Schindler Elevator Corp. v. Metropolitan Development Com'n
| Decision Date | 20 October 1994 |
| Docket Number | No. 49A05-9310-CV-372,49A05-9310-CV-372 |
| Citation | 641 N.E.2d 653 |
| Parties | SCHINDLER ELEVATOR CORPORATION and Construction Concepts, Inc., Appellants-Plaintiffs, v. METROPOLITAN DEVELOPMENT COMMISSION, Consolidated City of Indianapolis and Montgomery Elevator Co., Appellees-Defendants. |
| Court | Indiana Appellate Court |
Schindler Elevator Corporation and Construction Concepts, Inc. (collectively "Schindler") appeal from the trial court's adverse judgment in Schindler's suit against the Metropolitan Development Commission ("the Commission"), the Consolidated City of Indianapolis ("the City"), and Montgomery Elevator Company ("Montgomery"). Schindler initiated this action after the Commission awarded the contract for the Circle Centre Development Project, Mall Vertical Transportation Project ("the Project") to Montgomery. We affirm.
Schindler raises two issues on appeal, only one of which we need to address. Restated, that issue is whether the trial court erred in finding that the Commission complied with Indiana's public bidding laws in awarding the Project contract to Montgomery as the lowest responsible and responsive bidder.
Schindler and Montgomery are contractors in the business of manufacturing, supplying, installing, and maintaining elevators and escalators. 1 DeMars Program Management ("DeMars") was engaged by the City to assist in various aspects of the Circle Centre Mall project, and to compile, develop, and publish the Project's bid specifications, as well as to evaluate bids. The City, through the Department of Metropolitan Development ("DMD"), published its contract documents and specifications for the Project ("the Project Manual"). The Project Manual informed bidders that a pre-bid meeting would be held on April 27, 1993, and that bids for the Project would be opened on May 6, 1993. On April 27th, representatives of Schindler, Montgomery, Otis Elevator Company ("Otis"), and others attended the pre-bid meeting. Subsequently, Schindler, Montgomery, and Otis each submitted a bid on the Project to the City's Central Purchasing Division ("Central Purchasing"). On May 6th, the three bids were opened publicly and the base bid amount listed by each bidder was read aloud: Schindler, $3,338,000; Otis, $3,161,443; Montgomery, $2,399,000. Central Purchasing, the City's Division of Equal Opportunity ("DEO"), and DeMars reviewed each bid. Based on these evaluations, Montgomery was determined to be the apparent lowest responsible and responsive bidder.
On May 11, 1993, Schindler sent a letter to the DMD's project manager for the Circle Centre Mall in which Schindler argued that the bids from Montgomery and Otis were not responsive and protested any award to Montgomery, the apparent low bidder. On June 2, 1993, the Commission adopted a resolution awarding the contract for the Project to Montgomery. On June 11, 1993, Schindler sent a letter to the Commission in which Schindler protested the award of the Project contract to Montgomery. On June 16, 1993, Schindler's counsel sent a third protest letter to the Commission and the City's Legal Department. On June 17, 1993, the purchase order for the contract and a notice to proceed were issued.
Thereafter, on June 30, 1993, Schindler filed its five-count complaint seeking damages and injunctive relief. Schindler's complaint sought relief based on: the alleged violation of Indiana's public bidding laws; breach of contract; promissory estoppel; a taxpayer's public lawsuit seeking redress for the Commission and City's alleged favoritism, bias, arbitrary and capricious conduct, fraud, and constructive fraud; and unlawful scheme, contract, or combination in restraint of trade and preventing competition. The Commission and the City filed their answer on July 30, 1993. Montgomery filed its answer on August 2, 1993, along with a counterclaim for reasonable expenses and attorney's fees incurred in defending the suit. Schindler filed an amended complaint on August 12, 1993.
The trial on the merits was advanced and consolidated with the hearing on Schindler's request for a preliminary injunction. The Commission and the City filed a request for findings of fact and conclusions thereon pursuant to Ind. Trial Rule 52, and a bench trial was conducted August 17-19, 1993. At the close of Schindler's case, the defendants moved for involuntary dismissal pursuant to T.R. 41(B). The trial court granted the defendants' motions for involuntary dismissal as to counts II (breach of contract) and V (unlawful restraint of trade) of Schindler's amended complaint. On September 14, 1993, the trial court entered its findings of fact, conclusions thereon, and judgment in favor of defendants on the remaining counts in Schindler's amended complaint, and in favor of Schindler on Montgomery's counterclaim. Additional facts will be provided as required for discussion of the issues presented on appeal. 2
The issue on appeal is whether the trial court erred in finding that the Commission complied with Indiana's public bidding laws in awarding the Project contract to Montgomery as the lowest responsible and responsive bidder.
Schindler contends that Indiana's competitive bidding laws were violated because Montgomery's bid was not responsive as required by I.C. § 36-1-12-4(b)(8)(A) and the City unlawfully allowed Montgomery to supplement its bid after the bid opening. Schindler alleges that although Montgomery's bid reflected the lowest bid amount, it contained material variances with regard to requirements for minority business enterprise/women business enterprise ("MBE/WBE") participation, the submission of an affirmative action plan, the inclusion of a bid bond in an amount equalling at least five percent of the bid amount, and the submission of a properly completed "Invitation to Bid" form. We will address each of these allegations in turn.
Because we are reviewing a decision of public body vested with the power to award contracts for public work, we are guided by the following standard of review:
Indiana Code § 36-1-12-4 sets forth certain procedures to be followed in awarding public work contracts. It provides, in pertinent part:
"(8) [T]he board shall:
(A) Award the contract for public work or improvements to the lowest responsible and responsive bidder; or
(B) Reject all bids submitted.
* * * * * *
(10) In determining whether a bidder is responsive, the board may consider the following factors:
(A) Whether the bidder has submitted a bid or quote that conforms in all material respects to the specifications.
(B) Whether the bidder has submitted a bid that complies specifically with the invitation to bid and the instructions to bidders.
(C) Whether the bidder has complied with all applicable statutes, ordinances, resolutions, or rules pertaining to the award of a public contract."
I.C. §§ 36-1-12-4(8) & (10). 3 The purpose behind competitive bidding statutes is "to safeguard the public against fraud, favoritism, graft, extravagance, improvidence and corruption, and to insure honest competition for the best work or supplies at the lowest reasonable cost." School City of Gary v. Continental Electric Co. (1971), 149 Ind.App. 416, 273 N.E.2d 293, 296.
In order for a bid on a public work contract to be responsive, the bid must conform substantially to those specifications set forth in the invitation to bid. Bowen Engineering Corp., supra, 557 N.E.2d at 1364. A minor variance in a bid will not render the bid invalid. Id. A material variance, however, requires that the awarding body reject the bid as unresponsive. Id. A material variance has been defined as a variance which "affords one bidder a substantial advantage not available to other bidders [and which] destroys the competitive character of the bidding process...." Id.
Schindler contends first that Montgomery's bid was unresponsive because Montgomery's bid failed to meet specified goals for MBE/WBE participation or to demonstrate a good faith effort toward achieving such goals. In response, the appellees argue that the trial court correctly determined that Montgomery had satisfied the bidding requirements by demonstrating its good faith effort. We agree with the appellees.
The Project Manual informed bidders that the Project was subject to MBE/WBE participation goals and that bids must include a completed schedule of MBE/WBE participation listing the MBE/WBE contractors that the bidder intended to use on the Project. Goals for MBE/WBE participation were set at 13% and 2% respectively. The instructions to bidders defined "goal" as "a project specific numerically...
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