Legislation Would Prevent Costly Litigation To Rescind Bid
TRENTON – Legislation sponsored by Senator John Girgenti (D-Passaic) to permit contractors to withdraw a bid proposal for a public works contract if a clerical mistake is made by the bidder – particularly to prevent a costly, drawn-out legal process – was approved by the full Senate.
“If a contractor makes a mistake on a bid submitted for a public job, the only way to withdraw it is to take the case to the courts,” said Senator Girgenti. “By allowing companies to rescind a proposal – after providing sufficient evidence of an unintended, and potentially financially devastating, error – we will help prevent costly legal battles and keep companies doing business in New Jersey.”
The bill, a Senate Committee Substitute for S-514, would allow a bid to be withdrawn prior to the time specified for receipt of bids, or up to five business days after either a bid opening or a scheduled pre-award meeting, whichever comes later. The request to withdraw a bid would need to be submitted to the contracting unit by certified or registered mail, and would be effective upon mailing, under the bill.
A contractor who wishes to withdraw a bid would be required to submit credible evidence that supports the claim of an error for the withdrawal, demonstrating the following:
� The error, clerical as opposed to judgmental in nature and verifiable by written evidence, occurred in the computation of the bid;
� The error constitutes either an unintentional and substantial computational error or an unintentional omission of a substantial quantity of labor, material, or both, from the final bid computation; and
� There was an absence of gross negligence in the preparation of the bid.
The decision of the governing body would be final and the bidder would be disqualified from future bidding on the same project.
“Forcing contractors into an unnecessary legal process could result in project delays, incomplete work and excessive attorneys fees that will end up hurting both the public entity and the contractor,” said Senator Girgenti. “This bill would allow companies – only after significant scrutiny of their proosal – to withdraw their bid and avoid what could become a financially ruinous situation.”
The bill cleared the Senate Monday by a vote of 33-0. The Assembly must still consider the legislation.