Court Opinion

ID: 5166036
Source: CourtListenerOpinion
Date Created: 2022-01-02 03:35:25.543166+00
Date Added: 2024-06-11T08:25:51.506216
License: Public Domain

COMPTON, Justice,
dissenting.
In my view the three reasons proffered by DOT & PF for cancelling the bid solicitation are not supported by the record. I would therefore hold that there was no reasonable basis for DOT & PF’s decision to cancel the bid solicitation.
I.
PW complains that the bid solicitation was ambiguous in that “duty free and/or general merchandise retail business” was susceptible to different meanings. First, I do not agree with the court’s conclusion that this clause is ambiguous. The fact that different parties placed different interpretations on the clause seems hardly conclusive that the clause is ambiguous. See, e.g., Village Inn Apts. v. State Farm Fire & Cas. Co., 790 P.2d 581, 583 (Utah App.1990) (A contract term “is not ambiguous ... merely because one party assigns a different meaning to it in accordance with his or her own interests.”). Given the public’s present-day perception of the legal profession, conjuring an ambiguity out of the plain language of the bid solicitation clause may be seen by some as “lawyers at play in the halls of our court.”
As a bid solicitation is an implied contract, King v. Alaska State Hous. Auth., 633 P.2d 256, 263 (Alaska 1981), it is appropriate to borrow from the principles of contract construction. “Common sense and good faith are the leading characteristics of all constructions of contracts.” 17A Am.Jur.2d Contracts § 342 (1991). The court concludes that “the provision could reasonably be read to permit duty-free wholesale experience to qualify,” but does not elaborate. I believe the only common sense reading of the bid solicitation clause is that it requires retail experience, either duty-free or general merchandise.1
Second, and more importantly, the court’s conclusion that the clause is ambiguous is irrelevant. DGG gained no competitive advantage over PW, since PW was permitted to provide evidence that it met the retail experience requirement. After submission of this evidence, DOT & PF determined that PW did not have the requisite retail experience. That determination has not been reviewed, in view of DOT & PF’s cancellation of the solicitation. Since the conclusion that the retail experience clause is ambiguous is irrelevant, it cannot support the bid cancellation.
II.
PW complains that DOT & PF was biased against it, as it was not a local business. The evidence for this comes from two incidents.2 *1006First, DGG submitted an untimely written request to DOT & PF that the bid requirements be amended to allow for “limited review financial statements” in place of audited balance sheets. DOT & PF acceded to this request, and so amended the bid solicitation. Written comments and suggestions on the bidding terms were permitted, and DGG’s comments were of public record. This case is therefore unlike McBirney & Assocs. v. State, 753 P.2d 1132 (Alaska 1988), where the ex parte communications were not public record. Id. at 1138 (“[T]he impropriety derives from the fact that the suggestions were made outside the purview of other bidders and the public.”). PW does not suggest that the alteration was impermissible even if it did broaden the pool of prospective bidders. It would be hard pressed to make such a complaint, since it is in the public interest that as many businesses as are able to provide a service be qualified. I do not see how DOT & PF’s acceptance of an otherwise perfectly proper written comment four days after the comment period closed suggests any bias or impropriety.
Tom Owens’ affidavit describes the second incident. DOT & PF denies that the incident occurred as Owens describes, but because of the untimeliness of the presentation of the affidavit, neither DGG nor DOT & PF has had an opportunity to present a different version of what happened. Nonetheless, the court cites DOT & PF’s reliance on the affidavit in concluding that there was a reasonable basis to cancel the solicitation. The question is not whether DOT & PF relied on the affidavit. If a fact-finder were to find that Owens either misunderstood what Hum-phries said, or misrepresented what Hum-phries said, and that Humphries did not suggest any bias against PW, then this becomes a non-issue. Certainly Owens’ rationalization for not coming forward sooner suggests that he was biased; it was not until he learned to whom the contract was being awarded that he came forth. Given his wife’s involvement in the duty-free business, his recollection may be questioned. This issue is foreclosed from consideration by this court’s resolution of the case. Neither DGG’s submission of written comments, nor Tom Owens’ affidavit support PW’s claim that the DOT & PF was biased against it.
Regarding the “appearance of impropriety,” this ease is distinguishable from both McBirney, supra, and Dick Fischer Dev. v. Department of Admin., 838 P.2d 263 (Alaska 1992). In McBimey there was actual, substantial impropriety (enough to lead to a grand jury investigation), while in Fischer there was an ex parte communication between Commissioner Rudd and A1 Parrish, an agent of Fischer, about the project. Fischer, 838 P.2d at 267. It was disputed whether Parrish was an agent of Fischer at the time of the communication, but there was no dispute that a discussion did take place. Id. Thus, there was an opportunity for impropriety to occur. In the present case, no ex parte communication between DGG and DOT & PF has been shown. The only documented contact between DGG and DOT & PF was the written request to alter the bid specifications, a solicited request that was four days tardy. Had the request been timely, there is no evidence that the action taken in response to it was improper. I agree that actual impropriety need not be proven. However, I do not agree that the mere possibility that there could have been an impropriety is enough.
The present case is more akin to Kila, Inc. v. State, Dept. of Admin., 876 P.2d 1102 (Alaska 1994) than it is to McBimey or Fischer. In Kila, the unsuccessful bidder alleged “numerous ... improprieties and ... illegalities in the contracting process.” Kila, 876 P.2d at 1109. The court found them all to be without merit. Id. at 1106-09. Faced with a similar litany of unsubstantiated allegations, the court today finds an appearance of impropriety, not by examining each allegation, but by “considering the circumstances and allegations in the aggregate.” This, I suggest, makes the whole greater than the sum of the parts. For example, the court finds that Diane Barth’s e-mail message “does not prove any faulty procedure,” but nevertheless concludes, without explaining why, that the e-mail message “contributes to an appearance of impropriety when considered in conjunction with other circumstances regarding the bidding.” Either the e-mail *1007message evidences a “faulty procedure,” and therefore implies impropriety, or it does not. The “when considered in conjunction with other circumstances” proviso is used enough by the court that one begins to wonder if there is any fire behind all the smoke. By effectively holding that even the possibility of the appearance of impropriety is enough to cancel a bid solicitation, the court carries the rule established in McBimey and Fischer to a new, and unwarranted, level.
III.
I view the issue of continuing costs arising from litigation as a makeweight argument. The costs of litigation continue. Indeed, the cancellation has generated litigation. If the cost of litigation justifies cancellation, then every bid solicitation that is contested in court may be cancelled by the government with impunity. DOT & PF has not provided any estimate of savings which might result from cancelling the bid solicitation. This is understandable; it probably cannot. I agree with PW that cancelling a bid solicitation because an aggrieved bidder used the bid protest procedures sets a poor precedent.
IV.
We have held that “in exchange for a bidder’s investment of the time and resources involved in bid preparation, a government agency must'be held to an implied promise to consider bids honestly and fairly.” King, 633 P.2d at 263. When a government agency cancels a bid solicitation without a reasonable basis, it breaches this implied promise. Because the reasons advanced by DOT & PF for cancelling the bid are either irrelevant (ambiguity), unsupported by the record (impropriety), or insupportable as a matter of law (continuing costs of litigation), I would hold that there was no reasonable basis for its decision to cancel the bid.

. That PW and DGG may still dispute whether PW had the requisite retail experience to comply with the bid solicitation requirements does not mean that the retail experience clause is ambiguous, but merely that the parties disagree about the application of that clause to the particular facts of this case.

. The court refers to the PW memorandum "chronologically discussing events PW argued supported its claim that AIA was biased against PW and for DGG,” but wisely does not rely on the allegations contained in this memorandum to support its conclusion that there was a reasonable basis for DOT & PF to cancel the bid solicitation. The allegations are wholly unsubstantiated, often irrelevant, and largely do not, even if proven, suggest impropriety or impermissible activity. To cite but one example, PW alleged as a distinct incident of bias that "AIA purposely or negligently ignored that Bruce Davison was [PW's] designated contact person when it contacted Mr. van der Kolk.” PW does not explain how it was prejudiced by this alleged mistake, or how the allegation, even if true, indicates bias against it.