OAR 137-049-0430
Negotiation When Bids Exceed Cost Estimate

(1)

Generally. In accordance with ORS 279C.340 (Contract negotiations), if all Responsive Bids from Responsible Bidders on a competitively Bid Project exceed the Contracting Agency’s Cost Estimate, prior to Contract Award the Contracting Agency may negotiate Value Engineering and Other Options with the Responsible Bidder submitting the lowest, Responsive Bid in an attempt to bring the Project within the Contracting Agency’s Cost Estimate. The subcontractor disclosure and substitution requirements of OAR 137-049-0360 (First-Tier Subcontractors; Disclosure and Substitution) do not apply to negotiations under this rule.

(2)

Definitions. The following definitions apply to this administrative rule:

(a)

“Cost Estimate” means the Contracting Agency’s most recent pre-Bid, good faith assessment of anticipated Contract costs, consisting either of an estimate of an architect, engineer or other qualified professional, or confidential cost calculation work sheets, where available, and otherwise consisting of formal planning or budgetary documents.

(b)

“Other Options” means those items generally considered appropriate for negotiation in the RFP process, relating to the details of Contract performance as specified in OAR 137-049-0650 (Requests for Proposals (“RFP”)), but excluding any material requirements previously announced in the solicitation process that would likely affect the field of competition.

(c)

“Project” means a Public Improvement.

(d)

“Value Engineering” means the identification of alternative methods, materials or systems which provide for comparable function at reduced initial or life-time cost. It includes proposed changes to the plans, Specifications, or other Contract requirements which may be made, consistent with industry practice, under the original Contract by mutual agreement in order to take advantage of potential cost savings without impairing the essential functions or characteristics of the Public Improvement. Cost savings include those resulting from life cycle costing, which may either increase or decrease absolute costs over varying time periods.

(3)

Rejection of Bids. In determining whether all Responsive Bids from Responsible Bidders exceed the Cost Estimate, only those Bids that have been formally rejected, or Bids from Bidders who have been formally disqualified by the Contracting Agency, shall be excluded from consideration.

(4)

Scope of Negotiations. Contracting Agencies shall not proceed with Contract Award if the scope of the Project is significantly changed from the original Bid. The scope is considered to have been significantly changed if the pool of competition would likely have been affected by the change; that is, if other Bidders would have been expected by the Contracting Agency to participate in the Bidding process had the change been made during the solicitation process rather than during negotiation. This rule shall not be construed to prohibit resolicitation of trade subcontracts.

(5)

Discontinuing Negotiations. The Contracting Agency may discontinue negotiations at any time, and shall do so if it appears to the Contracting Agency that the apparent low Bidder is not negotiating in good faith or fails to share cost and pricing information upon request. Failure to rebid any portion of the project, or to obtain subcontractor pricing information upon request, shall be considered a lack of good faith.

(6)

Limitation. Negotiations may be undertaken only with the lowest Responsive, Responsible Bidder pursuant to ORS 279C.340 (Contract negotiations). That statute does not provide any additional authority to further negotiate with Bidders next in line for Contract Award.

(7)

Public Records. To the extent that a Bidder’s records used in Contract negotiations under ORS 279C.340 (Contract negotiations) are public records, they are exempt from disclosure until after the negotiated Contract has been awarded or the negotiation process has been terminated, at which time they are subject to disclosure pursuant to the provisions of the Oregon Public Records Law, ORS 192.311 (Definitions for ORS 192.311 to 192.478) through 192.478 (Exemption for Judicial Department).

Source: Rule 137-049-0430 — Negotiation When Bids Exceed Cost Estimate, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=137-049-0430.

137‑049‑0100
Application 137‑049‑0110
Policies 137‑049‑0120
Definitions 137‑049‑0130
Competitive Bidding Requirement 137‑049‑0140
Contracts for Construction Other Than Public Improvements 137‑049‑0150
Emergency Contracts 137‑049‑0160
Intermediate Procurements 137‑049‑0200
Solicitation Documents 137‑049‑0210
Notice and Advertising Requirements 137‑049‑0220
Prequalification of Offerors 137‑049‑0230
Eligibility to Bid or Propose 137‑049‑0240
Pre-Offer Conferences 137‑049‑0250
Addenda to Solicitation Documents 137‑049‑0260
Request for Clarification or Change 137‑049‑0270
Cancellation of Solicitation Document 137‑049‑0280
Offer Submissions 137‑049‑0290
Bid or Proposal Security 137‑049‑0300
Facsimile Bids and Proposals 137‑049‑0310
Electronic Procurement 137‑049‑0320
Pre-Closing Modification or Withdrawal of Offers 137‑049‑0330
Receipt, Opening and Recording of Offers 137‑049‑0340
Late Bids, Late Withdrawals and Late Modifications 137‑049‑0350
Mistakes 137‑049‑0360
First-Tier Subcontractors 137‑049‑0370
Disqualification of Persons 137‑049‑0380
Bid or Proposal Evaluation Criteria 137‑049‑0390
Offer Evaluation and Award 137‑049‑0395
Notice of Intent to Award 137‑049‑0400
Documentation of Award 137‑049‑0410
Time for Contracting Agency Acceptance 137‑049‑0420
Negotiation With Bidders Prohibited 137‑049‑0430
Negotiation When Bids Exceed Cost Estimate 137‑049‑0440
Rejection of Offers 137‑049‑0450
Protest of Contractor Selection, Contract Award 137‑049‑0460
Performance and Payment Security 137‑049‑0470
Substitute Contractor 137‑049‑0490
Foreign Contractor 137‑049‑0600
Purpose 137‑049‑0610
Definitions for Alternative Contracting Methods 137‑049‑0620
Use of Alternative Contracting Methods 137‑049‑0630
Findings, Notice and Hearing 137‑049‑0640
Competitive Proposals 137‑049‑0645
Requests for Qualifications (RFQ) 137‑049‑0650
Requests for Proposals (“RFP”) 137‑049‑0660
RFP Pricing Mechanisms 137‑049‑0670
Design-Build Contracts 137‑049‑0680
Energy Savings Performance Contracts (ESPC) 137‑049‑0690
Construction Manager/General Contractor Services (“CM/GC Services”) 137‑049‑0800
Required Contract Clauses 137‑049‑0810
Waiver of Delay Damages Against Public Policy 137‑049‑0815
BOLI Public Works Bond 137‑049‑0820
Retainage 137‑049‑0830
Contractor Progress Payments 137‑049‑0840
Interest 137‑049‑0850
Final Inspection 137‑049‑0860
Public Works Contracts 137‑049‑0870
Specifications 137‑049‑0880
Records Maintenance 137‑049‑0890
Contracting Agency Payment for Unpaid Labor or Supplies 137‑049‑0900
Contract Suspension 137‑049‑0910
Changes to the Work and Contract Amendments
Last Updated

Jun. 8, 2021

Rule 137-049-0430’s source at or​.us