Baxter's Asphalt & Concrete, Inc. v. Liberty County

• Decision Date: 10 March 1981
• Docket Number: No. VV-370,VV-370
• Court: Florida District Court of Appeals
• Parties: BAXTER'S ASPHALT & CONCRETE, INC., a Florida Corporation, Appellant, v. LIBERTY COUNTY, a Political Subdivision of the State of Florida; L. B. Arnold, Jack E. Summers, Jimmy Johnson, Richard Phillips and Donnie Gene Tharpe, as constituting the Board of County Commissioners of Liberty County, a Political Subdivision of the State of Florida; and Gulf Asphalt Corporation of Panama City, a Florida Corporation, Appellee.

Page 461

406 So.2d 461

BAXTER'S ASPHALT & CONCRETE, INC., a Florida Corporation, Appellant, v. LIBERTY COUNTY, a Political Subdivision of the State of Florida; L. B. Arnold, Jack E. Summers, Jimmy Johnson, Richard Phillips and Donnie Gene Tharpe, as constituting the Board of County Commissioners of Liberty County, a Political Subdivision of the State of Florida; and Gulf Asphalt Corporation of Panama City, a Florida Corporation, Appellee.

No. VV-370.

District Court of Appeal of Florida, First District.

March 10, 1981.

On Rehearing Nov. 18, 1981.

James J. Richardson and Barry Richard of Roberts, Miller, Baggett, LaFace, Richard & Wiser, Tallahassee, for appellant.

Bill A. Corbin, Blountstown, and L. Charles Hilton, Jr., Panama City, for appellee.

ERVIN, Judge.

Baxter's Asphalt and Concrete, Inc., appeals a final judgment which inter alia granted appellee Gulf's motion to dismiss and dissolve a temporary injunction entered by the trial court on May 5, 1980, which had prevented appellee Liberty County from awarding a public contract to Gulf. The judgment also denied Baxter's motion to amend its complaint. We reverse.

In April, 1980, appellee Liberty County advertised for bids on road resurfacing. An "Information for Prospective Bidders" was provided to each bidder by the county which included:

NOTE: Bidder must bid for both resurfacing alternatives ALT(A) and ALT(B) for a valid bond.

Alternate "A" called for a better and more expensive grade of asphalt than alternate "B". The appellee, Gulf, did not bid on alternate "A" because the county inadvertently failed to send Gulf the last page of the instructions which included the above quoted requirement. The prospective bidders were also provided with "Instructions to Bidders" which included the following provision:

Proposals will not be listed as "irregular" and will not be considered in the tabulation of bids if they were incomplete in any of the following forms at the time the proposals are removed from the sealed envelopes at bid openings:

(1) Proposals must show a total amount bid in the separate space provided "The Information to Bidders" also provided:

in the title page. (emphasis in original)

(6) WAIVER OF TECHNICAL FLAWS IN BID:

The board reserves the right to waive technical flaws or minor deficiencies in the preparation of the bid, wherever such technicality is obviously to the best interest of the Board.

Appellee, Gulf, submitted the lowest bid for alternate "B". Baxter's submitted the next lowest bid for alternate "B" which was about $148,000 greater than Gulf's proposal. Baxter's submitted the lowest bid on alternate "A", which was $187,000 greater than appellees' proposal on alternate "B". The bidders were also required to include within their bid proposal a guaranteed deposit or surety bond in the amount of 5% of the total actual bid. The county ignored Gulf's failure to bid on alternate "A" and awarded Gulf the contract. The appellant then filed a complaint for injunctive relief challenging the award of the contract on the grounds that Gulf's proposal did not comply with the bidding requirements. Baxter's later sought to amend its complaint by alleging in the proposed amended complaint that the county had not complied with Chapter 336, Florida Statutes (1979), and that the bidding process was unfair. The trial court denied the motion to amend and rendered a final judgment for appellees based largely on its findings that no showing of fraud or unfairness in awarding the contract had been established.

We agree with the trial court's finding that the record does not establish evidence of favoritism, fraud, or misconduct on the part of the county commissioners or Gulf during the course of the bidding process. Normally, such a showing is necessary to enjoin an award of a public contract. See Wester v. Belote, 103 Fla. 976, 138 So. 721 (1931). Cf. Wood-Hopkins Contracting Company v. Roger J. Au & Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978). Nevertheless, injunctive relief may be granted if there is alleged "a clear violation of the statute relating to competitive bidding" even in the absence of any "allegation of ... fraud or misconduct on the part of the county commissioners ...." Wester v. Belote, supra, 138 So. at 726.

Here, Gulf's failure to comply with the bid specifications constituted a clear violation of the competitive bid statute applicable here, Section 336.44, Florida Statutes (1979), ¹ in that the deviations in Gulf's bid were material. See Harry Pepper & Assoc. v. City of Cape Coral, 352 So.2d 1190 (Fla.2d DCA 1977). The court in Harry Pepper & Assoc., cited 64 Am.Jur.2d, Public Works & Contracts, § 59 (1972), for the following proposition: "The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by other bidders." Id. at 1193.

City of Miami Beach v. Klinger, 179 So.2d 864 (Fla. 3d DCA 1965), is the Florida case that has the closest factual similarity to the case at bar and is the most illustrative as to the problem of non-conforming bids. In Klinger, a successful bidder added an alternate in his bid which was not called for in the specifications. The other contractors submitted bids which conformed to the specifications. The alternate proposal in the nonconforming bid was ultimately accepted. The Klinger court held that the successful bidder's inclusion of the alternate proposal gave him an unfair advantage over other bidders. A New Jersey case, L. Pucillo & Sons v. Mayer & Council, etc., 73 N.J. 349, 375 A.2d 602 (N.J.1977), is also instructive. There, the Supreme Court of New Jersey disapproved a bid which had been The issue before the court was "whether the portion of the bidding specifications which directed garbage scavengers to submit proposals on all options was mandatory or permissive." 375 A.2d at p. 603. As in the instant case, the advertisements to bidders in L. Pucillo & Sons contained underscored, mandatory language which required that all proposals be bid, and a similar provision which read:

accepted by the Borough of New Milford. The bidders had been requested to submit proposals for garbage collection contracts of one, two and five years' duration. The defendant entered bids on the first three years but failed to submit a bid for the five-year contract. The plaintiff and another bidder submitted proposals on all alternatives as required. Nonetheless, the contract was awarded to the defendant which purported to waive defendant's failure to bid on the fifth year.

The mayor and Council reserves (sic) the right to waive any informalities and the right to reject any and all bids to the best interest of the Borough of New Milford. Id.

In reversing, the Supreme Court of New Jersey emphasized the underscored mandatory language in the advertising to bidders, stating:

We would have no objection to a procedure in which bidders were clearly told that they could select one or several options on which to bid. We are not, however, willing to transform the mandatory requirement in these specifications into a polite request. The ordinary reader of the specifications would regard them as calling for bids on all the terms specified. Awarding the contract to one who failed to submit bids on all terms necessarily created an inequality in the bidding and an opportunity for favoritism.

There is little doubt that Pacio's (the successful bidder) failure to bid on all options was not a minor irregularity which could be waived, (citations omitted) but rather was a substantial departure which could not be overlooked. (citations omitted) Justice Mountain recently formulated the distinction between material and non-material conditions in Terminal Const. Corp. v. Atlantic Cty. Sewerage Auth., (67 N.J. 403, 341 A.2d 327) supra:

Essentially this distinction between conditions that may or may not be waived stems from a recognition that there are certain requirements often incorporated in bidding specifications which by their nature may be relinquished without there being any possible frustration of the policies underlying competitive bidding.

He noted that such requirements must be distinguished from conditions

whose waiver is capable of becoming a vehicle for corruption or favoritism, or capable of encouraging improvidence or extravagance, or likely to affect the amount of any bid or to influence any potential bidder to refrain from bidding, or which are capable of affecting the ability of the contracting unit to make bid comparisons .... (citations omitted)

The latter category of conditions, he found, "are the kind ... which may not under any circumstances be waived." Id.

375 A.2d 604-605 (emphasis in original).

The New Jersey Supreme Court concluded that the successful bidder's "deviation from the specifications gave him a palpable economic benefit which gave him an advantage over his competitors and undermined the necessary common standard of competition." Id. at 606.

Similarly, in the instant case, Liberty County did not have the option to waive the mandatory requirement that Gulf bid on alternate "A". Gulf conceivably could have gained an unfair bidding advantage by failing to bid on alternate "A". By omitting to bid on alternate "A", Gulf arguably had a lower bonding requirement and arguably was exposed to a lesser financial risk. Gulf's failure to bid on alternate "A" also made the bids difficult to compare-a problem which the competitive bid statutes attempt to eliminate. Wester v. Belote, supra; Robinson's, Inc. v. Short, 146 So.2d 108 (Fla. 1st DCA 1962).

Appellees' endeavors to distinguish L. Pucillo & Sons, Inc., are unavailing. Appellees base their distinction upon the lower court's finding that the two alternates required to be bid were mutually exclusive. Even if this finding is correct, it has no bearing upon the competitive advantages that Gulf...