Ardmare Const. Co. v. Freedman

• Decision Date: 15 November 1983
• Citation: 467 A.2d 674,191 Conn. 497
• Court: Connecticut Supreme Court
• Parties: ARDMARE CONSTRUCTION COMPANY, INC. v. Elisha C. FREEDMAN, Commissioner of Administrative Services, et al.

Page 674

467 A.2d 674

191 Conn. 497

ARDMARE CONSTRUCTION COMPANY, INC. v. Elisha C. FREEDMAN, Commissioner of Administrative Services, et al.

Supreme Court of Connecticut.

Argued Oct. 4, 1983.

Decided Nov. 15, 1983.

John Yacavone, Asst. Atty. Gen., with whom were Thomas Yasensky, Asst. Atty. Gen., Steven G. Berg, Bridgeport, and, on brief, Joseph I. Lieberman, Atty. Gen., for appellants (defendants).

Thomas W. Bucci, Bridgeport, for appellee (plaintiff).

Before SPEZIALE, C.J., and PETERS, ARTHUR H. HEALEY, PARSKEY and SHEA, JJ.

SHEA, Associate Justice.

In a judgment rendered from the bench, ¹ the trial judge granted the plaintiff's request for mandamus, and ordered the commissioner of administrative services to award a contract for the repair of walls and walks at the community correctional center in Bridgeport to the plaintiff. The defendants ² have appealed maintaining that an order of mandamus was improper because (1) the commissioner performs a discretionary duty when awarding a public work contract; (2) the plaintiff had an adequate remedy at law; and (3) the plaintiff's bid was incomplete, requiring the commissioner to reject the bid pursuant to General Statutes § 4-137e(c). ³ We do not reach any of these issues but conclude that the plaintiff lacked standing to bring this action. ⁴

The facts are not disputed. The commissioner solicited bids for the project pursuant to General Statutes § 4-137a. ⁵ The plaintiff and fourteen other construction companies submitted bids on forms supplied by the department of administrative services. ⁶ On January 12, 1983, a public bid opening was held where it was announced that the plaintiff had submitted the lowest bid.

On January 17, 1983, the department of administrative services rejected the plaintiff's bid because the signature of the president, who purported to act as the agent for the company, had been impressed on the bidding form with a rubber stamp. The administrative services department had in the past maintained the practice of rejecting all bids that did not have an original handwritten signature. ⁷ According to the chief bidding officer, the department interpreted General Statutes § 4-137e(b) E ⁸ to require handwritten signatures. He conceded, however, that the department had not promulgated any regulation concerning its interpretation of the statute, and that no bidders had been notified of the requirement that bids be signed by hand.

The commissioner eventually awarded the contract to the defendant A. Petrucci Construction Company, the next lowest bidder. The plaintiff sought a temporary restraining order against the construction company as well as the commissioner, which was granted on March 11, 1978. There has been no work performed on the project since that order was issued.

I

In Perkins v. Lukens Steel Co., 310 U.S. 113, 125-130, 60 S.Ct. 869, 875-878, 84 L.Ed. 1108 (1940), it was held that prospective bidders had no standing to challenge an administrative interpretation of a public contract law because the competitive bidding statutes were enacted solely for the protection of the public and conferred no enforceable rights upon those seeking to do business with the government. "Courts should not, where Congress has not done so, subject purchasing agencies of Government to the delays necessarily incident to judicial scrutiny at the instance of potential sellers, which would be contrary to traditional governmental practice and would create a new concept of judicial controversies." Id., 310 U.S. at 130, 60 S.Ct. at 878. Although the delay occasioned by this litigation has been greatly curtailed by our granting a motion for an expedited appeal, a period of more than six months has elapsed since this action was brought during which needed repair work upon a state facility has been stalled and may now have to be performed under conditions different from those contemplated when bids were submitted. This court has consistently followed the view that an unsuccessful bidder has no standing to challenge the award of a public contract. Joseph Rugo, Inc. v. Henson, 148 Conn. 430, 171 A.2d 409 (1961); Austin v. Housing Authority, 143 Conn. 338, 122 A.2d 399 (1956); 10 McQuillin, Municipal Corporations (3d Ed.Rev.) § 29.77. Recently, in Spiniello Construction Co. v. Manchester, 189 Conn. 539, 456 A.2d 1199 (1983), we held that only "where fraud, corruption or favoritism has influenced the conduct of the bidding officials or when the very object and integrity of the competitive bidding process is defeated by the conduct of municipal officials," does an unsuccessful bidder have standing to challenge the award. Id., at 544, 456 A.2d 1199.

A

"Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy." Hiland v. Ives, 28 Conn.Sup. 243, 245, 257 A.2d 822 (1966).

This court has declared that "[a] bid, even the lowest responsible one, submitted in response to an invitation for bids is only an offer which, until accepted by the municipality, does not give rise to a contract between the parties." John J. Brennan Construction Corporation, Inc. v. Shelton, 187 Conn. 695, 702, 448 A.2d 180 (1982), citing Joseph Rugo, Inc. v. Henson, 190 F.Supp. 281 (D.Conn.1960); see also Spiniello Construction Co. v. Manchester, supra; Joseph Rugo, Inc. v. Henson, 148 Conn. 430, 171 A.2d 409 (1961); Austin v. Housing Authority, supra; 10 McQuillin, Municipal Corporations (3d Ed.Rev.) § 29.80. An unsuccessful bidder, therefore, has no legal or equitable right in the contract. Not unlike any other person whose offer has been rejected, the disappointed bidder has no right to judicial intervention. ⁹ See Austin v. Housing Authority, supra, 143 Conn. at 349, 122 A.2d 399; Perkins v. Lukens Steel Co., supra, 310 U.S. at 129, 60 S.Ct. at 877.

Absent any impairment of a private right, judicial review may be obtained only when authorized by statute. In the federal arena, a disappointed bidder has standing under the Administrative Procedures Act, 5 U.S.C. § 702, which provides, "[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof." (Emphasis added.) See B.K. Instrument, Inc. v. United States, 715 F.2d 713 (2d Cir.1983); Airco, Inc. v. Energy Research & Development Administration, 528 F.2d 1294 (7th Cir.1975) (per curiam); Armstrong & Armstrong, Inc. v. United States, 514 F.2d 402 (9th Cir.1975) (per curiam); Hayes International Corporation v. McLucas, 509 F.2d 247 (5th Cir.), cert. denied, 423 U.S. 864, 96 S.Ct. 123, 46 L.Ed.2d 92 (1975); William F. Wilke, Inc. v. Department of the Army, 485 F.2d 180 (4th Cir.1973); Merriam v. Kunzig, 476 F.2d 1233 (3d Cir.), cert. denied, 414 U.S. 911, 94 S.Ct. 233, 38 L.Ed.2d 149 (1973); Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859 (D.C.Cir.1970). ¹⁰ The Connecticut counterpart to § 702, however, is much more limited in scope. It provides that "[a] person who has exhausted all administrative remedies available within the agency and who is aggrieved by a final decision in a contested case is entitled to judicial review by way of appeal ...." General Statutes § 4-183(a). A party seeking review of a state agency's action, therefore, must establish more than aggrievement (injury in fact); he must establish that the injury resulted from a final decision in a contested case. ¹¹ See, e.g., Rybinski v. State Employees' Retirement Commission, 173 Conn. 462, 469-72, 378 A.2d 547 (1977) (commission meeting not a hearing within purview of General Statutes § 4-166; therefore not a contested case); Old Rock Road Corporation v. Commission on Special Revenue, 173 Conn. 384, 387-88, 377 A.2d 1119 (1977) (provisional grant of racing license not a final decision). An agency decision to reject a bid or to award a contract has none of the attributes of a formal hearing, nor is a formal hearing required by law. For this reason, the agency's decision does not involve a contested case, and the disappointed bidder cannot assert standing under § 4-183 of the Administrative Procedure Act. See Rybinski v. State Employees' Retirement Commission, supra.

Nor does the competitive bidding statute provide the disappointed bidder with standing. This court has frequently declared "[m]unicipal competitive bidding laws are enacted to guard against such evils as favoritism, fraud or corruption in the award of contracts, to secure the best product at the lowest price, and to benefit the taxpayers, not the bidders." John J. Brennan Construction Corporation, Inc. v. Shelton, 187 Conn. 695, 702, 448 A.2d 180 (1982); see also Joseph Rugo, Inc. v. Henson, 148 Conn. 430, 435, 171 A.2d 409 (1961); Austin v. Housing Authority, supra, 143 Conn. at 349, 122 A.2d 399.

B

In Spiniello Construction Co. v. Manchester, 189 Conn. 539, 456 A.2d 1199 (1983), we recognized that our prior decisions had the effect of preventing judicial review of potentially meritorious claims concerning the implementation and execution of competitive bidding statutes. We also acknowledged the fact that the group most benefitted by the statute--the public--had no effective means of protecting their interests. We substantially adopted the position in Scanwell that "[t]he public interest in preventing the granting of contracts through arbitrary or capricious action can properly be vindicated through a suit brought by one who suffers injury as a result of the illegal activity, but the suit itself is brought in the public interest by one acting essentially as a 'private attorney general.' " Scanwell Laboratories, Inc. v. Shaffer, supra, 424 F.2d at 864; see generally Davis, Administrative Law Treatise (2d Ed.) §§ 24:2, 24:3...