8.2 Letting Overrun/Underrun Justification
8.2.1 Overrun Justification Memorandum Guidelines
Accurate estimating is essential in determining the validity of bids. The following are the latest guidelines for overrun/underrun justification memorandums for federal aid and state-funded construction projects.
Letting overrun/underrun justification memorandums are required for all types of projects where the apparent low bid is 20% or more over or under the engineer’s estimate and there are two or more bidders, regardless of project cost. Projects with only one bidder require justification when the apparent low bid varies from the Engineer’s Estimate by more than +/-10%.
These memorandums are prepared by the District and submitted to CST/LMO for further handling and coordination with the FIN - LMO. This office submits all memorandums to the CST Director for ultimate approval of the recommended bid award or rejection by the Texas Transportation Commission.
Use
submitted to CST for review.
8.2.2 CST’s Determination of Bid Validity
The aforementioned letting overrun/underrun justification memorandums are used by CST to determine the validity of the bids. The following items are checked:
- Errors in plans or engineering estimate;
- Adequate competition;
- Indications of collusion among bidders; and
- Unbalanced bidding.
Once these points have been considered, CST recommends award or rejection of the bid overruns/underruns to be acted on by the Texas Transportation Commission (Commission) during the same month’s scheduled Commission meeting.
Refer to TxDOT’s
for more discussion letting overrun/underrun justifications.