State Bd. of Control v. Clutter Const. Corp., D-149
| Decision Date | 22 March 1962 |
| Docket Number | No. D-149,D-149 |
| Parties | The STATE BOARD OF CONTROL, a public corporation of the State of Fiorida, Appellant, v. CLUTTER CONSTRUCTION CORPORATION, a Florida corporation, Appellee. |
| Court | Florida District Court of Appeals |
Richard W. Ervin, Atty. Gen., and Joseph C. Jacobs, Asst. Atty. Gen., for appellant.
Ausley, Ausley, McMullen, O'Bryan, Michaels & McGehee, Tallahassee, for appellee.
Appellant, The State Board of Control, has appealed from an adverse final decree permitting appellee, Clutter Construction Corporation, to withdraw an erroneous bid it had submitted for the construction of a public building, enjoining the Board from accepting the bid, and ordering return to Clutter of its $80,000 bid check provided Clutter complied with certain conditions set forth in the decree. The facts surrounding the transaction which form the basis of this suit are not in conflict. The principal contention of the Board is that the chancellor drew erroneous inferences from the facts, and in reaching his conclusion applied erroneous principles of law.
The Board publicly invited bids for the construction of a classroom building to be located at the University of South Florida in Tampa. The invitation required each bidder to file with his bid a good faith check in the sum of $80,000. Clutter is a general contractor engaged in the business of constructing buildings of the type called for in the Board's invitation. It prepared at its Miami office an estimate of the costs which would be incurred by it as prime contractor in performing that part of the contract which it would undertake to complete with its own organization. This estimate constituted less than twenty-five percent of the total contract price. Two employees of the company then traveled to Tampa, arriving there the day before the bids were to be received and opened. For a period of about five hours prior to filing its bid with the Board, Clutter's employees were busily engaged in receiving from local sub-contractors bids for performing the remaining portion of the total contract. The bids received from the several sub-contractors on each phase of the work were tabulated, and the lowest bids entered on a work sheet used by Clutter's agents in making up the total contract price. The low bids of the several sub-contractors were added on a computing machine which had been brought to Tampa for use in preparing the bid it intended to submit. In the process of adding the subcontractors' bids, an error occurred which resulted in a total figure of $100,000 less than the true total of all bids received from the sub-contractors. The computing machine was of a type in which no paper tape was utilized, the total of any column of figures merely appearing in the appropriate place on the machine after the addition was completed. This machine had a history of malfunction, but had been checked and found to be in proper operating condition before being used for the purpose indicated above. A check of the machine made shortly thereafter revealed that it was not operating properly. The chancellor found from the evidence that the error which resulted in Clutter's bid being $100,000 less than the true total resulted either from a malfunction of the machine itself, or from an error by Clutter's employee in manipulating it during the process of adding the sub-contractors' bids and arriving at the total which was utilized in making up its total bid.
After competing its bid form, the base contract price for which Clutter proposed to perform the contract was $1,367,000, a sum $100,000 less than the total amount which it intended to bid. In this condition Clutter's proposal was promptly transmitted to the Board's office where it was filed just prior to the opening of bids for the contract in question. When Clutter's bid, together with the bids submitted by the other contractors,
After completing its bid form, the base contract price contained in Clutter's bid was $182,000 less than the next lowest bid. Clutter's employees who were then present immediately apprehended that its bid was erroneous. Clutter promptly communicated with the Board requesting time to check the computations set forth in its bid for possible personnel or machine error, and the next day discussed with the Board's architect the desirability of meeting for the purpose of discussing this situation. Clutter's bid was not immediately accepted for the reason that the next meeting of the Board was not scheduled to take place until about three weeks later. After discovering the error which occurred in computing the total amount of its bid, Clutter notified the Board and requested permission to withdraw its bid and have returned to it its $80,000 bid check. Upon advice of counsel the Board refused to comply with Clutter's request, whereupon this suit was instituted. Upon consideration of the evidence adduced before him, the chancellor rendered a decree and supporting memorandum opinion from which this appeal is taken.
In his opinion and decree the chancellor found the facts to be substantially as set forth above. In addition, it was found that this suit was instituted by Clutter before its bid was formally accepted by the Board. It was further found that the error made by Clutter in the computation of its bid was an honest mistake, and although it resulted from a negligent act, such act did not amount to gross negligence. The problem confronting the chancellor, as recited in his opinion, was a duty to relieve against an honest mistake of one party to avoid an unjust enrichment to another, but in so doing not to act unwisely in the preservation of the principles basic in competitive bidding, even though the Board in this case was not bound by any competitive bidding statute, nor was it compelled to accept the lowest competitive bid in awarding contracts such as the one here involved. The chancellor held that although one who files a sealed bid with a public body which has called for bids for public construction, and has deposited a check or bond as security for the performance of his bid if it is accepted, has no legal right to withdraw his bid before it is formally accepted or rejected, such bidder may seek relief in equity upon the following conditions: (a) the bidder acted in good faith in submitting the bid; (b) in preparing the bid there was an error of such magnitude that enforcement of the bid would work severe hardship upon the bidder; (c) the error was not a result of gross negligence or wilful inattention; (d) the error was discovered and communicated to the Board before the bid was accepted. The chancellor found that upon each of these facts being established by clear and convincing proof, a court of equity may authorize rescission of the bid subject, of course, to the rule that he who seeks equity must do equity. It was the chancellor's conclusion that the proof submitted by Clutter satisfied the several conditions set forth above thereby entitling it to equitable relief. He further found that the doing of equity by Clutter in this case required reimbursement to the State for such loss as it may have sustained by reason of the error. In conclusion it was decreed that Clutter should be permitted to withdraw its bid and to receive the $80,000 check deposited therewith upon condition that it pay the Board a sum equibalent to six per cent per annum on $1,467,000 (the contract price which Clutter intended to bid) for a period of forty-five days, as reimbursement for the loss sustained by the Board occasioned by delays resulting from the withdrawal of such bid; and upon the further condition that if all bids theretofore received by the Board were rejected and new bids called for, that Clutter will enter a bid of not more than its original intended price of $1,467,000. The decree held that the Board has the right, subject to statutory conditions precedent as to the availability of funds, to...
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