Permissible Changes in Scope of Work for Construction Contracts (2015)

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

4Code) includes processes for competitive sealed bidding that are used for design-build and other alternative delivery methods.3 The ABA Model Code provides that competitive sealed bidding is still the default selection method although it is no longer a statutory preference.4 Procedures for selection of contractors on transpor- tation infrastructure projects are based on state stat- utes and administrative rules. The underlying objec- tives of today’s bidding laws and regulations that require competitive bidding are the prevention of favoritism in expending public funds, the stimulation of competition in the construction industry, and the achievement of the best economic result for the pub- lic.5 Many state courts have stressed the objectives of competitive bidding. In New York, for example, the importance of complying with competitive bidding is illustrated in District Council No. 9 International Brotherhood of Painters & Allied Trades v. Metropoli- tan Transit Authority,6 where the court stated: The intent of the bidding statutes is to prevent favoritism, improvidence, extravagance, fraud and corruption and to promote economy in public administration and honesty, fidelity and good morality of administrative officers. ...This policy is so strong that a violation of the competitive bidding statute renders a public works contract void.7 The avoidance of favoritism and fraud is an important factor. However, the primary objective has always been to obtain a full and fair return on the expenditure of public funds. This is accomplished by extending invitations for public contract work on an open and equal basis to all that are able and will- ing to perform the work. Through supervised compe- tition among the parties, the public is assured that there will be a real and honest basis for the work performed.8 In Florida, as another example, the major objec- tives of competitive bidding are found in Wester v. Belote,9 where the court states: [To] protect the public against collusive contracts to secure fair competition upon equal terms to all bidders, to remove, not only collusion, but temptation for collusion and opportu- nity for gain at public expense, to close all avenues to favor- itism and fraud in its various forms, to secure the best values, and to afford an equal advantage to desiring to do business with public authorities, by affording an opportu- nity for an exact comparison of bids.10 In summary, competitive bidding requirements permit contractors to compete on a level playing field, enabling the public transportation agency to award contracts to the lowest eligible and responsi- ble bidder. State competitive bidding statutes are quite simi- lar and detail the process for state construction pro- curements. Common requirements include the fol- lowing standard procedures: 1) public advertisement to bidders inviting submission of proposals; 2) prep- aration of specifications, plans, and related informa- tion that are furnished to all prospective bidders; 3) formal submission to the awarding agency of writ- ten proposals responsive to the stated bidding requirements and with the required financial secu- rity guaranteeing execution of the contract; 4) agency consideration of the proposal using uniform evaluation criteria; and 5) award of the contract to the lowest eligible and responsible bidder.11 III. EXCEPTIONS TO COMPETITIVE BIDDING Some state statutes and regulations specify cer- tain circumstances where competitive bidding pro- cedures do not apply. The most common exceptions include: the amount of money involved in the con- tract; the necessity to respond to emergency situa- tions; and the use of “on-call” contracts.12 Certain state statutes do not require a competitive procure- ment if the contract value is less than $10,000.13 Bidding statutes often provide exceptions for emer- gency situations in which the temporary necessity for quick action to protect public safety and welfare overrides the interests of promoting competition.14 For example, Rhode Island permits the purchasing agent (who authorizes action by RIDOT) to make emergency procurements when there exists a threat to public health, welfare, or safety—all that is required is that “emergency procurements be made 3 Model Procurement Code for State and Local Govern- ments, American Bar Association, § 3-202 (2000). 4 Id. at xiii. For a discussion of project delivery sys- tems, see SELECTED STUDIES IN TRANSPORTATION LAW, VOL- UME 1, 2014 SUPPLEMENT, CONSTRUCTION CONTRACT LAW 1-12 through I-15, I-44 through I-84 (2014) (hereinafter 2014 Supplement). 5 2014 Supplement, supra note 4, at 1-12. 6 115 Misc. 2d 810, 454 N.Y.S.2d 663 (1982). 7 Id. at 816 (citations omitted). 8 2014 Supplement, supra note 4, at 1-13. 9 103 Fla. 976, 138 So. 721 (1931). 10 Id. at 981. See also Morse v. City of Boston, 253 Mass. 247, 148 N.E. 813 (1925). 11 2014 Supplement, supra note 4, at 1-13. 12 Another related exception in relation to construction projects is the impracticality of procuring certain profes- sional services through price competition. Under federal law, the Brooks Act allows the solicitation of architectural and engineering services based on factors other than price. Many states have adopted “Mini Brooks Acts” providing that price competitive bidding is not required for the pro- curement of personal or professional services. See 2014 Supplement, supra note 4, at 1-32. 13 2014 Supplement, supra note 4, App. C. 14 2014 Supplement, supra note 4, at 1-33.