(a) The commission may reject any and all bids opened, read, and tabulated under §9.15 and §9.16 of this subchapter (relating to Acceptance of Bids and Tabulation of Bids, respectively). It will reject all bids if:
  (1) there is reason to believe collusion may have existed among the bidders;
  (2) the lowest bid is determined to be both mathematically and materially unbalanced;
  (3) the lowest bid is higher than the department's estimate and the commission determines that re-advertising the project for bids may result in a significantly lower low bid;
  (4) the lowest bid is higher than the department's estimate and the commission determines that the work should be done by department forces; or
  (5) the lowest bid is determined to contain a bid error that meets the notification requirements contained in §9.16(e)(1) of this subchapter and satisfies the criteria contained in §9.16(e)(2) of this subchapter.
(b) Except as provided in subsection (c), (d), (e), or (f) of this section, if the commission does not reject all bids, it will award the contract to the lowest bidder.
(c) In accordance with Government Code, Chapter 2252, Subchapter A, the commission will not award a contract to a nonresident bidder unless the nonresident underbids the lowest bid submitted by a responsible resident bidder by an amount that is not less than the greater of:
  (1) the amount by which a resident bidder would be required to underbid the nonresident bidder to obtain a comparable contract in the state in which:
    (A) the nonresident's principal place of business is located; or
    (B) the nonresident is a resident manufacturer; or
  (2) the amount by which a resident bidder would be required to underbid the nonresident bidder to obtain a comparable contract in the state in which a majority of the manufacturing related to the contract will be performed.
(d) For a maintenance contract for a building or a segment of the state highway system involving a bid amount of less than $300,000, if the lowest bidder withdraws its bid after bid opening, the executive director may recommend to the commission that the contract be awarded to the second lowest bidder.
  (1) For purposes of this subsection, the term "withdrawal" includes written withdrawal of a bid after bid opening, failure to provide the required insurance or bonds, or failure to execute the contract.
  (2) The executive director may recommend award of the contract to the second lowest bidder if he or she, in writing, determines that the second lowest bidder is willing to perform the work at the unit bid prices of the lowest bidder; and
    (A) the unit bid prices of the lowest bidder are reasonable, and delaying award of the contract may result in significantly higher unit bid prices;
    (B) there is a specific need to expedite completion of the project to protect the health or safety of the traveling public; or
    (C) delaying award of the contract would jeopardize the structural integrity of the highway system.
  (3) The commission may accept the withdrawal of the lowest bid after bid opening if it concurs with the executive director's determinations.
  (4) If the commission awards a contract to the second lowest bidder and the department successfully enters into a contract with the second lowest bidder, the department will return the lowest bidder's bid guaranty upon execution of that contract.
(e) If the lowest bidder is not a preferred bidder and the contract will not use federal funds, the department, in accordance with Transportation Code, Chapter 223, Subchapter B, will award the contract to the lowest-bidding preferred bidder if that bidder's bid does not exceed the amount equal to 105 percent of the lowest bid. For purposes of this subsection, "preferred bidder" means a bidder whose principal place of business is in this state or a state that borders this state and that does not give a preference similar to Transportation Code, §223.050.
(f) When additional information is required to make a final decision, the commission may defer the award or rejection of the contract until the next regularly scheduled commission meeting.
(g) Contracts with an engineer's estimate of less than $1 million may be awarded or rejected by the executive director under the same conditions and limitations as provided in subsections (a)-(c) of this section.
(h) The commission may rescind the award of any contract prior to contract execution upon a determination that it is in the best interest of the state. The executive director may rescind the award of a contract awarded under subsection (g) of this section prior to contract execution upon a determination that it is in the best interest of the state. If a contract is rescinded under this subsection, the bid guaranty will be returned to the bidder but no compensation will be paid to the bidder as a result of the rescission.
(i) For a contract with a DBE goal, all bidders must submit the DBE information required by §9.227 of this chapter (related to Information from Bidders) within five calendar days after the date that the bids are opened.
(j) Prior to contract award, all low bidders must be participating or provide documentation of participation in the Department of Homeland Security's (DHS) E-Verify system within five calendar days after the date that the bids are opened.

Source Note: The provisions of this §9.17 adopted to be effective November 23, 1994, 19 TexReg 8867; amended to be effective September 22, 1995, 20 TexReg 7086; amended to be effective December 12, 1999, 24 TexReg 10901; amended to be effective July 18, 2002, 27 TexReg 6345; amended to be effective June 17, 2004, 29 TexReg 5795; amended to be effective December 8, 2005, 30 TexReg 8181; amended to be effective December 7, 2006, 31 TexReg 9751; amended to be effective December 11, 2008, 33 TexReg 10054; amended to be effective March 19, 2014, 39 TexReg 1936; amended to be effective January 4, 2017, 41 TexReg 10663; amended to be effective September 19,2018,43TexReg 5996; amended to be effective February 19, 2020, 45 TexReg 1042; amended to be effective April 20, 2023, 48 TexReg 1968; amended to be effective May 15, 2024, 49 TexReg 3373