Castro Valley, CA asked in Business Law for California

Q: Small Business status not claimed on a DoT CalTrans bid proposal.

The low bidder forgot (?) to 'claim' SBE status on electronic bid submittal, but is a certified SBE. The bid amount difference between 1st and 2nd is only $848 on a $2,4Mill bid. Second bidder ('I') claimed and is a certified SBE. Can 1st place bidder still claim SBE status after the fact?

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1 Lawyer Answer
James L. Arrasmith
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  • Sacramento, CA
  • Licensed in California

A: Under California law, the rules regarding Small Business Enterprise (SBE) status and bidding on Department of Transportation (CalTrans) projects can be complex. In general, if a bidder fails to claim SBE status at the time of submitting their bid, they may face challenges in claiming that status after the fact. However, the specific circumstances of the situation would need to be carefully reviewed.

Here are a few key points to consider:

1. Bid responsiveness: CalTrans typically requires bidders to properly complete and submit all required forms and certifications, including SBE status, for a bid to be considered responsive. Failure to claim SBE status at the time of bid submission could potentially render the bid non-responsive.

2. Bidder responsibility: Even if a bidder is certified as an SBE, they have the responsibility to claim that status on their bid proposal. Not doing so may raise questions about their diligence and responsibility as a bidder.

3. Fairness and transparency: Allowing a bidder to claim SBE status after bid opening could be seen as unfair to other bidders who properly claimed their status and whose bids were evaluated accordingly.

4. Specific agency rules: CalTrans and other public agencies may have specific rules and procedures governing the treatment of SBE status and bid evaluations. It would be important to review the specific rules applicable to this situation.

Given the small difference in bid amounts, the second bidder who claimed SBE status may have grounds to challenge an award to the first bidder who failed to claim that status. The first bidder would likely need to demonstrate a compelling reason for their oversight and why allowing a post-bid opening change would be fair and appropriate.

Ultimately, the decision may come down to the specific rules and procedures of CalTrans, as well as the discretion of the awarding agency. It would be advisable for the parties involved to carefully review the applicable regulations and consult with legal counsel specializing in government contracts and procurement law.

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