*1 Duval, Cragan and Paul H. Gordon W. Thorsness, Gantz, Brun- Powell & Hughes, STAR BOROUGH FAIRBANKS NORTH Fairbanks, appellant. din, DISTRICT, Appellant, SCHOOL Gates, Reeves, An- Bogle N. & James v. chorage, appellee. PRODUCTS, OFFICE BOWERS INC., Appellee. MATTHEWS, BURKE, Before No. S-4525. MOORE, JJ. COMPTON Alaska. Supreme Court of OPINION 25,
Sept. 1992. COMPTON, Justice. Amending Rehearing on Order 5,May dispute This arose after Fairbanks (school Borough District
North Star School district) requested proposals and awarded a copier services for contracts Prod- year period. Bowers Office three bidder, (Bowers), ucts, Inc. an unsuccessful the school district. sued that the school district had court concluded breached proposal, consider Bowers’ award- preparation costs ed Bowers its bid contracts. The school cancelled appeals. district We reverse. AND PROCEDURAL I. FACTUAL BACKGROUND provided Bowers Beginning in late year under three contract copier service In near with the school district. June contract, the expiration of the Bowers Request district advertised school (RFP) copier service Proposal to obtain years. next three district any or right reject all bids reserved option and the to obtain service competitively arranged the basis other government contracts. Bowers made sev- objections to the form and content eral the bid solicitation. No- July the school district issued its copier service
tice of Intent to Award the and Kodak. contracts protest Bowers submitted written School Board. made an oral to the protest, discussing After unanimously voted School Board to award Pitney Bowes and Kodak. the contracts to claiming that filed suit illegal requested decision was *2 damages injunction against per- and respond to to request Bowers’ for clarifica- formance of the contracts. RFP; 2) tion of the Pitney Bowes failed to comply with the RFP because its reference The court denied Bowers’ re- letters were not sent from its quest temporary restraining for a order. 3) clients district; to the school The court also denied Bowers’ first motion Bowes was allowed to substitute a differ- summary judgment holding for that: ent days proposals after were 1. The school district is under no le- remedy submitted to deficiencies the school gal duty publish to in request pro- for district noted in Bowes’ first sub- posals weights the relative which will be mission; 4) and the school district did not applied to the evaluation factors con- conduct a satisfactory inquiry into whether request proposals; tained and copiers the Kodak met requirements. RFP request 2. The at issue case, face, in this on its complied with the court denied a motion Bowers to Policy1 School requiring “competi- Board cancel the contracts and denied a motion purchasing practices; tive” ... the school district to remand the matter to the school district for correction of the considering After new cross motions for errors Upon reconsideration, identified. summary judgment, the court made several the court ordered as follows: findings and conclusions. The court found court, upon This review of the while the action was an evidence administrative presented, find, not pursuant 22.10.020(d), does as a matter of AS it law, would that cancellation of “handle the ease de the contracts novo is appropriate sense that the parties remedy. allowed issue of augment remedy, legal equitable, the record.” what Regarding appro- the mer- or its, priate the court question summarized as this case is a follows: of fact to be determined at trial....
The court finds that the District’s cu- mulative action and inaction in conduct- To the [previ- extent that this court’s ing an process evaluation and award plaintiff ... limit the orders to mon- ous] copiers pursuant contract for to RFP ey damages of bid costs 9005 was and these orders are vacated. the District implied failed to meet its Following trial, day a five the court af- contractual obligation for an honest and firmed its findings earlier and discussed
fair consideration of
proposals....
all
irregularities”
“additional
supported
which
... Plaintiff
damages
is entitled to
summary judgment
its
that the school dis-
this breach of contract.
trict had
breached
contractual
In reaching
conclusion,
this
duty
to treat
Bowers’
1)
found that:
the school district had
honestly.2
failed
The court found that Bowers
policy
1. It is the school
"pur-
district’s written
they
critical
time where
had three new
line,
competitively,
prejudice,
chase
coming
without
and to
schools
a historical moment
every
seek maximum
happening
educational value for
dol-
in what was
in Fairbanks. There
expended.”
lar
simply
enough
enough
was
time or
staff
enough expertise
training.
or
There sim-
2. The court reasoned as follows:
ply
enough
were not
man-hours to do the
I don't find that the School District was out
job
appears
kind of
that the School District
get
to
people
the Plaintiff.
I do not think that the
trying
try-
was
ing.
to do.
I don’t fault them for
acting
that were
for the School Dis-
trict—I don’t think it rises to the level of
rigged
process.
favoritism or a
I
any
I don’t find that there was
intentional
process
think the effect of the
was a series of
particular
action in this
case.
It’s a case of
compounded
flaws that
each
misfeasance,
other to the
not malfeasance. The task was
point
duty
that the
was breached.
simply performed improperly, and there were
very
The School District tried
hard to make
going
other factors
on in the District that
procedure go right.
There is no doubt
caused it. These were a series of events wait-
about it.
they
I’m not sure what else
ing
could
happen,
they
beyond
simply
were
they
done with the tools that
had
ability
avail-
the staffs
to control in that the District
able at the time.
It’s clear that
trying
there was
process,
just
was
to run a
but it
didn’t
inadequate staff. The School District was at a
have all the tools to
at that
[it]
run
time.
proposal.
honestly consider
damages in the amount
entitled to
was
independently scrutinize
More-
will
$29,516.30
preparation costs.
for bid
aggrieved
if
over,
“the
actions to determine
the court found that
the school district’s
integrity
duty
as to
has demonstrated
bidder
district breached
*3
place
actually
took
process
the
as
of
Bowers.
require-
the
failing to fulfill
resulted in
and the Court
competitiveness,
of
ments
DID
THE SCHOOL DISTRICT
III.
cancelling the con-
remedy of
must use the
TO
BREACH ITS DUTY
NOT
also awarded
tract.” The court
AND
CON-
FAIRLY
HONESTLY
pursuant to Alas-
attorney’s fees
costs and
BOWERS’ PROPOSAL
SIDER
dis-
82. The school
Rules 79 and
ka Civil
appeals.
Housing Au
King
trict
v. Alaska State
1981),
256,
(Alaska
263
633 P.2d
thority,
II.
OF REVIEW
STANDARD
agency
government
recognized that
we
goods
or services has
solicits bids
which
appropriate standard for
The
issue
fairly and
implied
duty to
by an
contractual
complicated
of this case is
our review
and we established
proceeded. honestly consider bids
in
the matter
manner which
the
dispute
appropriate standard for
brought
their
before
the
parties
ap-
duty
superior court as an administrative
this
had been breached:
the
whether
22.10.020(d). Howev-
AS
peal pursuant to
exchange for a bidder’s investment
[I]n
discovery
er,
engaged in
parties
the
in
resources involved
bid
of the time and
augmented the record before
agency must
government
preparation,
testi-
documentary
and live
with
evidence
promise to consider
implied
held to an
be
mony.
fairly.
of this
honestly and
Breach
bids
typical
part
agency
In the
administrative
an
of
implied contract
record,
give
only
agency
no
on an
disappointed
based
bidder to recover
entitles a
deference to the decision
the
of
the costs incurred
the ad
independently
scrutinize
hold,
in accordance with
We also
bid.
action. Tesoro Alaska Petro
ministrative
decisions, that the
of
the Court
Claims
Co.,
Pipe
746 P.2d
v. Kenai
Line
leum Co.
for review
“reasonable basis” standard
1987).
896,
(Alaska
903
decisions,
Jager v.
see
of administrative
(Alaska
1100,
State,
P.2d
1107-08
537
In the context of an administrative
Zamarello,
906,
P.2d
1975);
486
Kelly v.
augmented record we will
appeal with an
1971),
(Alaska
in this
applicable
is
916-17
re
independent scrutiny with
continue our
Industries,
Inc. v.
situation. See Keco
documentary
How
gard to new
evidence.
States,
1203-04
492 F.2d
United
ever,
accept
superior court’s
we will
the
(Ct.Cl.1974).
Ct.Cl. 566]
testimony
[203
findings
fact
on live
of
based
findings
appears that such
are
unless it
omitted).
(footnote
3. The court did find an in the RFP. we conclude in that identified implicitly put committee considered some features that the RFP these features expressly which the court did not feel were 60 Bowes, awarding Pitney a contract gives
Third, statutory scheme Alaska’s implicitly determined district the school in their school districts broad render did not 14.14.060(h). this minor variance decisions. AS procurement proposal non-responsive. Pitney Bowes’ great exercise courts should record, on our review Based disturbing a school caution before a reasonable that there was basis conclude especially true This is contract award. Chris implicit for this determination. See had the the school district this case where State, Transp. Dep 't Berg, Inc. v. proposals it received option reject all (Alaska Facilities, P.2d Pub. of anoth- copier service on the basis 1984). The letters of reference government contract. er Pitney were received from Bowes district Fourth, no claim that Bowers makes letters received substantially similar to reg any statutes or district violated Moreover, the school from other bidders. State, Dep’t Educ. Compare, ulations. advantage any possible district removed (Alaska Nickerson, 711 P.2d v. Bowes irregularity afforded 1985) (upholding award of bid contacting client statutory agency violated costs where a reference. requirements). *5 short, of the record leads In our review 2.The date of manufacture that the school dis- to the conclusion us copiers. Kodak’s not Bowers was trict’s conduct towards equip- required copier that the The RFP light the capricious. arbitrary or manufactured within ment must have been granted to school districts broad prior to the date of the contract. years five decisions under AS regarding procurement the school district had a conclude that We 14.14.060(h), we conclude implicit determina- reasonable basis for its proper deference to the court did not afford responsive to that Kodak’s bid was tion are of the school district. We decisions the and for its award of requirement argu- by the persuaded school determination of to Kodak. The contract following the technical flaws ments had a reason- whether the school district proposal found in the which the trial court made for its decision should be able basis not, individually process did either review the school district on the information based collectively, or constitute a breach it the contracts. had at the time awarded duty.4 implied contractual awards, dis- time of the the school At the and received assur- requested trict had 1.Pitney noncompliance with Bowes’ provided a reason- from Kodak which ances requirement. the reference letters for a conclusion that Kodak basis able manufacture re- satisfy could the date of required that letters The RFP reference quirement. clients to sent from a bidder’s be Instead, Pitney ob- the district. Bowes 3.Pitney Bowes’ substitution them in its letters and included tained the copier. of the M-522 determined that this proposal. The court ulti- district considered and competitive The school gave Pitney Bowes variance late-entry mately accepted a low volume non-responsive. advantage and made its bid justified Bowers’ rea- in trict neither clarified nor corrected the committee was issue. interpretation despite to do of these features. its consideration sonable so.” briefs, party addresses one In their neither that the school district’s failure We conclude support perceived which the court cited in flaw clarify requirement was harm- of the RFP summary judgment against of its the in this case. The record shows that less for clarification of the district. Bowers asked evaluated Bowers' even school district requirement in the RFP. The reference letter though reference letters and that the it lacked refer- found that "Bowers did not submit prevailed their of other bidders on meet the because it was unable to ence letters interpretation. requirement The dis- merits. under its Pitney ruling non-responsiveness from Bowes. claim unnecessary the record reflects that in that made it to rule on other bases award, Pitney Bowes should receive the expressly for relief. Bowers claims it re- only the merits district considered served the other bases for relief for deter- copier Pitney originally pro- Bowes in mination the event it did not posed. We conclude that school district ruling non-responsiveness favorable any possibility eliminated of unfairness to claim. by considering only Pitney
other bidders petition, considered Bowers’ original making in Bowes’ submission Borough Fairbanks North Star School Dis- perceive award. We can no restriction in opposition, trict’s reply, and Bowers’ as prevent the law which would prior briefing. well as the record and Be- accepting district from a better from advised, ing fully determined, Pitney Bowes once it had IT original petition of all the IS ORDERED that Bowers’ based on submissions bidders, rehearing should is GRANTED as to the issue Bowes be petition. awarded the contract.5 raised Section III of its concluding paragraph Opinion No. 3888 presented, Based on the facts we con- is amended to read as follows: clude that the school district had a reason- able basis for its determination that court is should award contracts to attorney’s REVERSED and award of Further, and Kodak. conclude that the fees to Bowers is VACATED. The court school district’s actions were summary judgment is directed to enter or as to Bowers. As a matter of favor of the school district on the motion law, the school district did not breach its summary judgment on the non-re- *6 implied duty fairly honestly consider sponsiveness claim. proposal.
Bowers’ supe- This case is REMANDED to the It follows from our conclusion that the proceedings rior for such additional superior failing court erred in grant by protest, as are warranted the bid evi- summary judgment in favor of the school dence, proceedings previously undertak- district, awarding prepa- Bowers its bid court, by superior en and resolved ration costs and in canceling the contracts remaining and issues to be resolved awarded to Kodak and Bowes. court, superior any. if judgment superior court is IT IS FURTHER that Bow- ORDERED attorney’s REVERSED and the award of petition ers’ is DENIED all other re- fees to Bowers is The court is VACATED. spects. directed to enter favor of the summary school district on its motion for
judgment.
RABINOWITZ, J., participating.
ORDER ON REHEARING Products, (Bowers)
Bowers Office Inc. petitioned rehearing,
has claiming
among other errors that it has been de-
prived day of its in court on claims not
addressed court. It position court’s Following trial identified several Iarities” did not amount breach of the irregularities” "additional support which it found lent school district's summary judgment against to its proposals. evaluate the "irregu- school district. We conclude that these