Under certain circumstances it is in the interest of the client to permit withdrawal of a bid or proposal which is the result of a demonstrated estimating error by the contractor. True, the purpose of a bid bond is to insure the low, responsible bidder will execute the contract. It will not serve the client, however, to insist on performance given a disgruntled contractor who is obviously destined to suffer a short- or long-term loss in the performance of the contractual responsibilities. If a bidder withdraws, the remaining bids or proposals should be considered as though that bid had not been received.

On public work, there are two legal matters to be discussed.

BID MISTAKE: Section 103, subparagraph 11 of General Municipal Law demands that after a showing of the following, a bidder may rescind its proposal post bid and recover its bid security: "(1) The mistake is known or made known to the public agency, board, office or subdivision prior to the awarding of the contract or within three days after the opening of the bid, whichever period is shorter; and (2) the price bid was based on an error of such magnitude that enforcement would be unconscionable; and (3) the bid was submitted in good faith and the bidder submits credible evidence that the mistake was a clerical error as opposed to a judgment error; and (4) the error in the bid is actually due to an unintentional and substantial arithmetic error or an unintentional omission of a substantial quantity of work, labor, material, or services made directly in the compilation of the bid, which unintentional arithmetic error or unintentional omission can be clearly shown by objective evidence drawn from inspection of the original work paper, documents, or materials used in the preparation of the bid sought to be withdrawn; and (5) it is possible to place the public agency, board, officer, or subdivision in status quo ante."

The law states further that withdrawal of the bid is the only option. Correction of the mistake is prohibited.

WITHDRAWAL DUE TO DELAY IN AWARD: Section 105 of General Municipal Law stipulates that if award is not made within the 45-day period following receipt of bids, a bidder may withdraw its bid and bid security. There is often confusion about this matter in that owners request specific time extensions from bidders. The fact is, a bid remains open until it is formally withdrawn. There is no extension necessary. After the 45-day period, if the notice of award is sent prior to receipt of a formal notice from the bidder that he is withdrawing the bid, the award stands.