J.L. Manta, Inc. v. Braun

393 N.W.2d 490, 1986 Minn. LEXIS 870
Supreme Court of Minnesota·Decided August 29, 1986·No. CI-85-821, C4-85-957·Published·Cited by 9 cases

Opinions

COYNE, Justice.

Respondent J.L. Manta, Inc. obtained a permanent injunction barring the State of Minnesota from awarding a bridge painting contract to Rainbow, Inc. and precluding the State from rejecting all bids and read-vertising for bids. We reverse.

Early in 1986 the Department of Transportation (DOT) advertised for bids for painting a bridge over the Mississippi River on Trunk Highway 3. The bid form indicated that the project comprised three [491] items: mobilization, traffic control, and painting. To the right of each item listed on the bid form were columns for the approximate quantity involved, the unit bid price, and the total bid amount for the item or the extension. Mobilization, or start-up costs, and traffic control were single unit items. The quantity for the painting was 281,100 square feet.

The bids ranged from Manta’s low bid of $301,749 to a high bid of $696,530 — with the majority of the seven bids exceeding $450,000. Manta’s bid, however, contained an alteration. The unit price and extension for the traffic control item had been changed from $4088 to $4082 by writing a “2” over the final “8”. The sum of $4082 and the extended bid prices for mobilization and painting amounted to Manta's total bid price of $301,749.

Relying on the mandatory language of Minn.Stat. § 16B.09, subd. 2 (1984):

Alterations and erasures. 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.

and Specifications 1206 and 1301 of the State’s Standard Specifications for Highway Construction (1978), the DOT rejected Manta’s bid because of the improper alteration. '

When the DOT awarded the contract to Rainbow, Inc., the next lowest bidder, Manta sued to enjoin the State from awarding the contract to any bidder except Manta and also sought a writ of mandamus compelling award of the contract to Manta. After Rainbow intervened, the district court granted Manta its requested injunc-tive relief but did not require the DOT to contract with Manta. The court of appeals affirmed the trial court’s determination that rejection of the Manta bid was arbitrary and capricious, but held that the State could not be enjoined from awarding the bridge painting contract to any business or person but Manta. The court of appeals concluded that the State had no authority to contract with Rainbow, Inc., or to reject all bids “for the sole purpose of resoliciting bids,” observing that rejection of all bids would be proper if the State abandoned the project or if there were some substantial reason for rejecting the Manta bid. J.L. Manta, Inc. v. Braun, 376 N.W.2d 466, 471 (Minn.App.1985).

I.

Although the lower courts regarded the rejection of Manta’s bid as arbitrary and capricious, it seems to us that there was indeed a substantial reason for its rejection: the DOT was simply following the statutory mandate. Certainly, the paramount purpose of the statutory bidding process is to protect the public interest by requiring contracts to be let to the lowest responsible bidder. Foley Bros., Inc. v. Marshall, 266 Minn. 259, 264, 123 N.W.2d 387, 391 (1963). Acknowledging that purpose of the competitive bidding requirement, the lower courts accepted Manta’s contention that it had substantially complied with the statutory requirements and that a $6 alteration in a bid of more than $300,000 is de minimus and should not be a ground for rejection of the bid of a responsible bidder.

We have recognized that the public should not be denied the benefit of the lowest bid for every minor technical defect that does not affect the substance of the bid. Thus, we have held that insubstantial departures from the commissioner’s requirements — defects which do not reflect bad faith, undermine the procedures, or prejudice the rights of those intended to be protected by the procedures — such as filing a certificate of non-collusion rather than an affidavit, Foley Bros., 266 Minn. at 264, 123 N.W.2d at 391, or submitting a bid a short time after the time set by the specifications, Nielsen v. City of St. Paul, 252 Minn. 12, 88 N.W.2d 853 (1958), do not justify rejection of the bid. We have also [492] recognized that competitive bidding protects the public interest by depriving or limiting the discretion of contract-making officials in areas susceptible to such abuses as fraud, favoritism, improvidence, or extravagance. Foley Bros., 266 Minn. at 264, 123 N.W.2d at 391. See also Telephone Associates, Inc. v. St. Louis County Board, 364 N.W.2d 378, 381 (Minn.1985).

With respect to the treatment of a bid containing an alteration or erasure of a bid price — an aspect of competitive bidding peculiarly susceptible to fraud and collusion — the legislature has deprived the officials who will let the contract of any discretion. Had it been within the DOT’s discretion to accept a bid containing a non-complying alteration, then, of course, its refusal to accept Manta’s bid would have been an arbitrary exercise of that discretion. A six dollar alteration in a bid of $301,749 is unquestionably de minimus. But section 16B.09, subd. 2, does not allow for the exercise of any discretion by the DOT. The statute specifically describes the only acceptable method of altering any price contained in the bid which is used in determining the lowest responsible bid. Unless the alteration or erasure is “crossed out and the correction printed in ink or typewritten adjacent to it and initialed in ink by the person signing the bid,” the bid “must be rejected.” Minn.Stat. § 16B.09, subd. 2. The statute, both clear and explicit, offers no basis for construction. Had the legislature intended either to make rejection or retention of a bid containing an altered price dependent upon the amount of the change or its relationship to the amount of the total bid price, or to accord public officials discretion to decide whether to accept or reject altered bids on a case by case basis, we have no doubt that section 16B.09, subd. 2, would have been couched in significantly different language.

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J.L. Manta, Inc. v. Braun, 393 N.W.2d 490, 1986 Minn. LEXIS 870 (Mich. 1986).

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J.L. Manta, Inc. v. Braun
393 N.W.2d 490 (Supreme Court of Minnesota, 1986)