Opinion ID: 901222
Heading Depth: 1
Heading Rank: 9

Heading: Unit Bid Contract

Text: [¶ 12.] To determine if the contract is a unit bid contract or a lump sum contract, we look to the contract language itself. The clearest indication that the contract is a unit bid contract is from the advertisement for the bid and the bid itself. The City's Advertisement for Bids used unit prices for the major items necessary for the projects to be bid. The Advertisement states: Approximate quantities of major construction items include the following: Water Main 4,230 L. Ft. Concrete Meter Vault 1 Each Sanitary Sewer Pipe 5,050 L. Ft 48 Diameter Manhole 18 Each Ordinary Rpadway Shaping 21,045 Sq. Yd. Aggregate Base Course 11,264 Ton PCC Pavement Replacement (8) 1,398 Sq. Yd. Asphalt Concrete Composite 4,436 Ton (emphasis added). The Bid Form divides the major items listed in the Advertisement into two projects, Schedules A and B. Each Schedule lists the items for that project, totaling 146 bid items for the two projects. For each of the items there is an estimated quantity column, unit column (measurement), a unit price column, and a total price column. For example, the following items appear on the form as follows: Est. Unit Total Item Description Quant. Unit Price Price 38. Asphalt Concrete Composite 3411.0 TON ____ ____ 66. Temporary Silt Fence 60 L.FT. ____ ____ Sayre, on behalf of the City, filled in the Estimated Quantity and Unit columns with the anticipated number of units needed to complete the project. Bidders were required to fill in the Unit Price and Total Price columns. The Total Price was derived by multiplying Sayre's estimated Unit quantity by the bidder's Unit Price amount. Each Schedule was then subtotaled and added together to derive the Total Gross Sum Bid for Project. Item 85 allowed the bidder to bid one of three alternatives: a Concrete meter vault, a factory built steel package or a precast concrete package. For that item, two alternatives allowed a bid For the Lump Sum of $ __________ No other item made reference to a lump sum bid. In fact, the form required the contractor to total all 146 items and insert that total on a line entitled TOTAL GROSS SUM BID FOR PROJECT. Right after the total gross sum bid, the form again refers to the nature of the contract as a unit bid; it states: In the event of a discrepancy between unit bid prices and extensions, the unit bid price shall govern. The bid will be evaluated and a contract award made on the proposal deemed to be in the best interest of the Owner. [¶ 13.] Notwithstanding that the Advertisement and Bid Form required the contractors to bid based on unit prices, the City claims that the contract is one for a lump sum. The City relies on the language of the Agreement signed by the parties to support its interpretation of the contract. A closer look at the provision on which the City relies actually shows a contrary intent. The language and form of the agreement are dictated by RUS Bulletin 1780-13. As with many of the RUS forms made part of the contract, it is written broadly enough to allow for either lump sum or unit bid contracts. The provision in the form is as follows: 4. The CONTRACTOR agrees to perform all of the work described in the CONTRACT DOCUMENTS and comply with the terms therein for the sum of $ ____________ or as shown in the BID schedule. A logical reading of the paragraph would lead one to conclude that the contract price is either shown in the bid schedule or if the job was bid as a lump sum, that lump sum amount would be entered in the blank. When the actual agreement was prepared for signatures, someone had typed beneath the blank Bid Alternate No. 2. Bid alternate No. 2 was item 85the only item indicated on the Bid Form that could be bid in a lump sum. When the form was completed, however, the total contract price for all 146 items rather than just item 85 was typed above the line. The City claims that this paragraph limits Prunty to $925, 587.77 as a lump sum price. Although the manner of completing the form may be a bit confusing, the provision or as shown in the BID schedule clearly points to the document from which the sum is derived. Under the City's interpretation, the phrase or as shown in the BID schedule would have no meaning. If, as the City suggests, that the clause is meaningless to the agreement, it should not have included it. Nevertheless, the advertisement for bid and the bid schedule are not confusing. Both invite the contractor to bid a price by unit based on the City's estimated number of units. [¶ 14.] Additionally, the bid form contemplates variations in quantities and work. The bid form concludes with an understanding and agreement that the City can unilaterally vary the quantities of material and work and delete contract items. The contract term provides: It is understood and agreed that the quantities of material to be furnished and work to be done may be varied on construction as may be deemed advisable by the City of Canistota. It is further understood and agreed that the City of Canistota may, at their option, delete items from the contract. The language of this provision read in conjunction with the other provisions of the contract makes it clear that the unit quantities initially estimated were subject to adjustment. The City hired Sayre to plan and supervise the project. Sayre engineers attempted to determine from less than precise city drawings the location and condition of the underground systems and the work and materials needed. As evidenced by the bid schedule, the quantities were estimated. Prunty's bid was based on the engineer's estimated quantities subject to adjustments during the project. [¶ 15.] As stated supra, to ascertain the intent of the parties, we rely on the contract's language and must attempt to give meaning to all the provisions of [the] contract. Fenske, 2004 SD 23 at ¶ 8, 676 N.W.2d at 393. In giving meaning to all the provisions of the documents making up this contract, we conclude that the parties' agreement is a unit bid contract, not a lump sum contract: (1) the contract documents allow for changes in unit quantity (but not unit price); (2) the units necessary to complete the project were estimated by Sayre, as opposed to Prunty; (3) the bid form included 146 items for unit bidding, however, only item 85 could have been bid in the alternative for the lump sum of $ ____________. In other words, item 85 could have been bid in units as all other items or it could have been bid as a lump sum. Therefore, the bid form itself indicates that it was a unit bid contract. We, therefore, conclude based upon the language of the document that the contract is a unit bid contract.