Words and figures: the contractor loses the bid bond when he mistakenly omits the word “thousand” | Burr & Forman
Entrepreneurs make mistakes with words. Entrepreneurs make mistakes with the numbers. And sometimes a mistake with the words leads to a mistake with the numbers.
In Clark Construction Co. v. Alabama Highway Department, a road contractor tried to withdraw his bid on a public market and have his bid bond returned after making a mistake on his written proposal. In its bid for a bridge construction project in Mobile County, the contractor had indicated a total amount of $ 1,119,609. On a particular item for the steel bridge superstructure, the contractor indicated the amount of “$ 368,000” in numerical value, but had the words “Three hundred and sixty-eight” immediately before the word “dollars”. The contractor mistakenly omitted the word âthousandâ from their written submission.
During the review of the bids, the Alabama Highway Department used the written words to calculate the total bid, as required by law. Section 39-2-7 of the Alabama Code provided: âIn the event of a discrepancy between the prices indicated in the numbers and in the words, the words shall prevail. The Department determined that the contractor’s bid was $ 816,977.60, as opposed to the $ 1,119,609 that the contractor intended to submit.
After learning of the error, the contractor requested permission to withdraw its bid based on the error, but the Department refused to allow the bid to be withdrawn. The contractor then refused to accept the work and the Department therefore lost the contractor’s bid bond of $ 10,000. The court of first instance ruled in favor of the Department.
The appeals court upheld the ruling, ruling that the âwords over numbersâ law should be interpreted strictly. In light of the potential damage that the contractor could have lost due to his error, the forfeiture of the bond (which was also required by law) was not excessive and otherwise fair.
Clark Construction is a good reminder to public contractors to pay particular attention to the tabulations of the offers. If there are errors in your written proposal, understand that the RFP or applicable law will control how the error is to be resolved.