Construction Bid Withdrawal Rules: Complete Guide to Withdrawing Bids

Bid Withdrawal Overview

Sometimes contractors need to withdraw bids due to errors, changed circumstances, or discovered mistakes. The rules differ significantly depending on whether withdrawal occurs before or after bid opening—and the consequences can be severe.

Before

Usually Allowed

After

Very Difficult

Bond

May Be Forfeited

Why Bid Withdrawal Matters

Submitting a bid creates a legal obligation. Public agencies rely on bids being firm to ensure fair competition. Improper withdrawal can result in:

Bid bond forfeiture: Loss of 5-10% of bid amount
Debarment: Being banned from future bidding
Lawsuit: Agency may sue for damages
Reputation damage: Word spreads in the industry

Withdrawal Before Bid Opening

Generally Permitted

Withdrawing a bid before the official bid opening is typically allowed without penalty. The bid hasn't been publicly opened, so no harm is done to the competitive process.

Typical Process:

• Submit written withdrawal request
• Request must be received before bid opening time
• Identify the project and your bid
• Agency returns sealed bid package
• Bid bond is released

Timing Is Critical

The withdrawal must be received before the scheduled bid opening time—not just sent. Allow time for delivery and processing. Electronic systems may have specific cutoff rules.

Withdrawal After Bid Opening

Much More Difficult

Once bids are publicly opened, withdrawal becomes extremely difficult. Your bid is now part of the public record and the agency has relied on it for the competitive process.

Withdrawal may be allowed only if:

• A material clerical error occurred (not judgment error)
• Error is clearly evident from the bid documents
• Bidder acts promptly upon discovering error
• Agency hasn't yet awarded the contract
• Withdrawal won't unduly harm the agency

What Doesn't Qualify

✗Errors in judgment (underestimating costs)
✗Market changes after bid submission
✗Finding a better project opportunity
✗Subcontractor backing out
✗Realizing you can't do the work

Clerical Error Claims

What Constitutes a Clerical Error

A clerical error is a mechanical mistake—not an error in judgment. Examples include:

May Qualify:

• Transposed numbers ($1,250,000 vs $1,520,000)
• Misplaced decimal point
• Math errors in extensions
• Omitting a bid item entirely
• Double-counting quantities

Won't Qualify:

• Underestimating labor costs
• Wrong material pricing
• Insufficient markup
• Missed scope items
• Bad subcontractor quotes

Proving a Clerical Error

To support a clerical error claim, you'll typically need to provide:

• Original workpapers and spreadsheets
• Evidence showing where the error occurred
• Explanation of how error happened
• Calculation of correct bid amount
• Declaration under penalty of perjury

Bid Bond Implications

When Bid Bonds Are Forfeited

If you withdraw improperly or refuse to execute the contract after award, the agency can make a claim on your bid bond:

• Bond amount: Typically 5-10% of bid
• Damages: Usually difference between your bid and next lowest
• Maximum: Limited to face value of bond
• Surety impact: May affect future bonding capacity

Your Surety Matters

If you need to pursue withdrawal, involve your surety company early. They have experience with these situations and may help negotiate with the agency.

Withdrawal Procedures

1. Act Immediately

If you discover an error, notify the agency as soon as possible. Delay weakens your position and may be seen as waiting to see if you win.

2. Submit Written Request

Prepare a formal written request explaining the error, providing supporting documentation, and requesting withdrawal or correction.

3. Provide Evidence

Include original workpapers, spreadsheets, subcontractor quotes, and any other documentation that shows the error was clerical, not judgmental.

4. Consider Legal Counsel

For significant amounts, consult an attorney experienced in construction law. The rules vary by jurisdiction and agency.

Preventing Bid Mistakes

Quality Control Checklist

✓Review all math with a calculator—don't trust spreadsheet formulas blindly
✓Have a second person check all numbers before submission
✓Compare total to engineer's estimate—big differences warrant review
✓Verify all subcontractor quotes are current and complete
✓Check that all addenda are incorporated
✓Don't rush—allow time for thorough review
✓Use standardized estimating procedures

Frequently Asked Questions

Can I withdraw if my subcontractor backs out?

Generally no. Subcontractor issues are considered part of business risk. You may have recourse against the subcontractor, but you're still obligated on your bid.

What if I'm the only bidder?

Agencies may be more willing to allow withdrawal if it won't affect competition. However, they're not required to—the same rules technically apply.

How long do I have to withdraw after opening?

Act immediately upon discovering the error. Most jurisdictions require prompt action— waiting even a few days weakens your position significantly.

Will withdrawal affect my ability to bid future work?

It can. Improper withdrawals may result in temporary or permanent debarment. Even allowed withdrawals create a record that agencies may consider.

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