Opinion ID: 1351655
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Heading: Applicable Statutory Law and Issue.

Text: Iowa Code section 331.341 provides: Contracts for improvements which may be paid for from the secondary road fund shall be awarded in accordance with sections 309.40 to 309.43, 310.14, 314.1, 314.2, and other applicable state law. Iowa Code § 331.341(3) (1999). The project here was to be paid for from the secondary road fund. Iowa Code section 314.1 therefore applies. That provision in relevant part provides: In the award of contracts for the construction, reconstruction, improvement, repair or maintenance of any highway, the agency having charge of awarding such contracts shall give due consideration not only to the prices bid but also to the mechanical or other equipment and the financial responsibility and experience in the performance of like or similar contracts. The agency may reject any or all bids, or may let by private contract or build by day labor, at a cost not in excess of the lowest bid received.... All contracts shall be in writing and shall be secured by a bond for the faithful performance thereof as provided by law. Iowa Code § 314.1 (emphasis added). The district court concluded that the Board's October 7 approval of HCI's bid fell short of establishing a binding agreement because section 314.1 required a formal written contract. The court also concluded that the Board's October 7 approval was conditional for two reasons. First, HCI did not provide the performance bond and certificate of insurance within the time stated in the Notice to Bidders and HCI's bid. Second, a book published by the Iowa Department of Transportation, entitled English Standard Specifications for Highway and Bridge Construction (commonly referred to as the Blue Book), contemplated the execution of a written contract. The court found that the Blue Book provisions relative to contract formation applied to the project. The court further found that because neither condition was fulfilled, there was no binding contract which in turn allowed the Board to reject all bids and re-bid. The issue we must decide boils down to whether the Board's approval of HCI's bid on October 7, 1999, created an enforceable contract.