re: Construction Law question: Criminal Charges for Unbalanced bidding?

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the Federal level has it's problems with construction, which is why many end up in disputes, delays and cost overruns.

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You can thank the GAO, ASBCA & the courts for this.

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I negotiated & administered construction contracts for 14 yrs in the Air Force

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So you admittedly haven't been on the contracting side of the ball waiting for the government to cut your check.
Kind of what I thought.

exactly
too often the bidder who finds the mistake and brings it up is the only one who encumbers his bid

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So a lot of times, it's better to wait until after you're awarded the job and hit them up with a change order

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And then I'd cancel the contract due to irregularities in the bid. I've administrated many of these bids and if you see something, say something. Because at the end of the day, I'm not going to process change orders immediately and I will scrutinize why you're submitting a change order.

On the federal side, if there is a change submitted that was reasonably susceptible to be known prior to award, you will be held to that, especially if it's a CM at Risk contract. If the changes are substantial, all you're doing is putting your firm at risk for losses or a lengthy adjudication procedures/lawsuits.

You aren't going to cancel a contract after it is executed and a vendor requests a legitimate change request. If you try to do that you will get an immediate response from my counsel.

Every set of contract documents are incomplete and designers put the burden on the contractors for many reasons not the least of which are ignorance, incompetence, laziness and liability. And people who don't process change orders in a timely matter are dickheads.

This is why I do zero commercial work. I do some Federal, a lot of Industrial and never have problems because I read the contract documents up front and will not enter into an agreement that is loaded against me. I'm fortunate enough to have the ability to say no. Many in this industry don't have that and they get screwed daily.

Kujo, I don't know about other states, just some about Louisiana and federal contracting. The criminal prosecutions I have seen against contractors are mostly misapplication of funds (R.S. 14:202), one false claims act (18 USC 287), and one for mail fraud for the contractor's submission of pay apps allegedly deliberately overestimating the % completion (IMO a political vendetta against someone who wouldn't play ball).

As to sitting on knowledge of an error or ambiguity and trying to take advantage on a public contract, I think that would be very hard to turn that into a criminal false claims act case. What I do see is the estoppel/defense the feds refer to as a "patent ambiguity". An example of this being applied is seen in this case language:

"As to its remaining claims, plaintiff is eligible for an equitable adjustment only if it can show that its conduct in preparing its bid was reasonable. When a contractor is faced with an obvious omission, an inconsistency, or discrepancy of significance, he is obligated to bring the situation to the Government's attention if he intends subsequently to resolve the issue in his own favor. In this case, although plaintiff knew, or was in a position where it should have been found out, that there were serious deficiencies in the RFP technical package, it did not resolve these matters before it submitted its bid. Reasonable conduct requires greater effort to clarify obvious and important deficiencies than that exerted by plaintiff.
The question of a contractor's duty to inquire or to take further action to remove deficiencies in bidding documents has been before the court in many cases. There is a duty to seek clarification of any obvious omission. Defects in plaintiff's bid package did not involve the type of ambiguous contractual provisions that reasonably are subject to differing interpretations. The state of the RFP technical package does not involve the type of ambiguous contract provisions that would warrant application of the doctrine of contra proferentem. Nor is this a case where the contractor was required to exercise clairvoyance and spot hidden ambiguities. The deficiencies in the RFP technical package could have been uncovered by a mere checking of Exhibit A with the contents of the package. Plaintiff knew, or was in a position to know, what it had or did not have before it signed the contract." 530 F.2d 911

Louisiana has selectively applied similar logic. (see 464 So.2d 322)

I think it's really just a defense to the claim or change order, not a crime unless perhaps there is proof the bidder had actual knowledge of the plan error and obviously unbalanced the bid to take advantage of the error.

Most states have their version of the federal false claims act, so I can only assume your professor is referring to a scenario of unbalancing a bid with proof of knowledge and intent to make a windfall off the government.

Bidding on construction work is part science, and part gambling, with cash flow, the relationship with the AE/KO, weather, subs, and plain luck determining whether a project ends with a profit or losing your arse. That's why winning a public bid usually just starts the worrying about what you missed that the other bidders must have seen. And if the job is going really well for your balance sheet, praying that the owner won't terminate for convenience.

Have an upvote. Well thought out post. Wish I had the time to be as eloquent

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you put erroneous quantities down in the spec, and I bid it that way, the onus is on you at that point once the contract is signed. You're the one that should have caught the error before releasing the RFP

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If I'm bidding individual units (because that's nominal issue at best, worst case rebid the defined quantity or issue a change. That's small beans really unless it's an essential major portion of the bid making up a majority of the contract cost) or an actual construction project? There's a difference. According to the FAR (if it's a federal job) if there is an error that is reasonably known, you should report the error during the bid process. If something changes in the spec by the agency or delay beyond your control (unforeseen or change in site conditions as an example), change order granted.

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the way, you can talk all big and bad but I never had problems getting a change order request approved. Not in that situation. I mean, what can the planner say other than "my mistake"?

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If the application for change is reasonable, it will be granted. I'm not going to cut you a change order just because.

I'm an executor of public funds, everything is under scrutiny that comes across the desk.