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Bidding on Contracts

Bidding on Contracts

The bidding process for any construction project, in which contractors and suppliers propose bids to the client (such as a homeowner or developer), involves several legal considerations. As part of contract law in Utah, you will often find that contractors need to be sufficiently bonded and — particularly if it’s a government contract — will need to adhere to strict regulations and requirements. While each contract is unique in some way, the bidding process is either for (1) a public contracts, where the party requesting bids is a government agency; or (2) a private contract, where none of the parties to the bidding process is a government agency.

Public Contracts

The bidding process in connection with public contracts is generally very formal, with a raft of existing rules and regulations that must be strictly followed in order to emerge with the winning bid. If you are bidding on a state or local government contract, you will need to be familiar with the laws and regulations of that jurisdiction. If it’s a federal contract, you will need to acquaint yourself with the rules established by the U.S. General Services Administration (GSA).

The public project bidding process often follows these steps: (1) An advertisement, or solicitation, for bids is published; (2) Qualified contractors receive and review the procurement documents (sometimes requiring payment of a deposit or non-refundable fee); (3) If interested, prospective bidders attend a meeting and tour the construction site; (4) Contractors solicit bids from subcontractors and suppliers; (5) After estimating costs, contractors submit sealed bids; (6) Bids are announced and/or read privately at a specified time; and then (7) the winning bids are chosen, based on the lowest responsible bid.
A responsible bid is one in which all of the factors involved in the project are adequately accounted for. In other words, the lowest bid will not win the contract if it is unrealistically low and either compromises the project or eventually will cost much more.

Private Contracts

In connection with private contracts, the bidding process is less formal and not generally constrained by detailed government-imposed rules and regulations. In the private sector, the owner or prime contractor requesting bids has wide latitude in setting its own rules for soliciting bids, and in selecting among the various bids submitted. However, this latitude in the private sector is not completely unbounded. In connection with major projects, it is wise to have a construction lawyer review bid solicitation documents for compliance with state and local laws and customs.

Negotiation Terms of Contracts

Individuals and companies negotiate and enter into contracts fairly frequently in the course of business. Some business agreements may be simple enough for the typical person to draft, and may just be a verbal agreement and a handshake, while others may require the help of a skilled contract attorney.

In either case, the ideal end result is confidence that you have negotiated the best terms for your business and created a well-drafted agreement that will avoid any dispute or potential litigation. Below, you’ll find tips on negotiating and writing a sound business contract.

Certain fundamental strategies will assist you in the day-to-day negotiation that all businesspersons perform, in contracts and other business transactions. Remember, those with whom your business is negotiating also will be working hard to leverage the deal in their favor. The following are a few suggestions to get you started on the road to effective negotiation strategies: 1 – You should always have clear objectives. It helps to make a list of goals before meeting the other party. 2- It is important to go to a negotiation having done your research. Know relevant law, facts, and figures. 3- Consider what you really need to get from the other party, and also decide in what areas you are willing to compromise. 4 – Listen to the other party and their concerns. 5 – You may want to have a first draft of an agreement written before meeting with the other party. 6- Build trust with the other party. Trust will aid communication. And finally 7 –keep the discussion ordered when meeting with the other party. Make a checklist of topics that should be reached during the negotiation.

So you want to draft a contract?

It is helpful to understand the basics of contract drafting even if you rarely draft your own contracts. A basic understanding can add to your confidence in all types of business writing, and will also aid when reviewing and interpreting the contracts in which you are a party. Consider the following suggestions for drafting a contract.

An effective contract should always be clear, specific, and focused. Sentences should be short to avoid unnecessary complexity and ambiguity. You may want to look at sample agreements prior to drafting your own. Make sure all party names are accurate. Include their business titles if applicable. A contract should be consistent in its tone, grammar, word usage, and abbreviations. Outlining the contract can aid clarity and allow for quick reference to certain clauses. Anticipate litigation by including sections regarding venue, choice of law, and attorney fees. Pages should be numbered. Avoid the appearance that pages could have been added after the agreement was signed. Be sure that you define important terms. All parties should sign the contract, including business titles if applicable. As with any business writing, proofread very carefully.

The truth is that you should never draft a contract. You should always have a licensed attorney do it. If you don’t you risk forgetting to include a provision that you didn’t even know that you needed simply because you’ve never had the experience that contract lawyer and litigation attorneys like those at Ascent Law have seen. Don’t make a million dollar mistake – have one of our contract lawyers help you with all contracts and written agreements.

Contract Lawyer Free Consultation

When you need a contract attorney, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506