Opinion ID: 1943110
Heading Depth: 1
Heading Rank: 3

Heading: Ozaukee County Review of an Agency Decision

Text: ¶ 28 We turn now to the question of whether the circuit court properly dismissed as moot Prism's petition for judicial review. The general rule is that the court will not determine abstract principles of law. City of Racine v. J-T Enters. of Am., 64 Wis.2d 691, 700, 221 N.W.2d 869 (1974). ¶ 29 An issue is moot when the court concludes that its resolution cannot have any practical effect on the existing controversy. Riesch, 278 Wis.2d 24, ¶ 11, 692 N.W.2d 219. The court of appeals has explained that a moot question is one which circumstances have rendered purely academic. State ex rel. Olson v. Litscher, 2000 WI App 61, ¶ 3, 233 Wis.2d 685, 608 N.W.2d 425. Appellate courts generally decline to reach the merits of an issue that has become moot. [11] Riesch, 278 Wis.2d 24, ¶ 12, 692 N.W.2d 219. ¶ 30 The State argues that even if Prism is correct on the merits of its protest, a court resolution would have no effect on the existing controversy because there is no remedy that can be granted to Prism at this point. It contends that the petition for judicial review is therefore rendered moot. Thus, the question we must answer is: even if Prism's protest was improperly denied, is there any relief that it can receive now, almost three years after the project has been completed? ¶ 31 To determine whether the resolution sought can have any practical effect on the existing controversy, we do not address the factual and legal issues implicated in Prism's petition for judicial review. For purposes of this review, we assume that Prism would be able to prove every fact and support every legal allegation in its protest and petition for judicial review. Rather, we examine Prism's requested relief. In its petition for judicial review, Prism requested two distinct remedies: money damages for the value of its winning proposal in the first RFP or award of the contract. We address each potential remedy in turn.
¶ 32 Prism asserts that it is entitled to money damages because it should have been awarded the contract under Adm Ch. 10, and the agency acted improperly when it instead let the contract to WEAS. Prism asserts that Adm § 10.15(2), which gives the DOA the authority to settle and resolve a protest, envisions a damages remedy for wronged bidders. [12] Yet, a money damages remedy would be contrary to the explicit purposes of Adm Ch. 10. ¶ 33 Adm Ch. 10 provides rules governing the State's procurement of contractual services. The purposes of the rules are, in part, [t]o ensure that contracts for contractual services are entered into only in the best interests of the state, and [t]o ensure that the state will procure at the lowest possible price, without sacrifice in quality, the contractual services required[.] Adm § 10.02. Further, Wis. Stat. § 16.75 provides that with certain limited exceptions, contracts should be awarded to the lowest responsible bidder. ¶ 34 It is an established proposition that procuring statutes and regulations such as Adm Ch. 10 are designed to prevent fraud, collusion, favoritism and improvidence in the administration of public business, as well as to ensure that the public receives the best work ... at the most reasonable price practicable. Aqua-Tech, Inc. v. Como Lake Prot. & Rehab. Dist., 71 Wis.2d 541, 550, 239 N.W.2d 25 (1976). As such, these regulations are intended for the benefit and protection of the public and not of the individual bidder. Id. ¶ 35 Even though protection for an aggrieved bidder is not within the purposes of a procurement regulation, a bidder has standing to contest an agency's decision to award the contract to another developer. This is because a bidder is in a particularly good position to challenge the bidding authority's action and thereby protect the rights of the public. Id. at 553, 239 N.W.2d 25. The bidder has a valuable business interest at stake and it is expected that the bidder will zealously protect the public interest as well as its own. Id. ¶ 36 A damages remedy, however, thwarts the purpose underlying the procurement statutes because it would require the taxpayers to pay twice for just one completed project. The court of appeals addressed a similar situation in D.M.K., Inc. v. Town of Pittsfield, 2006 WI App 40, 290 Wis.2d 474, 711 N.W.2d 672. In that case, D.M.K. was the lowest bidder on four municipal projects. Id., ¶ 3. The town, however, concluded that D.M.K. was not a responsible bidder, and it offered only two of the projects to D.M.K. Id., ¶ 7. ¶ 37 D.M.K. sued the town for lost profits. Id., ¶ 9. The circuit court granted summary judgment in favor of the town, and the court of appeals affirmed. After recognizing that the regulations were intended to protect the public, not the individual bidder, the court of appeals concluded that requiring the town to pay twice for the same project is contrary to the public interest: If D.M.K. were successful in [recovering its purported damages], the Town and its taxpayers would pay D.M.K.'s $216,000 in lost profits in addition to the contract price paid to the contractor who performed the work. On its face, this result fails to benefit or protect the public. Id., ¶ 26. ¶ 38 Prism argues that because Aqua-Tech and D.M.K. both involved lawsuits against municipalities, they have no application to lawsuits against the State. This argument is unavailing. Like the statutes discussed in Aqua-Tech and D.M.K., the stated purpose of Adm Ch. 10 is to protect the taxpayer from unnecessary expenditures. Taxpayers are not protected when any governmental body pays twice for the performance of one contract  regardless of whether that governmental body is a municipality or the State. We conclude that the reasoning in Aqua-Tech and D.M.K. applies to this case and that Prism is not entitled to a damages remedy.
¶ 39 Prism also seeks as a remedy the award of the contract. It contends that as the winning bidder of the first RFP process, it is entitled to the contract. [13] By the time Prism filed its petition for judicial review of the agency decision, however, the contract had already been signed. [14] In State ex rel. Hron Bros. Co. v. City of Port Washington, 265 Wis. 507, 509, 62 N.W.2d 1 (1953), we stated, [T]he fact that the contract has actually been awarded to another is sufficient to induce the courts to decline to interfere to further complicate the matter, even though they might otherwise have done so. (quoting State ex rel. Phelan v. Bd. of Educ., 24 Wis. 683, 684 (1869)). ¶ 40 Moreover, as the parties acknowledge, the Kenilworth redevelopment project is finished and the Kenilworth Building has been fully in use for nearly three years. We cannot unravel a contract when it has already been fully performed. As a practical matter, Prism cannot perform this contract. It makes no sense to award a contract for building a project which has already been completed. ¶ 41 Because Prism cannot receive either money damages or an award of the contract at this point, there is no remedy that Prism can receive even if all of its factual and legal allegations are true. This does not mean, however, that Prism was always without a remedy. ¶ 42 It is undisputed that the DOA informed Prism that it was going ahead with contract negotiations with WEAS and that it did not intend to stay the negotiations to permit for resolution of Prism's protest. [15] Nearly six weeks elapsed between the date Prism was put on notice that there would be no automatic stay and the date that the contract with WEAS was signed. Yet Prism did not seek an injunction to prevent the contract from being awarded to WEAS. [16] ¶ 43 It is expected that an aggrieved bidder will zealously protect the public interest and the public purse by taking legal action to ensure that a contract is not awarded to the wrong bidder. See Aqua-Tech, 71 Wis.2d at 553, 239 N.W.2d 25. If Prism believed that it was entitled to the contract, Prism was required to seek a temporary injunction to prevent the award of the contract to WEAS. In so doing, Prism would have preserved any entitlement it had to the contract. ¶ 44 Prism asserts that an injunction would not have been available because sovereign immunity precludes a lawsuit against the State unless the legislature consents to the suit. [17] Here, there is no statute giving legislative consent for a suit to enjoin the State from awarding a contract to another bidder. ¶ 45 However, there is a general exception to the rule of state immunity that would have been applicable here. See City of Kenosha v. State, 35 Wis.2d 317, 323, 151 N.W.2d 36 (1967). In Kenosha, we explained: A general exception to the rule of state immunity for agencies or arms of the state, however, is that courts may entertain suits to enjoin state officers and state agencies from acting beyond their constitutional or jurisdictional authority. These suits are permitted because they are suits against individuals acting in excess of their authority. Id. at 323-24, 151 N.W.2d 36. ¶ 46 In Prism's protest, filed before the contract was signed with WEAS, Prism contended that the System and the DOA were acting ultra vires because they did not follow the provisions of Adm Ch. 10 when they: (1) rescinded the initial award of the contract to Prism; (2) issued a second proposal; and (3) disclosed information from Prism's first bid. That is, Prism asserted that the DOA was acting without authority, which would have allowed Prism to seek an injunction against the agency. See id. Yet it did not do so. ¶ 47 It appears that Prism was aware of the necessity of seeking an injunction to preserve its interest in the contract. Instead of filing for an injunction, however, Prism sought assurances from attorneys for the DOA that it need not seek an injunction and would be permitted to seek a damages remedy. [18] Based on the correspondence provided by Prism, these assurances were not given. Ultimately, Prism attained neither an assurance that a damage remedy was available nor an injunction that could have preserved its interest in the contract. ¶ 48 It should have been apparent to Prism that under Wisconsin law, a damages remedy likely was unavailable and that an injunction was required to protect any interest it had in the Kenilworth contract. In Aqua-Tech, the court stated that a temporary injunction might be necessary to avoid rendering ineffective a possible judgment in the aggrieved bidder's favor. 71 Wis.2d at 552, 239 N.W.2d 25. An injunction would prevent the procuring agency from awarding the contract to another bidder pending a decision on the merits of the protest. Id. Aqua-Tech stands for the proposition that a disappointed bidder must seek a temporary injunction before the issue becomes moot. [19] ¶ 49 We conclude that the Ozaukee County circuit court properly dismissed as moot Prism's petition for judicial review of the DOA's decision. Even assuming that all of Prism's allegations are true, there is no relief that Prism can receive at this point. Prism is not entitled to money damages. Further, the DOA cannot be enjoined to award the contract to Prism because the contract has already been fully performed. Although Prism could have sought an injunction to protect any interest it had in the contract, it did not do so. Therefore, we conclude that resolution of Prism's protest cannot have any practical effect on this existing controversy.