simply to check the price offered by its pre-selected contractor. Unsuccessful bidders may be able to recover their costs of preparing and submitting bids, and other damages, if they can show the school already selected its contractor before submission of bids, and the bidding process was a charade. 2322 LCW Practice Advisor Schools should only request bids if they want to determine which contractor is the best fit for the project. Schools should not request contractors to submit bids if the school already knows which 1. W ITHDRAWAL O F B ID Once a school accepts the contractor’s bid, it may hold a contractor to its bid and proposed price absent a contractor’s mistake in the bid. A bidder must demonstrate it made a mistake in the bid, which the school knew or should have known was an error when reviewing the bid, in order to be relieved of its bid. 2323 The bidder may withdraw its bid based on its ordinary negligence, but not if the bidder acted with gross negligence or neglected its legal duty, which means the contractor displayed an extreme departure from ordinary standards of conduct. 2324 If a contractor refuses to perform as promised in its bid, it may be liable for the difference between the amount of its bid and the actual cost to the school for performance of the work. 2325 A school should be cautious if it requires a bidder to construct a project at its bid price after that bidder unsuccessfully attempted to withdraw its bid. The relationship between the school and the contractor may be contentious for the remainder of the project. Furthermore, the contractor may have an incentive to seek increases to the contract amount at every opportunity to make up for its mistakenly low bid price. The school may sometimes be better off releasing the unwilling contractor to avoid disputes and potential delays to the project. contractor it will select to construct the project. This effectively turns the process into a sham and the school may be liable to the unsuccessful bidders for damages.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 557