Court Opinion

ID: 6484994
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:08:19.999038+00
Date Added: 2024-06-11T15:54:17.957517
License: Public Domain

CON CURRIN G OPINION OP
PERRY. J.
One of the grounds of the petition is that the contract and the award are null and void for the reason that “the said specifications and advertisement for bids were indefinite, uncertain and incomplete in that they did not name any time within which the work thereunder was required to be completed and did not state whether or not the time for completing the work named'by a bidder would be considered by the commissioners in determining the lowest responsible bidder or provide any means of fixing or estimating the value in money of the-difference in time between the several bids so that intelligent and exact bidding and fair and equal competition was impossible, and it was and is impossible for the commissioners to definitely ascertain who among the bidders for said contract was, in fact, the lowest responsible bidder therefor.” The published call for tenders required that all bids for the construction of the road should be filed with the commission on or before September 28, 1911. The Lord-Young Engineering Company offered to do the work specified for the sum of $79,710 and to complete it by September 1, 1912. The complainant presented a bid in the sum of $79,367, performance to- he completed by December 1, 1912. Other bids in due form, with time of completion, were those of T. Bauman, $88,950, September 30, 1912; L. IVf. Whitehouse, $93,518, October 31, 1912; Concrete Construction Company, Limited, $91,462, October 31, 1912,. and the Honolulu Draying & Construction Company, $109,250, January 31, 1913.
The specifications related to the grading, metaling and oiling of 26,358.7 linear feet of highway, the construction of culverts, drains, ditches and walls, the removal and erection of fences *96and the making of other improvements incidental to the construction of the road and contained, inter alia, the following provision: “Each bidder shall state in his proposals (1) a specific sum for which he will furnish all labor, tools and material, except as specified to be furnished by the City and County of Honolulu, necessary to complete the work according to the plans and these specifications; (2) the time within which he will agree to complete the work.” The published call for tenders contained the same provision and in the form of bid prescribed by the commission was the following clause on the subject: “I hereby agree to fully complete the work specified on or before the......... day of .........., and that for each and every day thereafter that the contract remains uncompleted the sum of twenty ($20.00) dollars shall be deducted from the amount due on said contract, and it is hereby expressly understood and agreed that said sum shall be deemed and taken in all courts to be the liquidated damages for the non-completion of the work in the time aforesaid and not in the nature of a penalty.” In none of these three instruments was any further specification or statement set forth relating to the time of the completion of the performance of the contract.
Act 166 of the Laws of 1911, appropriating $200,000 for “belt roads and bridges” in the City and County of Honolulu, provides in section 3 that “the provisions of Act 62 of the laws of 1909, and amendments thereto, shall apply to all said items to the same extent as if they were a part of this Act”, with exceptions not material to' this case. Act 62 of the Laws of 1909, as amended by Act 47 of the Laws of 1911, in turn provides that “no expenditure of public money * * * where the sum to be expended shall be One Thousand Dollars ($1,000.00) or more, shall be made, except under contract let after public advertisement for sealed tenders, in the manner provided by law,” and that “all such contracts * * * shall be made with the lowest responsible bidder and' after publication of a call for *97tenders for not less than ten days in a newspaper of general circulation printed and published within said Territory.” In other words, expenditures under the appropriation referred to can be incurred only under contract with the lowest responsible bidder after an advertised call for tenders. Such statutory provisions are based upon motives of public economy and originate in some degree of distrust of the officers to whom the duty to make contracts for the public service is committed. Frame v. Felix, 167 Pa. St. 47. Their object is “to prevent favoritism, corruption, extravagance and improvidence in the awarding of all public contracts. * * * A fair competition among the bidders is the prime object of such statutory provisions and anything which tends to impair this is illegal. * * * Such a provision requires such information to be put within the reach of bidders as will enable them to bid intelligently and will enable the official having charge of the proposed work to know whose bid is the lowest.” Lucas v. American-Hawaiian Engineering & Construction Company, Limited, 16 Haw. 80, 90. As stated in another case, the objects sought are “to secure to the state the benefit and advantage of fair and just competition between bidders .and at the same time close, as far as possible, every avenue to favoritism and fraud in its varied forms * * * and to insure the accomplishment of the work at the lowest price by subjecting the contract for it to public competition. * * * In order to effectuate this it is manifest that where something is to- be done that is required, to be submitted to competition every essential part of it that goes to make up the whole of it must be submitted to such competition.” Frame v. Felix, supra. “The character of the work and the materials of which it shall be composed must be decided in advance.” Lucas v. Construction Co., supra. So also should the specifications include every other element essential to furnish a common standard by which to measure the respective bids. The use in the statute of the expression “lowest (responsible) bidder” neces*98sarily implies as much. Any indefiniteness in the specifications permitting of favoritism or rendering it impossible to determine by a common standard which is the lowest bidder frustrates the purpose of the statute and invalidates the award and contract. Mazet v. Pittsburgh, 131 Pa. St. 548; Ertle v. Leary, 114 Cal. 238; Ricketson v. Milwaukee, 47 L. R. A. (Wis.) 685; Chippewa Bridge Co. v. Durand, 99 N. W. (Wis.) 603. “Genuine competition can only result when parties .are bidding against each other for precisely the same thing and on precisely the same footing.” Lucas v. Construction Co., supra.
The specifications in idle case at bar fail in at least one respect to comply with these requirements. They are indefinite and misleading with reference to the time within which the contract is to be performed. The natural inference from what is said in the specifications, form of bid and call for tenders is that time will be deemed of importance by the commission and will be considered in making an award, but of how much importance and of what monetary value it would be impossible for intending bidders to ascertain from those instruments. Each bidder was left at liberty to name his own time. AVithin certain limits, at least, a shortening of the period for construction would ordinarily result in greater cost to the contractor and consequently to the taxpayers and a lengthening of it in a decrease of the cost. Each of the bidders made his tender in ignorance of the time to be named by each of the others and was given no opportunity of meeting opposing bids upon the same allowance of time. The commission did not express itself 'in the instruments under consideration as being bound to consider the element of time and it was open to it either to consider or to disregard the differences in the bids in that respect and, if the element was taken into consideration, to give as great or as low a monetary value to the difference as it should see fit. The specifications and advertisement left the commission at liberty to choose either a bidder who had named the lowest price and *99a longer period of time or one who had named a higher price and the lowest period of time. The case at bar furnishes a good illustration of the purpose and necessity of specifications concerning this element. With a difference of only $343 between the two leading bids would not the commission be justified in regarding that of the Lord-Young Company as the lowest and most favorable to the taxpayers ? The difference in time between these two bids is ninety-one days. Would it not be reasonable for the commission to find that the use of the highway by the public during that period of time was well worth more than $343, and that the cost to the taxpayers of a capable officer to inspect the progress of the work during that period would exceed that sum ? 'On the other hand, the commission was at liberty under the specifications and advertisement in spite of these considerations to award the contract to Wilson for the reason that the sum of money named by him was $343 less than that of his competitor. There was an opportunity for favoritism and the City and County did not have the benefit of real competition measured by a common standard with the bidders on precisely the same footing. It, is not an answer to this to say that the undisputed evidence was that the commission did not attach any importance to the differences in time. It is, at best, difficult for one to say with precision what motives impel his acts. Aside from that, however, the vice was in the specifications at the time of the call for tenders and in the tenders when filed and cannot be cured by the subsequent action or inaction of the commission. The absence of genuine competition still exists. Nor is it an answer that the bidders themselves filed their bids without raising the objection or that this com-plainant apparently did not appreciate its force until after the respondents’ answers were filed. The defect in the specifications and its consequences to the taxpayers are not for that reason any the less real.'
*100Kneeland v. Furlong, 20 Wis. 460, is a case in which it was held, under a charter provision substantially like that of onr statute, that the time of performance is an essential element to be named in such specifications. The court says: “Work cannot be let to the lowest bidder, within the meaning of the city charter, unless the bidders .are informed before bidding of the terms or principal stipulations of the contract each successful bidder is to enter into. Bidders should be informed either by the notice of the letting or by the specifications * * * of the terms of the contract; at least of the quality or amount of work, whenever it can be specified, to be included in any one contract; the time within which it is to be finished; the manner in which it is to be done; and, if materials .are to be furnished, their quality. All this we think the charter requires.”
To furnish a common standard for the competition either a reasonable time should be named in the specifications for the performance of the contract (or two or more alternative, reasonable periods), or, if the bidders .are left to name the proposed time of completion, the specifications should state the value of the difference in time between bids and thus furnish the means of reducing the bids to a common standard of measurement, or if one or more periods for performance are specified liberty may be given to the bidders to name a different period, the value of the difference in time being in such event also stated, or it should be specified that the award will be to' the bidder (responsible) naming the lowest price irrespective of the time required by him for the performance of the contract.
It is clear, without reference to the other grounds named in the bill of complaint, that the injunction prayed for and granted must stand and the contract in effect be set aside. Upon a new and valid call for tenders it may be that, aside from any question of his responsibility, Wilson will not be the lowest bidder, or it may be that, if he is the lowest bidder, the commissioners will find him to be the lowest responsible bidder and that fur*101ther evidence on the issue of Ms responsibility, whether for or against him, will be adduced before the commissioners or before the trial judge in a suit for injunction or before both .and it may also be that the commissioners, in the light of the contentions and arguments in this case on the subject of the secrecy of their meetings in the past, will adopt for the future a different view of their rights and their duty in that respect.
Under these circumstances I base my concurrence in the affirmance of the decree upon the sole ground that the specifications were fatally defective and the award and the contract for that reason invalid. Consideration of the other grounds is unnecessary to the decision of the case now before the court.