State ex rel. KNC, Inc. v. New Mexico Department of Finance & Administration, Property Control Division

704 P.2d 79, 103 N.M. 167
CourtNew Mexico Court of Appeals
DecidedMay 30, 1985
DocketNo. 7665
StatusPublished
Cited by8 cases

This text of 704 P.2d 79 (State ex rel. KNC, Inc. v. New Mexico Department of Finance & Administration, Property Control Division) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. KNC, Inc. v. New Mexico Department of Finance & Administration, Property Control Division, 704 P.2d 79, 103 N.M. 167 (N.M. Ct. App. 1985).

Opinion

OPINION

MINZNER, Judge.

Petitioner KNC, Inc. appeals the district court’s denial of its petition for writ of mandamus, by which petitioner in effect sought a determination that respondents had awarded a public works contract in violation of the Public Purchases Act, NMSA 1978, Sections 13-1-1 to -27 (Repl. Pamp.1983). Marecon, Inc., the party to whom the contract was awarded, was permitted to intervene in the action. We affirm.

Respondents, on behalf of the State of New Mexico, solicited sealed bids for a state office building in Santa Fe pursuant to the Act. Sealed bids were required because the project required a single purchase in an amount estimated to exceed five thousand dollars. See § 13-1-11(G). The Act required the State Purchasing Office to procure contracts by “purchase orders based on the lowest responsible bid when bids are required.” Section 13 — 1— 11(A).

The Act defined a “responsible bid” as “a written offer to furnish materials or services in conformity with standards, specifications, delivery terms and conditions and other requirements established by the user or central purchasing office.” Section 13-1-2(H). This appeal raises issues of first impression under the Act, which at the relevant time governed purchasing for state agencies. Since that time, the Act has been repealed and replaced by the Procurement Code. See NMSA 1978, §§ 13 — 1— 28 to -199 (Supp.1984). On appeal petitioner contends that the trial court erred in concluding that respondents had discretion to determine Marecon had submitted the lowest responsible bid and that the exercise of discretion was neither arbitrary nor unlawful.

Respondents first solicited bids for the building in June 1983. Subsequently they issued addenda one through five, which modified or interpreted the original solicitation, to prospective bidders. One of the prospective bidders was Marecon. Following bid openings, Marecon protested the proposed award; it was the second lowest bidder. Respondents determined there were inconsistencies in the instructions, base bids, and alternative bids, and rejected all bids.

In soliciting new bids, respondents issued two new addenda, numbers six and seven, reflecting an expanded project. Addendum six contained a revised bid form and incorporated relevant portions of addenda one through five. Addendum seven contained miscellaneous information for the bidders, including a report on soil conditions.

On both bids, the bidding instructions required bidders to acknowledge receipt of addenda as provided by the bid form. The form states, “The Bidder acknowledges the receipt of the following addenda:” and a space is provided. No specific instructions accompany the statement or space; apparently bidders complete the blank by specifying the acknowledged addenda. Further, on both bids, the instructions reserved the right to reject any and all bids, to waive technicalities, and to accept the bid deemed to be in the public interest.

The rebids were opened at the State Purchasing Office on September 9, 1983. Marecon’s lump sum bid was the lowest, at $11,198,000, and petitioner’s was the next lowest, at $11,204,400. Although Marecon had acknowledged receipt of the addenda in the proper manner on its first bid, it left the space blank on its rebid. Another bidder had acknowledged receipt only of addenda six and seven.

At the bid opening, petitioner indicated that it would protest Marecon’s bid for failure to acknowledge receipt of addenda. On September 9, after the bid opening, Marecon sent to the director of Property Control a mailgram and a letter, stating that it had considered all addenda. Neither the mailgram nor the letter was solicited by respondents.

Upon learning of the bid protest, the project architect made an investigation. He reviewed the bid documents, his internal office file, the bid abstracts, and Mare-con’s letter. The investigation satisfied the architect that Marecon had received and considered the addenda in making the bid. Consequently, the architect advised the director in writing that in his opinion the error was a minor technicality and respondents should award the contract to Mare-con as the lowest bidder. The director agreed, and he recommended that award to the State Board of Finance.

The trial court found that the waiver gave no competitive advantage to Marecon. The court also found that Marecon did not manipulate or subvert the bidding process, nor did it hide costs. The trial court agreed with the director that the failure to acknowledge was a technical irregularity and that the director properly exercised his authority in waiving it.

The parties agree that the state must award the public works contract to the lowest responsible bidder. The parties do not dispute that Marecon received addenda six and seven and considered them in rebidding. Although the Public Purchases Act is silent on the question, the parties also agree respondents had discretion to waive a technical irregularity. They disagree, however, whether the failure to acknowledge the addenda is waivable or, if waivable, whether the director acted properly on the facts of this case.

Petitioner urges that we follow the guide of the federal government in defining the discretionary area within which respondents must act in evaluating bids. Under the relevant federal regulations, federal procurement officers may waive informalities or irregularities in bids, but a specific provision limits that power when the bidder has failed to acknowledge receipt of an amendment.

The relevant regulation provides: Examples of minor informalities or irregularities include:
(d) Failure of a bidder to acknowledge receipt of an amendment to an invitation for bids, but only if:
(1) The bid received clearly indicates that the bidder received the amendment, such as where the amendment added another item to the invitation for bids and the bidder submitted a bid thereon; or
(2) The amendment involves only . a matter of form or is one which has either no effect or merely a trivial or negligible effect on price, quantity, quality, or delivery of the item bid upon.

41 C.F.R. § 1-2.405 (1983). With limited exceptions, the federal regulations do not permit waiver of the requirement to acknowledge receipt of addenda in the prescribed manner. See Charles N. White Construction Co. v. Department of Labor, 476 F.Supp. 862 (N.D.Miss.1979).

We assume the experience of the relevant federal agency has led the agency to restrict the discretion of its procurement officers. See generally IB J. McBride, Government Contracts § 10.100, at 10-341 (rev. 1985). However, the scope of discretion available to federal procurement officers is not necessarily that which our legislature intended the relevant state officers to have under the Act. See Martel Construction, Inc. v. Montana State Board of Examiners, 668 P.2d 222 (Mont.1983).

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Bluebook (online)
704 P.2d 79, 103 N.M. 167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-knc-inc-v-new-mexico-department-of-finance-nmctapp-1985.