The municipality I represent has received two bids for a public construction project that must comply with the Oklahoma Public Competitive Bidding Act. Both of the bids were way over the funds allocated for the project. The City's contracted engineer negotiated with the lowest bidder to adjust the amount of the bid through "value engineering" without changing the design specifications of the project. The engineer informed me that he worked with the bidder on scheduling of the project, and the time for the delivery of materials, which brought the bid under budget. This was done before the council accepted or rejected the bid.
This concerns me because the bid did not have a maximum bid price as part of the packet. And, it appears that the city may be favoring one bidder over another. I assume the contractual terms, after a bid is accepted, may be negotiated to bring the cost of the project down.
Does anyone have any insight on this issue?
Thanks
Ray
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Robert Ray Jones, Jr., Director
119 N. Robinson, Suite 1200
Oklahoma City, OK 73102
405-235-7471 | 405-232-3852 (fax)
www.lytlesoule.com
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My understanding is that if there are changes to the proposal that are sufficiently significant then the project becomes something different than what was originally put out for bid. As a rule of thumb I consider the maximum dollar amount of a change to be the same as the limit for change order so long as the changes do not make it a different proposal, but I also believe a lesser dollar amount in a change could alter the nature of the proposal to make it a new proposal. Those changes can be in the construction specifications, or they can be changes to the terms (such as extending deadlines, lessening insurance, financial or other obligations or risks). Every bidder's situation may be different, and the city cannot know what term will affect a change in a bidder's financial picture (a bidder may have a large stock of some item, or preferred contracts for some aspect of the bid). Depending on the specifics, the city should consider rejecting all bids and revising its specifications to include alternatives in the bids, and perhaps change the method of bidding to a construction management proposal if budget issues are sufficiently significant.
Jonathan E. Miller
City Attorney
City of Mustang
1501 N. Mustang Road
Mustang, Oklahoma 73064
Telephone: (405) 376-7746
Facsimile: (405) 376-7721
This email is sent by the City Attorney and may contain information that is privileged or confidential. If you received this email in error, please notify the sender by reply email and delete the email and any attachments. If you are a and officer, employee or agent of the City of Mustang, you should not share this email with others. Sharing this email may result in a loss of the attorney-client privilege.
From: Ray Jones jones@lytlesoule.com
Sent: Tuesday, February 1, 2022 10:30 AM
To: oama@lists.imla.org
Subject: [Oama] Public Bidding question
The municipality I represent has received two bids for a public construction project that must comply with the Oklahoma Public Competitive Bidding Act. Both of the bids were way over the funds allocated for the project. The City's contracted engineer negotiated with the lowest bidder to adjust the amount of the bid through "value engineering" without changing the design specifications of the project. The engineer informed me that he worked with the bidder on scheduling of the project, and the time for the delivery of materials, which brought the bid under budget. This was done before the council accepted or rejected the bid.
This concerns me because the bid did not have a maximum bid price as part of the packet. And, it appears that the city may be favoring one bidder over another. I assume the contractual terms, after a bid is accepted, may be negotiated to bring the cost of the project down.
Does anyone have any insight on this issue?
Thanks
Ray
[cid:image001.png@01D8175B.9A511EE0]
Robert Ray Jones, Jr., Director
119 N. Robinson, Suite 1200
Oklahoma City, OK 73102
405-235-7471 | 405-232-3852 (fax)
www.lytlesoule.comhttps://us-west-2.protection.sophos.com?d=lytlesoule.com&u=d3d3Lmx5dGxlc291bGUuY29t&i=NjBhNjhkYzZhZmIzMmUwZjVhOTkxZDZk&t=KzFPOHZGeFVrVXViZnVWRUdvMWpObVhjbjdzYkMzNDBrTzVMdS8xT3liYz0=&h=7338c80210bf4cf692c0e9c8622659c4
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I agree with Jon's analysis. I had this same issue with one of my municipal clients and after some research I advised to re-bid out the project.
Best wishes,
Joel W. Barnaby
Attorney at law
PO BOX 311
Skiatook, OK 74070
Phone: 918-695-7798
Email: jwbarnaby@sbcglobal.net
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On Tuesday, February 1, 2022, 11:07:56 AM CST, Jon Miller <jmiller@cityofmustang.org> wrote:
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My understanding is that if there are changes to the proposal that are sufficiently significant then the project becomes something different than what was originally put out for bid. As a rule of thumb I consider the maximum dollar amount of a change to be the same as the limit for change order so long as the changes do not make it a different proposal, but I also believe a lesser dollar amount in a change could alter the nature of the proposal to make it a new proposal. Those changes can be in the construction specifications, or they can be changes to the terms (such as extending deadlines, lessening insurance, financial or other obligations or risks). Every bidder’s situation may be different, and the city cannot know what term will affect a change in a bidder’s financial picture (a bidder may have a large stock of some item, or preferred contracts for some aspect of the bid). Depending on the specifics, the city should consider rejecting all bids and revising its specifications to include alternatives in the bids, and perhaps change the method of bidding to a construction management proposal if budget issues are sufficiently significant.
Jonathan E. Miller
City Attorney
City of Mustang
1501 N. Mustang Road
Mustang, Oklahoma 73064
Telephone: (405) 376-7746
Facsimile: (405) 376-7721
This email is sent by the City Attorney and may contain information that is privileged or confidential. If you received this email in error, please notify the sender by reply email and delete the email and any attachments. If you are a and officer, employee or agent of the City of Mustang, you should not share this email with others. Sharing this email may result in a loss of the attorney-client privilege.
From: Ray Jones jones@lytlesoule.com
Sent: Tuesday, February 1, 2022 10:30 AM
To: oama@lists.imla.org
Subject: [Oama] Public Bidding question
The municipality I represent has received two bids for a public construction project that must comply with the Oklahoma Public Competitive Bidding Act. Both of the bids were way over the funds allocated for the project. The City’s contracted engineer negotiated with the lowest bidder to adjust the amount of the bid through “value engineering” without changing the design specifications of the project. The engineer informed me that he worked with the bidder on scheduling of the project, and the time for the delivery of materials, which brought the bid under budget. This was done before the council accepted or rejected the bid.
This concerns me because the bid did not have a maximum bid price as part of the packet. And, it appears that the city may be favoring one bidder over another. I assume the contractual terms, after a bid is accepted, may be negotiated to bring the cost of the project down.
Does anyone have any insight on this issue?
Thanks
Ray
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Robert Ray Jones, Jr., Director
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119 N. Robinson, Suite 1200
Oklahoma City, OK 73102
405-235-7471 | 405-232-3852 (fax)
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IMPORTANT NOTICE:
This transmission is protected by the Electronic Communications Privacy Act, 18 U.S.C. Sections 2510-2521 and is intended to be delivered only to the named addressee(s). E-mail to clients of this firm presumptively contain privileged and confidential information. E-mail to non-clients are presumptively confidential and may be privileged. The information transmitted is intended only for the person or entity to which it is addressed. Any review, retransmission, dissemination or other use of this information, directly or indirectly, by persons or entities other than the intended recipient is prohibited. If you received this in error, please contact the sender and delete the material from all computers in which it resides.
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