Can a bidder withdraw its bid due to an honest and good faith mistake in its bid price? The short answer is yes.
But the bidder must act quickly – written notice to withdraw must be provided within two business days of the bid opening. More importantly, the bidder must submit credible evidence that the reason for the price bid being substantially lower was a clerical mistake, and not a “judgment” mistake, and was actually due to an unintentional and substantial arithmetical error or an unintentional omission of a substantial quantity of work, labor, material or services made directly in the compilation of the bid. See 73 P.S. § 1602.
In addition, bid withdrawal cannot result in a contract award on another bid of the same bidder, its partner, or to a corporation or business venture owned by the bidder or in which it has a substantial interest. If a bidder is permitted to withdraw, the bidder cannot supply any material or labor to, or perform any subcontract or other work agreement for any person to whom a contract or subcontract is awarded in the performance of the contract for which the withdrawn bid was submitted. See 73 P.S. § 1602.
Upon bid withdrawal, the public entity can award the contract to the next lowest bidder or reject all bids. If the latter occurs and the bid is re-advertised, the withdrawing bidder may be liable for all re-advertising and other associated costs, if it is determined that such costs would not have been incurred but for the withdrawal. The withdrawing bidder is also prohibited from resubmitting a bid on the re-bid. See 73 P.S. § 1603.
If you need assistance with a bid withdrawal or with another public contracting issue, feel free to call or email me. I’ll be happy to assist in anyway possible.
Christopher I. McCabe, Esq.
