111 A.3d 407
R.I.2015Background
- Town of Middletown issued an RFP (subaqueous/underground drainage + blasting) requiring a Bid Form, Non-Collusion Affidavit, Insurance Statement, and Company Profile (including subcontractor ID) to be "included with the bid" and warning that failure to submit required documents by the deadline "may render a bid non-responsive."
- Two bids received: HK&S (low bid $1,631,125) and C.B. Utility (higher bid $3,744,285). HK&S did not include the requested company profile and subcontractor identification with its bid.
- Woodard & Curran (consultant) recommended rejecting HK&S as nonresponsive; town council adopted that recommendation and awarded the contract to C.B. Utility after negotiations.
- HK&S sued in state court (removed to federal court and remanded), asserting wrongful denial of contract, tortious interference, negligence against Woodard & Curran, and procedural/constitutional claims. District court dismissed federal claims; state claims returned to Superior Court.
- Superior Court granted summary judgment for defendants, finding HK&S's bid nonresponsive as a matter of law and that defendants did not abuse discretion; Supreme Court affirmed on de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HK&S's bid was responsive despite missing company profile and subcontractor info | HK&S: required documents could be submitted after bid opening; bid should be treated as responsive | Town/Woodard & Curran: RFP unambiguously required those documents "with the bid" and warned failure may render bid nonresponsive | Court held bid was nonresponsive as a matter of law because RFP mandated inclusion by deadline; summary judgment proper |
| Whether the town abused discretion or acted in bad faith in awarding contract to C.B. Utility | HK&S: town should have evaluated responsibility and could not reject low bid without justification | Defendants: they acted within discretion; rejection based on clear RFP violation and public-safety-relevant info was missing | Court held no palpable abuse of discretion and will not substitute judicial judgment for awarding authority |
| Whether HK&S has viable tort or contract remedy (tortious interference, wrongful denial, negligence) | HK&S: lost contract and business expectancy due to defendants' actions; Woodard & Curran owed duties | Defendants: no actionable expectancy or duty because bid was nonresponsive and Woodard & Curran acted as agent of disclosed principal | Court held these claims fail because the bid was nonresponsive; no duty or actionable expectancy established |
| Whether procedural/substantive due process or equal protection claims survived | HK&S: denial of award deprived property/right and improperly discriminated | Defendants: no deprivation because nonresponsive bid is not a protected entitlement; not similarly situated to responsive bidder | Court held constitutional claims fail—no protected interest and lack of similar circumstance due to nonresponsiveness |
Key Cases Cited
- H.V. Collins Co. v. Tarro, 696 A.2d 298 (R.I. 1997) (awarding authority may consider factors beyond lowest price; courts defer absent palpable abuse of discretion)
- Paul Goldman, Inc. v. Burns, 283 A.2d 673 (R.I. 1971) (courts will not disturb public contract awards unless corruption, bad faith, or palpable abuse of discretion exists)
- Gilbane Building Co. v. Board of Trustees of State Colleges, 267 A.2d 396 (R.I. 1970) (judicial interference with awarding contracts is limited to prevent placing awarding officials in a "legalistic straitjacket")
- Blue Cross & Blue Shield of Rhode Island v. Najarian, 865 A.2d 1074 (R.I. 2005) (decisions of officials in procurement carry a presumption of correctness)
- Coastal Recycling, Inc. v. Connors, 854 A.3d 711 (R.I. 2004) (municipal contracts may be awarded to non-lowest bidders when public interest warrants)