Unless otherwise authorized by law, state and local governments must award contracts through competitive sealed bidding and award those contracts to the “lowest responsive and responsible bidder.” Pennsylvania court decisions have given us the following insight into what is meant by the terms “responsive” and “responsible.”
Responsive Bidder
A responsive bidder is one that submits a bid which fully conforms in all material respects to the requirements and criteria in the invitation for bids. Pennsylvania law is clear that instructions to bidders must be strictly followed for a bid to be valid, and a violation of any mandatory instructions constitutes a legally disqualifying error for which a bid may be rejected. However, the instructions for bidders might include a provision giving the contracting agency the discretionary authority to waive technical defects in the bid. Courts have held that a state or local government may waive these defects, but only where the non-compliance (1) does not deprive the state or local government of the assurance that the contract will be entered into and performed and (2) does not confer a competitive advantage on the bidder. Note that the state or local government must reserve for itself the right to reject the technical defect in the bid documents; otherwise, the provisions are mandatory and cannot be waived.
Responsible Bidder
A responsible bidder is one that has the judgment, skill, promptness, faithfulness, competent workmen, honesty, financial standing, reputation, experience, resources, facilities, past history of adherence to plans and specifications, capacity, ability, availability, and efficiency to do the project. The question of who is responsible is one for the sole discretion of the state or local government. That places the burden of proof on the bidder to show that the state or local government who set the terms of the bid and awarded the contract abused its discretion. In other words, there is a presumption that public officials are within the limits of their discretion in drawing up bid specifications and awarding contracts. However, a state or local government may only reject a bid on the basis that the low bidder is not responsible after a full and honest investigation, which would require interviewing the bidder’s references and documenting those responses. The decision must be based and supported by the results of the investigation. A bidder whose bid will be rejected on the basis of lack of responsibility should be given an opportunity to respond to the findings of the investigation, otherwise there may be a violation of the bidder’s due process rights.
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Please contact the author of this article, Wayne S. Martin, should you have any questions about your rights and obligations with respect to a public bid by calling (717) 763-1383 or via email at WMartin@ReagerAdlerPC.com. Wayne, who is part of Reager & Adler’s Litigation Group, holds a B.S. in Civil Engineering from the University of Pittsburgh and a J.D. from the Widener University School of Law. Prior to passing the Bar, Wayne worked as a licensed Professional Engineer. His practice focuses on all aspects of civil litigation, construction law, employment law, zoning and land use, and debt recovery law.