Muncy Area School Dist. v. Gardner

• Decision Date: 29 August 1985
• Parties: , 27 Ed. Law Rep. 518 MUNCY AREA SCHOOL DISTRICT v. John M. GARDNER, et al., John M. Gardner and United States Fidelity and Guarant. Company, Appellants. 553 C.D. 1984
• Court: Pennsylvania Commonwealth Court

Page 683

497 A.2d 683

91 Pa.Cmwlth. 406, 27 Ed. Law Rep. 518

MUNCY AREA SCHOOL DISTRICT v. John M. GARDNER, et al., John M. Gardner and United States

Fidelity and Guarant. Company, Appellants.

553 C.D. 1984

Commonwealth Court of Pennsylvania.

Argued Jan. 28, 1985.

Decided Aug. 29, 1985.

Jonathan E. Butterfield, Liebert, Short, Fitzpatrick & Lavin, Williamsport, for appellants.

Robert A. Eckenrode, McCormick, Reeder, Nichols, Sarno, Bahl & Knecht, Williamsport, for Muncy Area School Dist.

Michael J. Casale, Jr., Williamsport, for Basco Assoc.

Before COLINS, J., and BARBIERI and KALISH, Senior Judges.

BARBIERI, Senior Judge.

John M. Gardner (Gardner) and United States Fidelity and Guaranty Company (USF & G) (hereinafter referred to collectively as Appellants) appeal here the order of the Lycoming County Court of Common Pleas which granted plaintiff Muncy Area School District's (District) motion for summary judgment in favor of the District and against Appellants, and Basco Associates' (Basco) motion for summary judgment thereby releasing Basco, joined by Gardner and USF & G as an additional defendant, from the lawsuit.

The District, contemplating alterations and an addition (Section A) to an existing elementary school hired Basco, an architectural firm, to act as its agent in the preparation of specifications and instructions for the plumbing work involved in the proposed alterations and addition. The instructions to prospective bidders, including Gardner, requested the submission of a bid for the total combined cost of the plumbing work on the alterations and the Section A addition. The bids were to be submitted by 7:30 p.m. on November 17, 1981. On that day a representative of Basco, acting as agent for the District, contacted Gardner by telephone to inform him that his bid proposal would be unacceptable unless, in addition to his base bid, Gardner provided a "deduct" representing the amount Gardner estimated was the cost of plumbing work on the addition which the District could deduct from the base bid to arrive at a figure for the plumbing work on the alterations only. The District was contemplating the deletion of the Section A addition.

Gardner submitted a base bid of $35,000 and a deduct figure of $30,680; he submitted a bid bond in the amount of $3,500, surety of which was the USF & G. On December 16, 1981, Gardner was notified that the District intended to accept his base bid and the deduct he had provided, for a balance bid price for the proposed alterations of $4,320. In a letter dated December 18, 1981, addressed to Basco, Gardner attempted to submit a new breakdown for the plumbing work on the alterations, indicating an estimate of $13,324 as the cost of the work, rather than $4,320. On December 21, 1981, the District accepted Gardner's bid with the deduct. After Gardner informed the District that he could not perform the work for $4,320, the District, on January 14, 1982, awarded the plumbing contract to the next highest bidder at $13,650.

The District filed a civil action in assumpsit in Lycoming County Court of Common Pleas against Gardner and USF & G seeking damages against Gardner and against USF & G, guarantor of Gardner's $3,500 bid bond. Gardner and USF & G joined Basco seeking indemnification for any liability incurred and for additional damages. The trial court entered summary judgment in favor of the District, and against Gardner and USF & G and dismissed all claims against Basco.

We have jurisdiction of this appeal from the grant of summary judgment in favor of the District pursuant to Section 762 of the Judicial Code, 42 Pa.C.S. § 762, since Section 751 of the Public School Code of 1949, Act of March 10, 1949, P.L. 30, as amended, 24 P.S. § 7-751, regulating construction work to be done under contract let on bids, is drawn into question. Jurisdiction of the dispute between Appellants and Basco is perfected pursuant to Section 704(a) of the Judicial Code, 42 Pa.C.S. § 704(a), ¹ and Pa.R.A.P. 741(a). ²

Our scope of review when considering a grant of summary judgment is as follows:

It is well-established that we can sustain a summary judgment only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The record must be examined in the light most favorable to the non-moving party. The court must accept as true all well-pleaded facts in the plaintiff's ... pleadings, giving the plaintiff ... the benefit of all reasonable inferences to be drawn therefrom. Finally, a summary judgment should be granted only when the case is clear and free from doubt. Moreover, in passing upon a motion for summary judgment, it is no part of our function to decide issues of fact but solely to determine whether there is an issue of fact to be tried and all doubts as to the existence of a genuine issue as to a material fact must be resolved against the party moving for summary judgment. (Emphasis in original; citations omitted.)

Bollinger v. Palmerton Area Communities Endeavor, Inc., 241 Pa.Superior Ct. 341, 350, 361 A.2d 676, 680 (1976).

Gardner and USF & G argue on appeal that the summary judgment granted by the common pleas court was grounded on a finding that the change in instructions to bidders, i.e. the request for a deduct, was neither material nor substantial. ³ Appellants argue that the question of the materiality of the change in instructions raised a factual dispute which is more properly resolved by a jury as fact-finder. Thus, Appellants assert, the trial court usurped the function of the jury and the grant of summary judgment was in error.

Appellants argue that, were the fact-finder given the opportunity to resolve the factual dispute raised, it would have resolved the question of materiality in favor of Gardner and USF & G. Citing Page v. King, 285 Pa. 153, 131 A. 707 (1926) for the proposition that a contract cannot lawfully be awarded when unadvertised material changes are made in the specifications, Appellants assert that because there was not public notice of the request for the deduct figure, even though Gardner did not attempt to withdraw his bid within the statutorily required two days, ⁴ there is no valid enforceable contract between Gardner and the District, and the District is not entitled to the $3,500 bid bond.

The law in the area of public contracts is well-established. The submission of a bid for public work in response to an invitation constitutes an offer. A good and binding contract is formed when the public body, acting by responsible officers, accepts a written bid. A public contract has its inception in the award as distinguished from the formal signing of the contract, and is binding from that time on. It is the contractor, not the governmental unit, which acts at its peril in submitting bids and entering into a contract. As a general rule, one who filed a bid pursuant to a competitive bidding statute has no right to withdraw the bid, the reason being that the benefits accruing to one submitting a bid under the public bidding statutes are a sufficient consideration to render a bid submitted irrevocable. A statute may permit a bidder who makes an honest and good faith mistake of calculation in estimating his bid to withdraw the bid. Relief from mistakes in bids on public work is generally refused for errors in judgment. ⁵

The facts in the instant case are not in dispute. The District advertised for bids on plumbing work. Gardner obtained a copy of the specifications and instructions and prepared his bid. Notified at the last moment by telephone that a deduct was required, Gardner nevertheless complied with the request and submitted two figures, a bid on the total project as originally proposed, and a bid on the plumbing work for the alterations only, constituting separate offers either of which the school district was empowered to accept which acceptance would create a valid enforceable contract. Indeed, the District, when it determined to proceed with the alterations only, was required to accept Gardner's bid. ⁶ When Gardner perceived his error, which he concedes was a judgment error and not a mistake in calculation, he attempted to resubmit his bid in a different amount; he did not attempt to withdraw his bid, however. Thus, his offer stood, it was accepted, and a contract was made.

§ 1602 Withdrawal of bids; grounds; notice; restrictions; regulations

A bidder to any construction contract for the construction, reconstruction, demolition, alteration or repair of any public building or other public improvement or for the provision of services to or lease of real or personal property whether by lease or concession from such contracting body, excepting highway work, may withdraw his bid from consideration after the bid opening without forfeiture of the certified check, bank cashier's check, surety bid bond or other security filed with the bid if the price bid was submitted in good faith, and the bidder submits credible evidence that the reason for the price bid being substantially lower was a clerical mistake as opposed to a judgment mistake, and was actually due to an unintentional and substantial arithmetical error or an unintentional omission of a substantial quantity of work, labor, material or services made directly in the compilation of the bid; provided, (i) notice of a claim of the right to withdraw such bid is made in writing with the contracting body within two business days after the opening of bids; and (ii) the withdrawal of the bid would not result in the awarding of the contract on another bid of the same bidder, his partner, or to a corporation or business venture owned by or in which he has a substantial interest. No bidder who is permitted to withdraw a bid shall supply any material or labor to, or perform any subcontract or other work...