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Public Improvement - Competitive Bidding Method (PI - ITB)

What is a Public Improvement Competitive Bidding Method?

Public Improvement Competitive Bidding is a procurement method to acquire construction, reconstruction or major renovation projects on real property. Public improvement (PI) projects do not include procurements for:
  • Emergency work.
  • Minor alteration.
  • Ordinary repair or maintenance necessary to preserve a public improvement.
  • Projects for which no agency funds are used, either directly or indirectly, except for participation that is incidental or related primarily to project design or inspection.
For this procurement method, DAS Procurement Services on behalf of an agency, or an agency with delegated procurement authority, collectively termed, a procuring agency, issues an Invitation to Bid (ITB) to initiate the Public Improvement Competitive Bidding process.
Potential suppliers submit bids for the required project in response to the ITB. The procuring agency evaluates bid responses and awards a contract to the lowest responsive and responsible bidder.

When to Use Public Improvement Competitive Bidding Method

A procuring agency uses the Public Improvement Competitive Bidding method to acquire construction, reconstruction and major renovation projects on real property. The Oregon Accounting Manual defines real property as land, structures and anything attached to a piece of land or building in a manner that it becomes a part of that property.
All public improvement contracts must use the competitive bidding process except for circumstances offering substantial cost savings and other benefits, such as:
  • Contracts with qualified nonprofit agencies that provide employment opportunities for individuals with disabilities (refer to Qualified Rehabilitation Facility Program).
  • Contracts with a value of less than $5,000.
  • Contracts with a value under $100,000 that use the Intermediate Procurement process (refer to Intermediate Procurement).
  • Contracts to repair, maintain, improve or protect properties of the Department of Veterans’ Affairs.
  • Energy savings performance contracts.
An agency may request an exemption from the competitive bidding process for certain procurements. In seeking an exemption, the agency must submit written findings to DAS Procurement Services that state the exemption:
  • Is unlikely to encourage favoritism or substantially diminish competition.
  • Will likely result in substantial cost savings and other substantial benefits.
  • Requests a pilot project using an alternative contracting method.
Note: Prior to selecting any formal procurement method through the open market, an agency should refer to Procurement Planning for more information on conducting appropriate planning activities that facilitate the procurement process.
Refer to the Public Works for more information on construction, reconstruction, major renovation or painting of a road, highway, building, structure or improvement project of any type that serves the public interest, or equals or exceeds $750,000 in agency funds, and other distinguishing criteria of a public works project.

How to Process a Solicitation Using the Public Improvement Competitive Bidding Method

Prior to each budget period, an agency must submit a list of every public improvement contract that it plans to fund in the upcoming budget period to the Commissioner of the Bureau of Labor and Industries.

The agency must identify each improvement by name and estimate the total on-site construction costs. The agency must also indicate whether it intends to perform the construction through a private contractor. If the project is estimated to cost more than $125,000 and the agency intends to perform the work using its own equipment and personnel, the agency must also confirm that its decision is the least cost.

Resource: Use BOLI's Planned Public Improvement Summary Form (WH-118) to submit planned public improvement projects.

A procuring agency must use a process that comprises the following eight tasks to conduct a solicitation through the Public Improvement Competitive Bidding method. Click on a task  to view steps and instructions:
Unless an agency has delegated procurement authority to conduct Public Improvement Competitive Bidding, it must submit a public improvement project assignment request form to DAS Procurement Services to tentatively assign a state procurement analyst to serve as a project resource and schedule the work. After DAS/PS provisionally assigns an analyst, the requesting agency must provide plans, specifications, and other checklist items.

An ITB document for public improvements includes the ITB and its attachments, a sample contract, addenda, exhibits and supplemental information. An ITB must include the following information according to Oregon statutes and administrative rules:
  • A designation for or description of the public improvement project.
  • The location of the office where the solicitation document may be reviewed.
  • The date that prequalification applications are due and the class or classes of work for which bidders must be prequalified if prequalification is a requirement.
  • Time, date and place of bid opening.
  • The form and instructions for bid submission including any other special information, for example, electronic means of submission.
  • The name and title of the person receiving bids.
  • A statement that each bidder must identify whether the bidder is a resident bidder (refer to ORS 279A.120).
  • A statement that the procuring agency may cancel the procurement or reject any or all bids.
  • Requirement that a contractor or subcontractor must be licensed under ORS 468A.720.
  • A statement that the procuring agency may not receive or consider a bid for a public improvement contract unless the bidder is licensed by the Construction Contractors Board or the State Landscape Contractors Board.
  • Whether a contractor or a subcontractor under the contract must be licensed under ORS 468A.720 (applies to asbestos abatement projects).
  • Contractor's certification of nondiscrimination in obtaining required subcontractors according to ORS 279A.110(4). (Refer to OAR 137-049-0440(3)).Contracts for public works subject to ORS 279C.800 to 279C.870 or the Davis-Bacon Act (40 U.S.C. 3141 to 3148) require a statement that no bid will be received or considered by the agency unless the bid contains a statement by the bidder that the contractor agrees to be bound by and will comply with the provisions of 279C.838, 279C.840 or 40 U.S.C. 3141 to 3148.
Resource: DAS Procurement Services maintains forms, guidelines, and templates for use in developing solicitation documents for public improvement. A procuring agency should reference these documents and confer with DAS/PS and the Attorney General’s Office, as applicable, prior to issuing an ITB for a public improvement project.

The procuring agency must post the ITB, including all addenda and most attachments, through ORPIN. The procuring agency should provide the following information in the Solicitation/Opportunity Summary:
  • ITB purpose
  • Notice of any pre-bid conferences, including:
    • Time, date and location
    • Whether attendance is mandatory
    • Provision that statements made by the procuring agency or DAS representatives at the conference are not binding unless confirmed by written addendum posted through OregonBuys
  • Site access: Time and date the site will be available for bidders to view the site conditions
  • Project estimate: Range of estimate cost of the project for bonding purposes
  • Project completion dates: Number of calendar days from issuance of Notice to Proceed
    • Project start date
    • Substantial completion
    • Final completion
  • Liquidated damages: If applicable, the amount of liquidated damages applied to the contract resulting from the ITB
    • Project description

In addition to provisions of statute and rule that specify the elements of a Public Improvement ITB, a procuring agency must address the following considerations in its public improvement solicitation.

First tier subcontractor disclosure

A first-tier subcontractor is any entity providing labor or labor and materials on the contract that will be contracting directly with the prime contractor. If an ITB may result in a public improvement contract exceeding $100,000, the agency must designate a time of closing consistent with the first-tier subcontractor disclosure requirements (refer to ORS 279C.370(1)(b) and OAR 137-049-0360). Disclosure is required only for first-tier subcontractors whose subcontract value is equal to or greater than five percent of the estimated contract value but at least $15,000, or is valued at $350,000 or greater.

The ITB must provide instructions for bidders to submit subcontractor disclosures in the form and format required by statute, including the subcontractor's name, dollar value and the category of work that the subcontractor would be performing (refer to ORS 279C.370).

Bid security

A procuring agency may waive bid security and performance and payment requirements if the amount of the contract for the public improvement is less than $100,000 (refer OAR 125-249-0460). Additionally a procuring agency may exempt certain contracts or classes of contracts from all or a portion of the requirement for bid security, as well as bonds for the performance of the contract and payment of obligations (refer to ORS 279C.390).
Unless a procuring agency has otherwise exempted a procurement from bid security the procuring agency must require in the ITB document that bid security be submitted with the bid. Even if the procurement is exempted from bid security, the procuring agency may still require bid security from bidders. The requirement for bid security applies only to public improvement procurements with an estimated contract value of more than $100,000.
If a procuring agency requires bid security, the amount of the bid security must not be more than 10 percent or less than five percent of the submitted bid, consisting of the base bid and any additive alternates. The amount of bid security required should be considered carefully, and must be clearly stated in the ITB document. Bid security should not be used to discourage competition.
A procuring agency may accept the following forms of bid security:
  • A surety bond from a surety company authorized to do business in the state.
  • An irrevocable letter of credit issued by an insured institution (refer to ORS 706.008).
  • A cashier's check.
  • Certified check from the bidder.

Other considerations

A Public Improvement ITB must include considerations for:
  • Notifying bidders of addenda and making addenda available.
  • Disclosing joint venture/partnerships.
A procuring agency must ensure that a Public Improvement ITB covers all contractual terms and conditions applicable to the procurement, and must clearly specify the consequences for a contractor’s failure to perform the ITB’s scope of work or a contractor’s failure to meet established performance standards.
The procuring agency must follow its internal and state-level procedures for review and approval of the ITB document prior to posting the public notice. State-level procedures, at a minimum, require the agency to submit the ITB, with a sample contract, to the Attorney General for the required legal sufficiency review. Additional state-level reviews may be required depending on the type of public improvement project being procured.


A procuring agency may seek to prequalify bidders prior to issuing a solicitation for a public improvement project through either a mandatory or permissive prequalification process:
  • Mandatory prequalification requires that a bidder be prequalified to receive the solicitation document and to provide a bid to that solicitation document. The procuring agency will not accept or consider bids from suppliers that are not prequalified.
  • Permissive prequalification allows the procuring agency to prequalify suppliers, but does not limit distribution of a solicitation to prequalified persons. Suppliers who are not prequalified by the procuring agency may submit bids.

If a supplier is currently prequalified by either the Oregon Department of Transportation or the Oregon Department of Administrative Services, the supplier must be considered qualified to perform similar work for other procuring agencies.
A procuring agency may disqualify a supplier from award consideration (remove them from its prequalification list) at any time, provided the supplier is given adequate notice and an opportunity to be heard.

After the procuring agency obtains internal and state-level approvals, the agency must advertise the opportunity to potential bidders through a public notice posted on OregonBuys. This informs potential bidders of the procurement opportunity and strengthens competition.

To promote the procurement opportunity and foster competition, a procuring agency may supplement the public notice through additional means. An agency may use mail, newspaper or the agency’s website for this purpose, however, the information may only direct potential bidders to the official notice on OregonBuys.
Public improvement contracts with an estimated cost in excess of $125,000 also require publication of an advertisement for bids in at least one trade newspaper of general statewide circulation in addition to the electronic posting on OregonBuys.

All public notices must contain the following information:
  • Where, when, how, and for how long the ITB may be obtained.
  • A general description of the products or services to be acquired.
  • The date that suppliers must file applications for prequalification, if prequalification is a requirement, and the class of products or services for which suppliers must be prequalified.
  • The office where contract terms, conditions and specifications may be reviewed if unable to access the ORPIN official notice.
  • The name, title and address of the individual authorized to receive bids.
  • The scheduled bid opening.Any other information deemed appropriate.
Official notice of the ITB must appear on OregonBuys for a minimum of seven days prior to the bid opening date.
If the procuring agency publishes additional advertisements, the bid opening date must be a minimum of five days after the date of the last publication of the advertisement.

After posting notice, the procuring agency must manage the solicitation until bids have been received. Solicitation management includes:
  • Facilitating pre-bid conferences (if provided through the solicitation).
  • Receiving and responding to potential bidders’ written inquiries regarding the solicitation.Processing solicitation addenda, as required.
Prior to bid opening, the procuring agency may conduct a pre-bid conference to explain the procurement requirements, enable bidders to obtain information or to conduct site inspections. The procuring agency must provide notice of pre-bid conferences in the solicitation document. Any statements made at a pre-bid conference do not change the solicitation document unless the procuring agency confirms such statements with a written addendum to the solicitation document. 

After the official public notice of the solicitation and before the award of a contract, any communication between the procuring agency and potential bidders must occur within the context of the solicitation only. This communication can only occur during the scheduled question and answer time frame allowed by the ITB as it relates to supplier inquiries related to terms and conditions, specifications, addenda or other related matters. During this time frame, telephone conversations and meetings with potential bidders must be documented in the procurement file. 

If potential bidders submit written questions regarding a solicitation, the procuring agency should post the questions and answers on OregonBuys. A record of all material communications regarding the solicitation by potential bidders must be included as part of the procurement file.

If required, the procuring agency must issue an addendum to the ITB that describes any changes to the ITB resulting from the inquiries. An addendum is typically used to communicate material changes to the ITB, correct minor defects, and provide information or clarification to potential bidders. If the procuring agency must amend the ITB, the agency should consider the impact to the potential bidders and determine if additional time should be given for submission of bids. 

The procuring agency must post official notice of an addendum to the ITB through OregonBuys. When considering an addendum to an ITB, the procuring agency should consider the impact to the potential bidders and determine if additional time should be given for submission of bids. Provided there is no extenuating public interest to retain the bid opening date, the procuring agency should not issue an addendum less than 72 hours before the bid opening unless the addendum also extends the bid opening date.
The procuring agency may cancel a solicitation if it is in the public interest to do so. However, the agency must provide proper notice of the cancelation.

​The procuring agency must date and time stamp, but not open, any bid or modification submitted prior to bid opening. Bids must be stored in a secure place until the time and date set for bid opening.
At the time, date and place designated in the ITB for bid opening, the procuring agency must publicly open all bids and modifications received. The names of the bidders, the amounts of their bids and such other information as may be appropriate must be read aloud. Preliminary information should be recorded at the time of opening, for example, through a bid tabulation or bid abstract, and should be posted in ORPIN.

The procuring agency must inspect each bid to ensure that it is signed by the bidder and verify and secure any required bid security. All other documents must be available for public inspection after the bid opening.
Public improvement bid opening dates should occur on Tuesday, Wednesday or Thursday between 2 and 5 p.m. to facilitate the submission of first-tier subcontracting disclosures, if required. In setting dates and times, the procuring agency should be careful to ensure that the disclosure deadline does not fall on a state holiday.

For procurements with an estimated contract value of more than $100,000, bidders must submit a disclosure form identifying first-tier subcontractors within two working hours of bid opening. A first-tier subcontractor is any entity providing labor or labor and materials on the contract that will be contracting directly with the prime contractor.

The procuring agency must reject a bid if the bidder fails to submit the disclosure form with the required information by the deadline. A bidder may submit the disclosure form with its original bid. The procuring agency must compile and make available for public inspection the disclosure forms received and must submit copies of the disclosure forms to the Bureau of Labor and Industries.

A procuring agency must make its bid award to the lowest responsible and responsive bidder whose bid meets the ITB requirements and criteria. 

After the opening, the procuring agency must evaluate the lowest bid to determine whether it complies with all ITB requirements, specifications and ability of the bidder to perform the contract. If it is determined to be non-responsive, the procuring agency moves to the next lowest bid.

A Public improvement ITB may solicit lump-sum bids, unit price bids, or a combination of the two. The procuring agency should evaluate the bids according to the following criteria:
​Bid Type
​Evaluation Criteria
​Lump sum bid without additive or deductive alternates​Compare bids based on lump-sum prices for the base bid considering no additive or deductive alternates.​
​Lump sum bid with consideration of additive or deductive alternates​Compare bids based on total bid price calculated by adding to or deducting from the base bid those alternates selected by the procuring agency.
​Unit price​Compare bids based on total bid price calculated by multiplying estimated quantities by unit prices submitted by the bidder and adjust for any additive or deductive alternates selected by the procuring agency.

The procuring agency may award the contract by item, groups of items or the entire bid according to the award approach outlined in the ITB document.

After conducting an evaluation of the bids, the procuring agency must send non-responsiveness letters to unsuccessful bidders. Returning or releasing the bid security of all unsuccessful bidders occurs after a contract has been fully executed and all required bonds and insurance have been provided, or after all bids have been rejected.

Bid mistakes

Following the opening of bids, the integrity of the competitive procurement process and fair treatment of bidders is a concern, and the procuring agency must carefully consider allowing waivers, corrections or withdrawals of bids for certain mistakes. A bid cannot be corrected or withdrawn due to an error in judgment. 

If mistakes are found in a bid after the bid opening, but before award of the contract, the procuring agency may take the following actions:
  1. Waive, or permit a bidder to correct, a minor informality (a matter of form rather than substance that is evident on the face of the bid, or an insignificant mistake that can be waived or corrected without prejudice to other bidders).
  2. Correct clerical errors evident on the face of the bid or other documents submitted with the bid.
  3. Permit a bidder to withdraw a bid based on one or more clerical errors in the bid only if the bidder shows with objective proof and by clear and convincing evidence:
    • The nature of the error.
    • That the error is not a minor informality or an error in judgment.
    • That the error cannot be corrected or waived.
    • That the bidder acted in good faith in submitting a bid and in communicating that the alleged error in the bid exists.
    • That the bidder acted without gross negligence in submitting a bid that contained the claimed error.
    • That the bidder will suffer substantial detriment if they are not granted the permission to withdraw the bid.
    • That the state will not face substantial hardship from withdrawal of the bid.That the bidder promptly gave notice of the claimed error

Mistakes in bids may be corrected after bid opening using the criteria listed above. Following award, a bidder is bound by its bid, and may withdraw its bid or rescind a contract only as allowed by law.

Responsive and responsible

As part of an evaluation process, the procuring agency must determine whether the bidder is responsive and responsible. 

A responsive bid unequivocally commits to the requirements of the ITB. A responsive bidder is one whose bid substantially complies with the ITB and all prescribed procurement procedures and requirements and contains no material defects. 

A material defect is one that affects price, quality, quantity, or delivery terms. Material deficiencies affecting responsiveness may not be corrected. Some examples of non-responsiveness are:
  • The bid does not meet the minimum specifications or requirements for the products, services or construction.
  • The bid document makes exception to terms and conditions in the solicitation.
  • The bid is submitted without pricing or with conditional pricing.

A responsible bidder has the capability and capacity to carry out all contractual responsibilities, and has:

  • Appropriate financial, material, equipment, facility, and personnel resources and expertise, or has the ability to obtain the resources and expertise, necessary to meet all contractual responsibilities.
  • All required licenses.
  • No listing by the Construction Contractors Board as unqualified to hold a public improvement contract.
  • Completed previous contracts of a similar nature with a satisfactory record of performance.
  • A satisfactory record of integrity.
  • The legal qualifications to contract with the agency.An unexpired certificate issued by DAS if the bidder employs 50 or more full-time workers at the time of the bid opening and the estimated contract value exceeds $500,000.
  • Supplied all necessary information related to the determination of responsibility.
A procuring agency must document its findings in its procurement file, and file it with the Construction Contractors Board within 30 days of contract award.


When all responsive bids from responsible bidders exceed the cost estimate for the contract, the procuring agency may negotiate with the lowest responsive and responsible bidder. However, the scope and the terms and conditions of the project may not differ significantly from the original bid. All other negotiations with bidders are prohibited when using this procurement method.

Once the procuring agency determines the lowest responsive and responsible bidder, the agency must document the award determination and file it in the procurement file. At a minimum, documentation of an award determination for an ITB must include:
  • All submitted bids.
  • Completed bid tabulation sheet.
  • Written justification for rejection of lower bids.A completed Responsibility Determination Form for any bidder deemed not responsible.
In addition to these required elements, the procuring agency should also document any other relevant information used in its award decision. Examples may include any bids rejected, discussions held with a bidder, or clarification received from bidders.

After documenting the award determination, the procuring agency should prepare for contract award. Prior to awarding a contract, the procuring agency must send to all bidders a written notice of the intent to award and post a notice of intent to award on ORPIN at least seven days before the award of a contract. 

If unusual time constraints exist, the procuring agency is not required to post notice of intent to award or may shorten the notice period. The procuring agency must document the specific reasons for altering the notice period in the procurement file.

After the notice of intent to award, the procurement file must be made available according to law, except where statute requires the procuring agency to make information in the procurement file available before any notice of intent to award (refer to the Public Records Law).

After the intent to award notice period, and as required by the ITB, the procuring agency must provide the successful bidder a contract, signed purchase order, price agreement, or other contract documents, as applicable. 

Unless exempted, public improvement contracts with an estimated value of more than $100,000 require the successful bidder to execute and deliver a performance bond and a payment bond. The successful bidder must promptly execute the provided contract and complete any actions necessary to complete the contract, including posting performance security, submitting proof of insurance when the invitation to bid requires the submission, and agreeing to perform the scope of work and meet the performance standards descibed in the ITB. 

If the successful bidder fails to promptly and properly execute the contract, deliver the performance bond, the payment bond or the proof of insurance, if required, the bid security must be forfeited as liquidated damages.

Amendments, Protests, and Change Orders

Read the full sections on each of these subjects to learn more about requirements and how to process: