Premier Elec. Const. Co. v. Board of Ed. of City of Chicago

• Decision Date: 10 April 1979
• Docket Number: No. 77-1214,77-1214
• Citation: 70 Ill.App.3d 866,388 N.E.2d 1088,27 Ill.Dec. 125
• Parties: , 27 Ill.Dec. 125 PREMIER ELECTRICAL CONSTRUCTION COMPANY, Plaintiff-Appellant, v. BOARD OF EDUCATION OF the CITY OF CHICAGO, Defendant-Appellee.
• Court: United States Appellate Court of Illinois

Page 1088

388 N.E.2d 1088

70 Ill.App.3d 866, 27 Ill.Dec. 125

PREMIER ELECTRICAL CONSTRUCTION COMPANY, Plaintiff-Appellant, v. BOARD OF EDUCATION OF the CITY OF CHICAGO, Defendant-Appellee.

No. 77-1214.

Appellate Court of Illinois, First District, Second Division.

April 10, 1979.

Patrick Mazza & Associates, Chicago, for plaintiff-appellant.

Michael J. Murray, Chicago (Richard E. Girard, Edward C. Peterson, Chicago, of counsel), for defendant-appellee.

DOWNING, Justice:

This is an appeal from an order of the circuit court of Cook County denying damages to Premier Electrical Construction Company in connection with a bid it submitted to perform electrical work at a school owned and operated by the Board of Education of the City of Chicago.

On appeal Premier Electrical Construction Company (hereinafter Premier) contends that a contract existed between itself and the Board of Education; that the Board of Education breached the contract; and that as a result of the breach, it is entitled to recover damages.

The record indicates the following sequence of events occurred. The Board of Education of the City of Chicago (hereinafter the Board) solicited bids for electrical work to be done at Onahan Elementary School in Chicago. In accordance with certain Board rules and regulations, each bidder was required to submit an Affirmative Action Pre-Award Survey (hereinafter survey). The survey consisted of six pages requesting information about the bidder's employment practices.

Stanley C. Wielgos, vice-president of Premier, testified that due to a prior experience in connection with another bid where Premier's bid was returned for failure to include a survey, company procedures were instituted whereby two employees would witness that all necessary documents were included in the bid envelope. Wielgos stated that on June 5, 1975, he personally put a bid proposal, bid bond, and a complete survey in the bid envelope which was deposited with the Board by one of the two employees witnessing his actions.

On June 6, 1975, in accordance with statutory procedure (Ill.Rev.Stat.1975, ch. 122, par. 10-20.21), all bids submitted on the Onahan project were read aloud and recorded. Joseph Brenner, administrative assistant to the director of the Bureau of Architecture of the Board, testified that it was his job to determine the low bidder and whether the necessary documents were submitted with the bid. He stated that he received Premier's bid along with its survey but did not actually count the number of pages included in the survey. He explained that after the low bid is determined, it is sent to the Technical Review Board which checks to see whether specifications have been met and the bid is within the budget. If the bid is approved by the Technical Review Board, Brenner then forwards the survey to Louis J. Barnes, director of the Equal Employment Opportunity Program, for approval.

Premier received the following unsigned form letter dated June 11, 1975:

"Gentlemen:

Bids for the Electrical contract on the Onahan Elementary School were opened by the Board of Education on June 6, 1975.

Pending final approval by the Board of Education that your firm is in compliance with all applicable board policies and programs, it is anticipated that this contract will be awarded to you via Board Report at the June 25, 1975 Board Meeting."

Barnes testified to receiving Premier's survey on June 9, 1975. He noticed that the first four pages of the document were missing. He received only pages five and six plus a statement regarding Premier's affirmative action policy. He sent a memo to the Bureau of Architecture indicating that Premier's program was not approved due to its failure to include a work force inventory which was page three of the survey.

Barnes explained that in such a situation, the office of origin, in this case the Bureau of Architecture, decides whether to have the affirmative action program of the next lowest bidder evaluated, or to discard all bids and conduct a rebid, or to grant a waiver of the affirmative action program requirements. The office of origin notifies the bidder of the disapproval. A disqualified bidder can seek review by writing to the general superintendent or the office of origin. According to Barnes, a bidder is usually told of this procedure verbally, and there is no guarantee that a review will be given.

On June 16, 1975, Premier was notified that its survey was not approved because a work force inventory was not included. Wielgos sent a letter dated June 17, 1975, to the deputy superintendent of the Board, Manford Byrd, Jr., stating that Premier had submitted the inventory with its bid, enclosed a copy of its survey, and requested that it be reviewed. After receiving this letter, Byrd testified that he asked Barnes for comments.

On July 9, 1975, Barnes sent Byrd a written response stating that he could not answer Premier's letter because when he received its survey the first four pages were missing, and he had no way of knowing if Premier's contention that it submitted a complete survey was true.

Barnes testified that in formal competitive bidding, he cannot solicit information to amend affirmative action documents. He stated that if he finds obvious mistakes, omissions, or typographical errors in the survey, he seeks verification from the bidder and corrections are allowed. He also stated that verification of figures is considered a minor irregularity and is allowed provided the program as originally submitted was in substantial compliance. When handling such situations, Barnes said that he must use his discretion and judgment; that there was nothing in the guidelines which would allow a bidder in a formal competitive bid to submit additional information, supplement or modify information on its initial survey; and that he had no practice of communicating with a bidder when pages were omitted from the survey.

Barnes also testified that when a survey is sent to him, a file is made up and information as to the make-up of the bidder's work force is summarized on the inside cover of the file. Premier's file included a notation "in compliance" dated June 9, 1975, which Barnes said indicated the survey being considered at that time was acceptable. ¹ Barnes stated that surveys submitted by Premier in February, April, and August of 1975 for different contracts had been approved, but that this had no effect on whether the survey in question was acceptable.

Wielgos testified that on July 1, 1975, he was told by a Board employee to send a letter to Frank Mattox who was in charge of the Onahan project. Wielgos wrote a letter dated July 2, 1975, to Mattox explaining the situation and enclosed a copy of the survey requesting it be reviewed and its disapproval reversed.

Receiving no response, Wielgos stated that he sent another letter dated August 21, 1975, to Mattox stating he had not heard a decision and enclosed a sworn statement by one of Premier's employees to the effect that he witnessed the inclusion of a complete survey in the bid envelope. Wielgos testified that in September 1975, the Board asked Premier to extend the time of its bid in accordance with the instructions to bidders. Premier agreed and this agreement was reflected in a letter dated September 12, 1975.

Barnes stated that he received a copy of a letter dated September 9, 1975, addressed to Byrd from Saul Samuels, the director of the Bureau of Architecture, requesting that Premier be allowed to submit its complete survey for review. Byrd's signature appeared at the bottom of the letter under the word "approved." Barnes stated that he did not take any action upon receipt of the letter because Byrd had not directed him to evaluate the documents submitted and he was not sure what Byrd was approving.

Byrd testified that he approved Samuels' letter but explained that there was a reorganization of the Board in the fall of 1975, after which time he no longer dealt with the matter.

In December 1975, the Board rejected all bids submitted on the Onahan project and readvertised for new bids. The advertisement for new bids stated that there had been a revision in the plans and specifications. In January 1976, Premier submitted its second bid which was the same as its first bid since Premier found no change in the specifications. The Board admitted that in fact no change in the specifications had been made. Premier was not the lowest bidder and was not awarded the contract on the second bid.

On February 26, 1976, Premier filed a complaint requesting an emergency stay order be entered until a hearing could be held on the matter; that the Board be restrained from entering into any contract with anyone other than Premier; and that the court issue a writ of mandamus requiring the Board to award the contract to Premier.

On May 12, 1976, joint contractors involved in the second bidding, filed a petition for a temporary restraining order and sought the award of the same contract. ² By court order these cases were consolidated. After a full hearing, the trial court ordered the contract be awarded to the joint contractors and not to Premier. No appeal was taken from that judgment. Thereafter, Premier was allowed to amend its complaint to the proof presented at the hearing. Premier sought judgment against the Board for damages sustained as a result of the alleged wrongful rejection of its bid.

By court order of April 15, 1977, the denial of Premier's request for damages became final. Premier filed a timely notice of appeal from the April 15, 1977 judgment, seeking its reversal or in the alternative a new trial.

I.

In order to recover damages for breach of contract, Premier must first establish the existence of a valid contract. In an attempt to do so, Premier contends that the Board's letter of June 11, 1975 was intended to be an acceptance of Premier's bid, subject only to the Board's approval of Premier's affirmative action program.

The letter...