Bid Shopping Still in Vogue, Ask the Subcontractor

July 14, 2014

            The crude reality for most construction subcontractors is that after expending much time, effort and resources in preparing the lowest bid for a general contractor that is, itself, bidding a construction project, the general contractor will take the lowest subcontractor bid and go bid shopping after it is awarded the contract. A subcontractor’s conditional bid, which is when the subcontractor warns the general contractor that if its bid is used for bid shopping it shall constitute an acceptance of the bid that would create a binding contract, is unenforceable. And that is, of course, problematic for subcontractors.

In West Construction, Inc. v. Florida Blacktop, Inc., 37 Fla. L. Weekly D959, (FLA. 4th DCA 2012), the Court reversed a final judgment in favor of an asphalt subcontractor and against a general contractor. In West Construction, the subcontractor claimed that an enforceable contract was created when the general contractor went bid shopping with the subcontractor’s bid. The subcontractor, Florida Blacktop, Inc., had submitted a bid for asphalt paving in response to a request from West, who used the subcontractor’s bid in its own bid of a general construction project. The bid proposal from the subcontractor included a fine print statement that was basically intended to create a binding contract with the general contractor if the bid was the lowest bid and the general contractor was awarded the project.

West was awarded the project and a letter to the project’s owner listed Blacktop as its paving asphalt subcontractor. Blacktop thought it had the job, even sending a thank you note to West. As is not uncommon in the industry, West did not contract with Blacktop and contracted with another paving subcontractor, one which was likely willing to meet or beat Blacktop’s offer. Blacktop argued that there was an understanding with West that amounted to an enforceable verbal contract. The 4th District disagreed. The court reasoned that in the absence of evidence of the existence of a previous agreement by West to the conditions in Blacktop’s bid proposal, the mere use of Blacktop’s bid in submitting its bid did not constitute acceptance.

If a subcontractor doesn’t want its bid to be used for bid shipping without an assurance it will get the job, a prior (separate) agreement needs to be in place with the general contractor.

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