Bidder responsibility represents the minimum requirements a bidder must have to be awarded public work. A bidder is considered responsible if it is sufficiently qualified for the job it is bidding on. California Public Contract Code section 1103 defines a responsible bidder as “a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the public works contract.” Common issues affecting the determination of bidder responsibility include:
- The degree of experience the bidder has with the size and type of job in question.
- The qualifications and licensing of the bidder’s proposed subcontractors and personal.
- Any prior actions by the bidder that call into question its trustworthiness.
- The bidder’s bonding capacity.
When is Bidder responsibility determined?
Bidder responsibility is either determined at the bidding stage or at an earlier “prequalification” stage. Prequalification is desirable for all parties involved. For the public entity, it avoids the necessity to review bids from bidders that do not meet responsibility requirements. With respect to prospective bidders, prequalification saves non-responsible bidders the trouble of bidding work they have no chance of getting. Local agencies often use standardized prequalification forms and procedures for prequalification. These forms are available to all local agencies that wish to use them because the Department of Industrial Relations is required by statute to prepare these forms. (Pub. Cont. Code § 20101.)
What Factors Determine if the Grounds for Rejecting a Bid Implicate Bidder Responsibility rather than Bid Responsiveness?
While some issues such as non-conformance with bid instructions clearly render a bid non-responsive and other issues such as inadequate bonding capacity may unambiguously render a bidder nonresponsible, there are many facts used to disqualify bidders could be argued to implicate both. Courts weigh five factors to determine if a rational for rejecting a bid implicates bidder responsibility rather than bid responsiveness. These include:
- The complexity of the problem and the ensuing need for subtle administrative judgment.
- The need for ‘information received outside the bidding process.’
- Whether the problem is the sort that is susceptible to categorical hard and fast lines, or whether it is better handled on a “case-by-case” basis.
- The potential for ‘adverse impact on the professional or business reputation of the bidder.’
- The potential that “innocent bidders” are subject to “arbitrary or erroneous disqualification from public works contracting.” (Great West Contractors, Inc. v. Irvine Unified School Dist. (2010) 187 Cal.App.4th 1425, 1456–1457, as modified (Sept. 30, 2010), opinion supplemented on denial of reh’g (Cal. Ct. App., Sept. 30, 2010) 10 Cal. Daily Op. Serv. 12746.)
What is a Responsibility Hearing?
A responsibility hearing is a forum where a bidder deemed nonresponsible is afforded an opportunity to refute this finding. A contractor whose bid is rejected based on a finding that it is nonresponsible is entitled to a responsibility hearing based on its right to due process. Bidder responsibility often involves judgment calls and agency discretion. Thus, to avoid abuse, agencies are required to inform the implicated bidder of evidence against it and to provide the bidder an opportunity to respond to any allegations and present evidence supporting its responsibility. (City of Inglewood-L.A. County Civic Center Auth. v. Superior Court (1972) 7 Cal.3d 861, 864.) This responsibility hearing does not need to be a full evidentiary hearing as would occur in court. But the hearing must provide the alleged nonresponsible bidder due process including the opportunity to respond and present contrary evidence. (Id. at p. 870–872).
What Happens at a Bidder Responsibility Hearing?
At a bidder responsibility hearing an allegedly nonresponsible bidder, its attorney, and potentially its expert are presented with the evidence against the bidder. The bidder is then afforded an opportunity to respond to the allegations and evidence supporting the adverse determination and to provide evidence to the contrary. While formal evidentiary rules need not be followed, decision makers for the public entity must give the bidder due process by allowing it to present its case for responsibility and weighing the evidence presented against the information supporting the prior adverse finding.
Are Lawyers Allowed to Appear at Responsibility Hearings?
Yes. Attorneys are permitted to represent bidders at responsibility hearings. And given the potential consequences of being deemed a nonresponsible bidder, this is recommended.
What Are the Consequences of Being Deemed a Nonresponsible Bidder?
If a public entity upholds its finding that a bidder is nonresponsible, its decision not to consider the bidder’s bid is upheld. But there are farther reaching consequences. A bidder deemed nonresponsible may be precluded from bidding future work for the public entity in question. Some local ordinances specifically ban bidders deemed nonresponsible for defined periods of time. And a bidder may be required to disclose the adverse finding in connection with future public work it pursues.
Can an Adverse Finding at a Responsibility Hearing be Appealed?
Yes. An adverse finding upholding a determination that a bidder is nonresponsible can be appealed by filing a Writ of Mandate in court. But given the discretion afforded to public entities, a clear abuse of discretion or failure to provide due process must exist to overturn the findings of a responsibility hearing. And in the case of due process the remedy likely is a new responsibility hearing rather than an immediate determination in favor of responsibility.