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By a whopping 116-0 margin, the N.C. House of Representatives yesterday passed House Bill 1043 (“HB 1043”), aimed at bringing objectivity and uniformity to the prequalification of contractors on public construction projects in the Tar Heel State.
Don’t let yesterday’s vote tally deceive you, however; the legislation was not without its share of controversy.
Senator Neal Hunt, Chair, and Representative Dean Arp, House Co-Chair, helm the Purchase and Contract Study Committee, which is currently considering prequalification reform in North Carolina.
Statutes governing the procurement of public construction contracts are intended to promote honest and open bidding procedures, thereby placing interested contractors on an equal footing when competing for the work. A Pennsylvania court observed way back in 1908 that it is the duty of public awarding authorities “to see that the purposes aimed at by the laws shall be effected in good faith.”
Many contractors are skeptical that standard is being met in North Carolina.
As I’ve previously written, a number of prime contractors recently testified before the General Assembly’s Purchase and Contract Study Committee about how the statute permitting prequalification of bidders is often misused so that certain contractors are favored over others, particularly in the construction management at-risk context. The opportunity for misuse arises from the utter lack of any statutory direction for exercising the right to prequalify under existing law (click image below for larger version):
Thankfully, the Committee appears ready to recommend extensive and significant modifications to this bare-bones statute.
A $15 million school construction project is being let by a local board of education, and you really want this contract. Your team has been working relentlessly over the past week to accurately estimate the project and provide the school board with the most competitive price possible. You’ve sharpened your pencil, and reduced your margin to virtually nothing in the hopes of landing this project. Time to submit your proposal, fingers crossed…
…Well, the bid opening has now come and gone, and unfortunately, it looks like the work is going to be awarded to one of your competitors. However, you believe there was an irregularity in the bidding process, and the more you think about it, the more you want to contest what you consider to be an unjust result. Should you sue in an attempt to stop the contract from being awarded to your competitor?
The answer to that question depends substantially on the severity of the irregularity you’re concerned about.