Opinion ID: 1154635
Heading Depth: 1
Heading Rank: 4

Heading: Jurisprudence Construing LSA-R.S. 38:2214

Text: At various times, the statute has been construed by all of the appellate courts in this state, except the Third Circuit. While these cases may not be in direct conflict, they are clearly inconsistent and demonstrate an underlying lack of accord on the necessity of just cause for the rejection of bids. First and Second Circuits In Milton J. Womack, Inc. v. Legislative Budgetary Control Council, supra , the First Circuit Court of Appeal faced a situation wherein an unsuccessful low bidder sought a writ of mandamus to compel the awarding authority to provide it with an explanation of cause for that body's rejection of the plaintiff's bid. The court concluded that, following the 1982 and 1983 amendments to LSA-R.S. 38:2214, in rejecting any and all bids, a public entity must have `just cause.' 470 So.2d at 463. In finding that there was a ministerial duty on the part of the public entity to inform a bidder of the reasons for the rejection, the court further stated: We have already held that La.R.S. 38:2214 mandates just cause for the rejection of bids. We do not interpret the action of the legislature in changing the law, La.R.S. 38:2214, from one allowing the rejection of any and all bids without regard to cause to one requiring just cause to imply that the public entity need not tell a rejected bidder the cause for the rejection. The rejection of bids will be either for just cause or will be for an arbitrary and capricious reason. The refusal of the public entity to divulge the reason for the rejection would defeat the purpose of the legislationthe rejection of bids for just cause only. If only the public entity knows the reasons for the rejection of bids, but yet refuses to divulge the reason for the rejection, then what safeguard is there that the rejection was for just cause? To conclude otherwise is to make a mockery of the law. 470 So.2d 464. In Pittman Construction Company, Inc. v. Parish of East Baton Rouge, 493 So.2d 178, 191 (La.App. 1st Cir.1986), writ denied, 493 So.2d 1206 (La.1986), the low bidder on a public works contract sued to annul the award of the contract to another bidder. The trial court permanently enjoined work under the contract and ordered the awarding authority to execute the contract with the plaintiff. The appellate court affirmed the trial court. In Pittman, the court agreed with the finding in the Womack case that the 1982 and 1983 amendments had restricted the wide discretion formerly enjoyed by the awarding authority in rejecting any and all bids: Just cause is the determination to be made by the public entity when considering the rejection of any bid or all bids. If, as decreed by Womack, public entities must have just cause to reject any and all bids, then it can no longer be said that public entities have the discretion to reject all bids in the absence thereof. This Court believes that the jurisprudence wherein Louisiana courts have refused to compel award of a contract to the low bidder based on the public entity's right to reject any and all bids has been legislatively overruled or limited by the 1983 amendment to LSA-R.S. 38:2214. Thus, if the public entity does not have just cause to reject the low bidder nor just cause to reject all bids, awarding the contract to the lowest responsible bidder, by right of the statute which is not subject to waiver, becomes a ministerial duty subject to mandatory injunction and/or mandamus. [Citations omitted.] 493 So.2d at 191. Another First Circuit case addressing LSA-R.S. 38:2214 is C.R. Kirby Contractors, Inc. v. City of Baton Rouge, 612 So.2d 132 (La.App. 1 Cir.1992). In that case, an unsuccessful contractor sued the city to prevent rejection of all bids for a road improvement project after irregularities in the bidding process were uncovered. The trial court issued a writ of mandamus ordering the city to enter into a contract with the bidder. Thereafter, another bidder appealed. However, the court of appeal found that the city had just cause to reject all bids because the failure of city engineers to require contractors to place their license number on the exterior of the bid envelope was a violation of the contractor's licensing law. In so ruling, the court discussed the amended statute: Under the provisions of the Public Contract Law contained in La.R.S. 38:2214 B, the public entity desiring to let a public contract may reject any and all bids for just cause. The legislature amended this subsection in 1991 to include an illustrative list of what constitutes just cause. The purpose of the Public Contract Law is to insure that tax dollars for public works are spent wisely, that the lowest responsible bidder is awarded the contract, and that favoritism does not factor into the decision making process. In order to promote these purposes the legislature has enacted La.R.S. 38:2214 B requiring public entities to articulate reasons for rejecting any and all contracts. 612 So.2d at 134-135 See also Department of Transportation and Development v. Standard Construction Company of Georgia, 550 So.2d 1327 (La. App. 1 Cir.1989), writ denied, 559 So.2d 120 (La.1990); and Enerland Recovery Services, Inc. v. Parish of Lafourche, 619 So.2d 129 (La.App. 1 Cir.1993). In each of these cases, the court considered whether just cause to reject any and all bids had been established. The Second Circuit had an opportunity to consider the effects of the amendments to LSA-R.S. 38:2214 in Terral Barge Line, Inc. v. Madison Parish Port Commission, 577 So.2d 787 (La.App. 2 Cir.1991). In a footnote, the court noted that prior to 1982, the Public Bid Law, LSA-R.S. 38:2211 et seq., gave the public entity wide discretion to reject any and all bids without regard to cause. 577 So.2d at 791, n. 2. However, the court found that Acts 1982, No. 691, § 1 removed this discretion and required just cause to reject bids under the Public Bid Law. The court further observed that, absent just cause to reject all bids, mandamus could be used to compel the awarding of the contract to the lowest responsible bidder under the Public Bid Law, citing Pittman, supra .