Opinion ID: 1713620
Heading Depth: 1
Heading Rank: 2

Heading: withdrawal of bids

Text: ¶ 50. This brings us to the question of withdrawal. Cape asked to withdraw its bid if it could not correct its bid. DOT refused this request, conditioning withdrawal on Cape's forfeiture of the bid bond. The question of withdrawal also requires us to interpret the third sentence of subsection (5): If a bidder makes an error, omission or mistake and discovers it after the bids are opened, the bidder shall immediately and without delay give written notice and make known the fact of the mistake, omission or error which has been committed and submit to the municipality clear and satisfactory evidence of the mistake, omission or error and that it was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care in examining the plans or specifications and in conforming with the provisions of this section. ¶ 51. This language does not specify the municipality's role when the bidder notifies it of a mistake after the bids are opened. But the municipality's role becomes more clear if we go back to the Chippewa Bridge case: The whole matter is to be conducted with as much fairness, certainty, publicity, and absolute impartiality as any proceeding requiring the exercise of quasi-judicial authority. Municipal officers, in the execution of such law, must necessarily exercise the judicial function to a certain extent, acting between the corporation and the bidders, and between bidders. Chippewa Bridge, 122 Wis. at 99-100. It should not mechanically hold a bidder in a grasp of steel. ¶ 52. The municipality's role is also clarified by the Nelson case in which we are reminded that: It appears that in enacting [the bid mistake statute] the legislature intended to adopt the equitable rule of relief with limitations. As such, the statute should be construed consistent with that purpose. Nelson, 72 Wis. 2d at 409 (emphasis added). ¶ 53. Traditionally, the most common characteristics of the equitable rescission doctrine are: (1) timeliness of bidder's notification; (2) whether the terms of the contract as offered would be unconscionable; (3) whether the mistake is material; (4) whether the other party has been prejudiced by the mistake; and (5) whether the bidder is free from negligence. See Marana Unified Sch. Dist. No. 6 v. Aetna Cas. & Sur. Co., 696 P.2d 711, 715 (Ariz. Ct. App. 1984). [7] ¶ 54. Several components of the equitable rescission doctrine are embodied within the third sentence of § 66.0901(5). The Nelson court stated that this section is to be construed consistent with the legislature's intent to adopt the equitable rule of relief with limitations. Nelson, 72 Wis. 2d at 409. ¶ 55. First, the statute requires the bidder to provide notice of mistake or error immediately and without delay. Prompt notice is a sign of good faith to the municipality. It will usually minimize prejudice and permit withdrawal before the contract is awarded. ¶ 56. Second, the statute requires the bidder to make known the fact of the mistake, omission or error which has been committed. Pinpointing the mistake will show whether the mistake is material to the contract and whether it would be unreasonable or unconscionable to attempt to enforce the bid. ¶ 57. Third, the statute requires the bidder to submit clear and satisfactory evidence that the mistake, omission, or error was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care [1] in examining the plans or specifications and [2] in conforming with the provisions of this section. This requirement is designed to expose whether the bidder's error is an understandable, honest mistake of the kind that could happen inadvertently to a conscientious bidder, or evidence of a pattern of sloppiness or lack of adequate preparation that need not be excused. ¶ 58. The statute permits the municipality to carefully weigh the interests of the bidder in withdrawing against the interests of the municipality in awarding the contract with a forfeiture of the bid bond if the contract is not performed. Prejudice to the municipality is a reason for the municipality to go forward. ¶ 59. Wisconsin Stat. § 66.0901(5) is a modified codification of the equitable rescission doctrine. Nelson, 72 Wis. 2d at 409. The court in Gavahan summarized the unmodified doctrine as applied to certain bidders: We are of opinion that when a bidder who has made a mistake in his computations or mistakenly omitted items from consideration in making his estimates in good faith asks to withdraw his bid for correction before the bids are opened, he is entitled to withdraw it. Gavahan, 200 Wis. at 432. ¶ 60. The limitations to the doctrine imposed by the statute are that (1) a bidder who withdraws may not correct the bid or (2) a bidder who asks to withdraw after the bids are opened but before the contract is awarded must show that the bidder has met all the conditions set out in the third sentence. That is, a bidder must prove by clear and satisfactory evidence that the error was not caused by any careless act or omission on the bidder's part in the exercise of ordinary care in examining the plans and specifications and in conforming with the provisions of this section. [8] ¶ 61. The language of the statute normally permits a bidder to withdraw if the bidder satisfies the conditions in the third sentence, but a fair-minded, even-handed municipality is not an impotent municipality. A municipality is entitled to go forward to award the contract and trigger forfeiture of the bid bond if the bidder has not satisfied the conditions for withdrawal, if the bidder is not acting in complete good faith, or if the municipality can show that it has been prejudiced by the bidder's error.