Cedar Bay Const., Inc. v. City of Fremont

• Court: Ohio Supreme Court
• Writing for the Court: HOLMES; MOYER
• Citation: Cedar Bay Const., Inc. v. City of Fremont, 50 Ohio St.3d 19, 552 N.E.2d 202 (Ohio 1990)
• Decision Date: 21 March 1990
• Docket Number: No. 89-77,89-77
• Parties: CEDAR BAY CONSTRUCTION, INC., Appellant, v. CITY OF FREMONT, et al., Appellees.

Page 19

50 Ohio St.3d 19

552 N.E.2d 202

CEDAR BAY CONSTRUCTION, INC., Appellant, v. CITY OF FREMONT, et al., Appellees.

No. 89-77.

Supreme Court of Ohio.

Submitted Jan. 17, 1990.

Decided March 21, 1990.

Marshall & Melhorn, Richard M. Kerger and Jennifer J. Dawson, Toledo, for appellant.

Squire, Sanders & Dempsey and Thomas G. Hermann, Cleveland, for appellee, City of Fremont.

Arter & Hadden and Michael W. Currie, Columbus, for appellee, Mosser Const., Inc.

HOLMES, Justice.

The single issue presented in this case is whether the municipality abused its discretion by allowing clarifications and/or interpretations of a bid given by a bidding contractor after bids were opened, but before an award was made. For the reasons cited below, we hold the municipality did not abuse its discretion.

Under Ohio's competitive bidding statute municipalities are required to make a " * * * written contract with [the] lowest and best bidder after advertisement for not less than two nor more than four consecutive weeks in a newspaper of general circulation within the city." R.C. 735.05. The intent of competitive bidding, under either the state statutes or a municipal charter, is " * * * to provide for open and honest competition in bidding for public contracts and to save the public harmless, as well as bidders themselves, from any kind of favoritism or fraud in its varied forms." Chillicothe Bd. of Edn. v. Sever-Williams Co. (1970), 22 Ohio St.2d 107, 115, 51 O.O.2d 173, 178, 258 N.E.2d 605, 610 (construing R.C. 3313.46 as relating to the competitive bidding requirement for school boards).

Generally, courts in this state should be reluctant to substitute their judgment for that of city officials in determining which party is the "lowest and best bidder." "The rule is generally accepted that, in the absence of evidence to the contrary, public officers, administrative officers and public boards, within the limits of the jurisdiction conferred by law, will be presumed to have properly performed their duties and not to have acted illegally but regularly and in a lawful manner. All legal intendments are in favor of the administrative action." State, ex rel. Shafer, v. Ohio Turnpike Comm. (1953), 159 Ohio St. 581, 590, 50 O.O. 465, 469, 113 N.E.2d 14, 19; Bloch v. Glander (1949), 151 Ohio St. 381, 39 O.O. 216, 86 N.E.2d 318; State, ex rel. Gerspacher, v. Coffinberry (1952), 157 Ohio St. 32, 47 O.O. 31, 104 N.E.2d 1; Wheeling Steel Corp. v. Evatt (1944), 143 Ohio St. 71, 28 O.O. 21, 54 N.E.2d 132. In Altschul v. Springfield (1933), 48 Ohio App. 356, 1 O.O. 522, 193 N.E. 788, the court explained how the bidding process should be construed, by noting:

" * * * [W]hen the statute provides for the acceptance of the lowest and best bid the city is not limited to an acceptance of merely the lowest dollar bid.

"The statutes of this state as to most public work provided some years ago for the acceptance of only the lowest bid. That was subsequently amended so as to read 'lowest and best bid.' This amendment clearly indicates that the Legislature recognized that an element other than the mere low dollar bid often enters into the letting of a contract. Hence the amendment providing that the contract should be let to the lowest and best bidder followed.

"This amendment, therefore, places in the hands of city authorities the discretion of determining who under all the circumstances is the lowest and best bidder for the work in question.

"This discretion is not vested in the courts and the courts cannot interfere in the exercise of this discretion unless it clearly appears that the city authorities in whom such discretion has been vested are abusing the discretion so vested in them." (Emphasis sic.) Id. at 362, 1 O.O. at 525, 193 N.E at 790. See, also, State, ex rel. Walton, v. Hermann (1900), 63 Ohio St. 440, 59 N.E. 104, syllabus ("[a] statute which confers upon a board of public officers authority to make a contract 'with the lowest and best bidder,' confers upon the board a discretion with respect to the contract which can not be controlled by mandamus"), State, ex rel. United Dist. Heating, Inc., v. State Office Bldg. Comm. (1931), 124 Ohio St. 413, 179 N.E. 138 (an administrative board arbitrarily exercised its discretion by refusing to accept a bid solely upon the ground that nonunion labor might be employed upon the project).

This court in Dayton, ex rel. Scandrick, v. McGee (1981), 67 Ohio St.2d 356, 359, 21 O.O.3d 225, 226, 423 N.E.2d 1095, 1097, defined "abuse of discretion" as follows: " 'The meaning of the term "abuse of discretion" * * * connotes more than an error of law or of judgment; it implies an unreasonable, arbitrary or unconscionable attitude * * *.' Steiner v. Custer (1940), 137 Ohio St. 448; paragraph two of the syllabus ; Conner v. Conner (1959), 170 Ohio St. 85 [9 O.O.2d 480, 162 N.E.2d 852]; Rohde v. Farmer (1970), 23 Ohio St.2d 82 [52 O.O.2d 376, 262 N.E.2d 685]; and State v. Adams (1980), 62 Ohio St.2d 151 [16 O.O.3d 169, 404 N.E.2d 144]. 'Arbitrary' means 'without adequate determining principle; * * * not governed by any fixed rules or standard.' Black's Law Dictionary (5 Ed.). 'Unreasonable' means 'irrational.' Id." See, also, State, ex rel. Shafer, v. Ohio Turnpike Comm., supra, 159 Ohio St. at 591, 50 O.O. at 469-470, 113 N.E.2d at 19-20. As an example of a municipality's abuse of discretion, this court found in Dayton, ex rel. Scandrick, v. McGee, supra, that the use of an unannounced residency criterion in determining which bid was the "lowest and best" constituted an abuse of discretion. See, also, Pincelli v. Ohio Bridge Corp. (1965), 5 Ohio St.2d 41, 34 O.O.2d 55, 213 N.E.2d 356 (Athens County officials were enjoined from paying public funds for bridge work performed by a contractor, when the county failed to advertise for and take competitive bids).

In the case sub judice the bid specifications required that the submitted bids be based on equipment manufactured by certain named manufacturers. The facts indicate Mosser based its bid, in part, on less expensive equipment manufactured by Amwell Company, a substitute manufacturer not on the preapproved list of manufacturers. ³ The city scheduled a meeting with Mosser, prior to awarding the contract, in order to clarify Mosser's bid. At the meeting the city received assurances that Mosser would supply equipment that met the specifications. ⁴ After receiving the assurances, the city decided to award the contract to Mosser.

In the city's legal notice advertising for bids and in its bid instructions it expressly reserved the right to waive any irregularities or informalities in the bidding process. ⁵ Moreover, the city reserved in its contract documents the right to " * * * conduct such investigations as * * * [it] deem[ed] necessary to assist in the evaluation of any bid and to establish the responsibility, qualifications, and financial ability of the Bidders, proposed Subcontractors and other persons and organizations to do the work in accordance with the Contract Documents to Owner's [city's] satisfaction within the prescribed time." Further, the city provided in its bid instructions that "[i]f a Bidder fails to name a manufacturer for a particular item, then the manufacturer on which the Drawings and Specifications are based will be used in the Declaration; or/and if more than one manufacturer is listed without one being indicated as the basis of design, then the Owner [or Engineer] will select one of the named manufacturers." ⁶

On the basis of the facts cited above the trial court found for the city and Mosser, concluding that, " * * * there being no substitutions listed by Defendant Mosser, and Defend...