If a prime contractor bids to a public entity, uses a quote from a subcontractor, and identifies the subcontractor in its bid, is a contract formed between the prime and the sub if the public entity awards a contract to the prime? In Pennsylvania the answer is NO, according to a recent Commonwealth Court decision.
In Ribarchak v. Municipal Authority of the City of Monongahela, a prime contractor submitted a bid to a public authority, and identified a specific subcontractor in its bid. The public authority accepted the prime’s bid and awarded it a contract. The prime later substituted the named subcontractor with another subcontractor. The named subcontractor then sued for breach of contract, claiming that a valid contract had been formed with the prime when the prime included the sub in its bid and when the authority accepted the prime’s bid. The trial court rejected this claim, and the Commonwealth Court affirmed.
The Commonwealth Court followed the reasoning of many other jurisdictions that have rejected the notion that a contractor’s use of a subcontractor’s quote constitutes acceptance of the quote. The Commonwealth Court held that there must be affirmative evidence that the prime expressly accepted the subcontractor’s quote before a contract can be formed. The Commonwealth Court decision can be found here.
While this case concerned the public contracting context, it would seem that the rule is equally applicable in the private contracting context. A hat tip to my friend and former colleague Wally Zimolong who brought this decision to my attention in his blog Supplemental Conditions.