A California contractor discovers a $15,000 computational error in their bid after submission but before award on a public works project. Under California Public Contract Code Section 5100 et seq., what options are available?
Correct Answer
C) The contractor may withdraw the bid without penalty if the error is substantial and was made in good faith
California Public Contract Code Section 5100 et seq. allows contractors to withdraw bids due to substantial computational errors made in good faith, provided proper documentation is submitted. The contractor is not bound to honor bids containing material computational mistakes.
Why This Is the Correct Answer
California Public Contract Code Section 5100–5107 specifically provides relief for contractors who make clerical or computational errors in bids. If the error is substantial, was made in good faith, and the contractor provides proper documentation (e.g., original worksheets) promptly after discovering the error, they may withdraw the bid without forfeiture of the bid bond or any penalty.
Why the Other Options Are Wrong
Option A: The contractor must honor the bid as submitted regardless of computational errors
Contractors are NOT required to honor a bid containing a material computational error. Forcing a contractor to perform at a severely erroneous price would be inequitable and conflicts directly with PCC 5100 et seq., which was enacted precisely to address this situation.
Option B: The contractor may correct the bid but must pay a 5% penalty
There is no 5% penalty provision in California Public Contract Code for bid withdrawal due to a genuine computational error. This answer fabricates a penalty that does not exist in the statute.
Option D: The contractor may only withdraw if the error exceeds 10% of the total bid amount
The 10% threshold is not a requirement under PCC 5100. The statute focuses on whether the error is 'substantial' and made in good faith — it does not set a minimum percentage of the total bid as a prerequisite for withdrawal.
Memory Technique
Think 'Good Faith = Get Out Free.' Under PCC 5100, a good-faith computational mistake + proper documentation = no penalty withdrawal. The law protects honest mistakes, not strategic bid shopping.
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