NO. 90-369 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

SEBENA PAVING, INC., d/b/a 

BIG SKY PAVING, 

Plaintiff and Appellant, 

GALLATIN AIRPORT AUTHORITY, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

In and for the County of Gallatin, 

The Honorable Larry W. Moran, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Calvin L. Braaksma, Esq., Landoe, Brown, Planalp & 

Kommers, P.C., Bozeman, Montana 

For Respondent: 

Edmund P. Sedivy, Jr., Esq., Morrow, Sedivy & 

Bennett, Bozeman, Montana 

Filed: 

Submitted on Briefs: October 19, 1990 

Decided: December 5, 1990 

* 
Chief Justice J. A. Turnage delivered the Opinion of the Court. 

Plaintiff Sebena Paving, Inc., (Sebena) bid on a construction 

contract with defendant Gallatin Airport Authority. In a summary 

judgment the District Court for the Eighteenth Judicial District, 

Gallatin County, upheld the award of the contract to another 

bidder. Sebena appeals. We affirm. 

Sebena raises two issues on appeal. Our conclusion that the 

District Court did not err in allowing the Gallatin Airport 

Authority to accept the modified bid of Pioneer Ready Mix makes it 

unnecessary that we consider the second issue, whether the court 

erred in precluding Sebena from seeking damages. 

In March and April of 1988, the Gallatin Airport Authority 

(GAA) solicited bids on a construction project for airport 

improvements. As a federally-assisted program of the Department 

of Transportation, the contract was subject to certain goals for 

participation by minority-owned business enterprises (MBEs) and 

woman-owned business enterprises (WBEs) . All bids were required 

to include a vlSchedule of Participationvv showing that 2 percent of 

the work would be performed by MBEs and 4 percent of the work would 

be performed by WBEs. 

The bids were opened on April 13, 1988. Pioneer Ready Mix 

(Pioneer) had submitted the low bid. Pioneer's bid provided that 

the goals of participation by MBEs and WBEs would be met by using 

Bozeman Sand and Gravel as a WBE for electrical trench and conduit 
work and as an MBE for seeding work. Apparently there was some 

uncertainty as to whether a WBE, by virtue of being owned by a 

woman, also qualified as an MBE. After consulting the Federal 

Aviation Authority Civil Rights Office in Seattle, Washington, GAA 

decided that Pioneer's l8Schedule of Participation" showing Bozeman 

Sand and Gravel as both a WBE and an MBE was not acceptable. 

Pioneer submitted a substituted I1Schedule of Participation" on 

April 15, 1988, listing Bozeman Sand and Gravel only as a WBE, and 

adding LA Construction as an MBE. The amount of Pioneer's bid did 

not change. The contract was awarded to Pioneer. 

Sebena, the next lowest bidder, filed this suit in District 

Court, arguing that it submitted the lowest conforming bid and that 

it should have been awarded the contract. On cross-motions for 

summary judgment, the District Court held that GAA acted within its 

discretion in accepting the bid of Pioneer. 

Did the District Court err in allowing the Gallatin Airport 

Authority to accept the modified bid of Pioneer Ready Mix? 

Summary judgment is proper when there are no disputed issues 

of material fact and where the moving party is entitled to judgment 

as a matter of law. Rule 56 (c) , M. R. Civ. P. Our standard of review 

of a summary judgment is whether the trial court abused its discretion. First Interstate Bank of Kalispell v. Wann (1988), 235 Mont. 

111, 113, 765 P.2d 749, 750. In this case, the parties agree that 
there are no disputed issues of material fact. They do not agree 

on the application of the law to those facts. 

Sebena asserts that Pioneer's original bid should have been 

rejected and that no modification should have been allowed. 

Schedule I, attached to the invitation to bid provided that [b] ids 

that do not contain a Schedule [of participation by MBEs and WBEs] 

or bids containing a schedule that is incomplete shall be considered as nonresponsive and shall be rejected." Sebena argues 

that Pioneer's bid should be considered nonresponsive under that 

provision. 

In Martel Const. v. Montana State Bd. of Examiners (1983) , 

205 Mont. 332, 668 P.2d 222, this Court held that state officers 

have the power to waive immaterial irregularities in any bid 

offered. Sebena argues that Martel no longer controls because new 

statutes and administrative regulations have been enacted since it 

was decided. Specifically, § 18-4-303, MCA, a part of the Montana 

Procurement Act, provides in part that 

(4) Bids must be unconditionally accepted 

without alteration or correction, except as 

authorized in this chapter. Bids must be 

evaluated based on the requirements set forth 

in the invitation for bids . . . 

(6) The contract must be awarded with reasonable promptness by written notice to the 

lowest responsible and responsive bidder whose 

bid meets the requirements and criteria set 

forth in the invitation for bids . . . 
Sebena maintains that the present statute and rules are similar to 

those which governed in Chas. N. White Const. Co. v. Dept. of Labor 

(N.D. Miss. 1979), 476 F.Supp. 862. In that case, which was 

distinguished in Martel, the administrative agency had determined 

that a bid which did not contain written acknowledgment of receipt 

of addenda to the invitation for bids was nonresponsive. The court 

held that the determination of nonresponsiveness was not error 

which would permit the issuance of an injunction. White, 476 

The standard of review used in White was the limited review 

of the decision of an administrative agency. White, 476 F.Supp. 

at 866. That standard does not apply here because there has been 

no intermediate agency review. The standard of review of procurement decisions under the federal statutes and rules for WBE and MBE 

participation has been expressed as follows: 

[Clourts should not overturn any procurement 

determination unless the aggrieved bidder 

demonstrates that there was no rational basis 

for the agency's decision . . . [The court's] 

inquiry must fully take into account the 

discretion that is typically accorded officials in the procurement agencies by statutes 

and regulations. Such discretion extends not 

only to the evaluation of bids submitted in 

response to a solicitation but also to determination by the agency with respect to the 

application of technical, and often esoteric, 

regulations to the complicated circumstances 

of individual procurements. 
Only when the court concludes that there has 

been a clear violation of duty by the procurement officials should it intervene in the 

procurement process and proceed to a determination of the controversy on the merits. 

M. Steinthal & Co. v. Seamans (D.C. Cir. 1971), 455 F.2d 1289, 1301 

and 1303. 

In entering its summary judgment for GAA, the District Court 

stated that 

[tlhe facts of this case indicate the necessity that some discretion be permitted for a 

granting agency to carry on its business; it 

should have the power to exercise discretion, 

so long as it stays within reasonable bounds 

of fairness and efficiency. 

We agree with the statement of the District Court. Section 18-4- 

303(5), MCA, specifically provides that corrections for inadvertent 

errors in bids may be permitted. As GAA points out, Pioneer's bid 

properly showed 2 percent participation by MBEs and 4 percent participation by WBEs. On its face, the I1Schedule of Participation1' 

was complete. Only after conferring with the FAA Civil Rights 

Office in Seattle did GAA determine that a substituted llSchedule 

of Participation" would be required. We conclude that Pioneer's 

original bid contained a complete schedule and that the bid was not 

llnonresponsivell tothe invitation to bid. 

We hold that the rule expressed in Martel still stands: state 

officials have discretionary power to waive immaterial irregularities in any bid offered. Further, we conclude that the irregular- 
ity in Pioneer's bid was immaterial. This is not to say, as Sebena 

suggests, that goals for MBE and WBE participation are immaterial. 

The original bid from Pioneer, on its face, met the MBE and WBE 

participation goals. The bid that was accepted also met those 

goals. Pioneer's willingness to amend its bid shows that it was 

not attempting to avoid complying with the goals for participation 

by minority-owned and woman-owned businesses. 

Sebena also argues that not only was it improper to list 

Bozeman Sand and Gravel as both a WBE and an MBE, but that Bozeman 

Sand and Gravel was not qualified as either. Bozeman Sand and 

Gravel's qualification as a WBE was determined from a list of 

certified "Disadvantaged Business Enterprises1' promulgated by the 

Montana Department of Highways. There are administrative procedures for third-party challenges to such certification of a 

business. See 49 C.F.R. § 23.55. There is nothing in the record 

to indicate that Sebena followed those procedures. We hold that, 

having failed to exhaust its administrative remedies, Sebena is now 

barred from challenging Bozeman Sand and Gravel's certification. 

Affirmed. 
We concur: