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Paragraph 4-15 MISTAKES IN BIDS.

A. General. Correction or withdrawal of bids before or after contract award requires careful consideration to maintain the integrity of the competitive bidding system, to assure fairness, and to avoid delays or poor contract performance.  While bidders should be expected to be bound by their bids (the "firm bid rule"), circumstances may arise where correction or withdrawal of bids is proper and should be permitted.

B. Review of bids for mistakes. After bid opening, the Contracting Officer shall carefully review each bid to ensure that the bidders have not made any obvious mistakes in their bids.  If a bidder appears to have made a mistake, the Contracting Officer shall immediately bring the mistake to the attention of the bidder by phone to request confirmation of the bid as submitted.  It is advisable to confirm this phone call with a letter pointing out the questionable portion of the bid, how it must be corrected, and the procedures for allowing correction of the bid.  The bidder should be asked to reconfirm its bid in writing before award.

C. Minor Informalities.  The Contracting Officer may waive minor informalities or allow the bidder to correct them depending on which action is in the best interest of the HA.  Minor informalities are matters of form rather than substance, evident from the bid document, or insignificant mistakes that can be waived or corrected without prejudice to the other bidders; that is, the effect on price, quantity, quality, delivery, or contractual conditions is negligible.  Examples include the failure of a bidder to: return the number of signed bids required by the IFB; sign the bid, provided that the unsigned bid is accompanied by other material indicating the bidder's intent to be bound (e.g., a signed cover letter or a bid guarantee); complete one or more certifications; or acknowledge receipt of an amendment to the IFB, provided that it is clear from the bid that the bidder received the amendment and intended to be bound by its terms, or the amendment had a negligible effect on price, quantity, quality, or delivery.

D. Mistakes before bid opening.  A bidder shall be permitted to withdraw or modify its bid by written or telegraphic/facsimile notice prior to bid opening, as provided for in the IFB (see Form HUD-5369 Appendix 11).

E. Mistakes after bid opening.  The general rule is that a change to a bid after bid opening is not permitted, as this would give the bidder an advantage over other bidders.  There are certain exceptions to this rule, however, which are designed to prevent unreasonable results from the sealed bidding process.  Corrections of bids should only be allowed if the bidder can provide evidence of the bid price intended showing how the bid price was calculated but inadvertently listed incorrectly on the bid itself,

F. Withdrawal of bids: Withdrawal of a bid is permissible where there is an obvious error in the lowest bid, such as a math error or a misplaced decimal, but the mistake must be readily apparent from the bid itself.  A bidder may be permitted to withdraw a low bid if a mistake is clearly evident on the face of the bid document, but the intended correct bid is not similarly evident, or the bidder submits written evidence which clearly and convincingly demonstrates that a mistake was made.  The HA shall also require written supporting evidence before allowing withdrawal by the bidder.  If withdrawal is allowed by the HA, it should be without forfeiting the bid bond, upon verification of the error.  In cases of alleged mistakes or requests for withdrawal, the decision to allow a correction or withdrawal should only be made after consultation with the HA's legal counsel.

G. Displacing the low bidder: To maintain the integrity of the sealed bidding system, a bidder shall not be permitted to correct a bid mistake after bid opening that would cause such bidder to have the low bid, unless the mistake is clearly evident from examining the bid document, such as extension of unit prices or errors in addition.

H. Correction by low bidder: An otherwise low bidder shall be permitted to correct a mistake if the intended bid is obvious from the bid document or is otherwise supported by written evidence clearly dated before the submission of the bid.  A low bidder should not be permitted to correct a bid for mistakes or errors in judgment (such as pricing a bid with a lower profit margin than might have won the contract).

I. Mistakes after award. Correction of bid mistakes after award shall be subject to the same proof as corrections before award.

J. Documentation Required: Decisions to allow correction or withdrawal of mistakes in bids must be properly documented in the contract file.  As a minimum, the Contracting Officer shall prepare a written determination, citing the reasons mentioned above.