Boh Bros. Const. v. DOTDBoh Bros. Const. v. DOTD
BOH BROS. CONSTRUCTION CO., L.L.C.
v.
DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT, Frank Denton and Roddy Dillon.
Court of Appeal of Louisiana, First Circuit.
W.P. Wray, Jr., Baton Rouge, for Plaintiff-Appellant Boh Bros. Construction.
*676 Lawrence A. Durant, Baton Rouge, for Defendant-Appellee Dept. of Transportation and Development, et al.
H. Bruce Shreves and Denise C. Puente, New Orleans, for Intervenor-Appellee Barriere Construction Co., Inc.
Before LOTTINGER, C.J., and SHORTESS, FOIL, FOGG and CHIASSON,[*] JJ.
FOIL, Judge.
This appeal challenges a trial court's determination that the Louisiana Department of Transportation and Development did not violate the Public Bid Law in awarding three contracts to the lowest numerical bidder. After a thorough review of the record, we affirm.
BACKGROUND
On July 31, 1996, the State of Louisiana, Department of Transportation and Development (DOTD) advertised for bids on numerous public works contracts involving major highway overlay projects. The three contracts at dispute in this litigation are State Project Nos. XXX-XX-XXXX, XXX-XX-XXXX and XXX-XX-XXXX. The bid advertisement stated that bids must be submitted on the proposal forms provided by DOTD, must be prepared in accordance with Section 102 of the 1992 Louisiana Standard Specifications for Roads and Bridges and must include all information required by the proposal. It stated further that the bid shall include a proposal guaranty in an amount not less than specified in the advertisement.
On August 28, 1996, DOTD received bids on all three of the projects from Boh Brothers Construction Co., L.L.C. and Barriere Construction Company. Barriere's bids of $2,349,234.20 on SP-0099, $2,705,937.96 on SP-0038 and $138,039.05 on SP-0012 were the lowest bids submitted to DOTD. Boh Bros. bid $2,462,701.38 on SP-0099; $3,047,987.96 on SP-0038 and $145,661.44 on SP-0012.
All three of Barriere's bids were initially stamped "irregular" by DOTD. On SP-0099, two irregularities were cited in the proposal check list: (1) the bond was not for the amount specified in the proposal and (2) the Equal Employment Opportunity Certification Statement (EEO Statement) was incorrectly filled out. The advertisement for bids originally called for a $107,000.00 proposal guaranty, but by virtue of an addendum which increased the estimated cost on the project, this amount was changed to $108,000.00. Barriere's bid on this project contained a $107,000.00 proposal guaranty. The other two bids were stamped irregular for not having a correctly filled out EEO Statement; the proposal guaranty in these two bids matched the bond amount specified in the advertisements.
In a low bid analysis, Robert Pierce, Chairman of the DOTD Bid Review Committee, recommended that the contracts be awarded to Boh Bros. The recommendation was endorsed by Chief Engineer Roddy Dillon, and later approved by Secretary Frank Denton.
Barriere challenged DOTD's irregularity determination, charging that it simply made a mistake in filling out the EEO Statement, and pointed out that as part of the same bid letting, it submitted a bid on another state project which contained a correctly filled out EEO Statement. Barriere stressed that since 1984, it completed at least 12 federal aid projects for DOTD and filed the requisite EEO Statements therein. Therefore, Barriere urged, since DOTD had the properly filled out certifications on file, the error in filling out the forms on the three projects should have no bearing on the validity of its bids.
Thereafter, DOTD determined that its initial ruling that Barriere's bids were irregular was made in error, and it recognized Barriere as the lowest responsible bidder on the three contracts. DOTD found that the error in filling out the EEO Statement did not go to the substance of the bid, and concluded that the fact that Barriere's bid on SP-0099 contained a $1,000.00 less bid bond than required was not a substantive deviation from the bid because the bid advertisement initially *677 contained a proposal guaranty of $107,000.00, the precise amount of Barriere's proposal guaranty on the SP-0099 bid.
On October 7, 1996, Boh Bros. filed this lawsuit, seeking injunctive relief in the trial court to prevent DOTD from awarding the contracts to Barriere. It also sought a mandamus ordering DOTD to award the contracts to it as the lowest responsible bidder.
The trial court denied the request for a preliminary injunction, finding that the irregularities in the EEO Statement were errors of form which DOTD could legally waive. The court also ruled that the $1,000.00 discrepancy in the bid bond on SP-0099 was insubstantial and this deficiency could be waived by DOTD. Noting that the deficiencies in Barriere's bids were insignificant coupled with the fact that Boh Bros.' bid was over half a million dollars higher than Barriere's, the court believed that DOTD did not act arbitrarily or otherwise favorably in accepting Barriere's bid as the lowest responsive bid despite its insignificant irregularities.
Boh Bros. appealed, challenging as a matter of law the power of DOTD to waive insignificant irregularities in bids on public works projects.
MOTION TO DISMISS THE APPEAL AS MOOT
During the course of this appeal, DOTD filed a motion to dismiss Boh Bros.' appeal, offering proof that all three disputed projects have been substantially completed. DOTD contends that the injunctive relief prayed for by Boh Bros. is no longer available as a remedy due to the completion of the projects. It also points out that Boh Bros. did not specifically ask for damages in its petition, and because the only relief sought is no longer available, this court should dismiss the appeal as moot.
It is true that Boh Bros. did not request damages in its petition. It did, however, request a declaration that DOTD violated the Public Bid Law and sought the relief available to it at that time: to enjoin DOTD from entering into the contract with Barriere. In public bid cases, our courts have recognized the dilemma created when an unsuccessful bidder files a timely application for injunctive relief which is denied by the trial court, and during the appeal delays, the project is substantially completed, resulting in the unavailability of injunctive relief. See Airline Construction Company, Inc. v. Ascension Parish School Board,
In Stafford Construction Company, Inc. v. Terrebonne Parish School Board,
POWER OF DOTD TO WAIVE IRREGULARITIES IN BIDS
We now turn to the merits of the challenged action, namely, whether the trial court erred in finding that DOTD did not violate the Public Bid Law in determining that Barriere was the lowest responsible bidder on the three contracts in dispute. Boh Bros. takes issue with the trial court's determination that the alleged irregularities Boh Bros. cited in the Barriere bids were insignificant errors that could be waived by DOTD. It urges that a public entity is statutorily prohibited from waiving any deviation in a bid proposal, no matter how insignificant or trivial that deviation is.
In support of this position, Boh Bros. points to a 1987 amendment to a provision of the Public Bid Law,
The provisions and requirements of this Section, those stated in the advertisement for bids, and those required on the bid form shall not be considered as informalities and shall not be waived by any public entity.
Boh Bros. argues that by adding the language "required on the bid form" the legislature intended to preclude a public entity from waiving deviations that are properly characterized as a matter of the form of the bid, or a mere formality, rather than a substantive requirement of the bid.
Prior to the 1987 amendment to
Even after the cited changes to
The Public Bid Law was enacted in the interest of the tax paying citizens of the state, and its purpose is to ensure that tax dollars for public works are spent wisely, that the lowest responsible bidder is awarded the contract, and that favoritism does not enter into the decision making process. C.R. Kirby Contractors, Inc. v. City of Baton Rouge,
Therefore, we construe
Thus, the question in this case is whether Boh Bros. has established that there were substantive defects in the Barriere bids which precluded DOTD from awarding the contracts to Barriere. Boh Bros. insists that Barriere's submission of an allegedly incomplete EEO Statement on each of the three disputed projects required DOTD to declare Barriere's bids irregular and reject those bids. In support of its argument, Boh Bros. points to the language of the Equal Employment Opportunity Certification Form itself which states: "This form must be completed in the proposal submitted for bidding purposes. Failure to complete this form will result in rejection of the bid." Barriere also relies on a provision of the Louisiana Standard Specifications for Roads and Bridges, applicable to the contracts under review, § 102.08(10) which provides:
102.08 IRREGULAR PROPOSALS.
Proposals will be considered irregular and *679 will be rejected for any of the following conditions:
(10) On Federal-Aid Projects, if the ... Equal Employment Opportunity Certification forms in the proposal are not properly executed and submitted with the bid.
The pertinent language of the EEO Statement and Barriere's responses to it is as follows:
Certification with regard to the Performance of Previous Contracts subject to the Equal Opportunity Clause and the filing of the Required Reports Federal-Aid Contracts:
The bidder X or proposed subcontractor X certifies that he has ___, has not ___, participated in a previous contract or subcontract subject to the equal opportunity clause, as required by Executive Order 10925, 1114 or 11246, and that he has X, has not ___, filed with the Joint Reporting Committee, the Director of the Office of Federal Contract Compliance, a Federal Government contracting or administering agency, or the former president's committee on Equal Employment Opportunity, all reports due under the applicable filing requirements.
* * * * * *
Contractors and subcontractors who have participated in a previous contract or subcontract subject to the Executive Orders and have not filed the required reports shall submit a report covering the delinquent period or such other period specified by the Federal Highway Administration or by the Director, Office of Federal Contract Compliance, U.S. Department of Labor.
The form is signed by Barriere's president, George Wilson Jr.
It is obvious that Barriere did in fact submit a completed, signed EEO Statement. It certified therein that it filed all reports with the federal agencies under the applicable filing requirements. It is also clear that when filling out the form, Barriere's agent simply put the X in the incorrect box, marking the space after proposed subcontractor rather than the space certifying that it has participated in a previous contract subject to the equal opportunity clause. It is axiomatic that a bidder cannot be both a contractor and a subcontractor. Furthermore, the certification that the reporting requirements had been met necessarily implied that the contractor had participated in a prior contract subject to the equal opportunity clause. Indeed, the record reflects that on the same day Barriere submitted bids on the projects under review, it submitted a bid on State Project No. XXX-XX-XXXX which contained a correctly filled out EEO Statement certifying that it had participated in previous contracts subject to the equal opportunity clause and had filed all reports due under the applicable filing requirements.
Barriere's simple mistake in filling out the forms does not, in our opinion, rise to the level of an "irregularity." The EEO form is designed to ensure that contractors working on contracts involving the federal government have filed appropriate documents regarding equal employment concerns with the pertinent federal agencies. Barriere certified that it did in fact file the required reports with the respective agencies and the EEO forms submitted by Barriere in the bid proposals thus were fully responsive. DOTD acted within its power in determining that the mistake did not require rejection of the Barriere bids.
The only other alleged irregularity is that Barriere's bid on SP-0099 contained a proposal guaranty of $107,000.00, whereas the advertisement called for a $108,000.00 bid bond. Boh Bros. contends that the $1,000.00 discrepancy mandated rejection of Barriere's bid.
When SP-0099 was originally advertised, DOTD estimated the cost of the project to be $2,134,000.00. The proposal guaranty in the original notice to contractors was set at $107,000.00. DOTD later increased the estimated cost of the project to $2,222,000.00. *680 The estimated cost increase raised the proposal guaranty to $108,000.00. In the record there appears a revision sheet wherein the errors regarding the date for submission of the bids, the estimated cost and the proposal guaranty were corrected. On the section dealing with the $107,000.00 proposal guaranty, there appears the note "OK as is."
An addendum to the notice to contractors was issued by DOTD in which DOTD set forth that among other things, the estimated cost and the proposal guaranty were revised. The bid was advertised with a $108,000.00 proposal guaranty.
In accepting Barriere's bid containing a $107,000.00 proposal guaranty instead of a $108,000.00 bid bond, DOTD noted that the original advertisement called for a $107,000.00 bond. Furthermore, DOTD believed that the discrepancy in the proposal guaranty and Barriere's bid bond was not legally significant because Barriere's bond fell within
Due to DOTD's original advertisement calling for a $107,000.00 bid bond, and the fact that the $107,000.00 was within the approximately five percent of the estimated cost on the project, we agree with DOTD's position that the $1,000.00 discrepancy is a minor one which had no bearing on the substance of the bid, and therefore the deviation in the bid proposal on SP-0099 could legally be waived by DOTD.
Because Boh Bros. has failed to demonstrate any substantive deviations in Barriere's bid proposal precluding the award of the contracts to Barriere, the trial court acted correctly in denying Boh Bros. request for injunctive relief.
CONCLUSION
Based on the foregoing, the judgment appealed from is affirmed. All costs of this appeal are assessed to appellant, Boh Bros. Construction Co., L.L.C.
AFFIRMED.
LOTTINGER, C.J., concurs in part and dissents in part and assigns written reasons.
CHIASSON, J., concurs and dissents for reasons assigned by LOTTINGER, C.J.
LOTTINGER, Chief Judge, concurring and dissenting.
I respectfully concur in part and dissent in part.
The majority concludes:
Therefore, we construeLa.R.S. 38:2212A(1)(b) to preclude a public entity from waiving substantive provisions and requirements of the Public Bid Law, the advertisement for bids and the bids forms. The public entity may waive deviations that are not substantive in nature. However, it may not treat substantive requirements of the Bid Law, the advertisement for bids and the bid forms as mere informalities in order to justify its decision to waive a deviation in a bid. Whether a public entity permissibly waived a bid requirement is reviewable by the courts, and the issue should be determined by using the substance/form analysis.
The majority has reverted back to or at least continued the approach initially taken by this court in Sullivan v. City of Baton Rouge,
In determining whether a public entity has the discretion to waive bidding formalities, it is necessary to review the history of
LA R.S. 38:2212A(1)(b)
Prior to the initial enactment of
The legislature first attempted to curtail a public entity's discretion to waive informalities in 1984 when it enacted
Just prior to our decision in Pittman, the governor approved Act 195 of the 1986 Regular Session which amended
During the next legislative session the rule of Sullivan and Pittman was legislatively overruled when
In examining the chronology of Sullivan, Pittman and the amendments to
JURISPRUDENCE
Since the amendments, few courts have specifically addressed the issue of whether a public entity may continue to waive irregularities as to form. In many of the cases cited by the parties herein, the courts determined that the bids in question failed to comply with the substance of the bid requirements and therefore were properly rejected. Because the courts determined that the irregularities involved matters of substance rather than matters of form, the courts never reached the issue of whether a public entity still has discretion to waive irregularities of form. I briefly discuss these cases.
Systems Plus, Inc. v. East Jefferson General Hospital,
C.R. Kirby Contractors, Inc. v. City of Lake Charles,
In Triad Resources and Systems Holdings, Inc. v. Parish of Lafourche,
In Thigpen Construction Company, Inc. v. Parish of Jefferson,
Stafford Construction Co. v. Terrebonne Parish School Board, cited by the majority in support of its conclusion, also involved a substantial variance. Plaintiff argued that the school board and trial court erred in awarding a contract to a bidder who failed to attach a corporate resolution to their bid. Id. at 559. We held that the bid lacked a necessary and substantial part, the corporate resolution. Id. at 560. Because the bid package varied substantially from that required, we held that the trial court was clearly wrong in reasoning that the lack of a corporate resolution was a "minor, insignificant formality." Id. at 561. What the majority failed to note is that the clear legislative intent as expressed by statutory amendments was never made an issue in Stafford. Regardless, as noted above, the defect was one of substance rather than one of form, which even prior to the legislative amendments could not be waived.
In each of the foregoing cases, the bid at issue varied substantially from the bid specifications. Thus, the appellate courts were not called upon to consider whether the current version of
In Clement the fifth circuit pointed out that
The most recent appellate decision to discuss
In V.C. Nora, the bidder submitted a total bid price for each bid item rather than a unit price as required by the general bidding requirements. Id. at 470-71. The court acknowledged that under the facts, it was "apparent" that the bidder intended to bid $239,358.00 and not $41 million dollars. Yet, the court stated that such a conclusion did indeed require an interpretation outside the four corners of the bid. Id. at 471.
The court accepted DOTD's assertions that
Even though DOTD's rigid specifications as to the bid form may have seemingly harsh results, any interpretation but the most literal would contravene the stricti juris nature of the public contract laws.
Id. at 472 (Emphasis Added). Accordingly, the court concluded that Nora's bid was fatally defective for failure to provide unit prices as required. Id. at 473.
I would reject, as did the third circuit in V.C. Nora, the argument that Barber Brothers Contracting Co., Inc. v. Department of Transportation and Development,
After seeking clarification from H & S, DOTD awarded the contract to H & S. Barber Brothers, the next lowest bidder, brought suit to annul the contract. The trial court affirmed the award to H & S. Id. at 444.
On appeal, we found that the bid was ambiguous and that under Section 102.08 of the 1982 edition of the Louisiana Standard Specifications for Roads and Bridges (the Gold Book), DOTD was required to reject the bid. Id. at 443-44. Section 102.08 of the Gold Book provided in pertinent part:
IRREGULAR PROPOSALS. Proposals will be considered irregular and will be rejected for any of the following reasons:
....
(2) If there are unauthorized additions, conditional or alternate bids or irregularities which make the proposal incomplete, indefinite or ambiguous as to its meaning.
We reversed the trial court and ordered DOTD to accept the bid of Barber Brothers. Id. at 445.
Our decision in Barber Brothers was clearly based on a finding that H & S's bid was ambiguous. The issue of whether the DOTD had discretion to waive irregularities as to form under
CALOGERO, J., concurs, although preferring to bring the case up for full treatment. There is no ambiguity in the relevant bid language for there is no reasonable interpretation other than the construction given the bid by the district court. (Emphasis Added.)
Clearly Justice Calogero concurred on the grounds that there was no ambiguity in the bid. In reversing our decision, the supreme court did not determine whether a public entity still has discretion to waive irregularities of form under
Further, the majority's decision in L & M Demolition, Inc. v. City of New Orleans,
The majority's decision in L & M Demolition focused only on the permissive language of
INTERPRETATION OF AMENDED LA.R.S. 38:2212(A)(1)(b)
There is no ambiguity in the statute at issue. When a law is clear and unambiguous and its application does not lead to absurd consequences, the law shall be applied as written without further interpretation in search of the intent of the legislature. La. Civ.Code art. 9; New Orleans Rosenbush Claims Service, Inc. v. City of New Orleans, 94-2223, p. 11 (La. 4/10/95);
In 1987, the legislature amended
The Public Bid Law was enacted in the interest of the taxpaying public to prevent public officials from awarding contracts on the basis of favoritism or at possibly exorbitant and extortionate prices. New Orleans Rosenbush Claims Service, Inc.,
*685 The majority herein finds that "[t]o deny a public entity the power to waive insignificant deviations in order to select a low bid on every public works project is contrary to the interests of the taxpaying citizens of this state." Certainly there is truth is that statement. However, by amending
In the present case, the district court concluded that "the irregularities on the EEO form are mistakes of form, not substance.... A variation of substance must exist in the bid, whether by specification, bid procedure or otherwise, as a predicate for the rejection of the bid. Sullivan v. City of Baton Rouge,
Finding that the legislature intended to overrule Sullivan and remove a public entity's discretion to waive irregularities of form, I would find that the district court erred in determining that Barriere's bids were acceptable.
CONCURRENCE
I concur in the majority's handling of DOTD's motion to dismiss the appeal.
Therefore, for the above reasons, I respectfully concur in part and dissent in part.
NOTES
Notes
[*] Judge Remy Chiasson, retired, is sitting by special assignment of the Louisiana Supreme Court.
[1] The attorney general has also concluded that the rule of Sullivan and Pittman was legislatively overruled by Acts 195 of 1986 and 398 of 1987. La. Atty. Gen. Op. No. 93-633, p. 2 (1993).
[2] In interpreting the present version of