Quality Fixtures, Inc. v. Multi-Purpose Facilities Board

986 S.W.2d 865, 337 Ark. 115, 1999 Ark. LEXIS 157
CourtSupreme Court of Arkansas
DecidedMarch 25, 1999
Docket98-834
StatusPublished
Cited by2 cases

This text of 986 S.W.2d 865 (Quality Fixtures, Inc. v. Multi-Purpose Facilities Board) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Quality Fixtures, Inc. v. Multi-Purpose Facilities Board, 986 S.W.2d 865, 337 Ark. 115, 1999 Ark. LEXIS 157 (Ark. 1999).

Opinions

Robert L. Brown, Justice.

This case raises one issue for our review: whether the trial court erred in granting summary judgment and dismissing the complaint of appellant Quality Fixtures, Inc., which contested the bid award for construction of seating at the Alltel Arena to appellee Hussey Seating Company. We hold that the trial court’s judgment was not in error, and we affirm.

On July 15, 1997, appellee Multi-Purpose Facilities Board for Pulaski County, Arkansas (hereinafter Facilities Board) asked for bids for certain construction work at the Alltel Arena in North Litde Rock. Among the bids requested was one for the contract for cast iron seating at the Arena. Two companies submitted sealed bids for this work — Quality Fixtures and Hussey. On March 10, 1998, at 2:00 p.m. the sealed bids were publicly opened by the construction manager for the Facilities Board, Paul Simonetta. Quality Fixtures’s bid was $2,533,548. Hussey’s bid was $2,326,976.

After the bids were opened, the parties were advised that a recommendation would be made to the Facilities Board after review of the bids, the respective bonds, and the status of the contractor’s licenses. In reviewing these matters, the construction manager learned that Hussey’s Arkansas contractor’s license had expired on July 31, 1997.

On March 27, 1998, Hussey approved and signed findings of fact and conclusions of law at a hearing before the Arkansas Contractors Licensing Board, in which it admitted violating Ark. Code Ann. § 17-25-103(a)(1), (3), and (5) by submitting a bid without first obtaining a contractor’s license, by giving false evidence to the Licensing Board, and by submitting a bid with an expired license. Hussey paid a $10,000 penalty for violating the statute and received its renewed contractor’s license on April 1, 1998. On April 9, 1998, the Facilities Board waived any deficiencies in the bid initially received from Hussey and accepted the Hussey bid as the low bid. It then awarded the seating contract to Hussey.

On April 24, 1998, Quality Fixtures filed suit against the Facilities Board and Hussey and sought an injunction against the contract award to Hussey. The complaint further asked for a court order directing that the Facilities Board award the contract to Quality Fixtures as the lowest responsible bidder.

The parties stipulated to the facts, and both Quality Fixtures and Hussey filed motions for summary judgment. In its resulting summary-judgment order, the trial court determined that the Facilities Board had not acted illegally, arbitrarily, or capriciously in awarding the contract to Hussey, and the court dismissed Quality Fixtures’s complaint.

Quality Fixtures now claims on appeal that the trial court erred in granting summary judgment in favor of Hussey. It further contends that the trial court improperly segregated Hussey’s illegal conduct of submitting a bid without a valid license from the Facilities Board’s subsequent action in awarding the contract to Hussey. According to Quality Fixtures, without a current license, Hussey was foreclosed from bidding on the project. Quality Fixtures also argues that the bids were “considered” when the sealed bids were opened and compared on March 10, 1998, and that although the Facilities Board reserved the right to waive formalities or technicalities in the bids, it could not waive Hussey’s fraudulent conduct of submitting an illegal bid. Finally, Quality Fixtures points (1) to the Facilities Board’s statement that bids would not be considered if sent by fax, and (2) to Ark. Code Ann. § 22-9-203(d) (Supp. 1997), which states that the Facilities Board shall award the contract to the “lowest responsible bidder,” which was not Hussey at the time of the bid submissions due to its unlicensed status.

Two statutes seem to be particularly apposite to the issue at hand. First, there is the statute setting the license requirements necessary for a bid to be considered, which includes the necessity for a bidder to have a certificate of license from the state for its bid to be considered. See Ark. Code Ann. § 17-25-313 (Repl. 1995). Next, there is the award procedure for public projects, which prescribes in relevant part:

(d) On the date and time fixed in the notice, the board, commission, officer, or other authority in which or in whom authority is vested to award contracts, shall open and compare the bids and thereafter award the contract to the lowest responsible bidder, but only if it is the opinion of the authority that the best interests of the taxing unit would be served thereby.

Ark. Code Ann. § 22-9-203(d) (Supp. 1997).

There is also a case which is relevant to our review. See Ottinger v. Blackwell, 173 F. Supp. 817 (E.D. Ark. 1959). In Ottinger, the district court held that the Arkansas statute making it a misdemeanor to contract to construct without a license (Ark. Stats. Ann § 71-713 (Supp. 1951)) did not make a contract awarded to an unlicensed contractor illegal or void.1

The plaintiff, Ottinger Construction Company, submitted a bid for a highway construction project while it was unlicensed. When the bids were opened, Ottinger was the lowest bid by a wide margin and later realized that it made a mistake in its bid in the amount of $294,000.2

It tried to convince the Board to disregard its bid and filed a complaint to enjoin the Board from awarding it the contract because of its mistake. In doing so, Ottinger argued that its bid was illegal due to its unlicensed status. In rejecting Ottinger’s argument, the district court stated that:

The fallacy of this argument is that there is nothing in the statutes which indicates that before a contract can be let it is necessary that the contractor have a license, nor do the pertinent statutes characterize a contract awarded to an unlicensed contractor as illegal or void . . . While the statute says that it is a misdemeanor to contract to construct without having obtained a license, it does not say expressly that a contract cannot be made.

Ottinger, 173 F. Supp. at 821. The important point of this decision for purposes of the instant case is that the absence of a contractor’s license did not render a contract award illegal or void. And while the Ottinger case is not precedent for this court, coming from a different jurisdiction as it does, we agree with its reasoning. Furthermore, the facts of the case before us differ from Ottinger. Here, Hussey had renewed its license and was in good standing by the time the bids were considered by the Facilities Board and the contract was awarded.

In reading the relevant statutes, certain points are clear to us. According to § 17-25-313, bids will not be considered from parties that do not have a certificate of license. Second, it is the Facilities Board (or presumably its designee) that opens and compares the bids after submission and thereafter awards the contract to the lowest responsible bidder. This being the case, Hussey’s bid could not have been considered by the Facilities Board until its contractor’s license was in order. We believe that the trial court correctly differentiated between submission of bids and their opening at a time and date certain and consideration of the bids by the Facilities Board and the awarding of the contract.

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986 S.W.2d 865, 337 Ark. 115, 1999 Ark. LEXIS 157, Counsel Stack Legal Research, https://law.counselstack.com/opinion/quality-fixtures-inc-v-multi-purpose-facilities-board-ark-1999.