Inferno Associates, Inc. v. Division of Administration, Office of State Purchasing

692 So. 2d 1280, 1997 WL 163622
CourtLouisiana Court of Appeal
DecidedMarch 27, 1997
DocketNos. 96 CA 1150, 96 CA 1151
StatusPublished

This text of 692 So. 2d 1280 (Inferno Associates, Inc. v. Division of Administration, Office of State Purchasing) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Inferno Associates, Inc. v. Division of Administration, Office of State Purchasing, 692 So. 2d 1280, 1997 WL 163622 (La. Ct. App. 1997).

Opinion

FOGG, Judge.

This appeal by an aggrieved bidder challenges an administrative agency’s determination that the specification requirements of an invitation for bid (IFB) were vague and ambiguous and, therefore, the IFB must be withdrawn. The trial court affirmed the administrative rulings. For the following reasons, we affirm the judgment of the trial court.

On March 2, 1992, the State of Louisiana, Division of Administration (DOA) dispatched an IFB for proposal No. Y 41096 DL to contractors for the construction and installation of three medical waste incinerators. Inferno Associates, Inc. (Inferno) and Crochet Equipment Company, Inc. (CEC) were the only companies to submit bids in connection with this IFB. The sealed bid opening occurred of April 7,1992.

On May 18, 1992, Lee P. Fournet, Deputy Director of the Louisiana Department of Health and Hospitals (DHH), forwarded a letter to Virgie 0. Leblanc, Director of Louisiana State Purchasing. Therein, Fournet stated that, CEC was the low bidder; however, CEC did not provide detailed specifications as required by the bid specifications. He recommended, on behalf of DHH, that the bid from CEC be disqualified on that basis. Attached was a document entitled Deviation From Incinerator Specifications which listed twenty-two contract deviations.

Leblanc advised Brian Eddington, attorney for CEC, of DHH’s recommendation for the disqualification of Crochet Equipment Company’s bid proposal. On July 20, 1992, Eddington responded to Leblanc by letter as follows:

In a recent telephone conservation you requested that I provide you with a point-by-point defense to the listing of contract deviations submitted to your office by DHH. By this letter I must formally decline your request as such a response is not required by the Louisiana Procurement Code, and as such a request represents a substantial shifting of the burden of laproof mandated by the Procurement Code. As you are aware, the general principal underlying the Procurement Code is that the contract should be awarded to the lowest bidder. Should the Department of Health and Hospitals maintain the position that Crochet Equipment, Inc.’s bid was not responsive to the bid specifications they alone bear the burden of so proving.

[1282]*1282Leblanc construed the above letter as a protest of the award as provided for by LSA-R.S. 39:1671 A. On August 6,1992, she wrote to Eddington stating that the Procurement Code provides that contracts shall be awarded to “the lowest responsive ... bidder whose bid meets the requirements and criteria set forth in the invitation for bids.” She pointed out that DHH had evaluated the bids and determined that CEC’s bid did not meet the specifications as shown in the document entitled Deviation from Incinerator Specifications. She stated:

The notice requirements contained in the Purchasing Rules and Regulations provide that the “written protest must state the issues protested.” (Emphasis added.) A statement to the effect that a bidder is protesting the award does not put other interested persons on notice as to the precise issues that will be presented to the Hearing Officer.
Therefore, the only issues that will be before the Hearing Officer are those contained in the document entitled “Deviation from Incinerator Specifications” prepared by DHH.

She then stated that, pursuant to LSA-R.S. 39:1671 and corresponding Purchasing Rules and Regulations, a hearing would be held on August 26, 1992. That hearing was continued and testimony was heard on September 9,1992 and November 13,1992.

On December 21, 1992, the hearing officer for the Division Of Administration (DOA) rendered a decision. Therein, he stated that CEC had filed a timely protest to the State’s intent to award a contract for incinerators to Inferno Associates, contending that it was the lowest bidder and should have been awarded the contract. After reviewing the deviations asserted by DHH, the hearing officer concluded as follows:

hPage 14, paragraph 1, of the Invitation for Bids (IFB), required detailed construction specifications be furnished with the bid package. The IFB did not define what specifically constitutes “detailed construction specifications.”
Page 14, paragraph 2, of the IFB, states that technical data must be submitted; but it does not state that data must be furnished with the bid.
Page 12, paragraph 6, of the IFB, as modified by Addendum Number 3 states, “Shop Drawings must be submitted within ten (10) working days after notification to submit.”
Certain rules and regulations were promulgated pursuant to the Louisiana Procurement Code. In particular, LAC 34:I.2303(A) states, in part, “[sjpecifica-tions shall be drafted with objective of clearly describing the State’s requirements.”
The invitation for bids is ambiguous as to what information was required and when it was required. La. R.S. 39:1594(E) says, in part, “[b]ids shall be evaluated based on the requirements set forth in the invitation for bids.” Due to the confusing nature of the specifications, the State could not evaluate the bids based on the requirements set forth in the invitation for bids as required by law.

Based on the foregoing on three specific examples of ambiguity in the IFB, the hearing officer determined that bid No. Y 41096 DL had to be canceled and that, if the State wants to rebid this equipment, the ambiguous specifications must be clarified and also reviewed to assure that the specifications will not be unduly restrictive. The Commissioner of Administration for DOA affirmed the hearing officer’s decision.

Inferno filed a Petition to Review the Administrative Adjudication Hearing on February 8, 1996, contesting the hearing officer’s decision to cancel No. Y 14096 DL and the hearing officer’s failure to reach the issue of whether CEC’s bid was in compliance with the bid specifications. On July 26, 1996, the district court entered a judgment affirming the hearing officer’s decision. Inferno appealed.

The standard of judicial review of a decision of the agency is set forth in LSA-R.S. 49:964 G. That statute provides that |sthe court may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are (1) in violation of constitutional or statutory [1283]*1283provisions; (2) in excess of the agency’s statutory authority; (3) made upon unlawful procedure; (4) affected by error of law; (5) arbitrary, capricious, or an abuse of discretion; or (6) manifestly erroneous.

The manifest error test of La.R.S. 49:964 G(6) is used in reviewing the facts as found by the administrative tribunal; the arbitrary and capricious test of La. R.S. 49:964 G(5) is used in reviewing the administrative tribunal’s conclusions and the exercise of discretion. Save Ourselves v. La. Environ. Cont. Com’n, 452 So.2d 1152 (La.1984). A conclusion of a public body is capricious when the conclusion has no substantial evidence to support it, or the conclusion is contrary to substantiated competent evidence. The word “arbitrary” implies a disregard of evidence or of the proper weight thereof. Coliseum Square Ass’n v. New Orleans, 544 So.2d 351 (La.1989).

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Related

Save Ourselves, Inc. v. La. Environ. Cont. Com'n
452 So. 2d 1152 (Supreme Court of Louisiana, 1984)
Buras v. Board of Trustees of Police Pension
367 So. 2d 849 (Supreme Court of Louisiana, 1979)
Coliseum Square Ass'n v. City of New Orleans
544 So. 2d 351 (Supreme Court of Louisiana, 1989)

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692 So. 2d 1280, 1997 WL 163622, Counsel Stack Legal Research, https://law.counselstack.com/opinion/inferno-associates-inc-v-division-of-administration-office-of-state-lactapp-1997.