XIII. Bids and the Bidding Process

Parenthetical numbers in the text refer to sections of the current Revised Statutes of Missouri, abbreviated as RSMo.
The legal requirements

A city can decide for itself at what dollar-level bids must be taken. This decision should be by official board resolution. A good set of general rules is in Chapter 50.660, the rules governing contracts for counties and cities. These have frequently been recommended in audits to other political subdivisions.

Statutes say "to the lowest and best bidder." All bid announcements should include this statement to avoid awarding a contract to bidders who promise more than they can deliver or vendors of inferior product or shoddy service over responsible vendors. The statute also says bids should be awarded "after due opportunity for competition," but this is sometimes difficult for a city to do.

Phone bids

Seeking bids by telephone is perfectly acceptable and often necessary. However, phone bids need to be treated in the exact same matter as submitted written bids. Design a simple form for soliciting phone bids that lists the firm, the date, the person speaking on behalf of the vendor, the person speaking on behalf of the city, what was offered and for what price. This is the same information that would be on written bids. A form is in the back of this manual.

Telephone Bid Form (PDF)

Bid file folders

Make a file folder for every item the city bids. It should contain a copy of the announcement, the specifications, written bids received, telephone bids solicited, the contract along with the affidavit of publication of the notice. Specifications can be kept closed until public announcement of bid-letting is made (610.021 [11]). Sealed bids can be kept closed until bid opening (610.021 [12]). It's a good idea to seal phone bids after the paperwork has been completed until the opening.

Rejecting bids

Every bid call should include the words: "The city reserves the right to reject any and all bids." This is necessary because often bidders will offer to provide things different than what the city is seeking. If the bids received do not meet the specifications announced, they should be rejected even though this slows down the process.

Drawing bid specifications

It's not easy or simple to draw specifications. Be cautious if suppliers offer help — they may arrange specifications so only their product fits. This nullifies the "due opportunity for competition" statutes mandate.

Sole-source suppliers

It's easy to assume there is only one supplier who can furnish what the city wants. Remember, it was because of sole-source suppliers that the military purchased $600 toilet seats. There is almost always more than one supplier that can furnish an acceptable product.

Contracts must be in writing

Fourth-class cities are not required to pay for any product, good or service unless there is first a written contract. Missouri has a special rule (432.070) designed to protect all local governments. While private individuals and private businesses can be held liable for oral agreements (such as inventory ordered over the telephone) or "quasi-contracts" (inventory that is ordered, delivered and displayed for sale), these principles don't apply to governments in Missouri. Thus, if your city receives a bill for an item that you don't remember ordering and don't want, you may refuse to pay the bill. Unless the vendor can produce a properly signed contract, it will be unable to collect on the bill.