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Withdrawal Of Mistaken Bids

Wednesday, February 09, 2005 01:02 pm

Withdrawal Of Mistaken Bids

When a low bid is based on a clerical or mathematical mistake - as opposed to an error of judgment or interpretation - two questions arise. Is the bidder entitled to withdraw its mistaken bid without forfeiting its bid security? And is a competing bidder entitled to force withdrawal of the mistaken bid, precluding acceptance of the low bid?

The answers to these questions go to the essence of the integrity of the competitive bidding process. Some would argue that it is unfair for a public project owner to take advantage of a known clerical error and enforce a mistakenly underpriced bid against the will of the bidder. Conversely, it can be argued that it is unfair to allow a low bidder to gain contract award when its status as low bidder resulted from its own careless mistake. There is not a large volume of reported precedent on these matters, but it is instructive.

Right to Withdraw

On federal projects, a low bidder is entitled to withdraw a mistaken bid if it can prove the existence of a clerical or mathematical error. Proof is usually - although not necessarily - in the form of bid preparation worksheets. If there is sufficient proof, the bid may be withdrawn without forfeiture of the bid bond or other bid security. Matter of Northwest Builders, Comp. Gen. No. B-228555 (February 26, 1988); CCM September 1988, p. 5.

The right of a bidder on a federal contract to withdraw a mistaken bid is stated in the Federal Acquisition Regulation. Contracting officers are instructed to inform bidders of their right to submit a [...]

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