Bay Cities Paving & Grading v. City of San Leandro CA1/2
167 Cal. Rptr. 3d 733
Cal. Ct. App.2014Background
- City of San Leandro solicited bids for a BART–Downtown Pedestrian Interface public works project and required submission of a completed proposal and a two‑page bidder’s bond using the City’s standard form.
- Oliver DeSilva, Inc. dba Gallagher & Burk (G&B) submitted the lowest bid; its sealed bid package omitted page 33 (the first page) of the two‑page bid bond but included page 34 (signature page with signatures and notaries).
- After bid opening, G&B provided the missing first page; the surety (Travelers) confirmed the bond was authorized and the omission did not affect its commitment.
- Bay Cities (second low bidder) protested, arguing the omission rendered G&B’s bid nonresponsive and unenforceable; City staff and then the City Council found the omission was an inconsequential defect and waived it, awarding the contract to G&B.
- Bay Cities petitioned for a writ of mandate; the trial court denied relief, finding substantial evidence supported the City’s factual determination that the missing page was a minor, waivable irregularity; Bay Cities appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the City abused its discretion by waiving G&B’s missing bond page and awarding the contract | Bay Cities: omission of the bond face page meant no valid/enforceable bid bond at bid opening, so bid was materially nonresponsive and waiver was impermissible | City/G&B: signature page and standard form established the bond and compliance; the omission was an inconsequential defect the City could waive, supported by substantial evidence | Court affirmed: the missing page was an inconsequential deviation; City’s factual determination was supported by substantial evidence and waiver was permissible |
Key Cases Cited
- MCM Construction, Inc. v. City and County of San Francisco, 66 Cal.App.4th 359 (Cal. App.) (agency discretion to waive immaterial bid deviations; factual inquiry)
- Ghilotti Construction Co. v. City of Richmond, 45 Cal.App.4th 897 (Cal. App.) (a deviation is waivable unless it gives an unfair competitive advantage or affects bids)
- Valley Crest Landscape, Inc. v. City Council, 41 Cal.App.4th 1432 (Cal. App.) (material bid defects that permit statutory relief to withdraw without forfeiture create unfair advantage and are not waivable)
- Miller v. McKinnon, 20 Cal.2d 83 (Cal.) (statutory requirements for bid security can render a bid invalid when completely lacking)