2. Bids are examined to determine if they substantially comply with
the bid specifications. Particular attention should be paid to
the bid bond, if required, to ensure that the bond is properly
executed and that it binds the insurance company. O.A.G. 707a-7,
August 10, 1949. The purpose of the "substantial
compliance" rule is to enable the taxpayers upon the opening of
bds and the letting of the contract to know the exact amount of work
to be performed and the total sum to be paid to the lowest,
responsible bidder. Coller v. City of St. Paul, 26 N.W.
835 (Minn. 1947). [See also Section V. Bonds.]
C. Changes and Mistakes.
1. No material changes in bid proposals may be made after bids have
been opened and the contract awarded. O.A.G. 707b 10, April 12,
1974.
2. Insubstantial changes or variances are possible, however.
The test is whether the change would give a substantial benefit or
advantage to a bidder which would not be enjoyed by others. Carl
Bolander & Sons Co. v. City of Minneapolis, et al, 451 N.W. 2d
204 (Minn. 1990); Duffy v. City of Princeton, 60 N.W. 2d 27
(Minn. 1953); City of Bemidji v Ervin, 282 N.W. 683 (Minn.
1938); LeTourneau v. Hugo, 97 N.W. 115 (Minn. 1903).
a. An escalator clause for price of milk bid that was not in the
original specifications is material change and not a valid addition
to a contract. Such change is a substantial benefit to the
successful bidder not enjoyed by others. O.A.G. 707-13-7, May
21, 1945.
b. The increased cost of performance by a bidder is no
justification for modification or non-payment of a contract let
according to bidding procedure. Village of Minneota v.
Fairbanks Morse Co., 31 N.W. 2d 920 (Minn. 1948); Consolidated
Laboratories, Inc. v Shordon Scientific Co., 413 F.2d 208 (7th
Cir. 1966).
c. Price increases are reasonably anticipated and a bidder should
have considered this possibility in preparing his bid
proposal. Blaschka, Inc. v Frazer, 302 NYS 2d 443
(1969); Montauk Corp. v. Seeds, 215 Md 491, 138 A2d 907
(1958); O.A.G. 707b-7, November 14, 1947, July 22, 1947, January 15,
1946.
d. Provision for price increases or decreases can be included in
bid specifications provided there is a measurable or determinable
basis for such changes. (i.e. consumer price index, etc.)
Minn. Stat. § 375.21.
