(a) If the contracting body intends to contest the right of a bidder to withdraw a bid, it shall hold a hearing thereon within ten business days after the opening of such bids and issue an order allowing or denying the claim of such right within five days after the hearing. The contracting body shall give to the withdrawing bidder timely and reasonable notice of the time and place of any such hearing. The contracting body shall make a stenographic record of all testimony and other evidence presented at the hearing. Such order may be arbitrated under the applicable terms of the bidding documents or, if the bidding documents contain no such provision for arbitration, the then current rules of the American Arbitration Association.

(b) If the contracting body denies the claim for withdrawal and the bidder elects to arbitrate the matter or otherwise refuses to perform, the contracting body may proceed immediately in accordance with the provisions of this act. If it is finally determined in accordance with the provisions of this section that the bidder did not have the right to withdraw the bid pursuant to the provisions of this act the certified check, bank cashier's check, surety bid bond or other security furnished as the proposal guaranty shall be forfeited as liquidated damages.