Court of Appeals of Washington

Case no.: 87564-7-I
Date filed: January 26, 2026

A Washington appellate court has ruled that while a subcontractor conditioned its price quotation on written acceptance within seven days, the sub became bound when the prime contractor incorporated the price into its successful bid, notwithstanding the lack of written acceptance.

The City of Everett solicited bids for pump station modifications. McClure and Sons Inc. (MSI), in preparing its contract bid, asked for price quotations from several industrial electrical contractors. Quotations were expected no later than 10 minutes prior to a 2:00 p.m. bid submission. This “absolute drop dead” timeline would enable McClure to finalize the numbers before physically turning in a timely bid.

At 1:48 p.m. that afternoon, Stetner Electric Inc. sent McClure a proposal of $2,709,000. At 1:50 p.m., Stetner sent MSI an email correcting its earlier quotation, increasing the price to $2,850,000. MSI was already in the process of submitting its bid, which included Stetner’s earlier price, and was unable to incorporate the increased price.

The city announced contract award to MSI as the low bidder. The contractor asked permission to increase the contract price to correct its subcontractor’s error, but the city refused. MSI signed the contract at its original bid price under threat of forfeiture of its bid bond.

MSI informed Stetner it had been awarded the contract at a price that included Stetner’s $2,709,000 quotation. MSI offered to pay the increased corrected price, but Stetner became uncommunicative. MSI awarded an electrical subcontract to EC Electric, the second low offeror, at a price of $3,034,932, and then sued Stetner for the $325,932 price difference. A trial court granted summary judgment in favor of MSI on the basis of promissory estoppel, awarding the contractor the price difference.

Stetner appealed, arguing each of Stetner’s price quotations had included language requiring MSI’s acceptance in writing within seven days of receipt. MSI never accepted a Stetner price quotation in writing; therefore, any reliance by MSI had not been reasonable.

The Court of Appeals of Washington said this was an appropriate case for the application of the equitable doctrine of promissory estoppel. “Stetner promised to do the project’s electrical subcontracting work through its $2,709,000 bid—a promise that Stetner should reasonably have expected to cause MSI to change its position by incorporating the bid into its prime bid. MSI did change its position, incorporating Stetner’s bid into its prime bid. MSI’s reliance on that bid was justifiable, as Stetner had marked its bid ‘final’ and submitted it just 12 minutes ahead of the City’s deadline. MSI, in reliance on Stetner’s bid, formed a binding obligation with the City to perform the project at a cost based on Stetner’s $2,709,000 bid.”

The court was not swayed by Stetner’s argument that without written acceptance, MSI’s reliance could not be considered reasonable. MSI had not attempted to impose on Stetner any additional or altered material terms. MSI had simply incorporated Stetner’s quoted price into the bid on the prime contract.

“To allow Stetner’s seven day [sic] written acceptance condition to make its bid revocable after the City accepted MSI’s prime bid would defeat the purposes of promissory estoppel…. MSI’s reliance was reasonable. MSI accepted Stetner’s bid and it did not negotiate for or impose any other material conditions upon Stetner. MSI is entitled to recover the price it had to pay to cover for Stetner’s failure to perform.”

The last-minute submission of subcontractor price quotations on public projects is customary. This prevents bidders on the prime contract from “shopping around” the quoted price, playing one trade contractor against another.

This is a cautionary tale for trade contractors that frequently work as subcontractors. If the prime contract bidder reasonably relies on a quoted price, that price may be binding despite any contingencies or limitations stated in the proposal. And if a proposal is too equivocal for reliance, what is the point in submitting it?

Participants:
For McClure and Sons: Eric Michael Liberman, Seattle, Washington
For Stetner Electric: H. Lee Lewis, Seattle, Washington

Before: Judges Birk, Hazelrigg, and Mann

Opinion by: Judge Birk

Outcome: Judgment in favor of prime contractor affirmed

Source: Please click here to read the complete opinion.