Duffy v. Village of Princeton, 36057

• Decision Date: 10 July 1953
• Docket Number: No. 36057,36057
• Parties: DUFFY et al. v. VILLAGE OF PRINCENTON et al.
• Court: Minnesota Supreme Court

Page 27

60 N.W.2d 27

240 Minn. 9

DUFFY et al. v. VILLAGE OF PRINCENTON et al.

No. 36057.

Supreme Court of Minnesota.

July 10, 1953.

Syllabus by the Court.

1. The general rule of law applicable to specifications is that they must be sufficiently definite and precise to afford a basis for bids and they must be free from restrictions the effect of which would be to stifle competition. Held that the evidence sustains the trial court's conclusions that the specifications were sufficiently definite to afford a common standard of competition in bidding as required by law.

2. The test of a material variance in specifications is whether it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Held that the evidence sustains the trial court's conclusions that any variance in specifications in the instant case was unsubstantial and immaterial.

3. In selecting the lowest responsible bidder a municipality may exercise a reasonable discretion. Considerations other than price may be utilized such as quality, suitability, and adaptability of the article to be purchased for the use for which it was intended. Where it appears that the commission's choice is based on a substantial difference in quality, suitability, and adaptability, its action will not be itnerfered with.

Leonard M. Paulson, Milaca, Briggs, Gilbert, Morton Kyle & Macartney, and Frank Hammond, St. Paul, for appellants.

Faegre & Benson, Charles B. Howard, Minneapolis, Clarence C. Mitchell, Princeton, for respondents.

FRANK T. GALLAGHER, Justice.

Appeal from an amended judgment of the district court whereby it was determined in substance that all action taken by the defendant members of the public utilities commission of the village of Princeton was in accordance with the provisions of the statutes of the state of Minnesota with respect to public contracts.

On December 26, 1951, the public utilities commission of Princeton, referred to hereinafter as the commission, retained G. M. Orr Engineering Company to prepare plans and specifications for a Diesel generating unit for its municipal power plant. The plans and specifications were submitted at a meeting of the commission on February 4, 1952. The chairman, with no objection from any of the other members of the commission, directed that a change be made with respect to classification of the units on the basis of high- and low-speed engines. The plans and specifications were then approved. The next meeting of the commission was held on February 26, 1952, for the purpose of opening bids. Between that date and the next meeting of the commission, the engineers prepared a report in which it was stated that some of the bids were not acceptable, with comments on the bids which they did consider acceptable. On April 1, 1952, a resolution was adopted by the commission accepting the bid of defendant National Supply Engine Corporation, referred to hereinafter as National.

This action was commenced on April 7, 1952, by plaintiffs as residents, voters, citizens, taxpayers, and consumers of electricity, in their own behalf and in behalf of others similarly situated, to annul and set aside the award of the contract to National; to enjoin and restrain defendants from entering into, executing, or performing the proposed contract; and for other relief not pertinent to this appeal.

It is the claim of plaintiffs (1) that the specifications furnished by the commission were defective for reasons hereinafter stated; (2) that the bid of National did not comply with the specifications and was therefore incapable of acceptance by the commission; and (3) that, in awarding the contract to National, the commission acted in an arbitrary and unreasonable manner and thereby abused its discretion. The trial court found against plaintiffs on all three contentions.

1. According to plaintiffs, the provision which invalidates the specifications is as follows:

'If this Bid is accepted, the undersigned agrees to furnish a satisfactory Performance Bond and to execute form of contract as specified in the General Contract Conditions, and further agrees that if awarded contract, work on project will be commenced within _ _ working days after receipt of notice, and that the Contract will be fully completed within _ _ consecutive calendar days thereafter.'

They argue that this voids the specifications because each bidder was permitted to determine the time of performance and there was no definite standard upon which the bidders could compete. The trial court concluded that the specifications were sufficiently definite to afford a common standard of competition in bidding as required by law. The general rule of law applicable to specifications is that they must be sufficiently definite and precise to afford a basis for bids and they must be free from restrictions, the effect of which would be to stifle competition. Davies v. Village of Madelia, 205 Minn. 526, 287 N.W. 1; Rice v. City of St. Paul, 208 Minn. 509, 295 N.W. 529; 4 Dunnell, Dig. & Supp. § 6707.

In deciding whether such a common standard existed, we are faced with the testimony of G. M. Orr of the G. M. Orr Engineering Company, who has had extensive experience in drawing specifications such as the one in question. According to Mr. Orr the provision which is questioned by plaintiffs was the usual provision used when advertising for bids on power equipment. It was his opinion with regard to such specifications that, if a specific date of completion were provided by the commission, no bids would be received. In Davies v. Village of Madelia, supra, the court indicated that the controlling principle is that, where the governing body has the power to contract, the means of accomplishing such object should be left to it, as long as the means are such as are customary and reasonable. In the light of Orr's testimony, there seems to be no substantial prejudice to any of the bidders, and the provision seems to be both customary and reasonable. We feel, therefore, that the trial court should be affirmed on this point.

2. The second issue raised by plaintiffs is whether the bid of National contained substantial variations from the specifications which rendered it void and unacceptable. The test of whether a variance is material is whether it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Coller v. City of St. Paul, 223 Minn. 376, 385, 26 N.W.2d 835, 840; City of Bemidji v. Ervin, 204 Minn. 90, 282 N.W. 683; 43 Am.Jur., Public Works and Contracts, § 40. The question seems to resolve itself into whether the evidence gives ample support for the trial court's finding. Sutton v. City of St. Paul, 234 Minn. 263, 269, 48 N.W.2d 436, 440.

Plaintiff claim that the bid of National varies materially and substantially in three different respects, to wit: (a) cylinder liners; (b) time of performance; and (c) time of payment. In all three instances the trial court concluded that any variance was unsubstantial and immaterial.

(a) In connection with the matter of reborable cylinder liners, the specifications stated (section II, paragraph 8):

'The cylinders shall be so constructed as to enable serveral reborings. The cylinder liners, if cylinder liners are used, shall be bored true and smooth, and of sufficient thickness to safely allow for several reborings.'

In a section labeled 'Remarks' in the bid of National, it was stated:

'We wish to advise that we cannot meet the specifications in regard to Par. 8 of Section II. Our cylinder liners are not manufactured to permit reboring since it would be uneconomical to rebore liners and furnish oversize pistons. Ample liner wear is permissible before attention is required.'

With respect to the alleged variation, it appears from the evidence that as a consequence of the...