A new law, Assembly Bill 2182, added a new provision to the Local Agency Public Construction Act. Public Contract Code section 20103.8, which applies to local agencies, including school districts, sets forth the procedure an agency must follow in determining the lowest bid when the agency has asked for prices for items to be added to or deducted from the scope of work in the contract. Public Contract Code section 20103.8, which will become effective in January, requires that whenever additive or deductive items are included in a bid, that the bid solicitation must specify which of the four enumerated methods will be used to determine the lowest bid. The local agency has a choice of the following four methods for determining the lowest bid:
(a) The lowest bid shall be the lowest bid price on the base contract without consideration of the prices on the additive or deductive items.
(b) The lowest bid shall be the lowest total of the bid prices on the base contract and those additive or deductive items that were specifically identified in the bid solicitation as being used for the purpose of determining the lowest bid price.
(c) The lowest bid shall be the lowest total of the bid prices on the base contract and those additive or deductive items taken in order from a specifically identified list of those items, depending upon available funds as identified in the solicitation.
(d) The lowest bid shall be determined in a manner that prevents any information that would identify any of the bidders from being revealed to the public entity before the ranking of all bidders from lowest to highest has been determined.
If the local public agency does not specify which of the above four methods the agency will be utilizing, then the agency must determine the lowest bid using alternative (a), that is the lowest bid price on the base contract without consideration of the prices on the additive or deductive items. Public Contract Code section 20103.8 also specifies that the method of selecting the lowest bid does not preclude the local public agency from adding to or deducting from the contract any of the additive or deductive items specified after the lowest responsible bidder has been determined. In light of the above new law, local public agencies are advised to review again their bid documents to ensure compliance with Public Contract Code 20103.8.
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