Competitive Bidding Requirements

Competitive Bidding Requirements

Public works contracts are subject to numerous competitive bidding requirements, which are set forth in the Public Contract Code. The public works bidding process generally involves the submittal of sealed bids by all bidders on a specific date and to a specific place prior to an ironclad time deadline. The bids are then opened and read, and typically the lowest bidder is awarded the contract and becomes the general contractor.

Competitive bidding requirements serve several important purposes. As previously discussed, bidding laws exist to protect the public from misuse or waste of public funds, provide all qualified bidders with a fair opportunity to enter the bidding process, stimulate competition in a manner conducive to sound fiscal practices, and eliminate favoritism, fraud, corruption, and abuse of discretion in the awarding of public contracts.

However, the Public Contract Code provisions are narrowly construed so, unless a particular public entity is specifically subject to its provision, the Public Contract Code will not apply. For example, several California courts have held that charter cities are not subject to various provisions of the Public Contract Code competitive bidding provisions. However, the Code now states that if a charter city wishes to depart from the Public Contract Code, it must specifically set forth its alternative rules and procedures in its Charter.

The general rules of contract law are applicable to the competitive bidding process. Bids are considered irrevocable offers or options. Public agencies generally take the position that competitive bidding requirements exist for the benefit of the public and were not established to protect individual bidders. However, the Code now states that if a charter city wishes to depart from the Public Contract Code, it must specifically set forth its alternative rules and procedures in its charter.