Unique Nature of Public Projects
If you are like most contractors, you likely keep your business’s lights on through a mix of public and private construction projects. While many of the concepts are consistent among the two types, this post will focus on public projects. When you submit a bid for a public project, you will be dealing with a government agency. Part two, coming next month, will cover private contracts.
When a municipal, county, state, or federal government requires construction or remodel of a structure, the solicitation for bids must appear publicly for a certain amount of time while qualified contractors (or developers) submit bids. In the meantime, of course, you will procure necessary documents from the public entity to assess the project and come up with a price. However, it is possible you will get enough pertinent information from the solicitation alone.
Keep in mind that public construction projects must be a sufficiently competitive process, as officials want to be good stewards of taxpayer money. Tax revenue might be the most obvious source of compensation for you during a public construction project, but the public party might seek to compensate you with publicly issued bonds. Generally, the lowest responsible bid will be awarded the public contract, but don’t place a bid that’s too low and loses you money.
Section 255.20 of the Florida Statutes provides the legal framework through which public bidding may proceed. The section lays out the maximum prices for which certain public projects may avoid the competitive bidding process. For example, electrical work estimated to cost more than $75,000 must go through the process. With constructing or remodeling a public structure, the estimated price tag of competitively awarded bids starts at $300,000.
Construction bids for federal structures must go through the U.S. General Services Administration (GSA). As with other public entities needing construction work on a public building, sealed bids are submitted after a federally mandated amount of time has passed since the solicitation was published. Just as municipalities and counties must competitively award contracts to projects estimated over a certain amount of money, the Miller Act (Title 40 in the United States Code) regulates federal construction projects estimated at $100,000 or more.
Part 1 Conclusion
The added formalities of public construction projects can make for a longer and more complicated process than bidding for private projects. Next month’s blog will explain some notable similarities and differences between public and private bidding processes. If, in the meantime, you need any clarification on a bid or potential bid, give us a call at (305) 223-9811 and we can give you experienced legal counsel on your contracting issue.