A small municipality advertised a "call for tenders" to complete road construction in several newspapers. After the tender had been closed the job was not awarded to any of the prospective bidders. The municipality, on the recommendation of a neighbouring township contacted another firm and awarded it the contract on the basis of price and reputation. After learning of this development, the companies who had bid on the advertised tender joined forces and brought a suit against the municipality. They will be successful.

Question

Quizplus · Accepted Answer

The municipality is generally not obligated to award a contract to any bidder, even after a call for tenders, unless the tender documents specifically create such an obligation. The decision to award the contract to another firm based on price and reputation, without any indication of a breach of process or fairness, does not automatically result in a successful lawsuit by the original bidders.

A Small Municipality Advertised a "Call for Tenders" to Complete