Opinion ID: 1196440
Heading Depth: 1
Heading Rank: 2

Heading: events about which we write

Text: This is the good old boy process of public contract management. The subcontractor, 71 Construction, Inc., claims to have underbid its asphalt supply paving subcontract supplied to the general contractor, appellant Four Nines Gold, Inc., for street utility work in the City of Riverton, Wyoming. After the bids were opened on July 28, 1989, it was determined that Four Nines was low and 71 Construction was advised of its successful subcontract bid and low price for street surfacing material. On July 31, 71 Construction as subcontractor was informed by Four Nines that its bid was successful and would be given the subcontract in accord with the bid then accepted. A city council meeting was then scheduled for August 1, 1989 to provide for the formal contract award. On the morning of August 1, 71 Construction's president called the city engineer to relate that it had underbid its subcontract to Four Nines and wanted out. The admitted purpose of the call by 71 Construction to the city engineer was to secure a denial of Four Nines' bid so that 71 Construction could escape from its claimed mistake in bidding to supply 25,130 square yards of asphalt material at a price of $3.20 per square yard plus $7,900 mobilization expense reimbursement. [1] Lawsuits were mentioned by 71 Construction in the telephone call with the city engineer as a justification or explanation why Four Nines' bid should not be accepted since 71 Construction had made a mistake and might choose to do an insufficient job. [2] It worked. To avoid litigation, the city rejected all bids and rebid the contract with a few minor changes. With its bidding hand exposed, Four Nines was unsuccessful on second bid and subsequently sued 71 Construction for damages in loss of profits resulting from 71 Construction's activities in successfully defeating the award of the general contract to Four Nines. 71 Construction escaped further responsibility for its improvident bid which had been used by the general contractor in pricing its general contract bid. The claimed loss in profits totalled about $50,000 to Four Nines which provides the substance of this litigation. On the complaint for recovery of the profits by Four Nines and against 71 Construction, summary judgment was granted to 71 Construction to relieve it as a matter of law from liability when it undertook to have its principal's contract vacated or invalidated in order to release its separate responsibility for performance on the supply bid.