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Q & A: Public Bidding in Iowa
Competitive bidding on Public Works has provided quality work and good prices for the Iowa taxpayer. The following are commonly asked questions regarding public bidding in Iowa.

When must bids be let for public projects?

Primary highways* $1,000.00
Secondary roads $50,000.00
Farm to Market roads $1,000.00
Local government improvements (cities, counties, schools, Regents) $25,000.00
Levee & Drainage projects $10,000.00

*IDOT need not advertise for bids for emergency primary highway repairs that are caused by unforeseen events if it solicits bids from three highway contractors and the repair work costs less that $75,000

Does the use of federal funds on a state or local project change the bidding requirements?
It will not change the circumstances of when a project must be let for bid. It may change the criteria for letting a project, i.e. the use of targeted businesses, etc.

What bid must a public authority accept?
Public improvements, other than highways, must be let to the lowest responsible bidder. Highway letting authorities may take into account the price of the bid, financial ability, experience and equipment.

What does "lowest responsible bidder" mean?
It does not mean the lowest dollar figure. The amount of the bid is only one factor in determining the winning bid. A public authority has wide discretion in determining who is a "responsible" bidder, but it must have a valid reason for determining a bidder is responsible or is not responsible.

When is the determination made that a bidder is "responsible"?
Generally, that decision is made after the bid opening, but before the contract is awarded by the public authority. There is no state law requiring that this determination be made before bids are solicited or opened by the public authority. Thus, just because a potential bidder is sent a bid proposal by a public authority, does not mean the public authority has made a determination that potential bidder is qualified to bid or is a responsible bidder. However, bud proposals may contain requirements, such as net worth or bonding capacity, which are such that a potential bidder is precluded from submitting a bid because of its inability to satisfy those requirements.

Furthermore, the Iowa Department of Transportation has the authority to require a prospective bidder to meet pre-qualification standards before that bidder's bid proposals will be considered. See IDOT Standard Specifications for Highway and Bridge Construction (1997 Edition) section 1102.

Under What circumstances may a public authority reject bids?
Generally, a public authority may reject all bids for any reason, including the fact the bids were all above its estimate of the cost of the project. It may reject any bid not conforming to the request for bids.

If a public authority rejects all bids, must it relet the bids?
Highway letting authorities (state or county) may reject all bids and let the award to a private contractor or construct the project itself using "day labor", but the cost of the project may not exceed the lowest bid received. It need not relet the bid. Other public authorities may reject all bids, but must relet the project. It may not reject all bids and negotiate a price with a private contractor.

If a low bidder does not sign the contract when it has been awarded the bid (whether or not the public authority then forfeits the bid bond as a result) or withdraws the bid before acceptance and the public authority must relet the bid, may that bidder bid on the relet project?
Nothing in the law would prevent a bidder who refused to sign a contract for any reason or who withdrew a bid prior to acceptance from rebidding on the reletting caused by that bidders actions. However, a public authority who is authorized to accept only the lowest responsible bid, could, depending on the reason for the low bidders refusal to sign the contract or withdrawal, find that such a bidder was not responsible.

Can a public authority give preference to local contractors?
A public authority (state or local) must give a preference to an in-state contractor equal to any preference given by the state in which the out-of-state contractor comes from. A local public authority (city, county, school district) may not give a preference to a local contractor over another in-state contractor.

If I make a mistake in my bid, can I withdraw it?
A bidder has an absolute right to withdraw a bid for any reason prior to the bid opening. After the bid opening, there may be a penalty, often in the amount of the bid bond. Whether the public authority allows a bidder to withdraw a bid after opening without penalty depends on whether the mistake was merely a clerical mistake (i.e. someone miscalculated or left out a critical component) which is obvious on the face of the bid and whether the public authority has changed position because of the bid. Generally, the earlier the attempted withdrawal, the more likely the chances it can be done without penalty.

What types of construction services don't need to be bid?
Generally, professional services such as architects, engineers and construction managers on a project need not be bid.

May a public authority award a project to a bid which does not conform to the request for bids?
No. The public authority may not award a project to a bidder whose bid does not conform to the request for bids, not may it negotiate with that bidder to change its bid to be in conformance with the request.

What are my options if I am the low bidder, but I am not awarded the bid or I am the second low bidder, but I don't think the low bidder is qualified or made a bid in conformance with the request for bids?
Like withdrawing a bid, the quicker a protest is made to the public authority about its award of the bid, the greater the chances are of successfully convincing it to set aside the bid, if your reason is valid. If the public authority has made a mistake in awarding the bid, it may reject all bids and relet the project or award the bid to the lowest responsible bidder who has submitted a valid bid.

What are my options if the public authority denies my protest and awards the bid to another?
You may sue is district court (or if a state agency is involved, through the state's administrative appeals process), but your damages are generally limited to the cost of preparing your bid. You may also sue to enjoin the award of the bid, but you must act extremely quickly in this case, before the project is started. Furthermore, generally only a taxpayer of the public entity awarding the bid has the right to sue to enjoin the letting of the bid. Being the losing bidder does not give a contractor "standing" to bring such an action, unless the contractor is a taxpaying entity of that public authority.


The Associated General Contractors of Iowa
701 East Court Avenue, Suite B -- Des Moines, IA 50309
phone: 515-283-2424 fax: 515-244-6289

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