So you want to be a public construction contractor in Texas? First you need to know are the rules—and there are a lot of them. There are statutory procurement regimes for different types of public work, different agencies, and different project delivery methods. Different criteria and standards are used to evaluate all of them.
Hopefully this quick overview can provide some general guidance on the Texas Public Bidding Process.
One Step at a Time
Regardless of the type of project or procurement method, the first step to a successful bid (or other deliverable as the case may be) as a contractor is to review the instructions to bidders and other bid documents. These bid documents will set a form and format that the bid must be in, a date and time for delivering a bid, any necessary contractor qualifications, and any other requirements that the contractor is required to meet.
These instructions to bidders frequently require more than simply submitting a bid in a certain form. Oftentimes, they require contractors to attend pre-bid meetings. It is crucial that all of these instructions are followed, as failure to do so would give the government entity a reason to throw out the bid as non-responsive. Further, if a non-responsive bid was selected by the government entity, it would give another bidder a basis to challenge the award of the contract.
How to Win
The second step to a successful bid is to be aware of the criteria by which your bid will be judged, and bid accordingly. In Texas, until 1995, the method by which bids were judged was competitive sealed bidding, and the contract was awarded to the lowest bidder. That has since changed.
While lowest bid remains an option, government entities can also choose to select contractors based upon best value, which involves the consideration of factors other than price, such as quality, completion date and others. When the government entity’s selection is based on something other than exclusively price, it must expressly state in the bid documents the factors that are being evaluated, how each factor is evaluated, and the weight given to each factor. The government entity’s award of a contract based upon incorrectly applied factors, or an unstated factor, is a basis for an aggrieved bidder to challenge the award.
What if You Lose
If an aggrieved contractor wishes to challenge an award to another contractor, the aggrieved contractor will typically send written notice of the apparent errors in the award, including whether there are any errors in the selected contractor’s bid or in the application of the selection criteria. If the governmental entity agrees, it will typically reject all bids and re-bid the project. If the governmental entity does not agree, then the contractor will need to file a lawsuit.
A contractor may request that the court provide temporary injunction during the pendency of the lawsuit, halting construction of the project. Importantly, a contractor will generally not be entitled to have the court award the contract to it, even if it is the next highest scoring bidder. This is because no contract had been formed between the government entity and the contractor because the government entity has the authority to reject all bids. Thus, before engaging in a lawsuit, it is important to consider whether the cost of doing so is worth the remedy that the court may grant.
Texas has a complicated statutory regime for bidding, and it is not uncommon for government entities and contractors alike to fail to meet its requirements. Consider reaching out to an experienced Texas construction attorney if you have any questions.
ABOUT THE AUTHOR
Tim Fandrey – Construction Law Associate, Gray Reed, Dallas, Texas
Tim Fandrey understands construction and the business of construction. He represents contractors and subcontractors on a wide variety of construction matters including construction claims and litigation, lien and bond claims, giving of real time project advice and contract negotiation. Prior to law school, Tim worked as a civil engineer for more than four years, gaining experience in both the private and public sector. Tim designed dozens of bridges and roadways for the Missouri Department of Transportation. While working in the private sector, Tim developed project management skills by managing bridge and roadway design projects. He can be reached at [email protected].