Words and Numbers: Contractor Forfeits Bid Bond When It Mistakenly Leaves Out “Thousand” Word

Contractors make mistakes with words. Contractors make mistakes with numbers. And sometimes, a mistake with words leads to a mistake with numbers.

In Clark Construction Co. v. Alabama Highway Department, a highway contractor tried to withdraw its bid on public contract and have its bid bond returned after it made a mistake on a its written proposal. In its bid submission for a bridge construction project in Mobile County, the contractor had listed a total bid amount of $1,119,609. On a particular line item for Steel Bridge Superstructure, the contractor listed the amount of “$368,000” in numerical value, but had the words “Three Hundred Sixty Eight” immediately before the word “Dollars.” The contractor mistakenly left out the word “Thousand” from its written bid.

During the bid review, the Alabama Highway Department used the written words to calculate the total bid, as required by statute. Alabama Code Section 39-2-7 provided: “In case of a discrepancy between prices shown in the figures and in words, the words will govern.” The Department determined the contractor’s bid to be $816,977.60, as opposed to the $1,119,609 intended to be submitted by the contractor.

After learning about the error, the contractor asked permission to withdraw its bid on the basis of the mistake, but the Department refused to permit the bid to be withdrawn. The contractor then refused to accept the job, and so the Department forfeited the contractor’s $10,000 bid bond. The trial court ruled in favor of the Department.

The appellate court affirmed the decision, finding that the “words over numbers” statute was to be strictly construed. In light of the potential damages the contractor could have lost due to its mistake, the forfeiture of the bond (which was also required by the statute) was not excessive and otherwise fair.

Clark Construction is a good reminder to public contractors to pay close attention to bid tabulations. If there are errors in your written proposal, understand that the RFP or the applicable law will control how the error is to be resolved.

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