Bid Analysis

General
The engineer’s estimate is part of the PS&E. One of the purposes of the estimate is to serve as a guide to analyze bids. The estimate should be accurate, credible and based on realistic data. TxDOT maintains written procedures for justifying the award of a contract or for rejection of the bids when the low bid appears excessive or rejection is being considered for other reasons (refer to
Chapter 6: Letting
of TxDOT’s
Project Development Process Manual
for more information).
The bid analysis process is an examination of the unit bid prices for reasonable conformance with the engineer’s estimated prices. The
LGPM Guide
provides other factors that may be considered in the bid analysis.
Unbalanced Bids
The LG should perform an analysis of the tabulations and the project estimate to determine the presence of unbalanced bids. As defined in
23 CFR §635.102
, the two types of unbalanced bids are listed below.
  • A
    mathematically
     unbalanced bid is a bid containing lump sum or unit bid items that do not reasonably reflect the actual costs (plus reasonable profit, overhead costs and other indirect costs) to construct the item.
  • A
    materially
     unbalanced bid is a bid generating reasonable doubt that an award to a bidder would result in the lowest ultimate cost to the government. A materially unbalanced bid should not be awarded.
The LG must obtain TxDOT concurrence on the determination of whether or not a bid is unbalanced. Information related to unbalanced bid determination is available in the
LGPM Guide
and in TxDOT’s
Project Development Process Manual, Chapter 6: Letting
Lowest Bidder
The award of a contract, if awarded, must be made to the lowest responsive bid submitted by a responsible bidder.
Negotiations of bid item prices are strictly prohibited from the time of bid opening to construction contract execution.
Federal Requirements
  1. 23 CFR §635.114(a)
    – Federal-aid contracts shall be awarded only on the basis of the lowest responsive bid submitted by a bidder meeting the criteria of responsibility.
  2. – Negotiation with contractors, during the period following the opening of bids and before the award of the contract, shall not be permitted.
    23 CFR §635.113(a)
    – Negotiation with contractors, during the period following the opening of bids and before the award of the contract, shall not be permitted.
State Requirements
  1. Texas Transportation Code §223.0041
    – Stipulates the award of the contract must be made to the lowest bidder.
  2. Texas Transportation Code §223.045
    – Requires federal Buy America provisions to be applied to contracts awarded by TxDOT for improvement of the state highway system, regardless of whether federal funds are being utilized.
Required Practices
Related regulations, the required practices and a description of the LG and TxDOT responsibilities for the bid analysis process are included in the Concurrence in Award section below and in the
LGPM Guide
.