Opinion ID: 1713620
Heading Depth: 1
Heading Rank: 1

Heading: correction of bids

Text: ¶ 41. In this case, Cape asked to correct its bid, that is, to increase its bid by $450,450. The DOT refused to permit this correction. We agree with the DOT's decision, notwithstanding the fact that both Krasin and Nelson contain language supporting potential correction. In Krasin, the court said: Sub. (5) is headed Corrections of errors in bids. This heading manifestly contemplates that corrections of errors may be made in proper cases, and this would seem to imply that a bid when properly corrected may stand as a bid. Under this concept of the purpose of the statute, the village should under the facts found by the trial court, which are well supported by the evidence, have permitted substitution of the correct amount in the bid. Krasin, 233 Wis. at 517. ¶ 42. In Nelson, the court stated: [C]ourts have granted relief in equity to a bidder who, having discovered a material mistake of fact in his bid which is not due to his own failure to exercise ordinary care, acts promptly in informing the public authorities and requests the withdrawal or correction of his bid before the award is made. Nelson, 72 Wis. 2d at 409 (emphasis added). The court added: Section 66.29(5), Stats.,[ [5] ] is labeled Corrections of Errors in Bids, thereby indicating a legislative intent that bids might be amended under certain circumstances. It is clear from the statute, however, that an amendment is not a matter of right. A bidder has no absolute right to withdraw or amend a bid for a public contract and the governmental body could not be compelled to allow an amendment. Where the governmental body has refused to allow an amendment and has chosen instead to award the contract upon the bid as submitted, the bidder's sole remedy is to proceed under sec. 66.29(5). Id. at 418 (footnote omitted). ¶ 43. There are several problems with the conclusion that a municipality may allow a bidder to correct a bid before a contract is awarded. First, both the Krasin court and the Nelson court rely completely on the title of the subsection for their conclusion that the legislature intended correction as a remedial option under the statute. Historically, however, we know that the City of Milwaukee did not forward such a title with the draft it sent to the legislature, and 1933 Assembly Bill 780 contained no such title. The title to subsection 5 was added after enactment, likely by the Revisor of Statutes. Perhaps because the legislature often considers and enacts untitled legislation, only to have titles added after the fact, Wis. Stat. § 990.001(6) directs that titles to subchapters, sections, subsections, paragraphs and subdivisions of the statutes . . . are not part of the statutes.  [6] (Emphasis added.) ¶ 44. Second, the second sentence of Wis. Stat. § 66.0901(5) allows a bidder to withdraw because of an error in the bid before the bids are opened but the bidder may not bid upon the public contract unless it is readvertised and relet upon the readvertisement. It is very difficult to reconcile an interpretation of the statute that allows amendment after the bids are opened but precludes amendment before the bids are opened. If we were to read the statute to allow amendment of bids after bid opening, a bidder that discovers a mistake, error, or omission before bid opening would have an incentive to delay notification to the municipality until after the bids were opened because at that point the bidder would have the additional option of correction. This is presumably why, in most states, withdrawal is the only relief granted. Stein, supra, at ¶ 2.04[6][c]. ¶ 45. Third, allowing amendment or correction of a bid after the bids are opened might appear harmless if the effect of a correction were merely to alter a bidder's status as the low bidder. But it is not harmless if the bidder remains the low bidder at a higher bid. Authorizing the amendment of bids after bid opening would destroy certainty in the bid process and facilitate fraud, collusion, and favoritism, contrary to the public policy underpinning the statute. Logically, all bidders would be entitled to the same right of amendment as the low bidder and could reduce their bids to displace the low bidder. ¶ 46. The plain language of § 66.0901(5) does not contemplate bid amendment, and as a result we must conclude that municipalities do not have the authority to permit a bidder to amend its bid. Thus, the only relief available to a bidder that acknowledges a mistake, error, or omission in its bid is to request that its bid be withdrawn from consideration. ¶ 47. We draw support for this conclusion from Moffett, 178 U.S. 373. Moffett is the United States Supreme Court case relied upon in Gavahan, 200 Wis. at 433, the case that Nelson indicated the legislature intended to codify in enacting the bid mistake statute. Nelson, 72 Wis. 2d at 409. In Moffett, the court explained that judicial reformation of a contractakin to amendment when performed by private partiesis appropriate where there is mutual mistake. 178 U.S. at 385. In contrast, [a] mistake on one side may be a ground for rescinding, but not for reforming, a contract. Id. (emphasis added). Unlike private parties to a contract, a municipality performing in a quasi-judicial manner is not free to amend a contract simply through agreement. Without specific statutory authorization, its remedial powers are limited. Because courts did not recognize the judicial remedy of reformation when unilateral mistake was involved, a municipality should be similarly limited in the absence of express statutory authorization. ¶ 48. We note that the principle allowing the bidder to rescind but not amend its bid is consistent with other state competitive bidding schemes. As one treatise notes, [f]or state contracts, withdrawal or rescission is generally the only remedy allowed. Stein, supra, at ¶ 2.04; see also Real Property, Probate and Trust Law Section, American Bar Association, Design and Construction Contracts 207 (1988) (While the right to withdraw a mistaken bid is recognized under most states' laws, the right to correct is often not available.). The overriding consideration of state courts examining the issue has been a concern for preserving the integrity of the competitive bidding statutes and procedures and, accordingly, only withdrawal of the bid has been allowed. Stein, supra, at ¶ 2.04[6][b]. The likelihood of manipulation increases exponentially when a bidder can claim error and then adjust its bid after the amount of the other bids has been revealed. ¶ 49. In sum, the statute does not permit amendment of a bid as relief for mistakes, errors, or omissions under any set of circumstances. It only authorizes a municipality to allow withdrawal.