Hilton Const. Co., Inc. v. Rockdale County Bd. of Ed.

• Decision Date: 28 March 1980
• Docket Number: Nos. 35624,35625,s. 35624
• Citation: 245 Ga. 533,266 S.E.2d 157
• Parties: HILTON CONSTRUCTION COMPANY, INC. v. ROCKDALE COUNTY BOARD OF EDUCATION et al. ROCKDALE COUNTY BOARD OF EDUCATION v. HILTON CONSTRUCTION CO., INC.
• Court: Georgia Supreme Court

Page 157

266 S.E.2d 157

245 Ga. 533

HILTON CONSTRUCTION COMPANY, INC. v. ROCKDALE COUNTY BOARD OF EDUCATION et al.

ROCKDALE COUNTY BOARD OF EDUCATION v. HILTON CONSTRUCTION CO., INC.

Nos. 35624, 35625.

Supreme Court of Georgia.

Argued Nov. 20, 1979.

Decided March 18, 1980.

Rehearing Denied March 28, 1980.

David W. Porter, James M. Saunders, Atlanta, for appellant.

Vaughn & Barksdale, Clarence Vaughn, Conyers, Weekes, Candler, Sams & Weatherly, Gary M. Sams, R. Phillip Shinall, III, Decatur, for appellees.

PER CURIAM.

We adopt the trial court's findings of fact, as follows: "The plaintiff (Hilton Construction Co., Inc.) is a Georgia corporation authorized to do business in the State of Georgia. Plaintiff is also a taxpayer of the State of Georgia. Defendant Joiner is the Superintendent of the Rockdale County School System. Defendants Rogers, Sheppard, Almand, Blankship, Donaldson, Doster and Turner are the members of the Rockdale County Board of Education. Defendant Rockdale County School District is a political subdivision of the State of Georgia.

"In approximately May, 1978, the Rockdale County Board of Education issued invitations to bid on the Vocational Education wing addition to Heritage High School in Rockdale County, Georgia (hereinafter referred to as 'the project'). The project was to be built with a combination of local Rockdale County funds and funds from the State of Georgia through the Georgia Department of Education. The amount of state funds committed on the project is limited to four hundred thousand ($400,000.00) dollars with local funds making up the balance. In order to be eligible for the state funds, the Rockdale Board of Education was required to follow bidding procedures of the Georgia Board of Education, which required that 'the award of the contract will be made to the responsible bidder submitting the lowest acceptable bid.'

"On June 14, 1979, at 3:00 p. m., the bids submitted on the project were opened by the Rockdale Board of Education. Five bids were submitted with the plaintiff's bid being the lowest dollar bid at seven hundred eighteen thousand ($718,000.00) dollars. The second lowest dollar bid was submitted by Cube Construction Co., at seven hundred twenty thousand six hundred ($720,600.00) dollars. After opening the bids, the Superintendent of the Rockdale School System, Don J. Joiner, discussed the various bids and bidders with Willard N. Lamberson, the architect employed by the school system for the project . . . ¹

"At the meeting of the Rockdale Board of Education on that same evening of June 14, 1979, at 7:30 p. m., all the bids were presented to the Board of Education. The architect Lamberson was not present. At the time of the meeting, none of the board members had any knowledge about Hilton. The board members did have some knowledge that Cube Construction Company, the second low bidder, whose bid was $720,600.00, was performing on other construction projects in Rockdale County in a manner satisfactory to the public officials involved with those projects. The board members considered Cube to be 'known' and Hilton to be 'unknown'. Both Hilton's bid and Cube's bid included 300 calendar days of construction time for completion of the project. The completed facility contemplated by the project was needed by the local board in late August, 1980, for use by the Rockdale County School System.

"Solely on the basis of the aforesaid conversation he had had with the project architect (Lamberson) earlier in the day (see footnote 1, above) . . . defendant Joiner recommended to the local board that it reject Hilton's bid and award the contract to Cube, the second low bidder. The local board accepted defendant Joiner's recommendation, rejected Hilton's bid, and accepted Cube's bid. The Board of Education and Cube Construction Co. entered into a contract for construction of the project on June 18, 1979.

"On June 22, 1979, plaintiff sent a letter to the Board of Education protesting the awarding of the contract to Cube Construction Co. and requesting a hearing before the Board of Education. On June 26, 1979, the plaintiff filed with the board a Motion for Reconsideration. ² On July 2, 1979, plaintiff's Motion for Reconsideration was heard by the board, and Mr. Hill, plaintiff's president, and Mr. David W. Porter, plaintiff's attorney, were allowed to present their position to the board. ³

"It should be noted that at the June 14, 1979, meeting, none of the board members had been provided with any information indicating any problems Hilton had on any construction projects it was then currently performing. At no time did the local board make any independent investigation of its own about Hilton. The only additional information provided to the board relative to Hilton was at the subsequent board meeting, in executive session, on July 2, 1979, at which time the board was told by defendant Joiner that Hilton was late on the Georgia Tech project. After obtaining this information on July 2, 1979, the board neither inquired about nor obtained any further information about whether Hilton was in fact late on the Georgia Tech job, nor did they learn or inquire about whether it was Hilton's fault if it was indeed late on the project at Georgia Tech. The board accepted the superintendent's statement at face value.

"At this later meeting on July 2, the board considered plaintiff's Motion for Reconsideration, and after discussing the matter among themselves and with Joiner, decided to uphold their original decision." ⁴

Plaintiff filed this action for mandamus and injunction in the Rockdale County Superior Court on July 6 and obtained a temporary restraining order against the board, valid for 15 days. On July 24 the trial court entered an order overruling the defendant's motion to dismiss based on lack of standing and failure to exhaust administrative remedies. The court ordered that Cube Construction Co. be added as a defendant. The court ordered further that the temporary restraining order previously in effect be continued, conditioned upon plaintiff's posting a $50,000 bond to indemnify the defendants for losses caused by delay in the event plaintiff failed to prevail. This bond was not posted.

On August 24, following an evidentiary hearing, the trial court denied plaintiff's request for mandamus and injunction. Plaintiff appeals and the defendants cross appeal.

1. Plaintiff-appellant contends that the trial court erred in finding that the school board was authorized to reject its low bid. We agree.

The board rejected plaintiff's bid because plaintiff was "unknown" while Cube was "known." The State School Board regulations, sec. 40-3820(3)(L), which have the force and effect of law, Code Ann. § 32-653a, provide that projects using state funds will be awarded "to the responsible bidder submitting the lowest acceptable bid." (No argument is made that plaintiff's bid was not "acceptable" within the meaning of this regulation.) Whatever may be meant by the word "responsible," we are certain that being "unknown" does not show that a bidder is not "responsible." The board was not authorized to reject plaintiff's bid on the basis that plaintiff was "unknown."

The board argues that it was entitled to rely on the investigation performed by its agents. As the board acknowledges, the decision whether to accept or reject the bids was a decision to be made by the board. Here the board merely accepted the superintendent's recommendation to reject plaintiff's bid and to accept Cube's. This decision was not based upon facts reported to the board because ". . . at the June 14, 1979, meeting, none of the board members had been provided with any information indicating any problems Hilton had on any construction projects it was then currently performing." As the trial court also found, at the time plaintiff's bid was rejected ". . . none of the board members had any knowledge about Hilton." The trial court erred in concluding that the board exercised its own judgment in making the decision and that it did not simply accept the superintendent's recommendation. See Lively v. Fulcher, 244 Ga. 771, 262 S.E.2d 93 (1979).

Finally, the information conveyed to the board at its July 2 meeting that plaintiff was late on the Georgia Tech project did not establish that the plaintiff was not responsible. Being late on a project without any finding as to who caused the delay does not show that a bidder was not "responsible." For the reasons stated above we therefore conclude that the school board was not authorized to reject the low bid. This disposes of the issues raised on appeal by the plaintiff-appellant.

2. On cross appeal, the defendants enumerated several additional errors. First, they argue that Hilton does not have standing to challenge the award of the contract to Cube. They do not contend, however, that the competitive bidding procedures promulgated by the State Board of Education and relied on by Hilton were not legally binding on the school board in this case. State Board of Education Regulation, § 40-3820(3)(L); see Op. Atty. Gen. 77-32 (1977). Hilton claims standing as the low bidder to assert a violation of these regulations. We find it clear beyond peradventure that Hilton has a legally protected interest created by state law which gives it standing to assert this violation. See Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970); Funderburg Builders v. Abbeville County Mem. Hosp., 467 F.Supp. 821, 824 (D.S.C.1979). Peeples v. Byrd, 98 Ga. 688, 25 S.E. 677 (1896), relied on by Cube, is inapposite. In that case there was no requirement that the lowest bid be accepted and the court held that a rejected bidder had no standing to challenge the contract...