Determining Bidder Responsibility

Volume 5, Chapter 4

INTRODUCTION

This chapter sets forth University policy regarding bidder "responsibility" and addresses the four methods of determining responsibility:

  1. Standard bidding document requirements
  2. Prequalification
  3. Qualification
  4. Disqualification

(Back to top)

4.1 RESPONSIBILITY: ORIGIN AND POLICY

References:

 - Public Contract Code, State of California, Sections 10500-10506.

The term "responsible," as applied to bidders, has its origin in Public Contract Code, Section 10501, and in University policy. The code and policy both require that contracts "be awarded to the lowest responsible bidder" (see 1.1). A "responsible" bidder is one who is able to satisfactorily perform the work. A contract does not have to be awarded to the lowest bidder if that bidder is not responsible, as determined by the University.

The bid, itself, must also be "responsive"; that is, the form and content of the bid must meet the requirements of the bidding documents (see 7.1). A contract does not have to be awarded to the lowest responsible bidder, if that bidder's bid is nonresponsive.

University procedure is to use (1) standard bidding document requirements, (2) prequalification, (3) qualification, or (4) disqualification to determine the responsibility of a contractor or subcontractor or their intention to bid on University construction contracts.

(Back to top)

4.2 STANDARD BIDDING DOCUMENT REQUIREMENTS

The application of standard, predetermined responsibility requirements in the bidding documents is the most frequently used method of determining bidder "responsibility." If bidders cannot meet these requirements, they should not submit a bid. Any submitted bid not meeting these responsibility requirements is declared nonresponsive (see 7.1).

The University's construction documents contain the following predetermined responsibility requirements:

  1. State of California Contractor's License demonstrates minimum knowledge and experience to perform the work.
  2. Bonds verify financial capacity.
  3. Insurance shows that an insurance company is willing to assume certain contractor risks.

(Back to top)

4.3 PREQUALIFICATION

Prequalification may be used with any contracting mode (see FM4) and is usually used when the Facility wants required project work to be performed by a contractor who has successfully completed similar work. For example, the Facility may determine that to successfully complete a project, the contractor needs five years' experience with specific types of equipment and supervisory expertise in handling toxic waste.

The prequalification process will lengthen the bidding period unless prequalification is concluded before the scheduled bidding period.

4.3.1 Prequalification Guidelines

When using prequalification, adhere to the following guidelines:

  1. Contractors may be prequalified, at the Facility's discretion, to bid on projects of any value.
  2. Use the procedures in 4.3.2 to prequalify contractors.
  3. Subcontractors may be prequalified, using the procedures in 4.3.3, on those projects where the experience and performance of subcontractors is determined by the Facility to be critically important to the work.
  4. Contractors or subcontractors may be prequalified for bidding on a predetermined value of multiple projects.

4.3.2 Contractor Prequalification Procedures

  1. Use the Advertisement for Contractor Prequalification to specify the trade for which prequalification information is being requested. This sample advertisement was developed to be compatible with competitive bidding by including at least the following:
    1. A statement that bidders must be prequalified.
    2. A brief description of the work specifically, the contract type, project type, project size, estimated cost of the work, and major characteristics of construction.
    3. Where and when the Prequalification Questionnaire can be obtained.
    4. Where and when the Prequalification Questionnaire is to be submitted.
  2. Modify the Instructions to Bidders to address prequalified contractors by adding an article in the Supplementary Instructions to Bidders. 
  3. Use the sample Prequalification Questionnaire (available at the UCOP Approved Contract Templates page) to develop a specific questionnaire for the project.

    ---POINT SYSTEM: The questionnaire can be used to evaluate the potential Bidder on a point system. The Prequalification Questionnaire and its corresponding Prequalification Evaluation, are structured so the bidder must score a predetermined point total and meet minimum standards for questions within different topics. The points to award, minimum standards, and the number of points needed to prequalify are determined by the Facility.
    --PASS/FAIL: The questionnaire can be used to evaluate the potential Bidder on a pass/fail system. The Prequalification Questionnaire and its corresponding Prequalification Evaluation are structured so the bidder must meet minimum standards determined by the Facility. (see comparison of the two systems.)

  4. Further develop the Prequalification Questionnaire to be compatible with competitive bidding by including standards so the questionnaire:
    1. Relates reasonably to the performance of the work required by the bidding documents.
    2. Evidences a prospective bidder's ability to satisfactorily perform the work.
    3. Is objective.
    4. Applies uniformly to all prospective bidders.
    5. Is based on past performance.
  5. Consider the Topics for Prequalification Questionnaire. These topics are based on a contractor's past performance. Questions within the sample Prequalification Questionnaires in the Resource Directory are examples; topics and questions that are added must be structured so they can be objectively evaluated.
  6. If the Prequalification Questionnaire requests information that may be proprietary (such as financials or business methods), add the section number of such information to the list of those responses that will be considered “official information” if marked “confidential”. Should the Facility receive a request under the California Public Records Act (PRA) that may encompass the prequalification process, please contact the Office of the General Counsel or your Facility PRA representative for guidance.
  7. Provide in the Prequalification Questionnaire an informal appeal process and hearing process at the Facility level for those prospective bidders who are found to be not prequalified and who object to that determination.
  8. Use the sample Prequalification Evaluation, Point System or Pass/Fail, to develop a specific Prequalification Evaluation for the project. These alternate versions correspond to the Prequalification Questionnaires (see procedure 3, above). The Prequalification Evaluation an internal document not issued to prospective qualifiers is used to determine the prequalification status of contractors. Specific Prequalification Evaluation items must correspond to specific Prequalification Questionnaire items.
  9. Publicly advertise the Advertisement for Contractor Prequalification.
  10. Make the Prequalification Questionnaire available to contractors.
  11. Receive Prequalification Questionnaires from contractors no later than a specified time and date, at a designated location, in the same manner used for accepting bids. Allow a minimum of 15 days from the date of issuance for contractors to return completed Prequalification Questionnaires.
  12. Select an appropriate prequalification committee to rate each contractor using the Prequalification Evaluations.
  13. Notify contractors of their status either prequalified or not eligible to submit a bid for the project.
  14. Resolve any appeals from contractors not prequalified. Conduct an informal hearing to allow the contractor to explain reasons for the appeal. The Facility's decision on the appeal is final
  15. Make bidding documents available to prequalified contractors. Issue the Announcement to Prequalified Bidders with the bidding documents. On the announcement, list the names of prequalified contractors eligible to submit bids.
  16. Take bids from prequalified contractors.
  17. Award the contract to the lowest responsible bidder whose bid is responsive (see 4.1).

The Office of the President is available to provide assistance in preparing the Advertisement For Bids From Prequalified Contractors, the Prequalification Questionnaire, the Prequalification Evaluation and the Announcement to Prequalified Bidders.

4.3.3 Subcontractor Prequalification Procedures

  1. Follow the contractor prequalification procedures detailed in 4.3.2.
  2. State in both the Subcontractor Prequalification Questionnaire and the contractor's bidding documents that contractors may use bids only from those subcontractors who have been prequalified by the Facility for specific portions of the work.
  3. Provide a list of prequalified subcontractors in the bidding documents.

(Back to top)

4.4 QUALIFICATION

Bidder qualification is another method of determining bidder "responsibility" (see 4.1) in a limited way by setting forth certain qualification requirements at the time of bid. This method may be used when bidder requirements are not extensive, and time is not available to prequalify bidders.

The qualification method may involve, for example:

  • Documents for the design-and-build contracting mode that stipulate limited qualification requirements.
  • Lump-sum or cost-plus-fee contracts that require certain contractor experience or expertise. Bidders are informed that they must be able to prove they meet the stipulated requirements.

4.4.1 Qualification Guidelines

  1. Use the qualification method when bidder requirements are not extensive and time is not available to prequalify bidders (see 4.3).
  2. Use the qualification method to determine responsibility either before bids are accepted or after bids are opened.
  3. Use the procedures in 4.4.2 for qualification.

4.4.2 Qualification Procedures

  1. Modify the Advertisement for Bids to inform bidders that they must meet certain qualifications set forth in the Supplementary Instructions to Bidders to be allowed to bid or to be eligible for award. 
  2. Add an article to the Supplementary Instructions to Bidders stating all qualification standards the bidder must meet to be qualified to perform the work. Qualification standards should not be made too complicated and should not be so rigid that no one is able to bid on the project. Qualification standards may include one or more of the following:
    1. Experience with similar work
    2. Financial ability to complete the work
    3. Safety record
    4. References on completed projects
  3. List the forms the bidder is required to complete in the Bid Form, Article 11, "Required Completed Attachments". The completed forms will demonstrate to the Facility whether the bidder meets the required qualification standards. Use applicable portions of the Contractor's Statement of Experience and Financial Condition (see 8.5.3).
  4. Advertise publicly for bids using the modified Advertisement for Bids.
  5. Continue the qualification process using Method A, B, or C below.
    1. Method A Qualification Determined Before Bids Are Submitted:
      1. Have prospective bidders submit qualification documents in a sealed envelope at the place and time stipulated in the Advertisement for Bids.
      2. Receive qualification documents.
      3. Evaluate qualification documents.
      4. Notify bidders of their qualification status.
      5. Receive bids from qualified bidders at the place and time stipulated in the Advertisement for Bids.
      6. Formally open bids.
    2. Method B Qualification Determined When Bids Are Submitted:
      1. Have bidders submit qualification documents in a sealed envelope clearly labeled, "Qualification Documents," at the place and time stipulated in the Advertisement for Bids.
      2. Have bidders submit bids in a separate sealed envelope clearly labeled, "Sealed Bid for [Project Name and Number]."
      3. Accept qualification packets and sealed bid packets concurrently, at the place and time stipulated in the Advertisement for Bids.
      4. Open and evaluate qualification documents.
      5. Notify bidders of whether they have qualified and whether their bid will be opened.
      6. Do not open bids of bidders not qualified. Return unopened bids to bidders.
      7. Formally open bids of qualified bidders at the place and time stipulated in the Advertisement for Bids.
    3. Method C Qualification Determined When Bids Are Evaluated:
      1. Have bidders submit qualification documents along with (as an attachment to) the Bid Form.
      2. Formally open bids at the place and time stipulated in the Advertisement for Bids.
      3. Announce the (apparent) lowest responsible bidder subject to evaluation of all completed attachments.
      4. Evaluate qualification documents.
      5. Notify bidders of their evaluation status and the final determination of who is the apparent lowest responsible bidder.

(Back to top)

4.5 DISQUALIFICATION

Disqualification is another method of determining bidder "responsibility" (see 4.1). Disqualification may prohibit a contractor from bidding on University projects for a set period of time, whereas prequalification (see 4.3) and qualification (see 4.4) evaluate contractors for bidding on a specific project or on a predetermined value of multiple projects.

A list of contractors that have been debarred and are not eligible to bid on public works projects as a result of violations of Labor Code provisions governing prevailing wage and apprenticeship is available on the DIR website. The Facility can check this list to verify if a potential bidder is eligible.

Inevitably, there will be some defective work, schedule overruns, and disputes about guarantee work on almost all projects. Before a bidder can be disqualified, however, the Facility must establish, in an objective manner, that the bidder's past performance was materially deficient in the area used as the basis for disqualification. Use the guidelines in 4.5.1 and procedures in 4.5.2 to establish an objective basis for disqualification.

4.5.1 Disqualification Guidelines

  1. A contractor or subcontractor who has demonstrated performance that is not responsible on current or past University projects may be disqualified, by the Facility, from bidding on current or future University work for a period of three years.
  2. The period of disqualification shall be for an indefinite period for a contractor or subcontractor who has demonstrated performance that is not responsible by falsifying any information required during prequalification, qualification, bidding, or required by the contract documents.

4.5.2 Disqualification Procedures

  1. Determine whether a contractor or subcontractor has demonstrated performance that is not responsible. The following are considered examples of performance that is not responsible and that may lead to disqualification:
    1. Falsification of any information required during prequalification, qualification, bidding, or required by the contract documents.
    2. Performance of work without the required contractor's license.
    3. Non-observance of safety requirements.
    4. Failure to meet requirements of law in employment.
    5. Failure to meet contractually agreed-to affirmative action commitments.
    6. Use of unlicensed or improperly licensed subcontractors.
    7. Substitution of a subcontractor without the University's written consent.
    8. Failure to submit or adhere to contractually required and agreed-upon schedules.
    9. Conviction of a criminal offense in connection with current or past contracts with any entity.
    10. Poor past performance of work on University projects as evidenced by continued use of defective materials, refusal to correct work not in accordance with the contract documents, termination for cause, or repeated failure to provide proper supervision required by the contract documents.
    11. Use the Notice of Disqualification (see RD1.8) to notify the contractor or subcontractor of disqualification from bidding University work at any Facility. In the notice, list all specific examples from procedure 1, above, that serve as the basis for the determination that contractor or subcontractor performance is not responsible. Send the notice by a means that provides proof of receipt.
    12. Resolve appeals. contractors or subcontractors may file a written appeal of the Facility determination that their performance is not responsible to the Chair, Construction Review Board, with concurrent copy to the responsible Facility administrator where the original decision was made, within 10 calendar days from their receipt of the Notice of Disqualification. If written objections are received during that time period, a hearing must be established for contractors or subcontractors to demonstrate that their performance is responsible.
    13. Conduct hearings. The Chair, Construction Review Board, will appoint a hearing officer to preside over the hearing in the manner detailed in the Sample Letter: Hearing on Disqualification. This letter must be sent by the hearing officer to the contractor or subcontractor, to establish a hearing, at least five calendar days before the scheduled hearing date. The decision of the hearing officer is final and not appealable within the University.

(Back to top)

Revised February 24, 2012 (Change No. 12-002-C)

<< Back to Table of Contents Next chapter >>