10-24-13 Regular Meeting of La Porte City Council

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From:ctaskins@swbell.net To:Alexander, Corby Cc:Leach, Traci; Mick, David; Daeumer, Cherell Subject:Rehab Sanitary Sewer - Bid Bond Information Date:Tuesday, October 15, 2013 11:03:29 AM Attachments:Bid Bond Informations.pdf #13031 Rehabilitation of Sanitary Sewer Using Sliplining, Pipe BurstingCOMPLETE.pdf Corby: At last night’s CC meeting the council voted to table consideration on accepting bids for sanitary sewer rehabilitation job pending staff review of the comment “bonding not sealed” in the bid tabulation for the apparent low bidder. In speaking with Cherell in Purchasing the notation refers to the absence of the surety’s corporate seal on the bid bond form. After reviewing the law on this topic, as well as the bid bond and the city invitation to bidders form, it is my opinion that to the extent that this even constitutes a defect, it is non- material and is waivableby the city, for the following reasons: 1) I could find no statelaw that says that the absence of a corporate seal renders a bid bond defective, particularly in the context of governmental purchasing. The LGC chapter on notice and bidding for municipal contracting does not even address the topic – it only says a vendor can not correct pricing after bid opening. The only material I could find on the subject were guidelines for federal purchasing. Federal rulesprovide that failure to include a surety’s corporate seal on a bid bond for a federal project does not invalidate the bid and that a vendor is allowed to cure the defect after bid submittal. I imagine a Texas court would follow the same reasoning if the issue were litigated. 2) Under Texas law non-material defects in a bid that do not give an unfair advantage to the vendor relative to other vendors can be waived by a city. Assuming the absence of a corporate seal is a defect, my opinion is that it is not material as it would in no way prejudice theposition of the other vendors. I believe the bond would still be enforceable without theseal, as it was signed by the surety’s agent under a valid power of attorney (which does include a corporate seal). In as much as I think the bond would be enforceable by the city, it would not give the vendor an unfair advantage. 3) The city’s invitation to bidders form reserves to us the right to waive technicalities. This should coverthe situation of the lack of a corporate seal. Clark