State ex rel. Nebraska Building & Investment Co. v. Board of Commissioners of State Institutions

181 N.W. 530, 105 Neb. 570, 1921 Neb. LEXIS 74
CourtNebraska Supreme Court
DecidedJanuary 19, 1921
DocketNo. 21759
StatusPublished
Cited by10 cases

This text of 181 N.W. 530 (State ex rel. Nebraska Building & Investment Co. v. Board of Commissioners of State Institutions) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Nebraska Building & Investment Co. v. Board of Commissioners of State Institutions, 181 N.W. 530, 105 Neb. 570, 1921 Neb. LEXIS 74 (Neb. 1921).

Opinion

Flansburg, J.

Mandamus action against the members of the board of commissioners of state institutions to compel cancelation of an award of a contract made by the board, and to order that the contract be awarded to the relator, the Nebraska Building & Investment Company, which company claims to have been the lowest responsible bidder. Judgment was entered in favor of relator, canceling the prior award, as prayed, and ordering an award of the contract to relator. From this judgment respondents appealed.

The board of commissioners of state institutions has charge of the erection of state buildings. Contracts for the construction of buildings costing more than $1,000 can be made only through public competition, after giving-advertised notice, and must be awarded to the “lowest responsible bidder.” Laws 1915, ch. 129.

Plans and specifications were prepared and notice to bidders given for the construction of a hospital building at the Soldiers Home at Milford, Nebraska. In the proposal to bidders certain items of the work to be let were submitted in the alternative. At the time of the opening of the bids, the board decided upon those items which Avere to be considered as the basis for the letting of the contract, and announced such conclusion. Upon the work, based upon the items so decided upon, the bid of the relator Avas $77,853.30, while that of E. Rokahr Avas $77,96$, and other bids ranged higher. Relator’s status thus became fixed as the loAvest bidder in point of money amount. The board, however, awarded the contract to Rokahr. This aAvard the district court ordered canceled, upon the ground, evidently, that relator, ánd not Rokahr, Avas found by the court to be the loAvest responsible bidder.

The sole question is, hoAV far can the court by a mandamus proceeding control the board of state institutions in a determination as to AArho are lowest responsible bidders in such a case.

[572]*572The testimony of Mr. Oberlies, chairman of the board, was that relator at the time of the awárding of the contract had under construction for the state two buildings of which the state was in immediate need, and that the work on these buildings had been delayed; that the board had no criticism as to the financial responsibility of the relator company, but was governed in rejecting the bid of the company by the opinion that relator, being a relatively! new contractor, and having all the work that it could handle with its equipment and facilities, lacked the capacity, at that particular time, to carry out a strict performance of the contract then to be awarded.

Relator takes the position, since the board did not question its financial responsibility, and since the relator was ready and able to give a bond required by the statute to insure the faithful performance of the work, that the question of responsibility is out of the case, and that there remains only the ministerial duty on the part of the board to award the contract to relator upon its bid.

The term “responsible,” as used in the statute, has a bz’oader meaning than a mere reference to pecuniary ability. It was the intention of the statute that a bidder should be a responsible party aside from the giving of the bond. “Though a person may be able to give security to his employer, yet his ability to do and perform with promptness a heavy contract, involving large expenditures, must depend greatly upon his own resources. For this reason, it is assumed that the statute required the successful bidder to be a ‘responsible' one, that is to say, ‘able to respond or to answer in accordance with what is expected or demanded’ (see Webster’s Dictionary), in addition to the giving of the bond for the specific performance of the cozitract.” People v. Dorsheimer, 55 How. Pr. (N. Y.) 118.

The term “responsible” is not, however, limited to pecuniary ability, as may have been intimated in the New York case just cited, but pertains to many other characteristics of the bidder, such as his general ability and capacity to [573]*573carry on the work, his equipment and facilities, his promptness, and the quality of work previously done by him, his suitability to the particular task, and such other qualities as are found necessary to consider in order to determine whether or not, if awarded the contract, he could perform it strictly in accordance with its terms. Kelling v. Edwards, 116 Minn. 484; Inge v. Board of Public Works, 135 Ala. 187; 36 Cyc. 876. See note, 38 L. R. A. n. s. 672, and note, 26 L. R. A. 710.

As said by Mr. Freeman in his note in 50 Am. St. Rep. 489: “It is clear that if officers and administrative boards, having the power of awarding contracts for public work, were inquired to act ministerially, or in a particular way, the public interests would suffer at the hands of designing and unscrupulous men. On the other hand, it sometimes happens that public officers and administrative boards are oblivious to the interests of the public, and that, if there were no checks upon them, the door of fraud, corruption, and official extravagance would be thrown wide open. The law, therefore, has wisely provided that contracts for public work shall be let to the lowest responsible bidder giving adequate security.”

The tribunals having charge of the letting of these contracts for public work in passing upon the question of the responsibility of bidders, as determined from all those elements entering into that' question, do not act ministerially only, but exercise an official discretion. The action of the board in that respect is judicial in its nature, and the exercise of that discretion is vested in the board, and not in the courts.

When the board has made a decision that a certain bidder is not “responsible,” and this decision has such support from evidence, or information, then at hand, as to show that the board did not act arbitrarily, or from favoritism, ill will, or fraud, but from an honest conviction, based upon facts, that its action was,' in its judgment, for the best interests of the state, it is not the province of the courts to interfere by mandamus, and direct the action [574]*574of the board, even though the court should believe that the conclusion of the board was erroneous. For the court to take evidence and upon that evidence to determine that the bidder was in fact “responsible” in such a case would be to substitute the opinion and judgment of the court for that which, by the statute, belongs to the board, and would, under well-recognized rules of law, be unwarranted. State v. City of Lincoln, 68 Neb. 597; State v. Kendall, 15 Neb. 262; Johnson v. Sanitary District of Chicago, 163 Ill. 285; Kelly v. City of Chicago, 62 Ill. 279; note, 50 Am. St. Rep. 489; note, 38 L. R. A. n. s. 654.

It is insisted! that, under previous decisions of this, court, the relator has the right to a review and control of the decision of the board in a mandamus action.

In State v. York County, 13 Neb. 57, a writ of mandamus issued to review the action of the county board. The board had awarded a contract under a statute which required that such contract be let to the “lowest bidder competent under the provisions” of the statute. The competency or responsibility of the bidders was, however, not considered in the case. The action of the board was treated by the court, under its construction of the statute, as purely ministerial, and it was assumed without argument in the decision that relator was entitled to a writ if he was shown to be the lowest bidder.

In

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Cite This Page — Counsel Stack

Bluebook (online)
181 N.W. 530, 105 Neb. 570, 1921 Neb. LEXIS 74, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-nebraska-building-investment-co-v-board-of-commissioners-neb-1921.