What Officials Need to Know About Public Bidding
State Law Limits Municipal and Actions for New Construction Projects
Sep 5, 2009
State laws normally define how contracting for public construction projects must take place. The State legislature will normally define such things as:
- What size project must be bid as opposed to selecting a contractor by sole source,
- How a project must be advertised—the number of times, number of days between ads, time before receipt of bids for the last ad, where ad must be placed,
- Manner of changing bidding terms,
- How bids are to be received and made public,
- How a project is to be awarded based on bids received, and
- Method for waiving any or all of these requirements for emergency situations.
Many Laws Governing Public Bidding Are Archaic
Public bidding laws were first put in place to prevent elected officials from using public contracts as a type of patronage. Corrupt officials would simply give projects to relatives and cronies as rewards. Often these people were paid more than the project was worth, and were not competent to complete the work project. Taxpayers were left over-paying for substandard work.
To correct this and protect the taxpayer, State legislatures enacted laws governing the process of awarding taxpayer funded projects. Projects of some minimal size (in some states as small as $20,000) must be awarded through a public bidding process. The laws will prevent cronyism. If the mayor’s brother wants to construct a new water line for the City, he must bid against everyone else.
At times elected officials chafe at these rules, which tie officials’ hands and sometimes delay important projects moving forward. The laws typically lag behind technology, and don’t take advantage of the information era. Faxed bids or e-mailed bids don’t work if the law requires “sealed bids.” Bids received on an informal basis will not be allowed if the law says “public bid opening.” Advertisement on an electronic bulletin board will not work if the law says “in a newspaper of general circulation” or “in the newspaper of record.”
Waiving Certain Bid Requirements
Most State bidding laws recognize that, for certain projects in certain circumstances, open bidding might not be the best procedure. Perhaps closed bidding to pre-qualified contractors is best. Or perhaps, for a large project that must be completed quickly, contractors should be of a certain size and have certain numbers and types of equipment available. Or, for an project resulting from emergency conditions, the time required for bidding may result in a condition dangerous to the public to exist for too long of a time.
In those cases, the governing board of the community (City Council, County Commission, Water Board, etc.) must follow certain prescribed steps to waive all public bidding or a part thereof. This must be done before the project is advertised. Some requirements can possibly be waived after the advertisement but must be before bids are taken. At times, however, public officials are too anxious to lay aside state bidding laws.
Modern Methods of Communication May Not Work for Public Bidding
In this era where communications occur at the speed of light, and paper is giving way to pixels, many cities and counties are tempted to “go green” and do away with paper bids. E-mail is the way to go, some think. However, before allowing bids to be delivered by e-mail, fax, or other instantaneous communication, elected officials should check to see if State law allows it. The desire to cut back on paper is laudable, but the law must be followed.
A source for learning exact requirements for public bidding is the Municipal League. Each state has an organization of cities and/or counties that supports cities with resources and expertise. The Municipal League will include a staff attorney who will be familiar with all restrictions imposed on bidding by state law, and can guide the local official through any questions or concerns about the bidding process. The Municipal League will also work with the state legislature to bring about changes in the law, when requested to do so by members.
Elected officials can also rely on design professionals to navigate the minefield of state bidding laws. Engineers, architects, landscape architects, and other design professionals normally have much expertise in dealing with public bidding, and can help the municipal official to stay within the law.
A desire to modernize the bidding process should be tempered with the realization that the local municipal official is not free to change the bidding process. State law must be followed to keep the local government out of trouble.
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