Public Bidding: Can the Agency Re-Bid?
Public agencies typically reserve the right to reject all bids and to re-advertise for bids. Why would an agency do this?
It may be that the agency has a budget. If the bids received exceed the budget, the agency may need to scale back the scope of the project. Alternatively, the agency may realize that the specifications were somehow deficient, and in need of revision.
If this occurs, then the agency may decide to reject all bids and re-advertise the project. If, at the same time, the agency provides notice of its intent to re-advertise the project, then the initial bids may be retained as exempt from public disclosure until the agency makes a decision on the new solicitation. This way, the bidders will not know the pricing submitted by their competitors until after new bids are submitted, and to prevent anyone from gaining an advantage.
Challenging an agency’s decision to reject bids and readvertise may be difficult. For example, Florida Statutes, 120.57(3) provides that the standard of review for matters falling within that statute is whether the intended rejection of all bids is "illegal, arbitrary, dishonest or fraudulent". Accordingly, if the agency has a good faith basis to reject all bids, its decision will not likely be overturned.
Thus, when bidding on a public project, bear in mind that the agency may not be required to award the project. In the event of a re-bid, you should make every effort to determine whether the specifications or budget for the project have changed prior to submitting a new bid.