Stick to the rules

摘要

Public entities require bid security to ensure bidders will honor their bids and enter into binding contracts. For the most part, a bidder will forfeit its bid security if it fails to honor the bid. However, a recent case in Michigan serves as a reminder to public entities that they must adhere strictly to the legal and procedural requirements before declaring a forfeiture of bid security. Grand River Construction, Inc. v. Dept. of Transportation, 2016 WL 902277 (Mich. App. Mar. 16, 2016), involved a bid opening on Aug. 1, 2014, by the Michigan Department of Transportation (MDOT) on two construction projects. One project required bid security in the amount of $50,000, while the other required $25,000. Grand River Construction Inc. was the low bidder on both projects and, in accordance with the invitations to bid, MDOT had 49 calendar days thereafter to accept bids.