Opinion ID: 2613977
Heading Depth: 3
Heading Rank: 2

Heading: Introducing the locality requirement and awarding the contract to the fourth-ranked bidder

Text: In considering the contract with PDS, the City Council, as prescribed by the Purchasing Manual, could have responded to the recommended contract in one of six different ways: the Council could have approved it, tabled it, appointed a new selection committee, renegotiated the contract, disqualified the top-ranked bidder based on new information, or rejected all bids and readvertised for proposals. Purchasing Manual § 23.14.4. However, at its July 8, 1992 meeting the City Council did none of these things. Rather it committed two unlawful acts: it introduced a new factorlocalityin evaluating the proposals, and it awarded the contract to Mazria, the fourth-ranked bidder. The Code indicates that, in evaluating the eleven proposals, the City was required to apply the factors listed in the Request and no others. The award shall be made to the responsible offeror or offerors whose proposal is most advantageous to the local public body or legislative agency respectively, taking into consideration the evaluation factors set forth in the request for proposals. Section 13-1-117.1(B). The City's own regulations restrict its consideration of proposals even more explicitly: No criteria may be used in proposal evaluations that are not set forth in the request for proposal. Purchasing Manual § 23.14.1. Despite this clear rule, the City Council introduced the locality requirement. Its express concern was that the City should make the expertise we have at home work for this project. Council Minutes 8-9 (statement of Councilor Deborah Jaramillo). The award of the contract to Mazria was unlawful. The City was required to accept the bid most advantageous to the City, and it was forbidden from rejecting that bid and accepting another. See 10 McQuillin, supra, § 29.77, at 521; see also id. § 29.73, at 496-97 ([A]n award to other than the lowest bidder is prima facie erroneous and illegal.). The Purchasing Manual does state that, rather than approving the recommended contract, the City may [m]ake known information not available or not considered by the selection committee which would disqualify the top-rated firm. But the [a]ward may then be to the next rated firm, in descending order. Purchasing Manual § 23.14.4(d). This provision probably contemplates a situation like that of Conway Corporation v. Construction Engineers, Inc., 300 Ark. 225, 782 S.W.2d 36, 40 (1989) (city rejected low bid in good faith where previous experiences with low bidder were termed a fiasco), cert. denied, 494 U.S. 1080, 110 S.Ct. 1809, 108 L.Ed.2d 939 (1990). Nothing authorized the City to skip from the first to the fourth-ranked bidder. The City correctly argues that it may adopt new criteria after receiving bids. But it must do so properly. The Purchasing Manual provides that after the City has rejected all proposals it may order the request for proposal be re-advertized and order a [c]hange in the evaluation criteria that will be incorporated into the request for proposal. Purchasing Manual § 23.14.4(e)(2). The City did not follow this orderly progression. The City changed the rules in the middle of the game. PDS was misled because the City did not reveal the true weight it intended for the locality factor. PDS claims it would have completely restructured its proposal had it known the locality factor would be so significant.