Key Policy Issues

Responsible Bidding

Responsible bidding is the idea that public construction projects paid for by taxpayer money such as schools, libraries, and water treatment plants need not automatically be awarded to the lowest bidder. The public body undertaking the project should retain some discretion to award the project to the lowest “responsible bidder.”

So, what makes a bidder responsible, and why would a public body ever want to pass on the lowest bid?

The answer has to do with ethics and the opportunity to hire the safest, most qualified company available to perform the work on behalf of the taxpayers. There are companies out there willing to do the work for bargain-basement prices, but they may not always deliver what they promise and may let your community down.

A community can help assure that it hires only responsible companies by passing a “Responsible Bidder Ordinance” ­or a “Responsible Contracting Ordinance” – a resolution adopted into a public body’s procurement codes that specifies certain criteria that a contractor must meet in order to be eligible to perform work on behalf of that community.

Simple things like assuring that contractors have the proper business registrations, show past compliance with environmental, labor, and safety laws, relevant insurance coverage, prevailing wage compliance, and apprenticeship and training participation can go a long way in assuring the financial and structural success of all public construction projects.

In the long run, the responsible contractor is going to provide more taxpayer value than the contractor who is cutting corners in the areas of training, labor, or safety.

The term “lowest responsible bidder” is incapable of an exact definition, but the concept involves considerably more than solely the monetary amount of the company’s bid. The term contemplates that bidders discharge contractual obligations in accordance with what may be expected or demanded under the terms of the contract.

In fact, a contract may be awarded to one who is not the lowest bidder, where this is done in the public interest, in the exercise of discretionary power granted under the laws, without fraud, unfair dealing, or favoritism, and where there is a sound and reasonable basis for the award. Where an entity has exercised its discretion, the presumption obtains that the action was regular and lawful.

We track Responsible Bidder Ordinances (RBO) in our jurisdiction.

Click the states below to find the most updated responsible bidder ordinances passed throughout each state.