Court Opinion

ID: 9671665
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:41:36.919904+00
Date Added: 2024-06-11T18:16:11.400115
License: Public Domain

YETKA, Justice
(dissenting).
I would affirm the holding of the trial court and the court of appeals that the state was arbitrary in its treatment of the bids and further hold that if the state proceeds with this contract, it must award the bid to J.L. Manta, Inc., as the lowest responsible bidder.
The legislature has made clear that it intends that all state contracts be awarded to the lowest responsible bidder. Minn. Stat. § 16B.09, subd. 1 (1984) provides:
All state contracts and purchases made by or under the supervision of the commissioner or an agency for which competitive bids are required must be awarded to the lowest responsible bidder, taking into consideration conformity with the specifications, terms of delivery, and other conditions imposed in the call for bids. The commissioner may decide which is the lowest responsible bidder for all purchases. As to contracts other than for purchases, the head of the interested agency shall make the decision, subject to the approval of the commissioner. Any bid may be rejected. In a case where competitive bids are required and where all bids are rejected, new bids, if solicited, must be called for as in the first instance, unless otherwise provided by law.
Section 16B.04 of that same chapter vests rulemaking authority in the commissioner of administration. We have determined that minor variations in form will not invalidate the bid. See Otter Tail Power Co. v. MacKichan, 270 Minn. 262, 133 N.W.2d 511 (1965); Foley Bros., Inc. v. Marshall, 266 Minn. 259, 123 N.W.2d 387 (1963).
With the basic legislative intent in mind, the facts of this case bear repeating. In the road construction contract in question, one of the items to be bid was traffic control. Manta apparently intended to bid $4,082 for the work, but, under the column marked “Unit Price,” had typed in the figure $4,088. It appeared that a “2” was then handwritten over the last “8,” making the bid for traffic control $4,082, but the change was not initialed. Manta’s overall bid was $301,749, which correctly took into consideration $4,082 for traffic control; nevertheless, the state refused to award the contract to Manta because it did not initial the $6 change. The state admitted at oral argument that Manta was the lowest bidder and does not dispute Manta’s claims that it is a responsible bidder. It *495simply argues that the Manta bid must be rejected due to Minn.Stat. § 16B.09, subd. 2 (1984), which provides:
A bid containing an alteration or erasure of any price contained in the bid which is used in determining the lowest responsible bid must be rejected unless the alteration or erasure is corrected pursuant to this subdivision. An alteration or erasure may be crossed out and the correction printed in ink or typewritten adjacent to it and initialed in ink by the person signing the bid.
The next lowest bidder was Rainbow. Here, the state itself altered Rainbow’s bid by correcting its total so that the unit price bid for painting and the estimated square footage would be correct. The state justifies making these changes because it found that Rainbow’s unit price bid, when multiplied by the quantity required did not total Rainbow’s final bid. The state claims that its authority for making the change is the Department of Transportation’s Standard Specifications for Highway Construction Rule 13.01,. which provides: “In case of a discrepancy between a unit bid price and the extension, the unit bid price shall govern.”
I believe that to uphold this procedure is to circumvent the legislature’s fundamental intent concerning fairness in bidding for public contracts.
First, the change made by Manta in its bid is clearly a minor variation. The unini-tialed change did not affect the overall bid. The statute indicates that a bid containing an alteration or erasure of any price which is used in determining the lowest responsible bid must be rejected. Here, the overall original bid was not changed or altered in anyway. The unit price change of $6 was de minimus and did not affect the overall bid.
Second, the authority of the transportation department itself to alter a bid is questionable, especially if it so stringently prohibits the bidders from making minor alterations. I find no direct authority in the statute for the state to change bids; thus, if a bidder cannot alter a bid without initialing the same, the state should be bound by the same rules. The Standard Specifications do not directly cite their authority, and there is no statute giving clear rule-making authority to the commissioner of transportation. Under Minn.Stat. § 174.03, subd. 4(a) (1984), the commissioner is authorized to “construct and maintain transportation facilities authorized by law.” Explicit rulemaking authority for public bidding procedures is vested, however, in the commissioner of the Department of Administration. Minn.Stat. § 16B.04, subd. 1 (1984). Not to hold the state responsible under the same guide of conduct could mean that if a state official opening the bids favored a particular contractor, he could alter his overall bid by multiplying out the unit prices or, worse yet, insert unit prices that are missing. This could increase or decrease the overall bid and, therefore, change the final figure that the contractor intended as its overall bid. Although unlikely, such a scenario could occur. I would thus hold that Rule 13.01 of the transportation department’s Standard Specifications is invalid as not being a properly promulgated rule and not being authorized or pursuant to the bidding statutes.
Finally, after opening the bids, if the state wants to reject all bids, I agree with the majority opinion that it should be able to do so. However, it must have a clearly articulated reason for rejecting all bids, for if the department wanted to thwart the statute and favor a particular bidder, it could continue to call for and reject all bids until its favorite finally got the contract. The public interest is not served by such conduct. Rejection should occur only where the state can indicate an objective reason for rejecting all bids. Thus, in this case, since it did not have an objective reason, or at least did not indicate a reason for rejecting all bids, it should be required to award the bid to the lowest responsible bidder, namely, Manta.