In part one of this four-part series, a Charlotte contractor lawyer from Cotney Construction Law discussed the process local governments follow for developing precise project specifications and two types of solicitation methods for procuring bids from contractors: informal and formal. In this section, we will continue to explore this important topic focusing on how bids should be submitted to the government and the process for opening bids.
When submitting a bid to your local government office in North Carolina, it’s important to follow the following rules:
- There is no exact procedure for submitting informal bids. According to North Carolina law, an informal bid does not need to be sealed or received in any particular form to maintain validity. Contractors may submit a bid by fax, phone, electronically, or in any other form pre-approved by your local government.
- Formal bids must be sealed and sent to your local government office in paper form. Formal construction bids may not be submitted electronically, by fax, or by phone. If the pertinent government entity opens a bid before the official date and time established for opening bids and fails to obtain permission from the bidder, they will be charged with a Class 1 misdemeanor.
The process for opening bids is markedly different depending on whether the bid is informal or formal. Informal bids do not need to be opened at a public bid opening. Conversely, formal bids are required to be opened in a public area at the time, date, and location listed on the formal advertisement. However, there are many important caveats to the formal bid opening process including:
- In order to open bids for a government contract, the government must receive a minimum of three bids. These bids must be submitted by qualified and experienced contractors who have proven their competence in contracting. If less than three bids are received, the local government is required to re-advertise the proposed job. At this point, if they are unable to receive three bids, the contract will be awarded to the lowest responsive, responsible bidder.
- All bids submitted for projects that fall in the formal bidding range ($500,000 or more) are required to include a bid deposit equal to a minimum of five percent of the bid in the form of cash, cashier’s check, certified check, or bond. It is imperative that this deposit is included at the exact time the bid is submitted to the local government.
- Formal bids may be withdrawn at any time before the bid opening without incurring a penalty.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.