Opinion ID: 2613977
Heading Depth: 3
Heading Rank: 3

Heading: The rejection of all bids

Text: The City attempted to rectify the situation during the July 29, 1992 City Council meeting by rescinding the Mazria contract and rejecting all bids. This, however, did not cure its previous unlawful actions. As we have indicated, if it so chose, the City had the legal authority to reject all the bids, but not under the circumstances presented here. Purchasing Manual § 23.14.4(e); NMSA 1978, § 13-1-131 (An invitation for bids, a request for proposals or any other solicitation may be canceled or any or all bids or proposals may be rejected in whole or in part when it is in the best interest of the state agency or a local public body.); 10 McQuillin, supra, § 29.77, at 520 (If the authorities are so empowered, they may reject all bids.). But the City rejected all bids after accepting the Mazria bid. The City cites the Kentucky opinion Ohio River Conversions, Inc. v. City of Owensboro for the proposition that municipalities have wide discretion in the exercise of acceptance or rejection, and where they reserve the right to reject, the courts will not disturb their actions based on mere technicality, even if made unwisely or under mistake. 663 S.W.2d 759, 761 (Ky.Ct.App.1984). In that case the municipality solicited bids for the purchase of a city-owned boat dock. Upon learning that the highest bidder intended to remove the boat dock to another city leaving some of the Owensboro boating public without space to harbor their craft, the municipality accepted the bid of the second-highest bidder. The highest bidder sued for specific performance. The court found that the municipality did not violate the procurement code. There is nothing in Ohio River that excuses the conduct of the City in the case before us. While it is true that a municipality has wide discretion to accept or reject offers, that discretion does not include unlawful departure from its own rules and state procurement statutes. The City also offers Weber v. City of Philadelphia, 437 Pa. 179, 262 A.2d 297 (1970), as support for its rejection of all the bids. In Weber the City of Philadelphia solicited bids for a General Concession contract for a proposed sports stadium. Sealed bids were received and opened. Upon the recommendation of Philadelphia's Stadium Committee, all bids were rejected and new specifications were drawn up. Id. at 298-99. The Philadelphia Home Rule Charter, § 8-200(2)(b), permits the rejection of all bids if it is in the interest of the City so to do. 262 A.2d at 300. The highest bidder brought suit to rescind the rejection and enjoin further solicitation for bids. Id. at 299. The Pennsylvania Supreme Court stated that it would uphold the rejection of the bids in the absence of fraud, collusion, bad faith or arbitrary action on the part of the City. Id. The court found these factors absent. Id. at 302. The facts indicated that the City's conduct was sensible and in good faith. For example, the original solicitation did not include a proposal to join the operation of general concession stands with the operation of the more prestigious Stadium Club. Id. at 300. The situation in Weber would have been quite different had Philadelphia acted like the City of Santa Fe by considering bids, introducing a new evaluation factor, accepting the fourth-ranked bid, and then rejecting all bids. No one disputes that the City has authority to reject all bids. But it must do so in a fair manner as specified by the Code and the Purchasing Manual. In Weber there was no suggestion that Philadelphia failed to follow its own rules in rejecting all the bids it had received. The cases cited by the City do not support its arguments.