Rod Cooke Constr. Co. v. Lamar Cnty. Sch. Bd.
| Decision Date | 10 April 2014 |
| Docket Number | No. 2012–CA–00339–COA.,2012–CA–00339–COA. |
| Citation | 135 So.3d 902 |
| Parties | ROD COOKE CONSTRUCTION COMPANY, INC., Appellant v. LAMAR COUNTY SCHOOL BOARD, Appellee. |
| Court | Mississippi Court of Appeals |
OPINION TEXT STARTS HERE
Christopher Solop, attorney for appellant.
David M. Ott, Hattiesburg, Joseph Randle Tullos, Richard D. Norton, attorneys for appellee.
Before LEE, C.J., BARNES and ISHEE, JJ.
BARNES, J., for the Court:
¶ 1. On July 8, 2011, the Lamar County School Board (Board) issued a solicitation for bids for the construction of a new elementary school. Rod Cooke Construction Company (Cooke), a nonresident contractor from Alabama, submitted the lowest bid of $9,232,000. The second lowest bid was submitted by Hanco Corporation (Hanco), a Mississippi resident contractor. Hanco's bid was $9,321,000 ($89,000 more than Cooke's bid).
¶ 2. At the September 28, 2011 Board meeting, the proposed bids for construction of the elementary school were discussed, and the three lowest bids were considered. The minutes from the meeting noted:
Board Counsel provided a narrative summary of the job performance of the two companies, Rod Cooke Construction and Hanco Corporation. Counsel reported that the information provided as a summary was obtained from various sources including contact with contractors, architects, subcontractors[,] and property owners. There were positive comments for both bidders, and the summary of negative comments [is] as follows:
Rod Cooke Construction:
1. A lack of coordination of some projects between the general and subcontractors resulted in delay in completion.
2. Occasional delay in paying subcontractors timely has created negative attitudes and problems with subcontractors.
3. Dissatisfaction with the workmanship from the perspective of a few owners.
4. Delay in completing time sensitive projects.
Hanco:
1. Delay in completing a project-not a time sensitive project.
Upon hearing the information from [Board Counsel], Dr. Burnett recommended that the Board proceed with awarding the bid and that they accept the Hanco Corporation bid.
Buddy Morris then made a motion to award the bid to Hanco [Corporation] based on the preference to resident contractors and based on Hanco [Corporation] being the “lowest and best bid” as well as “substantially equal” in cost to Rod Cooke Construction.
Thus, the Board awarded the job to the second lowest bidder, Hanco.
¶ 3. On September 29, 2011, Cooke filed a protest; however, the Board did not reconsider its decision to reject Cooke's bid. Board counsel sent a letter to Cooke on October 6, 2011, outlining the Board's reasons for awarding the bid to Hanco. Cooke filed a notice of appeal with the Lamar County Circuit Court on October 10, 2011; Cooke's bill of exceptions, signed by the Board president, was filed on October11, 2011. A hearing was held on February 6, 2012, and the circuit court affirmed the Board's decision to award the job to Hanco.
¶ 4. On appeal, we find that the Board's award of the contract to Hanco was not arbitrary or capricious, and we uphold the circuit court's judgment.
STANDARD OF REVIEW
¶ 5. Our review of a municipal board's actions is limited. Precision Commc'ns, Inc. v. Hinds Cnty., 74 So.3d 366, 369 (¶ 9) (Miss.Ct.App.2011) (citing Nelson v. City of Horn Lake ex. rel. Bd. of Aldermen, 968 So.2d 938, 942 (¶ 10) (Miss.2007)).
[W]e will not set aside the action of the governing body of a municipality unless such action is clearly shown to be arbitrary, capricious, or discriminatory or is illegal or without substantial evidentiary basis. An act is arbitrary and capricious when it is done at pleasure, without reasoned judgment or with disregard for the surrounding facts and circumstances. Substantial evidence is such relevant evidence as reasonable minds might accept as adequate to support a conclusion or more than a mere scintilla of evidence.
Id. (internal citations and quotation marks omitted). Questions of law and issues of statutory interpretation, however, are reviewed de novo. Id.
DISCUSSION
¶ 6. Cooke contends that language in the “Instructions to Bidders” required the Board to accept the lowest bid offer and that the bid documents should have reflected that past performance would be considered in awarding the bid. The “Instructions for Bidders” stated:
Award of Contract: Contract will be awarded on the basis of the low base bid or low combination of base bid and those alternates if any which produce a total within available funds. The Owner reserves the right to waive irregularities and to reject any and all bids.
However, the instructions also noted: “ Disqualification of Bidder: ‘The Owner reserves the right to award to other than the low bidder when, in the Owner's judgment, it is in his best interest to do so.’ ”
¶ 7. Mississippi Code Annotated section 31–7–13(d)(i) (Supp.2012), which governs the bidding process for awarding public contracts, states:
Purchases may be made from the lowest and best bidder.... If any governing authority accepts a bid other than the lowest bid actually submitted, it shall place on its minutes detailed calculations and narrative summary showing that the accepted bid was determined to be the lowest and best bid, including the dollar amount of the accepted bid and the dollar amount of the lowest bid.
(Emphasis added). “It is implicit in this language that a governing body cannot be compelled to accept a bid simply because it is the lowest, and that other factors must enter the analysis.” Billy E. Burnett, Inc. v. Pontotoc Cnty. Bd. of Supervisors, 940 So.2d 241, 243 (¶ 6) (Miss Ct.App.2006). Even prior to the enactment of section 31–7–13, the Mississippi Supreme Court held: “The ‘lowest’ bid may be determined by monetary standards with the dollar as the unit, but this is not so in determining the ‘best’ bid, or the ‘responsible’ bid; that question involves a number of other factorsand elements.” Parker Bros. v. Crawford, 219 Miss. 199, 208, 68 So.2d 281, 284 (1953). Thus, an administrative agency is not required to accept the lowest bid, without any regard as to whether it is also the “best” bid.
¶ 8. The Board complied with the statutory requirements of section 31–7–13(d)(i). Included in the record is a “narrative summary” detailing the basis for the Board's award of the contract to Hanco. Also included are the detailed calculations of the two bids. The bid documents clearly state that the Board could award a contract to a bidder that was not the lowest bidder if the Board determined that it was “best” to do so. Accordingly, we find Cooke's claim that the bid documents required the Board to accept the lowest bid without merit.1
¶ 9. Cooke also argues that past performance was not a criterion specified in the solicitation for bids and that the Board's investigation into Cooke's past performance with other entities was not “fair and objective” and was “the epitome of arbitrary and capricious conduct by a public body.”
¶ 10. Cooke maintains that prior payment disputes with suppliers should not have been taken into consideration, as its suppliers were protected by a payment bond. However, the supreme court rejected this argument in Nelson, 968 So.2d at 946 (¶ 33):
This Court has held that where bond is given under Mississippi Code Annotated Section 85–7–185 (Rev.1999), the bond serves in lieu of any equity or trust in favor of materialmen and laborers. See Dickson v. United States Fid. & Guar. Co., 150 Miss. 864, 117 So. 245, 248 (1928). Even though Section 85–7–185 affords protection for “persons furnishing labor or material,” neither this provision nor Mississippi case law prohibits a governing authority from considering a contractor's prior disputes with creditors. Miss.Code Ann. § 85–7–185 (Rev.1999). The aggregate of such disputes may bear upon the contractor's honesty, integrity, business judgment, conduct under previous contracts, and pecuniary ability—all of which have been held to be appropriate considerations in awarding a public contract. See Parker Bros., 68 So.2d at 284–85.
Furthermore, not all of the complaints concerned payment issues; some alleged deficient workmanship and project-management problems. The project architect's letter to the Board reveals that he investigated both Cooke and Hanco in an equal manner, contacting seven prior references for each. We note that there was also some positive feedback concerning Cooke's performance included in the letter.
¶ 11. As we have already noted, Mississippi's appellate courts have consistently stated that the law permits a governing authority to consider factors other than price in determining who is the lowest and best bidder. In Burnett, 940 So.2d at 243 (¶ 6), this Court stated:
The Mississippi Supreme Court has recognized that public authorities may, in making a determination of whether a bid is the lowest and best, take into consideration factors such as the bidder's honesty and integrity, the bidder's skill and business judgment, the bidder's experience and facilities for carrying out the contract, the bidder's conduct under previous contracts, and the quality of work previously done by the bidder.
(Emphasis added) (citing Parker Bros., 219 Miss. at 209, 68 So.2d at 285). One year later, the supreme court reiterated in Nelson:
All matters that relate to a bidder's prompt and efficient performance of the contract are material to a bidder's “responsibility,” including the bidder's honesty and integrity, skill and business judgment, experience and facilities for performing the contract, conduct under previous contracts, and the quality of previous work.
Nelson, 968 So.2d at 943 (¶ 16) (citing Parker Bros., 219 Miss. at 208–09, 68 So.2d at 284–85).
¶ 12. In the present case, the Board reviewed the bids...
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