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Most buyers award bids to the “lowest responsive and responsible bidder” yet how many of us have actually tried to define the word “responsible”? I think most of us try to avoid the responsibility determination. Generally, if the low bid meets specifications, but we have reservations about the responsibility of the bidder, we just award the contract and keep our fingers crossed. However, sometimes the stakes are too high and it is necessary to determine whether or not the bidder is responsible. This is especially important when the bid involves labor, such as in a contract for public work construction. Court cases and statutory law tell us what governmental agencies should be considering when making such determinations. The cases noted here are from public work contracts. A public work contract is defined as “an agreement for the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind.” ¹

Responsive vs. Responsible
Before reviewing cases regarding “responsible bidders,” let’s clarify the terms responsive and responsible. A California Court of Appeal case provided a good definition of the difference between responsive and responsible. The court said “a bid is ‘responsive’ if it promises to do what the bidding instructions demand; a bidder is ‘responsible’ if it can perform the contract as promised.” ^{2, 3}

In other words, in determining whether a bid is responsive, an awarding body (agency) should look at whether or not the bid offered meets the prescribed specifications, not at how well the bidder will perform. Alternately, in determining whether a bidder is responsible, an agency looks at whether or not the bidder is able to perform as specified, not at whether or not the bid itself meets the specifications.

A determination of non-responsibility seems more difficult than a determination of non-responsiveness only because we don’t often attempt it. However, it still requires an objective (fact-based) judgment versus a subjective (gut-feeling) judgment.

Determining if a Bidder is Responsible
The California Public Contract Code states “if a contract is awarded, it shall be awarded to the lowest responsible bidder. . .” ⁴ Most government agencies have also included this requirement in their Municipal Codes, City Charters or Board Resolutions. Thus, the definition of the word “responsible” is at the heart of most bid awards.

A California Court of Appeal stated the word “responsible,” in the context of the award of public construction contracts, included an “attribute of trustworthiness but also had reference to quality, fitness and capacity of low bidder to satisfactorily perform the proposed work.” In addition it said, “public construction contract must be awarded to lowest bidder unless it is found that he is not responsible, i.e. not qualified to do particular work under consideration.” ^{5, 6}(emphasis added)

The California Supreme Court determined that an awarding body may not declare a bidder non-responsible merely because another bidder is more responsible.⁷ Instead the agency must first determine whether or not the lowest bidder is responsible in her own right, rather than comparing her to other bidders. The court made this determination when the Court agreed with the lowest monetary bidder who challenged the City’s award to another bidder on the ground that the chosen bidder had scored significantly higher in the responsibility rating process. The court sided with the rejected bidder concluding that “the civic authority’s judgment of ‘relative superiority’ was inappropriate and that because the low bidder was responsible, awarding the contract to the other bidder violated the statute.” ⁸ In other words, public construction contracts, under statute requiring award to lowest responsible bidder, may not be awarded on the basis of relative superiority. For example, bids are opened and the second lowest bidder is known to the agency and has given superior work in the past, however, the lowest bidder is relatively unknown to the agency. The agency (probably at the urging of the customer-department) wants to award to the second lowest bidder. The court is saying that the second bidder’s supposed superiority is not sufficient justification for denying the award to the lowest bidder in favor of the second lowest bidder. The agency must first prove the lowest bidder is not “responsible,” i.e. he is “not qualified to do[the] particular work under consideration.” ⁹

The California Supreme Court also held that an agency could not determine that a bidder, because of his longer estimated completion time, was not the lowest monetary bidder. In other words, the agency could not penalize a bidder for a longer completion time by determining that the job would ultimately cost more if he did it because it would take longer to complete. (This is assuming that the bidder offered to complete the work within the time allowed in the bid solicitation, but the agency wanted to take advantage of a higher bidder’s offer to complete the job early).¹⁰

Requirements for Rejecting a Bidder as Non-Responsible
The Inglewood court said “prior to awarding public works contracts to other than lowest bidder, the awarding body must notify the low monetary bidder of any evidence reflecting upon his responsibility, received from others or adduced as a result of independent investigation, afford him opportunity to rebut such adverse evidence, and permit him to present evidence that he is qualified to perform the contract, but due process does not require a quasi-judicial proceeding prior to rejection of low monetary bidder as non responsive.” Okay, this is a really long sentence, so let’s take it apart. According to Inglewood, an awarding agency must do the following before rejecting the lowest bidder as non-responsible:

Although the court does not mandate the actual format for these procedures, it does say that they do not need to be done in an official judicial-type proceeding (such as a hearing.)

Awarding agencies are also not limited to the information presented in the original bid when making the determination of a “qualified bidder.” In another case involving a sanitation district, the court said “in making such determination, the district was not limited to information presented with original bids, but, pursuant to due process guidelines,¹¹ was to consider additional information presented by bidder to rebut district’s initial award to another bidder.” ¹² Additionally, these statutory and case laws may not be limited to projects funded by governmental agencies. One court stated “in certain circumstances, ‘lowest responsible bidder’ requirements must be followed even if the expenditure for a public work is not made from the agency’s treasury.” ¹³

These statutory and case laws are designed to ensure that the taxpayers receive the most for their money and that awards are made without favoritism, fraud or corruption (Inglewood). At times they create an enormous bureaucratic burden for the governmental/public agency. However, there is good news. If the public agent makes an honest mistake, he will probably not be held personally liable (although his agency may have to rescind an award or pay damages.) This topic will be discussed in a future Beyond Basics article.

¹ Boydston v. Napa Sanitation District, 222 Cal.App.3d 1362, 272 Cal.Rprt. 458 (1990)

² Taylor Bus Services, Inc. v. San Diego Board of Education, Cal.App. 3d 1331 195 (1987), 241 Cal.Rptr. 379. Note that the court also found that a “bidder whose bid is determined to be non-responsive is entitled to notice of that fact and is entitled to submit materials, in a manner defined by the agency, concerning the issue of responsiveness but the agency is not required to conduct a hearing and need not produce findings.” The court also said that the“. . . process due when [a] bidder is determined not to be responsible does not apply to determination of nonresponsiveness of a bid. . .”

³ Another case determined that “usually, responsiveness of bid submitted on public construction project must be determined from face of bid, without outside investigation or information.” Valley Crest Landscape, Inc. v. City Council of City of Davis (North Bay Const., Inc.) 41 Cal.App. 4th 1432, modified on denial of rehearing (1996).

⁴ California Public Contract Code, Division 2, Part 3, Chapter 2, Article 3, Section 22038(b).

⁵ West v. Oakland, 30 Cal.App. 556, 560, 159 p.202 (1916).

⁶ Government Code Section 25454>37902.

⁷ City of Inglewood-L.A. County Civic Center Authority v. The Superior Court of Los Angeles County, 7 Cal.3d 861, 500 p.2d 601 (1972)

⁸ Hastings Law Journal, p. 40 (1987)

⁹ West v. Oakland, 30 Cal.App. 556, 560, 159 p.202 (1916).

¹⁰ City of Inglewood-L.A. County Civic Center Authority v. The Superior Court of Los Angeles County, 7 Cal.3d 861, 500 p.2d 601 (1972)

¹¹ “Due process” requires that one be given notice and opportunity to be heard.

¹² Boydston v. Napa Sanitation District, 222 Cal.App.3d 1362, 272 Cal.Rprt. 458 (1990)

¹³ East Bay Garbage Co. v. Washington Township Sanitation Co., 52 Cal.2d 708, 344 P. 2d 289 (1959)

Copyright © 2004 by Karen Theriault, Esq., C.P.M.