Imagine that feeling on bid day: You’ve worked hard to ensure your bid includes everything. You’ve lined-up your subcontractors, secured your bid bond and are awaiting the owner’s opening of bids. But as the bids are opened, you quickly realize that you’ve made a major mistake. Maybe you missed some critical scope items, or underpriced certain portions of the work. Regardless, once the bids are opened you are low, but a wide margin. You soon realize your error and figure out that if you perform the work, you will lose large amounts of money. Likewise, even you want to perform the work, your surety may not issue you the final payment/performance bonds because you are so low in contract price. What can you do?
Can you withdraw your bid?
The short answer is maybe, but you better act quickly.
A bidding contractor may withdraw its bid at any time up until the bids are opened. After that, California law allows a successful bidder to withdraw its bid in very limited circ*mstances. Withdrawing a bid without a claim on your 10% bid bond requires some analysis and close attention to the calendar.
Public Contract Code Section 5103 allows a successful bidder to withdraw its bid, within 5 working days of bid opening, without impact to the bid security (bid bond), but only if the winning bidder can establish, to the owner’s satisfaction, that the bidding mistake was typographical or clerical in nature and only if the owner consents to the withdrawal.
Examples of typographical errors include transposing numbers from a takeoff into the bid or failing to incorporate a subcontractor’s price into your overall bid. The mistake must be clerical in nature, not that you simply regret the bid or the price submitted for the work. Errors in judgment, or overall carelessness in your bid, is not grounds for bid withdrawal without a hit on your bid bond.
In this situation, time is the most important element to consider. A winning bidder must act promptly and in no event later than 5 business days after bid opening.
You must promptly notify the owner in writing of your mistake and request for withdrawal. If you choose to withdraw your bid, best practices dictate that you want to show the owner your mistake. They don’t have to simply take your word for it. Demonstrate to the owner how you made the mistake. Show them material or labor take-offs, subcontractor pricing, etc. The more detail you can provide to the owner through bid-day documents, the stronger your withdrawal will be and thus, the greater the likelihood the request to withdraw will be granted. Best to hire a lawyer who has experience in this field to assist you in getting this done.
If the owner grants your request to withdraw and the project is re-bid, you are prohibited from bidding again on the project.
What if the owner refuses to grant your request to withdraw? In that situation, you should immediately consult with legal counsel. The law affords a winning contractor 90 days to pursue legal action against an owner who fails to consent to a timely bid withdrawal, but certain procedures should be employed to ensure that you will ultimately win a legal challenge. You should also promptly notify your surety of your plan to withdraw so that they are kept in the loop on our efforts in order to protect the bid bond penalty.
For more information on public works bid withdrawals, please contact Lanak & Hanna Principal Attorneys Frank J. Lanak, [emailprotected] and Colin K. McCarthy, [emailprotected].
The information contained herein is not advice and should not be treated as such. You must not rely on the information as an alternative to legal advice from an appropriately qualified attorney.
About Post Author
Colin McCarthy is a principal Lanak & Hanna, P.C. He has been representing owners, general contractors, trade contractors, material suppliers, design professionals, and bonding companies for nearly twenty years, with an emphasis in complex construction projects. He is well-versed in all forms of project delivery methods and fluent with construction plans and specifications.
FAQs
You must promptly notify the owner in writing of your mistake and request for withdrawal. If you choose to withdraw your bid, best practices dictate that you want to show the owner your mistake. They don't have to simply take your word for it. Demonstrate to the owner how you made the mistake.
Can a bid be withdrawn? ›
In many cases — yes. Buyers who have placed a bid can retract their bid any time before the auctioneer announces the sale has been completed. It's important to note, however, that the withdrawal of one bid does not revive any previous bid. The auction will continue with the next highest bidder.
What is the public contract code for withdrawal of bids? ›
10767. Any bid may be withdrawn at any time prior to the time fixed in the public notice for the opening of bids only by written request for the withdrawal of the bid filed with the trustees. The request shall be executed by the bidder or his or her duly authorized representative.
Can a bidder withdraw a bid after opening? ›
In most cases, a bidder cannot withdraw a bid after the bid opening, as it can compromise the fairness and integrity of the bidding process. Once bids are opened, they are considered binding commitments.
What is bid withdrawal? ›
WITHDRAWAL OF BIDS: Bids already submitted may be withdrawn upon proper identification of bidder and provided request is received prior to time of closing.
How can a bidder withdraw his/her bid? ›
A Bidder may, through a Letter of Withdrawal, withdraw its bid after it has been submitted, for valid and justifiable reason; provided that the Letter of Withdrawal is received by the Procuring Entity prior to the deadline prescribed for submission and receipt of bids.
How do you decline a bid on a contract? ›
Tips for Politely Declining a Business Offer
- Send it from the right address. ...
- Check the recipient's address. ...
- Include your company letterhead. ...
- Use an appropriate salutation. ...
- Communicate clearly and effectively. ...
- State That You Are Declining the Offer. ...
- Offer a Reason for Declining the Offer. ...
- Thank Them for Their Interest.
The right of withdrawal allows the consumer to change his mind about the purchase made, freeing himself from the contract concluded without giving any reason. In this case, the consumer can return the goods and obtain a refund of the amount paid.
What is the public contract code 10340? ›
(a) Except as provided by subdivision (b), state agencies shall secure at least three competitive bids or proposals for each contract.
What is the public contracting code 9204? ›
PCC 9204 specifies a mandatory step-by-step claims submission and evaluation process as a precondition to legal action by contractors upon disputed claims. First, the claimant contractor must submit, via registered or certified mail, the claim to the public entity.
During this process there are times when a contractor figures out that it underbid the project and seeks to withdraw its bid. However, a bid may be rescinded only under very specific circ*mstances. Bids may be rescinded due to mutual mistake, fraud and unilateral mistake.
Can a seller cancel a bidders bid? ›
As a seller, you can cancel bids on eBay in the following situations: when you agree to a buyer's request, when the item isn't available anymore, if you made an error in the listing, or if you're concerned the bidder might be fraudulent.
How do I cancel a bid after winning? ›
Politely ask the seller to cancel the transaction and express how much you would appreciate his cooperation. If the seller agrees to release you from your obligation, he can use tools within eBay to do so and then relist the item for sale.
What happens if you bid without money? ›
Most auction houses choose not to pursue complicated, expensive, and time-consuming lawsuits, so failed bid cases rarely end up in court. Instead, unpaid items are usually returned to the original consignor, put into a future auction, or sold privately.
How do I remove a bid from a buyer? ›
If you need to cancel a bid:
- Go to Canceling bids placed on your listing - opens in new window or tab.
- Enter the item number, the username of the member whose bid you're canceling, and the reason you're canceling the bid.
- Select Submit.
Also, an offer must remain open for at least 10 business days after certain material changes. In addition, security holders have withdrawal rights and may withdraw tendered shares during the entire period the equity tender offer remains open.
Are you allowed to withdraw a bid on eBay? ›
When you can retract a bid. You can retract a bid if (Note: these options are only applicable for up to 1 hour when the listing is ending in less than 12 hours): The seller significantly changed the description of the item. You accidentally bid the wrong amount.
