Title: James Cape & Sons Company v. Terrence D. Mulcahy

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2005 WI 128 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2002AP2817 
COMPLETE TITLE: 
 
 
James Cape & Sons Company,  
          Plaintiff-Respondent, 
     v. 
Terrence D. Mulcahy, Secretary, and State  
of Wisconsin Department of Transportation,  
          Defendants-Appellants-Petitioners. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2003 WI App 229 
Reported at:  268 Wis. 2d 203, 672 N.W.2d 292 
(Ct. App. 2003-Published) 
 
 
OPINION FILED: 
July 15, 2005   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
April 29, 2004 and April 26, 2005 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane   
 
JUDGE: 
Moria Krueger   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendants-appellants-petitioners the cause was 
argued by Charlotte Gibson, assistant attorney general, with 
whom on the briefs was Peggy A. Lautenschlager, attorney 
general. 
 
 
For the plaintiff-respondent there were briefs by Brian W. 
Mullins, Carl A. Sinderbrand and Wickwire Gavin P.C., Madison, 
and oral argument by Carl A. Sinderbrand. 
 
An amicus curiae brief was filed by Raymond P. Taffora, 
Charles V. Sweeney, Dereck R. Brower and Michael Best & 
Friedrich, 
LLP, 
Waukesha, 
on 
behalf 
of 
the 
Wisconsin 
Transportation Builders Association, AGC of Wisconsin, Inc., and 
Associated Builders and Contractors of Wisconsin, Inc. 
 
2005 WI 128 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2002AP2817  
(L.C. No. 
01 CV 822) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
James Cape & Sons Company,  
 
          Plaintiff-Respondent, 
 
     v. 
 
Terrence D. Mulcahy, Secretary, and 
State of Wisconsin Department of  
Transportation,  
 
          Defendants-Appellants- 
          Petitioners. 
 
FILED 
 
JUL 15, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.   Affirmed.   
 
¶1 
DAVID T. PROSSER, J.   This is a review of a published 
decision of the court of appeals1 affirming a circuit court order 
granting summary judgment in favor of the plaintiff, James Cape 
& Sons Company (Cape), in a dispute over forfeiture of a 
proposal guaranty/bid bond.  The issue is whether Cape can 
recover a $100,000 proposal guaranty that the Department of 
Transportation (DOT) declared forfeited after Cape refused to 
                                                 
1 James Cape & Sons Co. v. Mulcahy, 2003 WI App 229, 268 
Wis. 2d 203, 672 N.W.2d 292. 
No. 2002AP2817 
 
2 
 
perform a highway construction project for which it had 
submitted the low bid.   
¶2 
Wisconsin Stat. § 66.0901 
governs 
the 
process 
for 
bidding on public works projects.  The specific issue in this 
case 
involves 
Wis. Stat. § 66.0901(5),2 
which 
provides 
the 
remedial mechanism for dealing with bidder errors.  After the 
bids on the highway project were opened, Cape realized that it 
had neglected to incorporate a last-minute change from a 
subcontractor into its bid.  It sought to amend the bid, or, 
failing that, to withdraw the bid and recover its bid bond.  The 
DOT would not allow Cape relief for its bid mistake, awarded 
Cape the contract, and when Cape refused to perform, retained 
Cape's bid bond.  Cape initiated the present action to recover 
its bid bond. 
¶3 
In deciding this case, we are presented with an 
opportunity to review and clarify the statutory and common law 
rules that operate when a bidder submits a mistaken bid to a 
Wisconsin "municipality"3 to perform a public works project.  In 
doing so, we reintroduce a principle substantially overlooked in 
cases on the subject.  The principle that has gone unrecognized 
in the context of bidder mistake is that a municipality acts in 
a quasi-judicial manner when overseeing the competitive bidding 
                                                 
2 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise indicated. 
3 The 
term 
"municipality" 
is 
defined 
in 
Wis. Stat. § 66.0901(1)(a) to include the state, which includes 
the Department of Transportation.  See infra ¶20. 
No. 2002AP2817 
 
3 
 
process, including when a municipality has been notified of a 
mistake, error, or omission that has occurred in the preparation 
of a bid.  Accordingly, a municipality that has been so notified 
must consider the evidence submitted by the bidder in a quasi-
judicial manner.   
¶4 
The municipality's evaluation in a quasi-judicial 
manner is consistent with the remedial standard contemplated by 
the statute.  As we explain, § 66.0901(5) is an effort to codify 
in part the common law doctrine of equitable rescission.  Common 
law contract principles, as they existed when this statutory 
provision was enacted, dictate that courts "reform" a contract 
as a remedy for mutual mistake.  When there is a unilateral 
mistake, however, as in cases of bidder error, the only relief a 
court may award is rescission of the contract.  Because 
§ 66.0901(5) does not provide any other remedy, we conclude that 
a municipality may not permit an errant bidder to "correct" or 
amend its bid.   
¶5 
On a separate issue, § 66.0901(5) creates a cause of 
action for a bidder to recover a forfeited bid bond where the 
public works contract is awarded but not performed.  In a cause 
of action to recover a proposal guaranty, the circuit court 
employs a de novo standard of review, and may take additional 
evidence 
in 
determining 
whether 
the 
bidder 
is 
free 
of 
carelessness, 
negligence, 
or 
inexcusable neglect 
and 
thus 
entitled to the return of the bond.   
¶6 
In this case, the DOT did not properly consider Cape's 
request to withdraw because it conditioned Cape's withdrawal on 
No. 2002AP2817 
 
4 
 
the forfeiture of Cape's $100,000 bid bond.  The statute 
contemplates a municipal determination as to whether to allow 
withdrawal apart from the decision to retain a proposal 
guaranty.  Often withdrawal and forfeiture are linked because 
the terms governing the proposal guaranty allow forfeiture only 
if a bidder refuses to execute a contract that has been awarded.  
This linkage does not obviate a municipality's duty to consider 
withdrawal and forfeiture separately.  Because the DOT failed to 
properly consider Cape's timely request to withdraw its bid 
without forfeiting its bid bond, the DOT operated under an 
incorrect theory of law.  In the subsequent judicial hearing to 
recover the bond, Cape satisfied all the requirements to 
withdraw its bid, and the court found that Cape was free from 
negligence.  Because this court is not willing to upset the 
circuit court's finding, the decision of the court of appeals is 
affirmed. 
I. FACTS AND PROCEDURAL HISTORY 
¶7 
In 2000 the DOT let bids for construction work on the 
Milwaukee Zoo Interchange.  The DOT imposed a bidding deadline 
for the project of 9 a.m. on October 10, 2000.  Consistent with 
normal industry practices, Cape, a Wisconsin corporation that 
engages in highway construction, compiled its bid during the 
late evening and early morning hours of October 9 and 10 
immediately before the bids were due.   
¶8 
Cape 
solicited 
subcontractor 
bids 
for 
certain 
components of the project.  Zenith Tech, Inc. bid on concrete 
masonry work as a subcontractor.  Shortly before the bids were 
No. 2002AP2817 
 
5 
 
due, Zenith Tech notified Cape that it was raising its per unit 
cost for a portion of the concrete masonry work from $425 to 
$555 per cubic yard.  At 9:00 a.m. on October 10, Cape submitted 
its bid of $16,332,873.75, without incorporating Zenith Tech's 
last-minute change.  If Cape had taken account of the Zenith 
Tech change, its bid would have been $450,450.00 more than the 
bid submitted.   
¶9 
In 
accordance 
with 
the 
DOT's 
specified 
bidding 
procedures, Cape tendered a $100,000 proposal guaranty with its 
bid.  When the DOT opened the bids at 9:00 a.m., Cape's bid was 
the lowest.  At that time, Cape suspected that there had been an 
error due to the substantial difference between its bid and the 
next lowest bid.  Cape immediately reviewed its bid in order to 
confirm or dispel its suspicions.  In doing so, Cape discovered 
that its bid did not include the Zenith Tech change.  Later that 
day, Cape notified the DOT of the error by a hand-delivered 
letter from Cape's president, William Cape, to the project's 
Chief Proposal Management Engineer.  The letter stated:   
The error is in the unit price for Line No. 0510—
Item No. 50201——Concrete Masonry, Bridges.  This item 
is a subcontractor item and is not an item Cape would 
perform.  We received bids on Item 50201 from 
subcontractors.  Zenith Tech., Inc. submitted the low 
subcontract price to us, in a typewritten format 
around 7:30 a.m., this morning.  Their typed-in unit 
price for Item No. 50201 was $425.00 per c.y.  We 
entered that price in our handwritten bid tabulation.  
The unit prices in our handwritten bid tabulation were 
then entered into the computer which generated the bid 
we submitted to WDOT this morning.  At around 8:30 or 
8:45 a.m. this morning, shortly before the bids were 
due, and at a hectic time for us, Zenith Tech phoned 
us and said their unit price for Item 50201 was 
No. 2002AP2817 
 
6 
 
$555.00 per c.y.  The revised unit price did not get 
translated into our final bid tabulation.  
. . . . 
We 
request 
that 
our 
bid 
be 
corrected; 
to 
$16,783,323.75.  We understand that our corrected bid 
may not be the low bid.  If the bid cannot be 
corrected, we request that our bid be returned and 
that our bid bond not be claimed upon.    
¶10 The DOT responded on October 13, 2000, with a letter: 
You asked to have your bid corrected.  Neither 
the statutes nor specifications allow for a bid 
correction after the bids are opened.  We will not 
make the corrected change.  In the alternative, you 
have asked that your bid be returned and that your bid 
bond not be claimed upon.  We can consider your 
request to withdraw your bid but you will forfeit the 
proposal guaranty.  You will not be entitled to 
recover the forfeited proposal guaranty ($100,000) 
unless you prove that the making of the "error" was 
free from carelessness, negligence or inexcusable 
neglect.  Section 66.29(5), Stats.  If you do not 
withdraw, you are responsible for the signed bid in 
the amount of $16,332,873.75. 
¶11 On October 24, 2000, the DOT awarded Cape the contract 
for the Zoo Interchange project because Cape's uncorrected bid 
was lower than the other bids.  Cape responded by advising the 
DOT that it would not execute the contract due to its error and 
reiterated that it requested relief from the forfeiture of its 
proposal guaranty.  The DOT annulled the contract award and 
declared a forfeiture of Cape's proposal guaranty. 
¶12 Cape initiated this lawsuit seeking a declaration that 
it was entitled to correct its bid or in the alternative recover 
the $100,000 proposal guaranty.  Cape moved for summary judgment 
and the DOT countered with a motion to dismiss.    
No. 2002AP2817 
 
7 
 
¶13 The Dane County Circuit Court, Moria Krueger, Judge, 
concluded that Cape met the threshold requirements under the 
statute to qualify for relief, and accordingly the DOT should 
have at least considered whether to permit relief.  In the 
alternative, 
the 
circuit 
court 
concluded 
that 
Cape 
had 
demonstrated that the mistake was free from carelessness, 
negligence, and inexcusable neglect.  As a result of its 
findings, the circuit court granted Cape summary judgment and 
ordered that the forfeited $100,000 be returned to Cape.   
¶14 The DOT appealed, and the court of appeals affirmed, 
though on more narrow grounds.  Based on prior precedent, the 
court of appeals believed that it was constrained to evaluate 
simply 
whether 
Cape 
demonstrated 
that 
it 
was 
free 
from 
carelessness, 
negligence, 
and 
inexcusable 
neglect 
under 
§ 66.0901(5).  Assessing the facts under this standard, the 
court of appeals concluded that Cape "satisfactorily established 
in the summary judgment record its freedom from 'carelessness, 
negligence or inexcusable neglect.'"  James Cape & Sons v. 
Mulcahy, 2003 WI App 229, ¶40, 268 Wis. 2d 203, 672 N.W.2d 292.   
II. DISCUSSION 
¶15 "When state agencies undertake large public works 
projects, . . . they typically enter into construction contracts 
through the process of formal advertising and competitive 
bidding. . . . [M]ost states have developed a statutory and 
regulatory scheme to insure public works contracts are awarded 
to the lowest responsible and responsive bidder."  Steven G.M. 
Stein, Construction Law ¶2.02[8] (2002) (hereinafter "Stein").  
No. 2002AP2817 
 
8 
 
The rules for competitive bidding on public works projects seek 
"to prevent fraud, collusion, favoritism and improvidence in the 
administration of public business as well as to insure that the 
public receives the best work or supplies at the most reasonable 
price 
practicable." 
 
Nelson 
Inc. 
v. 
Sewerage 
Comm'n 
of 
Milwaukee, 72 Wis. 2d 400, 408, 241 N.W.2d 390 (1976).  
¶16 The time during which bids are compiled is "hectic," 
partly 
as 
a 
result 
of 
last-minute 
price 
changes 
by 
subcontractors that must be incorporated into a complex web of 
bid 
figures. 
 
See 
Robert 
J. 
Smith, 
et 
al., 
Wisconsin 
Construction Law and Construction Liens 25 (1989).  Given the 
atmosphere of organized chaos within which bids are compiled, 
mistakes, errors, and omissions are inevitable.  The reality for 
bidders is that they are generally bound by the bids they 
submit.  Nelson, 72 Wis. 2d at 408.  The necessities of 
competitive bidding do not permit bidders any absolute right of 
withdrawal after bid opening.  Id. at 417.   
¶17 However, as one construction law treatise advises, 
"[r]elief for mistakes in bid represents the most significant 
exception 
to 
the 
rule 
that, under . . . state 
competitive 
bidding, a bid remains firm and may not be withdrawn . . . ."  
Stein, supra at ¶2.04.  In order to "minimize the possibility of 
unscrupulous bidders taking advantage of alleged mistakes and 
undermining the confidence of the public in the bidding 
process," bidders typically bear a substantial burden of proof 
in obtaining relief from mistakes.  Id.   
No. 2002AP2817 
 
9 
 
¶18 While 
procedures 
that allow 
bidders 
relief 
from 
mistakes, 
errors, 
and 
omissions 
raise 
concerns 
about 
manipulation of the bidding process, there remain other concerns 
even if we assume all parties proceed in good faith.  In 
addition to preventing unscrupulous practices, the system must 
balance the public's interest in obtaining the benefits of an 
advantageous price against the concern that municipalities not 
reap unjust windfalls from the mistakes, errors, and omissions 
of bidders.  There is obvious tension between the rule of firm 
bids and the exception for some mistakes.   
¶19 One mechanism to help reconcile these concerns is to 
require a bidder to submit a proposal guaranty with its bid.  
These so-called "bid bonds" typically provide "a financially 
responsible party who will pay all or a portion of the damages 
caused if the bidder to whom a contract is awarded refuses to 
enter 
into 
it." 
 
Steven 
M. 
Siegfried, 
Introduction 
to 
Construction Law 86 (1987) (quoting J. Sweet, Legal Aspects of 
Architecture, Engineering and the Construction Process 295, 300 
(1977)).   
¶20 In 
Wisconsin, 
bidding 
on 
public 
works 
projects 
operates under Wis. Stat. § 66.0901.  Section 66.0901, which 
assists public bodies in conducting public contract awards, 
covers contracts "for the construction, execution, repair, 
remodeling or improvement of a public work or building or for 
the furnishing of supplies or material of any kind, proposals 
for 
which 
are 
required 
to 
be 
advertised 
for 
by 
law."  
Wis. Stat. § 66.0901(1)(c).  The statute applies to a broad 
No. 2002AP2817 
 
10 
 
range of public bodies, including the state, towns, cities, 
villages, school districts, boards of school directors, sewer 
districts, drainage districts, and technical college districts.  
Wis. Stat. § 66.0901(1)(a).   
¶21 Section 66.0901(5) acknowledges that mistakes, errors, 
or omissions will invariably enter the bidding process inasmuch 
as it provides a framework for addressing these occurrences.  
Subsection (5) provides: 
CORRECTIONS OF ERRORS IN BIDS.  If a person submits a 
bid or proposal for the performance of public work 
under any public contract to be let by a municipality 
and the bidder claims that a mistake, omission or 
error has been made in preparing the bid, the bidder 
shall, before the bids are opened, make known the fact 
that an error, omission or mistake has been made.  If 
the bidder makes this fact known, the bid shall be 
returned to the bidder unopened and the bidder may not 
bid upon the public contract unless it is readvertised 
and relet upon the readvertisement.  If a bidder makes 
an error, omission or mistake and discovers it after 
the bids are opened, the bidder shall immediately and 
without delay give written notice and make known the 
fact of the mistake, omission or error which has been 
committed and submit to the municipality clear and 
satisfactory evidence of the mistake, omission or 
error and that it was not caused by any careless act 
or omission on the bidder's part in the exercise of 
ordinary care in examining the plans or specifications 
and in conforming with the provisions of this section.  
If the discovery and notice of a mistake, omission or 
error causes a forfeiture, the bidder may not recover 
the moneys or certified check forfeited as liquidated 
damages unless it is proven before a court of 
competent jurisdiction in an action brought for the 
recovery of the amount forfeited, that in making the 
mistake, error or omission the bidder was free from 
carelessness, negligence or inexcusable neglect.  
Wis. Stat. § 66.0901(5).   
No. 2002AP2817 
 
11 
 
¶22 We note that § 66.0901(5) consists of four sentences 
and is titled "CORRECTIONS OF ERRORS IN BIDS."  Both parties 
acknowledge the applicability of § 66.0901(5) and recognize that 
we must engage in statutory interpretation to ascertain its 
meaning.   
¶23 The court clarified the appropriate analysis for 
statutory interpretation in State ex rel. Kalal v. Circuit Court 
for Dane County, 2004 WI 58, 271 Wis. 2d 633, 681 N.W.2d 110.  
First, we focus on the statutory language, id., ¶44, where we 
typically give words their common, ordinary, and accepted 
meaning.  Id., ¶45.  We also consider the purpose, scope, and 
context of the statute so long as these indications of statutory 
meaning are ascertainable from the text and structure of the 
statute itself.  Id., ¶48.  If a statute is ambiguous——that is, 
if the statute is capable of being understood by reasonably 
well-informed persons in two or more senses——then extrinsic 
sources such as legislative history may be consulted.  Id., 
¶¶47, 50.   
¶24 The manifest purpose of § 66.0901(5) is to provide a 
structure for addressing bidder mistake, error, or omission in 
the bidding process.  The statute clearly contemplates that 
bidders should be afforded relief for some, but not all, 
mistakes, errors, or omissions. The scope of § 66.0901(5) is 
broad, at least with respect to the purpose to which it is 
directed.  This subsection appears to be the exclusive procedure 
for permitting relief from mistakes, errors, and omissions in 
preparing bids for public works projects.  The scope of the 
No. 2002AP2817 
 
12 
 
subsection includes a mechanism for judicial review when a bid 
bond has been forfeited.  All this is found within the context 
of a statutory scheme designed to secure and administer a 
uniform procedure for awarding public contracts.  
¶25 Given the purpose, scope, and context of the statute, 
it occupies the field regarding mistakes, errors, and omissions 
in the competitive bidding process for public work projects.  
See Village of Turtle Lake v. Orvedahl Constr., Inc., 135 
Wis. 2d 385, 388, 400 N.W.2d 475 (Ct. App. 1986).  Yet the 
statute does not answer certain questions and its gaps and 
imprecise language have sparked sufficient confusion that we may 
resort to legislative history. 
¶26 Wisconsin Stat. § 66.0901(5) dates back to 1933.  Ch. 
395, Laws of 1933.  It was part of a larger bill to create 
section 66.29 of the statutes relating to the qualifications of 
bidders upon public works.  According to the Legislative 
Reference 
Bureau 
drafting 
file, 
1933 
Assembly 
Bill 
780, 
introduced by Representative Max Galasinski, was "a city of 
Milwaukee bill brought to us fully drafted."   
¶27 The text of the original subsection (5) is printed in 
the margin.4  It differs from the present text in several 
                                                 
4As enacted in 1933, § 66.29(5) read: 
Whenever any person shall submit a bid or 
proposal for the performance of public work under any 
public contract to be let by the municipality, board, 
public body or officer thereof, who shall claim 
mistake, omission or error in preparing his bid, the 
said person shall, before the bids are opened, make 
known the fact that he has made an error, omission or 
No. 2002AP2817 
 
13 
 
respects.  In the 1933 text, subsection (5) has only two long 
sentences.  The 1933 text also lacks a title for subsection (5).  
The absence of a title can be explained by the fact that the 
City of Milwaukee draft had no title, or even a "relating 
clause." 
¶28 In the 1999 session, the legislature reworded and 
renumbered § 66.29(5) as part of a massive effort to modernize 
chapter 66.  See 1999 Wis. Act 150, § 331.  The prefatory note 
states that the Joint Legislative Council's Special Committee on 
General 
Municipal 
Law 
Recodification, 
the 
source 
of 
the 
                                                                                                                                                             
mistake, and in such case his bid shall be returned to 
him unopened and the said person shall not be entitled 
to bid upon the contract at hand unless the same is 
re-advertised and relet upon advertisement.  In case 
any such person shall make an error or omission or 
mistake and shall discover the same after the bids are 
opened, he shall immediately and without delay give 
written notice and make known the fact of such 
mistake, omission or error which has been committed 
and submit to the municipality, board, public body or 
officers thereof, clear and satisfactory evidence of 
such mistake, omission or error and that the same was 
not caused by any careless act or omission on his part 
in the exercise of ordinary care in examining the 
plans, 
specifications, 
and 
conforming 
with 
the 
provisions of this section, and in case of forfeiture, 
shall not be entitled to recover the moneys or 
certified check forfeited as liquidated damages unless 
he 
shall 
prove 
before 
a 
court 
of 
competent 
jurisdiction in an action brought for the recovery of 
the amount forfeited, that in making the mistake, 
error or omission he was free from carelessness, 
negligence or inexcusable neglect.   
This language did not change in any relevant respect until 
the 1999 modernization effort, which was not intended to 
substantively change the statute.  
No. 2002AP2817 
 
14 
 
legislation, intended that "unless explicitly noted, this bill 
makes no substantive changes in the statutory provisions treated 
by the bill."  (Emphasis added.)  Both parties agree that no 
substantive changes were intended by the changes resulting in 
§ 66.0901(5). 
¶29 It should be noted that the effective date of the 
revised, renumbered text was January 1, 2001, which was after 
the October 10, 2000, bid error in this case. 
¶30 The first two sentences of the present subsection 
apply to bidders who discover a mistake, omission, or error 
"before the bids are opened."  A municipality's role in such 
situations is clearly defined.  Municipalities must return the 
unopened bid to the bidder if the bidder acknowledges the 
mistake, error, or omission prior to bid opening.  The first and 
second sentences of § 66.0901(5) are not at issue in this case 
because both parties acknowledge that Cape discovered that its 
bid was the product of a mistake, omission, or error after the 
bids were opened. 
¶31 Nonetheless, these 
first 
two sentences 
are 
very 
revealing.  Prior to 1933, there was no general statute 
governing bids on public works.  Bidding was conducted under 
local ordinances in accord with principles of equity and common 
law. 
¶32 In 1930 this court decided a case from Milwaukee 
County that must have had some influence on the drafting of this 
subsection.  See Gavahan v. Village of Shorewood, 200 Wis. 429, 
228 N.W. 497 (1930).  Plaintiff Gavahan bid on eight items of 
No. 2002AP2817 
 
15 
 
sewer work for the Village of Shorewood.  On each item he bid, 
he was required to make a deposit of $150.  He erroneously made 
a deposit of $2000 instead of $1200.  Plaintiff also made a 
mistake in preparing the bids by "omitting the cost of 
manholes."  He discovered his mistake before the bids were 
opened and asked to withdraw them.  Id. at 430.  The Village 
refused to permit withdrawal, declared the bids accepted, 
demanded that plaintiff enter into contracts for the work, and 
refused to return any of the bond money when Gavahan refused to 
perform.  Id. 
¶33 This court's response was indignant.  In a unanimous 
opinion by Justice Chester Fowler, the court said:  
 
We are of opinion that when a bidder who has made 
a mistake in his computations or mistakenly omitted 
items from consideration in making his estimates in 
good faith asks to withdraw his bid for correction 
before the bids are opened, he is entitled to withdraw 
it; and that if in such case the municipality refuses 
to allow him to withdraw it, he is entitled to recover 
his deposit.  It may be that such a rule will allow 
dishonest bidders to claim mistake when there is none 
in fact.  And it will require re-advertisement where 
there is only one bid, if the bidder does not file a 
corrected bid.  But the city is in no worse position 
than it would be had no bid been filed at all, and 
here there were other bids so re-advertisement would 
not have been necessary.  This is in accord with 
Moffett, Hodgkins & Clarke Co. v. Rochester, 178 U.S. 
373.  This was an action in the federal court for 
relief from a bid . . . on the ground that the 
plaintiff made a mistake in omitting, in footing up 
the total amount of the bid, his estimates of the cost 
of parts of the work.  The defendants as here, 
contended that the plaintiff was not entitled to any 
relief.  The court says: 
No. 2002AP2817 
 
16 
 
 
If the defendants are correct in their 
contention there is absolutely no redress 
for a bidder for public work, no matter how 
aggravated or palpable his blunder.  The 
moment 
his 
proposal 
is 
opened 
by 
the 
executive board he is held as in a grasp of 
steel.  There is no remedy, no escape.  If 
through an error of his clerk he has agreed 
to do work worth a million dollars for ten 
dollars, he must be held to the strict 
letter of his contract, while equity stands 
by with folded hands and sees him driven 
into bankruptcy.  The defendants' position 
admits of no compromise, no exception, no 
middle ground. 
 
 . . .  As the plaintiff here has grounded his 
right to relief on mistake, we need not and do not 
consider whether in absence of mistake a bid may be 
withdrawn. 
Id. at 423-33. 
¶34 The first sentence of subsection (5) of the 1933 
legislation addresses the precise situation in Gavahan.  It 
provides that whenever any person who submits a bid claims a 
mistake, omission, or error in preparing his bid "before the 
bids are opened," he shall make known the fact that he has made 
an error "and in such case his bid shall be returned to him 
unopened."  The second sentence of the present legislation 
emphasizes that the bidder "shall not be entitled to bid upon 
the contract," unless it is readvertised and relet upon the 
advertisement. 
¶35 The court's attitude toward the defendant Village of 
Shorewood reflects an earlier decision, Chippewa Bridge Co. v. 
City of Durand, 122 Wis. 85, 99-100, 99 N.W. 603 (1904), in 
which the court stated: "Municipal officers, in the execution of 
No. 2002AP2817 
 
17 
 
[competitive bidding requirements], must necessarily exercise 
the judicial function to a certain extent, acting between the 
[municipal] corporation and the bidders, and between bidders."  
Shorewood's action in refusing to permit withdrawal of Gavahan's 
bid was inconsistent with the tempered, even-handed approach 
envisioned by the court. 
¶36 Returning to the present statute, the third sentence 
of § 66.0901(5) provides: 
If a bidder makes an error, omission or mistake and 
discovers it after the bids are opened, the bidder 
shall immediately and without delay give written 
notice and make known the fact of the mistake, 
omission or error which has been committed and submit 
to the municipality clear and satisfactory evidence of 
the mistake, omission or error and that it was not 
caused by any careless act or omission on the bidder's 
part in the exercise of ordinary care in examining the 
plans or specifications and in conforming with the 
provisions of this section. 
This 
sentence 
speaks 
directly 
to 
the 
bidder's 
reporting 
obligation when the bidder discovers a mistake, error, or 
omission after the bids are opened.  Broadly speaking, the 
bidder must report the error and provide information about the 
error to the municipality.  This third sentence is ambiguous in 
the sense that it does not explain whether a bidder may ask to 
withdraw or correct his bid and what the municipality should do 
if either request is made.  In addressing these questions, it 
must be remembered that until January 1, 2001, the third 
sentence and the fourth sentence were parts of a single 
sentence. 
No. 2002AP2817 
 
18 
 
¶37 Two cases, Krasin v. Village of Almond, 233 Wis. 513, 
290 N.W. 152 (1940), and Nelson, have interpreted the third 
sentence of the subsection.  In the first case, Krasin 
immediately suspected, after the opening of bids, that he had 
miscalculated the cost of constructing a village hall.  Krasin, 
233 Wis. at 515.  In reviewing his calculations, he realized 
that a worn ribbon in his adding machine had caused him to 
misread a "6" as a "0."  Id.  He immediately made the error 
known to the Almond Village Board, but the Board rejected his 
request to amend the bid and awarded Krasin the contract.  Id.  
The contractor refused to perform and the Almond Village Board 
declared forfeited his $2000 bid deposit.  Id. at 516. 
¶38 Krasin filed suit and prevailed, recovering his $2000 
deposit after a bench trial.  The Village of Almond appealed.  
This court concluded, in a unanimous opinion by Justice Fowler, 
that Krasin complied with the timely notice requirement of the 
statute and also met the requirement of demonstrating that the 
mistake did not result from any carelessness in examining the 
plans and specifications or in conforming to the competitive 
bidding statute.  Moreover, this court concluded that Krasin 
demonstrated that any neglect in this instance was excusable, 
and therefore he was entitled to recover the $2000.   
¶39 Nelson also presented the issue of whether a bidder 
should recover its deposit upon discovery of a mistake after the 
bids were opened.  At the bid opening, Nelson became concerned 
that he had miscalculated the total cost of his bid, and upon 
review of his bid over several days found a total of five errors 
No. 2002AP2817 
 
19 
 
of 
$114,000, 
$41,700, 
$10,000, 
$19,000, 
and 
$193,515 
respectively, on a $5,677,000 bid.  Nelson, 72 Wis. 2d  at 404.  
The sewerage commission refused to allow Nelson to amend his 
bid.  Id. at 405.  When Nelson refused to perform the work, the 
commission retained his bid deposit.  Id. at 406. Nelson sued 
for recovery of his deposit.  Id.  The circuit court found that 
the plaintiff had not given timely notice and that the errors 
and omissions were a result of plaintiff's carelessness, 
negligence, and inexcusable neglect.  Id.  This court reversed 
the circuit court finding on timeliness, but affirmed the 
circuit 
court's 
holding 
that 
the 
plaintiff 
acted 
with 
inexcusable neglect and was therefore not entitled to recover 
his deposit.  Id. at 412, 417. 
¶40 Neither of these decisions explicitly discussed a 
municipality's performance in a quasi-judicial manner in the 
competitive bidding process.  But in Krasin, the court chastised 
the Village for its argument that Krasin could not claim error 
in the bid process after filing a sworn statement that he had 
checked his bid in detail before submitting his proposal.  
Krasin, 233 Wis. at 518.  In Nelson, the court observed: "It 
appears 
that 
in 
enacting 
that 
section 
[§ 66.29(5)] 
the 
legislature intended to adopt the equitable rule of relief with 
limitations. 
 
As 
such, 
the 
statute 
should 
be 
construed 
consistent with that purpose."  Nelson, 72 Wis. 2d at 409. 
III. CORRECTION OF BIDS 
 
¶41 In this case, Cape asked to "correct" its bid, that 
is, to increase its bid by $450,450.  The DOT refused to permit 
No. 2002AP2817 
 
20 
 
this 
"correction." 
 
We 
agree 
with 
the 
DOT's 
decision, 
notwithstanding the fact that both Krasin and Nelson contain 
language supporting potential correction.  In Krasin, the court 
said: 
Sub. (5) is headed "Corrections of errors in bids."  
This heading manifestly contemplates that corrections 
of errors may be made in proper cases, and this would 
seem to imply that a bid when properly corrected may 
stand as a bid.  Under this concept of the purpose of 
the statute, the village should under the facts found 
by the trial court, which are well supported by the 
evidence, have permitted substitution of the correct 
amount in the bid. 
Krasin, 233 Wis. at 517.   
¶42 In Nelson, the court stated: 
[C]ourts have granted relief in equity to a bidder 
who, having discovered a material mistake of fact in 
his bid which is not due to his own failure to 
exercise ordinary care, acts promptly in informing the 
public authorities and requests the withdrawal or 
correction of his bid before the award is made. 
Nelson, 72 Wis. 2d at 409 (emphasis added).  The court added: 
Section 
66.29(5), 
Stats.,[5] 
is 
labeled 
"Corrections of Errors in Bids," thereby indicating a 
legislative intent that bids might be amended under 
certain circumstances.  It is clear from the statute, 
however, that an amendment is not a matter of right.  
A bidder has no absolute right to withdraw or amend a 
bid for a public contract and the governmental body 
could not be compelled to allow an amendment.  Where 
the 
governmental 
body 
has 
refused 
to 
allow 
an 
amendment and has chosen instead to award the contract 
upon the bid as submitted, the bidder's sole remedy is 
to proceed under sec. 66.29(5). 
                                                 
5 As explained above, § 66.29(5) is the predecessor to 
§ 66.0901(5).   
No. 2002AP2817 
 
21 
 
Id. at 418 (footnote omitted).   
¶43 There are several problems with the conclusion that a 
municipality may allow a bidder to "correct" a bid before a 
contract is awarded.  First, both the Krasin court and the 
Nelson court rely completely on the title of the subsection for 
their conclusion that the legislature intended "correction" as a 
remedial option under the statute.  Historically, however, we 
know that the City of Milwaukee did not forward such a title 
with the draft it sent to the legislature, and 1933 Assembly 
Bill 780 contained no such title.  The title to subsection 5 was 
added after enactment, likely by the Revisor of Statutes.  
Perhaps because the legislature often considers and enacts 
untitled legislation, only to have titles added after the fact, 
Wis. Stat. § 990.001(6) directs that "titles to subchapters, 
sections, 
subsections, 
paragraphs and 
subdivisions of the 
statutes . . . are not part of the statutes."6  (Emphasis added.) 
¶44 Second, the second sentence of Wis. Stat. § 66.0901(5) 
allows a bidder to withdraw because of an error in the bid 
before the bids are opened but "the bidder may not bid upon the 
                                                 
6 We have previously construed a title as a "limited source 
of legislative intent."  City of Milwaukee v. DILHR, 106 
Wis. 2d 254, 262 n.8, 316 N.W.2d 367 (1982); see also Hanmer v. 
DILHR, 92 Wis. 2d 90, 94 n.3, 284 N.W.2d 587 (1979).  If the 
title drafted by the revisor conflicts with the wording of the 
statute, we will give more weight to the statutory language.  
State v. Black, 188 Wis. 2d 639, 645, 526 N.W.2d 132 (1994) ("In 
the face of such plain and unambiguous language we must 
disregard the title of the statute.  Consideration of a 
statutory title may be used only to resolve doubt as to the 
meaning of the statute.") (citations omitted). 
No. 2002AP2817 
 
22 
 
public contract unless it is readvertised and relet upon the 
readvertisement."  It is very difficult to reconcile an 
interpretation of the statute that allows amendment after the 
bids are opened but precludes amendment before the bids are 
opened.  If we were to read the statute to allow amendment of 
bids after bid opening, a bidder that discovers a mistake, 
error, or omission before bid opening would have an incentive to 
delay notification to the municipality until after the bids were 
opened because at that point the bidder would have the 
additional option of correction.  This is presumably why, in 
most states, withdrawal is the only relief granted.  Stein, 
supra, at ¶2.04[6][c]. 
¶45 Third, allowing amendment or correction of a bid after 
the bids are opened might appear harmless if the effect of a 
correction were merely to alter a bidder's status as the low 
bidder.  But it is not harmless if the bidder remains the low 
bidder at a higher bid.  Authorizing the amendment of bids after 
bid opening would destroy certainty in the bid process and 
facilitate fraud, collusion, and favoritism, contrary to the 
public policy underpinning the statute.  Logically, all bidders 
would be entitled to the same right of amendment as the low 
bidder and could reduce their bids to displace the low bidder. 
¶46 The 
plain 
language 
of 
§ 66.0901(5) 
does 
not 
contemplate bid amendment, and as a result we must conclude that 
municipalities do not have the authority to permit a bidder to 
amend its bid.  Thus, the only relief available to a bidder that 
No. 2002AP2817 
 
23 
 
acknowledges a mistake, error, or omission in its bid is to 
request that its bid be withdrawn from consideration.   
¶47 We draw support for this conclusion from Moffett, 178 
U.S. 373.  Moffett is the United States Supreme Court case 
relied upon in Gavahan, 200 Wis. at 433, the case that Nelson 
indicated the legislature intended to codify in enacting the bid 
mistake statute.  Nelson, 72 Wis. 2d at 409.  In Moffett, the 
court explained that judicial reformation of a contract——akin to 
amendment when performed by private parties——is appropriate 
where there is mutual mistake.  178 U.S. at 385.  In contrast, 
"[a] mistake on one side may be a ground for rescinding, but not 
for reforming, a contract."  Id. (emphasis added).  Unlike 
private parties to a contract, a municipality performing in a 
quasi-judicial manner is not free to amend a contract simply 
through agreement.  Without specific statutory authorization, 
its remedial powers are limited.  Because courts did not 
recognize the judicial remedy of reformation when unilateral 
mistake was involved, a municipality should be similarly limited 
in the absence of express statutory authorization.    
¶48 We note that the principle allowing the bidder to 
rescind but not amend its bid is consistent with other state 
competitive bidding schemes.  As one treatise notes, "[f]or 
state contracts, withdrawal or rescission is generally the only 
remedy allowed."  Stein, supra, at ¶2.04; see also Real 
Property, 
Probate 
and 
Trust 
Law 
Section, 
American 
Bar 
Association, Design 
and 
Construction 
Contracts 
207 
(1988) 
("While the right to withdraw a mistaken bid is recognized under 
No. 2002AP2817 
 
24 
 
most 
states' 
laws, 
the 
right 
to 
correct 
is 
often 
not 
available.").  "The overriding consideration of state courts 
examining the issue has been a concern for preserving the 
integrity of the competitive bidding statutes and procedures 
and, accordingly, only withdrawal of the bid has been allowed."  
Stein, supra, at ¶2.04[6][b].  The likelihood of manipulation 
increases exponentially when a bidder can claim error and then 
adjust its bid after the amount of the other bids has been 
revealed.   
¶49 In sum, the statute does not permit amendment of a bid 
as relief for mistakes, errors, or omissions under any set of 
circumstances.  It only authorizes a municipality to allow 
withdrawal.   
IV. WITHDRAWAL OF BIDS 
¶50 This brings us to the question of withdrawal.  Cape 
asked to withdraw its bid if it could not correct its bid.  DOT 
refused 
this 
request, 
conditioning 
withdrawal 
on 
Cape's 
forfeiture of the bid bond.  The question of withdrawal also 
requires us to interpret the third sentence of subsection (5): 
If a bidder makes an error, omission or mistake and 
discovers it after the bids are opened, the bidder 
shall immediately and without delay give written 
notice and make known the fact of the mistake, 
omission or error which has been committed and submit 
to the municipality clear and satisfactory evidence of 
the mistake, omission or error and that it was not 
caused by any careless act or omission on the bidder's 
part in the exercise of ordinary care in examining the 
plans or specifications and in conforming with the 
provisions of this section. 
No. 2002AP2817 
 
25 
 
¶51 This language does not specify the municipality's role 
when the bidder notifies it of a mistake after the bids are 
opened.  But the municipality's role becomes more clear if we go 
back to the Chippewa Bridge case: 
The whole matter is to be conducted with as much 
fairness, 
certainty, 
publicity, 
and 
absolute 
impartiality as any proceeding requiring the exercise 
of quasi-judicial authority.  Municipal officers, in 
the execution of such law, must necessarily exercise 
the judicial function to a certain extent, acting 
between the corporation and the bidders, and between 
bidders. 
Chippewa Bridge, 122 Wis. at 99-100.  It should not mechanically 
hold a bidder in a grasp of steel. 
 
¶52 The municipality's role is also clarified by the 
Nelson case in which we are reminded that: "It appears that in 
enacting [the bid mistake statute] the legislature intended to 
adopt the equitable rule of relief with limitations.  As such, 
the statute should be construed consistent with that purpose."  
Nelson, 72 Wis. 2d at 409 (emphasis added). 
¶53 Traditionally, the most common characteristics of the 
equitable rescission doctrine are: (1) timeliness of bidder's 
notification; (2) whether the terms of the contract as offered 
would be unconscionable; (3) whether the mistake is material; 
(4) whether the other party has been prejudiced by the mistake; 
and (5) whether the bidder is free from negligence.  See Marana 
No. 2002AP2817 
 
26 
 
Unified Sch. Dist. No. 6 v. Aetna Cas. & Sur. Co., 696 P.2d 711, 
715 (Ariz. Ct. App. 1984).7   
¶54 Several 
components 
of 
the 
equitable 
rescission 
doctrine are embodied within the third sentence of § 66.0901(5).  
The Nelson court stated that this section is to be construed 
consistent with the legislature's intent to adopt the equitable 
rule of relief with limitations.  Nelson, 72 Wis. 2d at 409.   
¶55 First, the statute requires the bidder to provide 
notice of mistake or error "immediately and without delay."  
                                                 
7 One construction law treatise notes that the most common 
judicial 
considerations 
in 
determining 
whether 
to 
grant 
equitable relief are: 
1. 
Was the mistake a clerical error or an error of 
judgment? 
2. 
Was the error demonstrable so that the awarding 
authority should have known of the mistake? 
3. 
Was the bidder guilty of any culpable or gross 
negligence? 
4. 
Was the mistake so substantial that it was 
reasonably certain that the parties would not 
have entered into the contract if they had known 
of the existence of the error? 
5. 
Would enforcement be unconscionable? 
6. 
Was it an honest mistake? 
7. 
Can the status quo be preserved without harm to 
the public? 
8. 
Is the offending party willing to comply with 
reasonable 
requirements 
that 
may 
be 
deemed 
necessary to protect the interests of the public? 
Steven M. Siegfried, Introduction to Construction Law 8 (1987).   
No. 2002AP2817 
 
27 
 
Prompt notice is a sign of good faith to the municipality.  It 
will usually minimize prejudice and permit withdrawal before the 
contract is awarded. 
¶56 Second, the statute requires the bidder to make known 
"the fact of the mistake, omission or error which has been 
committed."  Pinpointing the mistake will show whether the 
mistake is material to the contract and whether it would be 
unreasonable or "unconscionable" to attempt to enforce the bid. 
¶57 Third, the statute requires the bidder to submit 
"clear and satisfactory evidence" that the mistake, omission, or 
error "was not caused by any careless act or omission on the 
bidder's part in the exercise of ordinary care [1] in examining 
the plans or specifications and [2] in conforming with the 
provisions of this section."  This requirement is designed to 
expose whether the bidder's error is an understandable, honest 
mistake of the kind that could happen inadvertently to a 
conscientious bidder, or evidence of a pattern of sloppiness or 
lack of adequate preparation that need not be excused. 
¶58 The statute permits the municipality to carefully 
weigh the interests of the bidder in withdrawing against the 
interests of the municipality in awarding the contract with a 
forfeiture of the bid bond if the contract is not performed.  
Prejudice to the municipality is a reason for the municipality 
to go forward. 
¶59 Wisconsin 
Stat. 
§ 66.0901(5) 
is 
a 
modified 
codification of the equitable rescission doctrine.  Nelson, 72 
Wis. 2d at 409.  The court in Gavahan summarized the unmodified 
No. 2002AP2817 
 
28 
 
doctrine as applied to certain bidders: "We are of opinion that 
when a bidder who has made a mistake in his computations or 
mistakenly omitted items from consideration in making his 
estimates in good faith asks to withdraw his bid for correction 
before the bids are opened, he is entitled to withdraw it."  
Gavahan, 200 Wis. at 432. 
¶60 The "limitations" to the doctrine imposed by the 
statute are that (1) a bidder who withdraws may not correct the 
bid or (2) a bidder who asks to withdraw after the bids are 
opened but before the contract is awarded must show that the 
bidder has met all the conditions set out in the third sentence.  
That is, a bidder must prove by clear and satisfactory evidence 
that the error was not caused "by any careless act or omission 
on the bidder's part in the exercise of ordinary care in 
examining the plans and specifications and in conforming with 
the provisions of this section."8 
¶61 The language of the statute normally permits a bidder 
to withdraw if the bidder satisfies the conditions in the third 
sentence, but a fair-minded, even-handed municipality is not an 
                                                 
8 It should be noted that the "careless act or omission" on 
the bidder's part in the third sentence is narrower than the 
"carelessness, negligence or inexcusable neglect" in the fourth 
sentence.  It is narrower because it applies to the "exercise of 
ordinary care in examining the plans or specifications [of the 
project in preparing the bid] and in conforming with the 
provisions of this section."  The "provisions of this section" 
did not include subsections (6), (7), (8), and (9) in the 1933 
legislation, but these subsections must now be read in pari 
materia with subsection (5) if the noncompliance with one of the 
subsections is the cause of the bidder's error, omission, or 
mistake. 
No. 2002AP2817 
 
29 
 
impotent municipality.  A municipality is entitled to go forward 
to award the contract and trigger forfeiture of the bid bond if 
the bidder has not satisfied the conditions for withdrawal, if 
the bidder is not acting in complete good faith, or if the 
municipality can show that it has been prejudiced by the 
bidder's error. 
V. FORFEITURE OF BID BOND 
¶62 We 
come 
then 
to 
the 
fourth 
sentence 
of 
Wis. Stat. § 66.0901(5):  It reads: 
If the discovery and notice of a mistake, omission or 
error causes a forfeiture, the bidder may not recover 
the moneys or certified check forfeited as liquidated 
damages unless it is proven before a court of 
competent jurisdiction in an action brought for the 
recovery of the amount forfeited, that in making the 
mistake, error or omission the bidder was free from 
carelessness, negligence or inexcusable neglect. 
¶63 Acceptance 
of 
a 
bid 
by 
a 
municipality 
is 
a 
precondition to forfeiture of a bidder's deposit.  Gaastra v. 
Village of Fairwater, 77 Wis. 2d 7, 8-9, 252 N.W.2d 60 (1977).  
Acceptance of a bid explains the phrase that "the discovery and 
notice of a mistake, omission or error causes a forfeiture," for 
some mistakes will be discovered after the award of the 
contract.  It also subjects the municipality's conduct to 
scrutiny when the municipality awards the contract knowing of 
the bidder's error and then seeks the forfeiture of a bidder's 
guaranty bond.  The fourth sentence specifically contemplates a 
court proceeding to determine whether a proposal guaranty should 
No. 2002AP2817 
 
30 
 
be returned to the bidder when a municipality has retained the 
proposal guaranty. 
¶64 Both Krasin and Nelson addressed the last sentence of 
§ 66.0901(5).  In Krasin, the court specifically analyzed the 
operation of the linguistic triplet "carelessness, negligence, 
or inexcusable neglect," freedom from which entitles the bidder 
to recovery of its forfeited proposal guaranty.  "The three 
terms . . . as applied to the instant facts are synonymous."  
233 Wis. at 519 (emphasis added).  The Nelson court amplified 
this comment:  
The clear meaning of the statute is that the bidder 
should not be relieved of the consequences of his 
mistake where that mistake is due to his failure to 
exercise ordinary care in the preparation of the bid.  
As it is used in the statute, "neglect" should include 
omission or oversight.  An omission or oversight which 
results in a forfeiture is inexcusable where it is due 
to the bidder's failure to exercise ordinary care.  
The statute cannot reasonably be read to require, as 
the plaintiff seems to contend, that any negligence 
must 
also 
be 
found 
to 
be 
"inexcusable." 
 
By 
definition, negligence or carelessness is conduct 
which is inexcusable under the circumstances.   
72 Wis. 2d at 414-15 (emphasis added).  We read these cases to 
hold that there is a single standard in the forfeiture recovery 
context by which all mistakes, errors, and omissions are judged: 
ordinary care.   
 
¶65 How 
does 
the 
forfeiture 
decision 
relate 
to 
a 
municipality's obligation to determine whether the bidder is 
entitled to withdraw his bid as relief for a mistake, error, or 
omissions?   
No. 2002AP2817 
 
31 
 
 
¶66 The statute provides greater procedural protection to 
a bidder than certiorari review.  The circuit court has the 
power of de novo review, and the statutory scheme appears to 
vest the court with certain equity powers.  Gaastra, 77 
Wis. 2d at 14.  As in this case, the court is entitled to take 
evidence rather than simply review the municipality's decision.  
This can be explained by the fact that although the municipality 
is expected to act in a quasi-judicial manner, it could be 
injured by a bidder's withdrawal or could gain by retention of 
the proposal guaranty.  Thus, it may not act dispassionately. 
¶67 "Neither subsections (5) [n]or (7) of [the public 
works bid statute] delineates the circumstances in which a 
municipality may retain a bidder's bid deposit as a forfeiture." 
Gaastra, 77 Wis. 2d at 14.  Instead, the terms of a proposal 
guaranty, including the conditions under which the bond is 
forfeited, are generally a matter addressed in some manner by 
the municipality.  See id. at 9 (citing the municipality's 
advertisement as evidence of the condition of the bid bond, 
which would only be retained if the bidder's bid were accepted); 
see also Wis. Stat. § 62.15(3) (setting conditions for bond 
forfeiture as liquidated damages where successful bidder for a 
city public works project fails to file the proper contract and 
bond); 
Department 
of 
Transportation, 
State 
of 
Wisconsin, 
Standard Specifications for Highway and Structure Construction 
§§ 101, 103.7 (1996).  The conditions causing forfeiture are a 
function of the particular factual setting, which in turn is 
controlled to some extent by other provisions of statutes, 
No. 2002AP2817 
 
32 
 
municipal 
charters, 
and 
other 
formal 
protocols 
that 
a 
municipality might create for the purposes of competitive 
bidding procedures.   
¶68 Nothing in § 66.0901(5) itself limits forfeiture to 
situations in which a bidder refuses to execute a contract for a 
public works project which has been awarded to it by a 
municipality.  In reality, however, the accepted practice seems 
to be that the conditions under which a bid bond or proposal 
guaranty may be retained tend to be limited by bid documents.  
For instance, in this case, the DOT has limited its rights to 
retain a proposal guaranty to situations in which it has awarded 
a contract to a particular bidder and that bidder refuses to 
execute the contract.   
¶69 Because 
bid 
withdrawal 
and 
proposal 
guaranty 
forfeiture are usually linked, a circuit court may first review 
whether a bidder should have been permitted to withdraw its bid 
before award of the contract.  This will entail consideration of 
whether the bidder has met every condition in the third sentence 
of Wis. Stat. § 66.0901(5), and has acted in good faith.  The 
court may also examine whether the municipality's refusal to 
allow timely withdrawal was prompted by the withdrawal's real 
prejudice to the municipality.  If the bidder cannot show by 
clear and satisfactory evidence that its error, omission, or 
mistake was not caused by any careless act or omission in the 
exercise 
of 
ordinary 
care 
in 
examining 
the 
plans 
or 
specifications and in conformance with the conditions of the 
statute, then it will not be able to show that it was "free from 
No. 2002AP2817 
 
33 
 
carelessness, negligence or inexcusable neglect" at a later 
stage of the hearing. 
¶70 On the other hand, if the bidder is able to satisfy 
the withdrawal test but the municipality is able to show how the 
bidder's withdrawal has prejudiced or will prejudice the 
municipality, the bidder will have to meet the higher standard 
that it was "free from carelessness, negligence or inexcusable 
neglect" to avoid forfeiture.  The law is clear that the bidder 
has no vested right to withdraw its bid.  Nelson, 72 Wis. 2d at 
417.  It certainly has no right to withdraw without the adverse 
consequence of forfeiture.  That is the purpose of the bid bond.  
A rule allowing a bidder to withdraw without consequences would 
seriously undermine the bidder's duties, unless the bidder is 
able to show that it was "free" from negligence.  A court 
endowed with the power to conduct de novo review, take 
additional evidence, and factor in equitable considerations 
should be able to implement the objective of the statute. 
VI. APPLICATION 
¶71 In this case, when Cape notified the DOT that it would 
like to amend or withdraw its bid and recover its proposal 
guaranty, the DOT correctly decided that amendment was not an 
option.  It went on, however, to state that if it were to allow 
Cape to withdraw, Cape would automatically lose its proposal 
guaranty.  The DOT displayed a willingness to allow Cape to 
withdraw, but conditioned the withdrawal on the $100,000 
forfeiture.  It went on to state that the proposal guaranty was 
No. 2002AP2817 
 
34 
 
not recoverable unless Cape met the judicial forfeiture recovery 
requirements.   
¶72 In refusing to consider the possibility of withdrawal 
under the statute without forfeiture, the DOT operated under an 
incorrect theory of law.  In the subsequent evidentiary hearing 
before Circuit Judge Moria Krueger, Cape established that it 
immediately notified the DOT of its error or mistake by letter 
the same day the bids were opened.  It pinpointed the mistake 
and explained how it had occurred.  The DOT did not dispute the 
specific error or the way in which it occurred.  Had the error 
been noted before the bids were opened, the bid could have been 
withdrawn and the contract would have been awarded to the low 
bidder.  If the error could have been corrected after the bids 
were opened, Cape would not have been the low bidder and the 
contract would have been awarded exactly as it was.   
¶73 Cape demonstrated the kind of honest mistake that can 
happen to a conscientious bidder, a mistake akin to the 
mathematical mistakes in Krasin, Gaastra, and Turtle Lake, as 
opposed to the multiple miscalculations and misjudgments in 
Nelson.  Cape's mistake was not caused by a failure to examine 
the plans or specifications of the project or in conforming to 
the provisions of the section.  The circuit court found that 
Cape met the requirements of the statute to qualify for relief; 
that is, withdraw its bid before the award of the contract.  It 
also concluded that Cape's mistake was free from carelessness, 
negligence, and inexcusable neglect.   
No. 2002AP2817 
 
35 
 
¶74 Whether Cape violated its duty of ordinary care9 is a 
"mixed question of law and fact."  See Rockweit v. Senecal, 197 
Wis. 2d 409, 423, 541 N.W.2d 742 (1995).  We will not reverse 
the circuit court's findings of fact unless they are "clearly 
erroneous."  Wis. Stat. § 805.17(2).   
¶75 The court of appeals affirmed.  We see no basis for 
reversing 
the 
decisions 
of 
these 
two 
courts 
without 
significantly altering the meaning of Wis. Stat. § 66.0901(5).  
Consequently, the decision of the court of appeals is affirmed. 
 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
                                                 
9 See supra ¶64. 
No. 2002AP2817 
 
 
 
1