Loading...
CF-Village-CS 881213 (2) CANTERBURY, STUBER, ELDER & GOOCH ATTORNEYS AND COUNSELORS 5550 LBJ FREEWAY, SUITE DALLAS, TEXAS 75~.40-6;='17 ANDREW BRAM NICK (~1~) ~c~[ [3~ [988 Mr. Alan Ratliff City Manager City of Coppell P.O. Box 478 Coppell, Texas 750.19 ~: Bid Protest by Cajun Contractors, Inc. - Village Parkway Pump Station Project l~quest for Proposal No. 0030 Contract Award Considered at City Council Meeting on December 13, 1988 .4/' Dear Mr. Batliff: Plea~uensid~is as a supplement to Cajun Contractors, Inc.'s ("Cajun")~Bid Protest~)on the above-referenced project which was received by xuuL office on November 8, 1988. Cajun has recently received a copy of the doctm~ents prepared by Ginn, Inc. which will be considered by the City Council during its regularly scheduled meeting on December 13th. As you may know, the City of Coppell is authorized under applicable law to reject a low bid and select that bid which is most advantageous to the City. See Associated General contractors of Texas, Inc. v. City of Corpus Christi, 694 S.W. 2d 581 (Tex. App. - 1985, nc writ); see also A & A Construction Co., Inc. v. City of Corpus Christi, 527 S.W. 2d 833 (Tex. App. - 1975, ~) writ) (the low bidder on a public construction project has no absolute right to contract award and the City has the discretion to reject the low bid and accept the next lowest bidder.) In exercising its discretion, the City may weigh /~verm] f~_¢t~rs i~rejecting a low bidder including the bidder's ~ilure to confom_.~ts bid to the contract requirements. See Attorney Ge~Lal 0piniu.--No. ~;-449 (February 23, 1982) and Attorney General -O~z~nn No_ MW-?9g (N=rch 9~ 1981) (copies attached). In addition, an _~___-j~rent lack of experienc~may justify the rejection of the low bid. S~?_ corbin ,,.. Collin Curry C~issioner's court, 651 S.W. 2d 55 (Tex. App. - 1983, no writ). In light of the above, it is Cajun's position that the City of .Coppell is well within its authority to reject the apparent low bid of C.D. Henderson, Inc. The basis for this decision is set forth in Cajun's bid protest letter da. ted November 7, 1988 ar~ in the r~m%aining doctm~ents prepared by Ginn, Inc. for review by the City Council during the December 13, 1988 meeting. ~ANTERBURY, STUBER, ELDER & GOOCH ATTORNEYS AND COUNSELORS Mr. Alan l~atliff Page Tw~ December 13, 1988 Finally, in response to the options presented by Ginn, Inc. in its December 5, 1988 letter to Mr. Doyle, Cajun would respectfully su~uit that option No. 3 (the rejection of all bids and the re-advertisement of the project) would be inappropriate. The reason for this position is tb~t the re-advertisement w~uld allow the original bidders plus any new bidders to suk~it "tailored" bids with knowledge of the low amounts stated in the original proposals. This would violate a basic tenant of competitive bidding which "requires that all bidders be placed upon the same plane of equality." See Texas Highway Conmmission v. Texas Association of Steel Importers, Inc., 372 $.W. 2d 525, 527 (Tex. 1963). In addition, it would force low bidders such as Cajun to alter their original proposals since competitors would likely undercut Cajun's "1o~' bid by even a nominal amount in order to be awarded the contract. Thank you for your anticipated consideration of the above matters. Very truly yours, Andrew Bramnick cc: Larry Jackson, Esq., w/encls. cc: Mr. Mike Daigre, w/encls. Opinion No. MW-299 .~ '~ PAGE 1 CITATION RANK(R) DATABASE MODE Opinion No. MW-299 R 5 OF 5 TX-AG P TX March 9, 1981 Honorable Mike Driscoll Harris County Attorney 1001 Preston, Suite 634 Houston, Texas 77002 Re: Authority of a county to take a bid which provides for escalation in costs Dear Mr. Driscoll: The Commissioners Court of Harris County is required by law to award certain contracts after taking competitive bids. See, e.g., V.T.C.S. arts. 1658, 1659, 1659a, 2358-61, 2368a. Contracts must generally be awarded to the lowest and best bidder. You advise that instead of stating a lump sum bid in the bid form furnished by the county, some bidders insert an amount but also include an escalation clause which provides for price increases based upon increases in their costs. We understand that the bid form which Harris County uses does not invite the use of escalation clauses. You have asked the following questions: 1. Is Harris County authorized to accept a bid which the bidder has qualified to provide for escalation in costs during the period of the contract, if the total bid can be calculated? 2. Is Harris County authorized to accept a bid which the bidder has qualified to provide for escalation in costs during the period of the contract, if the total bid can not be calculated? 3. Is Harris County authorized to accept an alternate bid not based on the specifications? In Texas Highway Commission v. Texas Association of Steel Importers, Inc., 372 S.W. 2d 525, 527 (Tex. 1963), the Texas Supreme Court, quoting from Sterrett v. Bell, 240 S.W. 2d 516, 520 (Tex. Civ. App.--Dallas 1951, no writ), observed that competitive bidding requires: due advertisement, giving opportunity to bid, and contemplates a bidding on the same undertaking upon each of the same material items covered by the contract; upon the same thing. It requires that all bidders be placed upon the same plane of equality and that they each bid upon the same terms and conditions involved in all the items and parts of the contract, and that the proposal specify as to all bids the same, or substantially similar specifications. Its purpose is to stimulate competition, prevent favoritism and secure the best work and materials at the lowest practicable price .... There can be no competitive bidding in a legal sense where the terms of the letting of the contract prevent or restrict competition, favor a contractor or materialman, or increase the cost of the work or of the materials or other items going into the project. See also Attorney General Opinion H-24 (1973). In light of the views expressed in the foregoing quotation, we think it is readily apparent that the commissioners court may not accept a bid which is not Opinion. No. MW-299 ~ '~ PAGE 2 based upon advertised specifications. To do so would be to violate a fundamental tenet of the competitive bidding process, which is that bidders must have an opportunity to bid on equal terms and to have their bids Judged according to the same standards. Further, the requirement that bids be evaluated in accordance with the same criteria must be observed if the commissioners court is to fulfill its statutory mandate to award contracts to the lowest and best bidder. This requirement cannot be satisfied when a bid is ~uallf~in a manner not contemplated by the bid invitation and specifications, i.e., when it is not based upon the criteria by which all bidders are given to understand their bids will be Judged. We therefore conclude that Harris County may not accept a bid which contains an escalation clause when such clauses are not mentioned in the advertised specifications. We do not address the question of whether the invited use of any particular escalation clause would be permissible. Accordingly, based upon the facts you have submitted, we answer your questions in the negative. SUMMARY The Commissioners Court of Harris County is not authorized to accept a bid which is not based upon advertised specifications. Because the bid form which Harris County uses does not mention escalation clauses, the commissioners court may not accept a bid which contains an escalation clause, regardless of whether the total bid can be calculated. Very truly yours, MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR. First Assistant Attorney General RICHARD E. GRAY III Executive Assistant Attorney General Prepared by Jon Bible Assistant Attorney General APPROVED: OPINION COMMITTEE Susan L. Garrison, Chairman James Allison Jon Bible Rick Gilpin Bruce Youngblood Opinion No. MW-299 END OF DOCUMENT Opinion No. MW-449 PAGE 1 CITATION RANK(R) DATABASE MODE Opinion No. MW-449 R 3 OF 5 TX-AG P TX February 23, 1982 Honorable Henry Wade Criminal District Attorney Condemnation Section Sixth Floor, Records Building Dallas, Texas 75202 Re: May a county award a bid with conditions different from those stated in the bid specifications Dear Mr. Wade: You ask whether a commissioners court may accept a bid with conditions different from those set out in the bid specifications. You state that the purchasing agent sent out bid documents for the purchase of asphalt, liquids, road oils, and similar items. Although the 'Notice and Instructions to Bidders' uses the term 'annual contract' in relation to such items, none of the bid documents provide the specific term of the contract. Company A submitted a timely bid on some of the items, and the bid was accepted by the commissioners' court on January 5, 1981, by an order. The Specifications/Bid Proposal likewise did not state a contract term for the bid. The following language appears therein: Prices are to be firm for the contract period. Vendor may raise prices only when the market justifies with a 30 day written notice. The contract may be terminated on a 30 day written notice by either party. Apparently, Company B submitted an untimely bid for the remaining items covered by the samd bid proposal on January 9, 1981, which bid the commissioners' court accepted by another order. Each of the two orders provided that each contract was awarded to the lowest bidder 'as per specifications and prices set forth in bid' and 'as per proposal presented.' The bid from Company B which was accepted by the commissioners court contained a provision which was added by the bidder saying '[t]he above prices are subject to change without notice.' Company B also changed the units from tons to gallons or pounds on some of the asphalt items. Competitive bidding is the foundation for purchasing by agencies of the state of Texas. The supreme court in an opinion by Justice Norvell states: The purpose and intent of competitive bidding ordinances and statutes are well stated in Sterrett v. Bell, Tex. Civ. App., 240 S.W.2d 516, 520 (no wt. hist.) wherein it was said: 'Competitive bidding' requires due advertisement, giving opportunity to bid, and contemplates a bidding on the same undertaking upon each of the same material items covered by the contract; upon the same thing. It requires that all bidders be placed upon the same plane of equality and that they each bid upon the same terms and conditions involved in all the items and parts of the contract, and that the proposal specify as to all bids the same, or Opinion No. MW-449 ~-' ~ PAGE 2 substantially similar specifications. Its purpose is to stimulate competition, prevent favoritism and secure the best work and materials at the lowest practicable price, for the best interests and benefits of the taxpayers and property owners. There can be no competive bidding in a legal sense where the terms of the letting of the contract prevent or restrict competition, favor a contractor or materialman, or increase the cost of the work or of the materials or other items going into the project. Texas Highway Commission v. Texas Association of Steel Importers, Inc., 372 S.W.2d 525, 527 (Tex. 1963). Article 2368, V.T.C.S., requires that purchases by commissioners' courts or by cities in amounts of $3,000 or more must be committed to competitive bidding, and the case of Kelly v. Cochran, 82 S.W.2d 641 (Tex. 1935), finds the failure to have competitive bidding as grounds for holding a commissioners court purchase contract invalid. See also V.T.C.S. arts. 1659, 1659a. In setting out requirements for purchasing contracts for materials based on unit prices, article 2368a states in section 2a, in pertinent part: In the event a contract is to be let on a unit price basis, the information furnished bidders shall specify the approximate quantities estimated upon the best available information, but the compesation paid the contractor shall be based upon the actual quantities constructed or supplied. We could find no approximation of quantities in the bid specifications as required above in section 2a. You pointed out also that the various provisions in the bid specifications with regard to the contract term and prices are themselves contradictory and confusing. On the one hand, the language provides that the prices are to be firm for the contract period, but the contract period is not specifically set out. These ambiguous invitations are instructions for competitive bids left the bidding requirements to conjecture so that competitive bidding was prevented. The bids submitted in response thereto should not have been accepted. See Attorney General Opinions MW-299 (1981); H-24 (1973). The untimely bid also violated article 2368a and-would be void as section 2(d) states: (d) Any and all such contract or agreements hereafter made by any county or city in this state, without complying with the terms of this Section, shall be void and shall not be enforceable in any court of this state and the performance of same and the payment of any money thereunder may be enjoined by any property taxpaying citizen of such county or city. We do not reach your second question which was contingent upon an affirmative answer to the first question. SUBMMARY The Commissioners Court of Dallas County may not accept a bid with conditions different from those stated in the bids. Very truly yours, MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR. First Assistant Attorney General RICHARD E. GRAY III Executive Assistant Attorney General