G. D. Womack Trenching, Inc. v. Maitland Water System, Inc.

• Court: Louisiana Court of Appeal
• Decided: April 7, 2004
• Docket: CA-0003-1579
• Status: Unknown

Opinion

STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT

03-1579

G. D. WOMACK TRENCHING, INC.

VERSUS

MAITLAND WATER SYSTEM, INC., ET AL.

**********

APPEAL FROM THE SEVENTH JUDICIAL DISTRICT COURT PARISH OF CATAHOULA, NO. 22,666 HONORABLE KATHY A. JOHNSON, DISTRICT JUDGE

ELIZABETH A. PICKETT JUDGE

Court composed of Jimmie C. Peters, Marc T. Amy, and Elizabeth A. Pickett, Judges.

AFFIRMED.

Sam O. Henry, III Blackwell, Chambliss, Henry, Caldwell, Cagle & Camp, LLP P. O. Box 1829 West Monroe, LA 71294-1829 (318) 388-1000 Counsel for Defendant/Appellant: Jabar Corporation

Virgil Russell Purvis, Jr. Smith, Taliaferro, Purvis & Boothe P.O. Box 277 Jonesville, LA 71343 (318) 339-8526 Counsel for Defendant/Appellant: Maitland Water System, Inc.

George Trippe Hawthorne Kean, Miller, Hawthorne, D’Armond, McCowan & Jarman P.O. Box 3513 Baton Rouge, LA 70821-3513 (225) 387-0999 Counsel for Plaintiff/Appellee: G. D. Womack Trenching, Inc. PICKETT, Judge.

Maitland Water System, Inc., appeals the judgment of the trial court which

withdrew the award of a public contract to Jabar Corporation and awarded the contract

to G. D. Womack Trenching, Inc. Jabar also appeals this judgment.

FACTS

Maitland Water Systems, Inc. (Maitland), a public corporation, was required

to move some of its water lines because the Louisiana Department of Transportation

and Development (DOTD) planned to widen Louisiana Highway 15 from Sicily Island

to the Concordia Parish line. Maitland and DOTD entered into a contract regarding

the relocation of the lines. Maitland was responsible for doing the work, DOTD was

to pay for the work, and all plans had to be coordinated and approved by DOTD

through its project engineer, James Free. Maitland retained McManus Consulting

Engineers (McManus) to oversee the preparation for the project, including soliciting

bids for work related to the relocation of the water lines. One of the elements of the

project involved digging a trench, placing pipe, and backfilling the trench.

McManus advertised the right to bid on the project in September 2002. The Bid

Form, which had been sent to DOTD for approval in June 2002, included a Base Bid

and an Additive Alternative No. 1. The Base Bid included all phases of the project.

The Alternate Bid was included because in the areas within the road’s right of way,

it was contemplated that the trenches could not simply be backfilled with the dirt

originally removed from the trench but had to be filled with select backfill. The

alternate bid form suggested that 3,650 cubic yards of backfill would have to be

removed, disposed of, and replaced with select backfill. The bid form asked for a unit

price per cubic yard for this work.

1 The bids were opened on October 8, 2002, by Max Larche of McManus. The

total amount of the bids was as follows:

Contractor Base Bid Alternative No. 1 Total Womack $212,218.00 $21,900.00 $239,118.00 KCS Construction $235,192.40 $34,675.00 $269,867.40 Camo Construction $256,018.80 $35,587.50 $291,606.30 Jabar $197,926.71 $87,602.00 $285,528.71

While Jabar had the lowest Base Bid, its bid for Alternative No. 1 was at a rate

of $4.00 per cubic yard for disposal of backfill and $20.00 per cubic yard for select

fill. Since Womack’s bid for Alternative No. 1 was at a rate of $1.00 for disposal of

backfill and $5.00 for select fill, its total bid price was lower.

On October 11, 2002, Larche sent the bid tabulation sheet and Jabar’s low Base

Bid to John Tyler of DOTD. After reviewing the bid sheets, Tyler called Larche and

told him that the project did not require 3,650 cubic yards of backfill to be replaced

with select fill because select fill would only have to be used where the water line

crossed the road. After speaking with Tyler, Larche reviewed the plans and

determined that no more than 140 cubic yards of backfill would have to be disposed

of and replaced with select fill. On October 24, 2002, Larche recalculated the total

amounts of the bids, changing only the quantity for the Alternative No.1. The result

was as follows:

Contractor Base Bid Alternative No. 1 Total Womack $212,218.00 $890.00 $218,058.00 KCS Construction $235,192.40 $1330.00 $236,522.40 Camo Construction $256,018.80 $1365.00 $256,383.80 Jabar $197,926.71 $3360.00 $201,286.71

Following this recalculation, it was determined that Jabar was the lowest bidder.

McManus recommended to Maitland that the contract be awarded to Jabar. DOTD

approved, and the contract was awarded to Jabar. The other bidders, including

2 Womack, were given notice that Jabar had been awarded the contract on November

18, 2002.

Representatives of Jabar, McManus, and Maitland met to discuss the project on

January 9, 2003. On January 14, because DOTD requested that a stop work order

issue because of delays in clearing and grubbing, a stop work order was issued by

McManus. The letter from Larche to Jabar specifically stated that Jabar should

continue ordering materials for the project. On April 11, 2003, Jabar sent an invoice

to DOTD for pipe that it had purchased for the project and was stockpiling at the

Maitland office.

On May 5, 2003, Womack filed a petition against Maitland and Jabar to enjoin

performance of the contract between Maitland and Jabar and to declare the contract

illegal and void. Womack claimed that its bid was the lowest bid and that Maitland

engaged in post-bid manipulation that made Jabar’s bid the lowest bid. Womack also

sought an order declaring it to be the lowest bidder and awarding it the contract. The

trial court issued a Temporary Restraining Order on May 5, 2003.

Maitland and Jabar answered the petition, asserting that the bid was not

manipulated for the purpose of awarding Jabar the bid. Maitland claimed it had the

authority by the terms of the bid itself to modify the alternate bid to conform to the

work requirements of DOTD. Maitland and Jabar also claimed that Womack’s suit

was untimely and that the delay of six months before filing suit constituted waiver of

objection. The trial court held a hearing on May 29, 2003, which the parties stipulated

would constitute trial of the preliminary and permanent injunctions and all other

issues.

The trial court issued a written ruling on August 23, 2003. The trial court ruled

that the reduction of the quantities in the alternate bid was a violation of La.R.S.

3 38:2212. The trial court further found that the bid form, reserving to Maitland the

right to decrease quantities, did not allow Maitland to recalculate the bid using lower

quantities for the alternate bid. The trial court further found that Womack’s suit was

not untimely. The trial court declared the contract between Maitland and Jabar null

and void and ordered Maitland to award the contract to Womack. Finally, the trial

court authorized Maitland to issue a change order allowing it to purchase the pipe

Jabar had stockpiled and deducting that from the contract awarded to Womack. A

judgment to that effect was signed on September 8, 2003. Maitland and Jabar now

appeal that ruling.

ASSIGNMENTS OF ERROR

Maitland asserts three assignments of error:

1. The Trial Court erred in its conclusion under the undisputed facts that the recalculation of the alternative bids and the award to Jabar violated La.R.S. 38:2212.

2. The Trial Court erred in concluding that the reservation of the right to reduce quantities did not grant Maitland the right to recalculate the bid.

3. Alternatively, the Trial Court erred in ordering that the contract be awarded to Womack.

Jabar Corporation adopts the assignments of error alleged by Maitland and also

complains that the trial court erred in refusing to find that Womack’s petition was

untimely and, thus, failed to state a cause of action.

DISCUSSION

We will begin by addressing the issue of whether Womack’s complaint was

timely. Initially, we note that Womack filed this suit as an interested party pursuant

to La.R.S. 38:2220, which states, in pertinent part:

4 A. Any purchase of materials or supplies, or any contract entered into for the construction of public works, contrary to the provisions of this Part shall be null and void.

B. The district attorney in whose district a violation of this Part occurs, the attorney general, or any interested party may bring suit in the district court through summary proceeding to enjoin the award of a contract or to seek other appropriate injunctive relief to prevent the award of a contract which would be in violation of this Part, or through ordinary proceeding to seek appropriate remedy to nullify a contract entered into in violation of this Part.

The statute itself does not include any specific time limits for filing a suit seeking

injunctive relief. Jabar alleges that the supreme court’s ruling inAirline Construction

v. Ascension Parish School Board, 568 So.2d 1029 (La.1990), mandates a finding that

the trial court erred in finding the suit was timely. The supreme court held in Airline

Construction that an unsuccessful bidder does not have a cause of action to recover

damages unless the unsuccessful bidder timely seeks injunctive relief. In the instant

case, Womack filed a suit for injunctive relief, not a suit seeking damages. In the

course of its opinion, however, the supreme court did discuss the timeliness of a suit

for injunction:

We hold that an unsuccessful bidder on a public contract who wishes to obtain relief because of the rejection of its bid must seek injunctive relief at a time when the grounds for attacking the wrongful award of the contract were known or knowable to the bidder and when corrective action as a practical matter can be taken by the public body. Cf. Gray v. State of Louisiana through the Department of Highways, 250 La. 1045, 202 So.2d 24 (1967) (landowners, although aware that their property was being appropriated for borrow pit purposes, did not seek to enjoin the entry onto their land and the removal of dirt, but filed suit only two days before the job was completed, and the court denied damages for trespass, limiting recovery to just compensation for the property taken). If an aggrieved bidder does not timely file a suit for injunction, he has waived any right he may have to claim damages against the public body or the successful bidder.

The timeliness of a suit for injunction depends on the facts and circumstances of the particular case, including, among other things, the knowledge possessed by the attacking bidder concerning the wrongful award of the contract, the point in time the bidder acquired this knowledge, the point in time that the public body became indebted to the

5 successful bidder, and the time period between the awarding of the illegal contract and the completion of construction.

Id. at 1035.

The trial court found that “[t]he unsuccessful bidder filed suit for injunction

and declaratory relief prior to any work being performed on the project in question.”

Whether corrective action can be taken is but one factor to be weighed in determining

the issue. Other factors include when the aggrieved party knew the contract was

awarded wrongfully. In this case, Womack was aware of all of the facts relating to

the bid when he received notice that Jabar had been awarded the contract in November

2002. Womack did not file this suit until April 2003, and gave no reason for the

delay. The trial court concluded that since a stop order had been issued by DOTD and

work had not begun, the suit was timely. Jabar alleges that they bought materials for

the job and made other arrangements in order to begin work on the project when the

stop order was lifted. The trial court found that payment for the materials could be

arranged so that Jabar would be returned to its original position. The second part of

the test is whether “corrective action as a practical matter can be taken by the public

body.” Because the stop work order had been issued, this condition was met. The suit

is timely, and we will proceed to discuss the merits of the case.

The trial court found that the recalculation of the bids violated La.R.S.

38:2212(A)(3)(e),1 which provides:

Any proposal shall include no more than three alternates. An alternate bid by any name is still an alternate. Alternates, if accepted, shall be accepted in the order in which they are listed on the bid form. Determination of the low bidder shall be on the basis of the sum of the base bid and any alternates accepted. However, the public entity shall reserve the right to accept alternates in any order which does not affect determination of the low bidder.

1 The trial court incorrectly designates this section of the statute as R.S. 38:2212(d). 6 By altering the quantities used in the alternate bid, the determination of the low bidder

was affected. Maitland correctly points out that the law would sanction any one of

three alternatives to the action it took. First, it could have accepted the base bid and

alternate of Womack and then executed a change order. Second, it could have rejected

all bids and called for new bids. Finally, it could have accepted the base bid of Jabar

and rejected all of the alternate bids and then executed a change order. The trial court

suggested the final option would have been most appropriate, but Maitland argues that

since there was no unit price for select fill and backfill disposal this would have been

impossible. A change order can be within the scope of a contract and not include

merely additions or deletions from the existing materials. This assignment of error

lacks merit, as Maitland chose an alternative that is not sanctioned by the law.

The second assignment of error alleged by Maitland is that the language of the

bid clearly put the bidders on notice that the amounts in the contract might be

changed. On the final page of the bid, the following clause appears:

The OWNER reserves the right to accept or reject any, all or any one of the above Items. Due to the nature of the work, quantities may be increased or decreased. Therefore, Contractors are advised not to submit unbalanced bids. The low BIDDER will be determined by the combination of Base or Alternate Items, as required to implement this project. BIDDERS must submit bids for all Bid Items (Base and Alternate).

The trial court found that this language, as well as a note at the bottom of the page

reserving the right of the owner to have change orders executed by the contractor, did

not grant to Maitland the authority to change the quantities in the alternate bid section.

We find that as used in the bid form “Item” refers to either the Base Bid or the

Alternate Bid, not to the individual specifications included in those bids. As such, this

paragraph is merely a restatement of the law and clearly enunciates Maitland’s right

to accept both the base bid and the alternate bid, accept the base bid and reject the

7 alternate bid, or reject both bids. Reading the paragraph as the appellants suggest

invites the possibility of manipulating quantities and specifications to reach a desired

result. This assignment of error lacks merit.

Finally, Maitland argues that the trial court erred in awarding the contract to

Womack rather than rebidding the contract. In Haughton Elevator Division v. State,

through the Division of Administration, 367 So.2d 1161 (La.1979), the supreme court

determined that although Haughton was the low bidder on the contract at issue, the

contract had been awarded to the second lowest bidder. Upon determining that

Haughton’s bid had been improperly rejected, the supreme court reversed the trial

court’s denial of the appellant’s request for a preliminary injunction and remanded the

case to the district court with instructions “that it issue a preliminary injunction

restraining, enjoining, and prohibiting the defendant . . . or any person acting on its

behalf from awarding the . . . contracts at issue to any person, firm, or corporation

other than the plaintiff Haughton Elevator Division, the low bidder on such contracts.”

Id. at 1169-70. Accordingly, we find no error in the ruling of the trial court in the

instant matter which orders that the contract be awarded to the lowest bidder.

CONCLUSION

We agree with the trial court that the appellee’s suit for injunction was timely

filed. We further agree that Maitland violated La.R.S. 38:2212(A)(3)(e) by

recalculating the bid prior to awarding the contract to Jabar. The trial court acted

within its authority by ordering the contract to be awarded to the appellee. The

judgment of the trial court is affirmed. Costs of this appeal are to be divided equally

between the appellants.