West Virginia Code of State Rules › Agency 157 - Highways › Title 157 - PROCEDURAL RULE DEPARTMENT OF TRANSPORTATION DIVISION OF HIGHWAYS › Series 157-14 - Rules Relating Generally to Various Functions of the Commissioner of Highways › Section 157-14-11 - Bid analysis

Current through Register Vol. XLI, No. 28, July 12, 2024
11.1. The
				evaluation of the proposals must also include a bid analysis. This requires a
				thorough and comprehensive bid analysis, and the Division must examine the unit
				bid prices for reasonable conformance with the Engineer's estimate. If extreme
				variations exist, the bid must be thoroughly evaluated. Where obvious
				unbalancing exists, the Division must provide written justification to accept
				or reject the bid. The bid analysis is the tool to detect whether collusion or
				bid rigging is occurring, whether the Division has received a fair price for
				the work, and if any unbalancing of the bids may result in a windfall for the
				contractor and corresponding disadvantage to the Division.
11.2. The Division may scale the level of
				scrutiny provided by the bid analysis to be commensurate with the complexity
				and value of the project. The Division is more likely to expend more effort on
				the bid analysis for projects of significant value or risk, complex projects,
				and projects with limited competition.
11.3. A mathematically unbalanced bid means
				the bid contains unit prices for items of work that do not reflect reasonable
				actual costs plus a reasonable proportionate share of profit, overhead and
				other indirect costs. The contractor may still be the lowest bidder, with the
				lowest total cost, but how they distributed the costs to the pay items is
				mathematically incorrect. For example, a contractor that bids one penny as unit
				price for an item of work has placed the cost for that work in other items. A
				mathematically unbalanced bid is an acceptable bid provided the result of the
				unbalancing does not result in a windfall for the contractor and a
				corresponding increase in cost to the Division.
11.4. A materially unbalanced bid means a bid
				which generates a reasonable doubt that award to the bidder submitting a
				mathematically unbalanced bid will result in the lowest ultimate cost to the
				Division. The contractor has shifted the costs between items of work
				anticipating a potential windfall from doing so. For example, a contractor
				believes the quantity of a specific item of work is likely to overrun, so they
				add money to the unit price above the true cost of performing the work. The
				overrun in actual work performed and corresponding inflation of the price,
				result in a windfall for the contractor. In some situations, the increased cost
				to the project is large enough it would change who the low bidder is, if the
				proposal included the correct quantity of work. In this situation, the bid may
				be declared materially unbalanced and rejected.
11.5. The Federal Highway Administration
				(FHWA) provides guidance on bid analysis in their publication "Guidelines on
				Preparing Engineer's Estimate, Bid Reviews and Evaluation" (Guidelines). The
				guidelines provide direction regarding the factors the Division will use during
				the bid analysis. These factors include:
11.5.a. Comparison of the bids against the
				Engineer's estimate.
11.5.b. The
				number of bids submitted.
11.5.c.
				The distribution or range in price of bids received.
11.5.d. The identity and geographic location
				of the bidders.
11.5.e. The
				potential for savings if the project is re-advertised.
11.5.f. The bid prices for the project under
				review versus bid prices for similar projects in the same letting.
11.5.g. The urgency of the project.
11.5.h. The current market
				conditions and workload.
11.5.i. If
				there is evidence of any unbalancing of bids.
11.5.j. Any large variances in bid prices
				compared with the Engineer's estimate and the other bids.
11.5.k. Is there justification for the
				variance in pricing?
11.5.l. Any
				other factor the Department deems important.