Mississippi's "Preference" Statute--It is really quite simple.

Mississippi has two "preference" statutes. The first one is found under the statutory scheme for the Board of Public Contractors at Miss. Code Ann. §31-3-21(3) (Rev.2010). The second one is found under the Mississippi statutes dealing with Public Purchases at Miss. Code Ann. §31-7-47 (Supp. 2012). The purpose of these statutes is to ensure that Mississippi contractors are given the benefit of any "preference" afforded by a non-resident contractor bidding in Mississippi. In other words, in deciding the lowest and best bidder, the governing authority in Mississippi would apply the percentage increase to each out-of-state bidder’s price which is equal to the percentage of "preference" given to a non-resident contractor in the bidder’s home state.

For example, assume a Mississippi resident contractor bids $100 while a non-resident contractor bids $95. On its face, the non-resident contractor would appear to be the low bidder. However, if the non-resident contractor’s state grants a ten percent (10%) preference to its own resident contractors, then Mississippi’s governing authority must add ten percent (10%) to the non-resident contractor’s price when evaluating the bid. This results in the non-resident contractor’s bid being adjusted to $104.50 ($95 x .10 = $9.5 + $95 = $104.50). Therefore, the Mississippi contractor’s bid would be the lowest and best bid and awarded the contract. See generally, Refrigeration Sales Co., Inc. v. State of Mississippi, 645 So. 2d 1351 (Miss. 1994)(interpreting the application of Mississippi’s "preference" statute to bid of non-resident contractor from New York).

Despite the simple and straight forward nature of these "preference" statutes, the Mississippi Attorney General has opined that if a low bid from a non-resident contractor is "equal or substantially equal" to that of the second low bidder that is a Mississippi contractor, these statues require the governing agency to "prefer" the Mississippi resident contractor over the low non-resident bidder, even though the words "equal or substantially equal" do not appear in either statute.Miss. Attorney General Opinion No. 2007-00452, addressed to Malcolm Jones (September 4, 2007). Until the Mississippi Supreme Court or the Court of Appeals addresses the Mississippi Attorney General’s interpretation, the actual application of these statutes to the bidding process will be more complicated than the statutes require.

Appeals from School Board Orders--Do not delay!

If you are bidding on a project for a school board and are aggrieved by the decision to award the contract to another party, you must appeal the order "within ten (10) days from the date of adjournment of the meeting at which the order is entered."  Miss. Code Ann. § 37-7-115. The procedure for appealing the award decision is the same as set forth in Miss. Code Ann. § 11-51-75 and requires preparing and filing a bill of exceptions with the circuit court.  Because of the short time within which to appeal the decision, a contractor must not delay in deciding whether to appeal or walk away and fight another day.

"Redesignated" HUBZones Expiring October 1, 2011 - May Affect Your HUBZone Eligibility

 

On October 1, 2011, "redesignated" HUBZone areas will expire. These areas were previously set to expire at earlier dates, but in 2004, Congress extended and "grandfathered" their HUBZone status until the results of the 2010 Census were published. The original "redesignated" expiration date was June 1, 2011, but it was extended and now will take effect on October 1, 2011. The Small Business Administration is encouraging all currently-certified HUBZone concerns to assess the impact expiration of "redesignated" areas will have on their eligibility to remain in the HUBZone program, whether a concern’s principal office is currently located in a "redesignated" area or if it relies upon the employment of residents in redesignated areas to meet the "35%" rule.

The HUBZone program does not require termination of existing HUBZone contracts if a concern is no longer eligible after October 1, 2011. However, because a concern must be properly certified and eligible as of the date (a) it submitted its initial offer for the contract and (b) the date the contract was awarded, expiration of "redesignated" areas may impact pending offers. Also, regardless of whether a current HUBZone concern has an offer pending for a federal contract, it must always notify the SBA of any "material" change which could impact its HUBZone eligibility. Firms that will no longer qualify for the HUBZone program as of October 1, 2011, can voluntarily de-certify. If that is not done, the SBA will send proposed de-certification letters which must be responded to within thirty (30) days.

Concerns which voluntarily decertify or otherwise become non-compliant with the HUBZone program as of October 1, 2011, can re-apply after ninety (90) days have passed since the date of a voluntary decertification agreement or decertification.

Bid Protests--Time is not on your side

If you believe you have grounds for protesting the decision of a board of supervisors, or municipal authorities of a city, town, or village to reject a bid or award a contract, you need to act promptly. The clock is ticking and fast.

Under Miss. Code Ann. §11-51-75 (Rev. 2002) you have only ten (10) days from the adjournment of the meeting to appeal the adverse decision of the board of supervisors or municipal authorities to the circuit court. Do not wait for the official copy of the minutes to the meeting. Contact your legal counsel immediately since he/she will need to prepare a bill of exceptions (essentially a statement of the facts) that must be signed by the president of the board of supervisors or the municipal authority and presented to the circuit court clerk to perfect the appeal.

Remember, in the context of bid protests, if you delay you will lose the right to challenge the decision of the board of supervisors or municipal authority.

Listing of Subcontractors with a Bid--should it be grounds for rejecting a low bid from a responsible bidder?

Where in the Mississippi Procurement Statutes does it require subcontractors to be listed with a bid?  The correct answer is NO WHERE!!  So why use it to decide whether to award the contract to a prime contractor who is the low bidder with a valid certificate of responsibility from the Mississippi State Board of Contractors?

Rule 12 of the Mississippi State Board of Contractor’s Rules and Regulations states:

… the Prime Contractor on or before the date of being awarded the prime Contract, shall submit to the awarding agency a list of all subcontracts, exceeding Fifty Thousand Dollars ($50,000.00) with respect to public projects…

(Emphasis added.)

The Department of Finance and Administration’s Procurement Manual provides as follows concerning the requirement for the listing of subcontractors:

600.55

SUBCONTRACTOR’S LIST

The Contractor will submit to the Bureau a list of all Subcontractors to be used on the Project within seven (7) days after written notice of contract award. Any Subcontractor listed must be acceptable to the Bureau. [Miss Code 1972, Annotated, Sections 31-3-1 through 31-3-23.]

(Emphasis added.)

And, when the City of Vicksburg questioned whether it could award the contract to the apparent low bidder that had not listed its subcontractors as required on the Bid Form, the Attorney General opined as follows:

In response to your first inquiry, previous opinions have stated that a waiver of an irregularity in a bid received would not be improper in cases where (1) the irregularity does not destroy the competitive character of the bid by affecting the amount of the bid thereby giving the bidder an advantage or benefit over other bidders and (2) the irregularity does not involve noncompliance with a statutory or regulatory requirement. See MS AG Op., Dees (June 7, 1995) and MS Ag Op., Kilpatrick, December 19, 1997). See also Parker Construction Company v. Board of Aldermen of the City of Natchez, 721 So.2d 671 (Miss. App. 1998). In your first inquiry, the irregularity was the failure to list the names of subcontractors on the bid form. We have previously opined that there is no statutory or regulatory requirement that a contractor submit a list of subcontractors upon the submission of his or her bid.  MS AG Op., Dees (June 7, 1995).  In fact, as you have stated, the Rules and Regulations of the State Board of Contractors, Rule 12, specifies that "the Prime Contractor, on or before the date of being awarded the prime contract, shall submit to the awarding agency a list of all sub-contracts, exceeding Fifty Thousand Dollars ($50,000.00) with respect to public projects…" It is the responsibility of the awarding authority, however, to make a final determination whether an irregularity in a bid may be waived.

(Emphasis added). Mississippi Attorney General Opinion, dated September 22, 2000, addressed to Nancy D. Thomas. See also, Mississippi Attorney General Opinion, date June 7, 1995, addressed to A.J. "Buddy" Dees, Jr. (public agency permitted to award contract where prime contractor’s bid document listed subcontractor did not have a certificate of responsibility but prime contractor substituted licensed subcontractor prior to award).

Nonetheless, the design professionals for most public projects require the listing of subcontractors. Then, when a prime contractor fails to list its subcontractors or makes an error in listing its subcontractor, the design professional and/or public agency decide whether to reject the bid or waive the "irregularity". What are the criteria for deciding which of the two options will be exercised? You tell me.

If the public agency requires the listing of subcontractors it should state in the Instructions to Bidders that the bid will be rejected if subcontractors are not listed properly. It is just that simple. In addition, public agencies should change their rules and regulations to state listing of subcontractors must be submitted with the bid to be considered for award. This would mean that everyone would know the rules for listing of subcontractors. Will this happen? It is doubtful. It appears design professionals and public agencies prefer the flexibility afforded by such an ambiguity in the bidding process rather than the objectivity associated with clear Instructions to Bidders.

Mandatory Pre-Bid Meetings - Do I really have to attend?

There is an emerging trend in public bids to include a requirement for a mandatory pre-bid meeting. The requirement to attend the pre-bid meeting is typically set forth in the Instructions to Bidders ("ITB") and provides that a contractor’s failure to attend will result in its bid being rejected as non-responsive.  

As a preliminary matter, there is no Mississippi statute or regulation which requires a public agency to conduct a pre-bid meeting or for a contractor to attend a pre-bid meeting to qualify it to submit a bid.  This is a "requirement" typically included in the Instructions to Bidders by the Owner/Architect.  One reason it may be included is to give "local" contractors an advantage over "foreign" contractors. "Foreign" contractors are forced to expend additional time and effort to attend the pre-bid meeting, and cannot simply throw a bid together and submit it to the public agency. Another reason the requirement is included may be to give the opportunity for the Owner/Architect to give final, pre-bid information on the project requirements and, sometimes, even to serve as an alternative (though not a good one) to an amendment to the ITB.

A contractor that does not attend the pre-bid meeting risks the potential for having its bid rejected as non-responsive.  If the Owner/Architect truly intends to enforce this requirement, at bid opening the Owner/Architect should examine each bid to determine the identity of the bidder and compare it to the list of attendees at the pre-bid meeting.  If the bidder did not attend the pre-bid meeting, the Owner/Architect should return the bid unopened.

In most instances, the Owner/Architect will open the bids and address the issue only if the apparent low bidder has not attended the pre-bid meeting.  The bigger the spread between the apparent low bidder and the second low bidder, the more likely it is that failure to attend the mandatory pre-bid meeting will be waived. The Mississippi Attorney General has opined that "a bidding irregularity may be waived if: (1) the irregularity does not destroy the competitive character of the bid by affecting the amount of the bid thereby giving the bidder an advantage or benefit over other bidders and (2) the irregularity does not involve noncompliance with a statutory or regulatory requirement."  Because the requirement to attend a pre-bid meeting is not a statutory or regulatory requirement, Owners/Architects frequently waive the pre-bid meeting requirement without a challenge.  

If, however, the Owner/Architect does not agree to voluntarily waive the irregularity, an argument can be made that by opening the contractor’s bid that did not attend the pre-bid meeting; the Owner/Architect has already waived the requirement.   

There is another alternative. A contractor that is concerned about the requirement for a mandatory pre-bid meeting can file a pre-bid protest with the public agency challenging this requirement as unduly restrictive on competition and not in the best interests of the public.   

Checklist for Mississippi Construction Contractors

If you have ever been the apparent low bidder on a public construction project and had your bid rejected because of an irregularity in the bid documents, you are not alone.  What is even more frustrating, and will make you fighting mad, is when the public agency decides to waive the same irregularity of a competitor when you are the second low bidder.  Perhaps the best way to avoid this situation is to make sure that you have completed your bid in strict accordance with the instructions to bidders.  I know it is difficult to focus on all the particulars when less than an hour before the bid is to be submitted subcontractors and suppliers are sending in prices or changing the ones previously provided.  Here is a simple bid checklist that may help you avoid those last minute mistakes.

  • Read the "Instruction to Bidders" when you obtain a copy of the solicitation to make sure that there are no unusual or different bid requirements. 
    • Pre-Bid Conference
    • Bid Bond
    • Site Visit
    • Listing of Subcontractors
  • Prepare the bid envelope in advance, identifying (1) the project, (2) the person to whom the bid is to be submitted, (3) the location where the bid is to be submitted and (4) the date and time for the submission of the bid.  ALWAYS PLACE CERTIFICATE OF RESPONSIBILITY NUMBER ON THE OUTSIDE OF THE ENVELOPE.
  • Complete the bid form and check to determine whether all the blank spaces for prices are completed with a dollar amount or a "---" or "-0-".
  • Check your addition and multiplication for unit prices and total bid price.
  • Acknowledge all Amendments/Addenda to the solicitation.
  • List subcontractors, if required.
  • Sign and date the bid documents.
  • Check the bid bond, if required, to make sure that it is in the correct amount and proper form.
  • Place bid documents and bid bond, if required, into envelope and submit.

In the event you are determined to be the apparent low bidder, and your bid is not more than ten percent (10%) above the amount of funds allocated for the project, it is likely that you will be awarded the contract.