Opinion ID: 1118500
Heading Depth: 1
Heading Rank: 5

Heading: Butler Reasoning Rejected

Text: We reject the reasoning employed in the Butler decision and, consequently, overrule Butler. The Butler opinion incorrectly distinguished its holding from this court's opinions in Mottner and Bellingham Am. Pub'g Co. v. Bellingham Pub'g Co., 145 Wash. 25, 258 P. 836 (1927), on the basis that  Mottner and Bellingham ... involved bid guidelines where the right to reject was stated as the right to reject any and all bids.' Butler, at 295. In Butler, the relevant bidding statute declared bids could only be rejected for good cause, and this was viewed by the appellate court as a restriction on the State's discretion to reject bids which, in effect, turned the State's invitation for bids into an offer rather than an invitation for offers. Appellants contend the bidding statute also restricts the discretion of the State to reject bids, as RCW 43.19.1911 provides: the contract shall be [awarded] to the lowest responsible bidder ... Provided, That whenever there is reason to believe that the lowest acceptable bid is not the best price obtainable, all bids may be rejected. Peerless and ATS further submit that due to this statutory language, the State's invitations to bid in this case were actually offers to contract. This assertion is contrary to the controlling rule of Mottner and Bellingham Am. The rule is that a public agency's invitation to bid on a public works contract is not an offer to contract but rather a solicitation for an offer. Bellingham Am. Pub'g Co. v. Bellingham Pub'g Co., supra . [4] The Butler analysis was recently rejected by Division Two of the Court of Appeals in A-Line Equip. Co. v. Lower Columbia College, 49 Wn. App. 217, 741 P.2d 1057 (1987). Division Two held in A-Line that a governmental body's rejection of competitive bids submitted, whether for good cause or not, does not give the lowest responsible bidder a damages right of action for breach of contract. The A-Line opinion correctly holds, in accordance with Mottner and Bellingham Am., that statutory language which limits the discretion of the government to reject bids, while it operates to protect against arbitrary and capricious government action, does not create a new cause of action previously unrecognized in this state or contractually obligate the government to the lowest bidder upon entry of the lowest bid. A-Line, at 222. Second, A-Line held that Butler should not be followed as Butler deviated from the fundamental rule that competitive bidding regulations exist for the protection and benefit of the public, and that a taxpayer's suit is the only remedy available for the improper award of a public contract. The A-Line opinion correctly analyzed Butler as follows: The Butler court attempted to distinguish the Mottner and Bellingham Pub'g Co. cases on the basis that former RCW 28A.58.135, the bidding statute at issue in Butler, provided that [a]ny or all bids may be rejected for good cause, while the statutes at issue in the previous cases contained no similar good cause requirement. We are not persuaded that the addition of this language was intended to change the fundamental rule that a taxpayer's suit is the exclusive remedy available for the improper award of a public contract. More likely that language was intended to provide added protection to the public through a stricter standard of judicial review of agency conduct within the taxpayer's suit. See Mottner v. Mercer Island, 75 Wn.2d at 578. (Italics ours.) A-Line, at 222-23. We agree with this analysis from A-Line. It interprets bidding statute language in a manner consistent with previous decisions. As Mottner unequivocally states: Plaintiffs misinterpret the purpose of [the competitive bidding statute]. Its mantle of protection was not intended to benefit the unsuccessful contractor seeking a public work contract, but rather the tax paying public from arbitrary, capricious, fraudulent conduct on the part of public officials who would favor, without legitimate cause, someone other than the low bidder. The statute, therefore, affords plaintiffs no remedy in damages. (Italics ours.) Mottner, 75 Wn.2d at 578. The Mottner decision concludes: The plaintiffs did not in this action seek injunctive relief. Instead they sought a remedy that is not available to them, that is monetary damages. Mottner, at 580. These last words of the Mottner decision crystallize the matter: the existing rule set out by this court does not deny a remedy to the bidders in this case; rather, it simply rules out monetary damages as a remedy in consideration of protecting the taxpayers' interest. Bidders who are mistakenly or wrongfully denied contracts have every incentive under our current rule to move quickly in seeking an injunction. If a protest is a prerequisite to court action, then bidders may seek temporary restraint on performance of the contract in question. In this way all parties are interested in as quick and fair a settlement of the issue as possible. Bond requirements upon bidders seeking to enjoin performance of a contract by a third party are not an unfair burden upon a party with a meritorious claim. [1] By restricting the remedy available to disappointed low bidders to the parameters outlined in Mottner and Bellingham Am., we allow relief to bidders that does not compete with the public interest and is consistent with a mutual public interest in public contracts being performed by the lowest bidder.