05/16/2017
For a subcontractor, there is a general principle that should be kept in mind during the bidding process. Promissory estoppel is a legal theory that prevents a subcontractor from withdrawing or rescinding the bid after it has been submitted and the prime contractor has relied upon the subcontractor’s price. Promissory estoppel only applies to the subcontractor. The converse is not applicable unless a commitment is made by the prime contractor to the subcontractor that the subcontractor would be awarded a contract if the prime contractor was awarded a contract. After the owner has awarded the contract, the prime contractor may try to impose new terms or conditions on the subcontractor. Any changes in the terms or conditions may affect the subcontractor’s bid price and time of performance. The best way to control the terms and conditions, and control the scope of the work is through a carefully prepared bidding process. As a bidder, the subcontractor should visit the jobsite, attend pre-bid meetings, and obtain answers to questions, and clarifications of ambiguities. The use of standardized forms allows the bidder to standardize the bid process for internal consistency. Sending the prime contractor a pre-bid letter also can be very helpful. Pre-bid letters should define the basis of price (i.e., the scope of work to be performed), the schedule and work sequence used to determine costs, and any other important terms and conditions upon which the price is based. If the assumptions upon which the bid is based change, costs also will change. The time to seek modifications to the terms or conditions, or otherwise assert any qualifications (exceptions to the owner or prime contractor’s bid documents) is prior to the bid. If a pre-bid letter has been sent to the prime contractor, simply calling in or emailing the price on the date of the bid completes the bid process. ASA’s Contract Changes and Claims is a series of articles providing tips for the management of changes and changed conditions and how to realize full adjustment to the contract price or contract time. http://ow.ly/3ytm30bMFUI
