Court Opinion

ID: 9547121
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:42:00.244066+00
Date Added: 2024-06-11T15:17:21.223251
License: Public Domain

ERICKSON, Justice,
dissenting:
I respectfully dissent. In my view, once a bid to a public authority is opened, the bid or offer becomes irrevocable, see 10 E. McQuillin, The Law of Municipal Corporations § 29.67, at 383 (3d ed. 1981),1 and a unilateral mistake of a contractor does not justify rescission absent a showing that
(1) the mistake relates to a material feature of the contract; (2) it occurred despite the exercise of reasonable care; and (3) the public authority can be placed in status quo.
City of Florence v. Powder Horn Constructors, Inc., 716 P.2d 143, 144 (Colo.App.1985) (relying upon John J. Calnan Co. v. Talsma Builders, Inc., 67 Ill.2d 213, 10 Ill.Dec. 242, 367 N.E.2d 695 (1977)). The irrevocability of the bid is, to an extent, supported by the “Information for Bidders” section of the bid contract which provides that: “No BIDDER may withdraw a BID within 60 days of the actual date of the opening thereof.”
While I acknowledge that the John J. Calnan Co. case is distinguishable on its facts from this case, I believe that it provides the best formula for balancing the need to preserve the trial court’s ability to grant the equitable remedy of rescission in meritorious cases, against the need to preserve the integrity of the bidding process and to diminish the frequency of fraud, collusion, and careless bid preparation.
The majority, questions whether any legitimate purpose is served by requiring a bidder to establish freedom from negligence, asserting that “such requirement would in these limited circumstances severely undermine policies of fostering fair dealing and certainty among contracting parties essential to any contract negotiation process.” Maj. op. at 361. The majority asserts that requiring a lack of negligence “focuses substantial evidence on the cause of the mistake,” when primary focus should be given to the “consequences of the mistake.” Maj. op. at 362. Accordingly, the majority concludes that in order to rescind the bid Powder Horn must establish a “good faith mistake.” Maj. op. at 365.
In my view, simply requiring a contractor to submit a bid in good faith compromises the integrity of the bidding process by failing to penalize sloppy bid preparation and by failing to discourage fraud by contractors who seek to rescind a bid that is not the product of clerical error but rather a mistake in judgment on the contractor’s part. A majority of jurisdictions has adopted the requirement that a contractor demonstrate that he exercised reasonable care before he is allowed to rescind a bid. See 10 E. McQuillin, The Law of Municipal Corporations § 29.67, at 383 (3d ed. 1981); Annotation, Right of Bidder for State or Municipal Contract to Rescind Bid on Ground That Bid Was Based Upon His Own Mistake or That of His Employee, 2 A.L.R.4th 991, 1003-13 (1980).
In this case, it is conceded that Powder Horn’s $73,326 error was material, thus satisfying the first element of the three-part test set forth by the court of appeals. With respect to the negligence element, the trial court concluded that Powder Horn failed to exercise reasonable care in preparing its bid. Because this finding is supported by the record, see maj. op. at 358-359 (Vollack, J., dissenting), we will not disturb it. We need not address the third element because Powder Horn failed to exercise reasonable care in preparing its bid.
While I believe that under the bid bond the City is limited to actual damages not to *371exceed the limits of the bond, I am not convinced that the court of appeals or the trial court considered the actual damages suffered by the City. See City of Florence, 716 P.2d at 145. Accordingly, I would return the case to the court of appeals for remand to Úie district court to determine actual damages suffered by the City.

. Section 24-105-201(4), 10 C.R.S. (1982), provides in pertinent part: “After the bids are opened, they shall be irrevocable for the period specified in the invitation for bids, except as provided in section 24-103-202(6)." I note. however, that the language in section 24-103-202(6), 10 C.R.S. (1982), relating to withdrawal of inadvertently erroneous bids is permissive, not mandatory. See Maj. op. at 359 (Vollack, J., dissenting).