The formation of subcontracts on publicly-bid construction projects has always been a tricky matter. A bidder on the prime contract relies on a price quotation from a would-be subcontractor when pricing the prime contract bid. If the bidder is awarded the contract, is it obligated to use that subcontractor? Is the sub obligated to perform at its quoted price?

In a recent North Carolina case, a public project owner added to the mechanical work prior to the date for bid submission. The bidder on the prime contract neglected to tell its prospective mechanical subcontractor, which priced the work “as per” the drawings and specifications it had been provided. The bidder incorporated that price into its bid and was awarded the prime contract. The mechanical sub refused to honor its price, saying it had not been informed of the full scope of work. A court ruled there was no binding agreement, as there had been no meeting of the minds.

Other cases this week were state supreme court decisions from Ohio and Pennsylvania. The Ohio Supreme Court ruled that a construction manager-at-risk on a public project was not required to bond its work because the public works bond statute applied only to “bid” work. And, the Pennsylvania Supreme Court refused to stay the award of a $20 million electrical contract despite allegations of agency favoritism and misrepresentation by the successful offeror.