Roe v. State, Division of Administration

560 So. 2d 474, 1990 WL 47700
CourtLouisiana Court of Appeal
DecidedApril 10, 1990
DocketNo. 89 CA 0267
StatusPublished

This text of 560 So. 2d 474 (Roe v. State, Division of Administration) 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
Roe v. State, Division of Administration, 560 So. 2d 474, 1990 WL 47700 (La. Ct. App. 1990).

Opinion

SHORTESS, Judge.

This suit was brought by Ronald J. Roe, doing business as Transcription Unlimited (plaintiff), against the State of Louisiana, Division of Administration (defendant). It asserts that defendant advertised for bids for the furnishing of dictation1 services for Charity Hospital in New Orleans (CHNO); that plaintiff’s was the “lowest, responsible” bid; that defendant improperly sought to cancel the [bid] proposal after the opening of the bids; and that plaintiff is entitled to be awarded the contract. By two amending and supplemental petitions plaintiff alleges damages in the form of loss of profits2 and asserts that the contract entered into for the interim between the date of expiration of the previous year’s contract and the date that a new bid proposal (with revised specifications) resulted in an award which was “contrary to law and regulations.” No damages distinct from the rejection of plaintiff’s bid are alleged as a result of the interim contract, [476]*476and plaintiff does not assert that he should have been awarded a contract for the interim services. In a third supplemental and amending petition, plaintiff names Hugh M. Carleton and Sharilyn Livingston, both employees of the Division of Administration, defendants.

After trial on the merits, the trial court rendered judgment for plaintiff and against defendant for $42,215.25 in lost profits. Defendant appeals, specifying error in the trial court’s determination of improper rejection, in the trial court’s finding that plaintiff should have been awarded the contract, in the award of lost profits, and in the denial of the individual defendant’s peremptory exception of prescription.

CANCELLATION OF THE BID SOLICITATION

A bid solicitation may be rejected “only if it is determined in writing by the chief procurement officer or his designee that such action is taken in the best interests of the state.” LSA-R.S. 39:1599. The discretion vested by this statute is limited only by the requirement that the determination be made “in a non-arbitrary manner, for valid reasons.” Coney v. State, 385 So.2d 368, 372 (La.App. 1st Cir.1980).

Defendant mailed a solicitation for bid proposals to thirteen prospective bidders on February 18, 1982. Only two bidders responded. Plaintiff submitted a bid of “$9.00 per thousand [words]” and “.30<t” for any additional copies,3 and indicated that the bid price was conditioned4 upon plaintiffs performance of the contract services (through the use of a facsimile (fax) terminal at CHNO and a fax terminal at plaintiff’s business) in Alexandria, Louisiana. Plaintiff’s proposal envisioned dictation by telephone from doctors at CHNO to plaintiff’s Alexandria operations, transcription of the dictated material upon receipt, and then returning the transcribed material to CHNO via the fax terminal.

The incumbent contractor, Dictation, Inc. (Dictation), submitted a bid including a graduated pricing schedule (dependent upon word usage) varying between $10.79 and $11.35 per thousand words, with no additional cost for copies.5

Sharilyn Livingston, a purchasing agent with the Division of Administration, forwarded the bids to Edward L. Stiegler, Director of Purchasing at CHNO, requesting that he “please review these bids and advise.” In addition, Livingston’s correspondence requested that Stiegler review the bid specifications and indicated that if Stiegler wished “to have this file rebid with revised specifications, please let me know.” The record reveals that the specifications had not been revised in over ten years.

Stiegler forwarded copies of the bids to those departments at CHNO requiring dictation services: medical records, radiology, and histopathology. Correspondence to Stiegler dated April 1, 1982, from the radiology department indicated an inability to determine which bid was lower due to plaintiff’s charge for additional copies.

At this juncture we note that early in the trial, during cross-examination of plaintiff with respect to the apparent conditional nature of his bid,6 the court sustained an objection by plaintiff’s counsel asserting that evidence of any reasons for rejection of the bid other than copy cost was inadmissible because “none were ever given for the rejection of the bid, and none are pled in the defendant’s answer, and I don’t want this testimony to broaden the pleadings.” This ruling overlooked plaintiff’s burden which included proving the fact that his bid was not only the lowest [477]*477but also that it was responsive to the specifications. See LSA-R.S. 39:1594(G). The petition alleges as much, as it must, in order to support the relief plaintiff sought. The learned trial court relied on Haughton Elevator v. State Division of Administration, 367 So.2d 1161 (La.1979) and LSA-R.S. 39:1594(E) (prohibiting evaluation of bids based upon criteria not included in the bid invitation). In Haughton the low bidder was disqualified after the State determined it was not a responsible bidder from facts outside the bid proposal. The Supreme Court said this was improper and that Haughton (the low bidder) had to be given a hearing and an opportunity to respond before its bid could be rejected, and remanded the case. The distinction at bar is manifest: here the bid solicitation was cancelled because criteria from the bid invitation made it impossible to evaluate the bids pursuant to LSA-R.S. 39:1594(E). The record reveals that a determination as to the lowest bid was never made and, in fact, could not be made without reference to copy usage figures which were not in the specifications. Only one of the three departments at CHNO specified how many copies per report were required, but even that department did not specify a total number. Plaintiff asserts that only this one department’s copy usage can be considered. The record is abundantly clear that all three departments needed copies and plaintiffs position would require us to close our eyes to this fact as well as the fact that if the contract were awarded to plaintiff, these copies were not going to be free.

Livingston testified she could not obtain copy usage figures because CHNO did not maintain a record of copy usage (presumably because CHNO was not billed for copies under the existing contract). Livingston requested copy usage figures from plaintiff’s opponent, the incumbent contractor, Dictation. The correspondence providing these figures indicates that Dictation opposed rebidding because these figures indicated its bid was lower. Livingston testified she could not base an award on these figures because they were outside the bid invitation.

Deborah A. Rogers, Livingston’s supervisor, testified similarly that it was impossible to make a determination as to the lowest bid. Additionally, she testified that it was not at all uncommon to cancel a bid after the bid opening if it became apparent that there was a problem with the specifications. She estimated that such action is taken regularly, eight to ten times a month.

Hugh M. Carleton, Director of the State Purchasing Office, had the authority to cancel the bid. See LSA-R.S. 39:1599. Carleton testified that he interpreted the cancellation provision of the Procurement Code7 as requiring “cogent and compelling reasons to believe it is in Louisiana’s best interests.” Reading the appropriate purchasing regulations into the record,8

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Related

Daves Ins. Agency, Inc. v. State
488 So. 2d 705 (Louisiana Court of Appeal, 1986)
Haughton Elevator Division v. STATE, ETC.
367 So. 2d 1161 (Supreme Court of Louisiana, 1979)
Dotd v. Standard Const. Co. of Ga.
550 So. 2d 1327 (Louisiana Court of Appeal, 1989)
Coney v. State
385 So. 2d 368 (Louisiana Court of Appeal, 1980)

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560 So. 2d 474, 1990 WL 47700, Counsel Stack Legal Research, https://law.counselstack.com/opinion/roe-v-state-division-of-administration-lactapp-1990.