State v. Weisz & Sons, Inc.

• Decision Date: 21 January 1986
• Docket Number: No. 85-210,85-210
• Citation: 713 P.2d 176
• Parties: The STATE of Wyoming; Sidney C. Werner, Director, Department of Administration and Fiscal Control; Robert Skyles, Administrator, Purchasing and Property Control; Randolph Wood, Director, Department of Environmental Quality; Roger Shaffer, Administrator, Land Quality Division, Appellants (Defendants), v. WEISZ & SONS, INC., Appellee (Plaintiff), Eby Mine Services, Inc., Appellee (Intervenor).
• Court: Wyoming Supreme Court

Page 176

713 P.2d 176

The STATE of Wyoming; Sidney C. Werner, Director, Department of Administration and Fiscal Control; Robert Skyles, Administrator, Purchasing and Property Control; Randolph Wood, Director, Department of Environmental Quality; Roger Shaffer, Administrator, Land Quality Division, Appellants (Defendants), v. WEISZ & SONS, INC., Appellee (Plaintiff),

Eby Mine Services, Inc., Appellee (Intervenor).

No. 85-210.

Supreme Court of Wyoming.

Jan. 21, 1986.

Allen C. Johnson, Sr. Asst. Atty. Gen., Cheyenne, for appellants.

David H. Carmichael of Carmichael, McNiff & Patton, Cheyenne, for appellee.

Don W. Riske, Cheyenne, for intervenor.

Before THOMAS, C.J., ROONEY, ^* BROWN and CARDINE, JJ., and RAPER, J., Retired.

RAPER, Justice, Retired.

The State of Wyoming, appellant, Department of Environmental Quality (DEQ), appellant, through the Department of Administration and Fiscal Control (DAFC), appellant, solicited and received bids for the performance of a contract to inject slurry underground to backfill mine voids for subsidence control at Hanna, Wyoming. Weisz & Sons, Inc. (Weisz), appellee, was the low bidder but was disqualified by DAFC upon recommendation of DEQ, after evaluation of bids, for not being responsive in its bid. DEQ, through DAFC, then accepted the bid of the second low bidder, Eby Mine Services, Inc. (Eby), intervenor in the district court. ¹

Weisz sought and obtained a temporary restraining order in the district court to restrain the appellants from awarding the contract pending a trial on the merits. After trial, the trial judge rendered a written opinion devoted in practically its entirety to an analysis of the evidence with an ultimate finding that "it was an abuse of discretion by the officials evaluating the bids, to hold that the omission of such documentation from plaintiff's bid amounted to a material variance sufficient to reject the bid."

The district court then permanently enjoined appellants from awarding the contract to anyone other than Weisz.

The appellants state the issues to be:

"1. Is the State of Wyoming immune from a suit such as this?

"2. If the State is not immune from a suit for injunction, then did the Appellee carry the heavy burden of proof placed on him?

"3. Could the District Court have treated this case as judicial review of agency action under the Administrative Procedures Act?

"4. As a matter of policy, should the courts refrain from reviewing day-to-day decisions of executive branch agencies when those decisions are discretionary?"

Weisz considers the issues to be:

"I. Whether sovereign immunity precludes district court jurisdiction over state agencies and state officials in 'disappointed bidder cases.'

"II. Whether the district court may afford injunctive relief in this case, pursuant to Wyoming Statutes and the Wyoming Rules of Appellate Procedure."

We are satisfied that the only issue is whether under the circumstances of this case the district court has authority to substitute its discretion for that of DAFC and DEQ and award a contract for injection of slurry through use of an injunction. Since our decision on this issue is dispositive of the appeal, we need not consider any other question.

We will explain and confirm the order of reversal heretofore entered on October 31, 1985.

Legislative direction for state contracting appears in W.S. 9-2-1016(b)(viii) and (xiv) ² governing bidding and contracts required by agencies. DAFC is required to establish uniform standards governing such agency action and standard forms of bids and contracts "sufficiently designed to permit award on the basis of the lowest evaluated price as determined in accordance with objective, measurable criteria set forth in the invitation for bids." (Emphasis added.) ³ DAFC followed through and adopted a set of purchasing rules.

The rules and regulations cover various statements of policy and advisories in aspects of procurement, such as the basic method being by competitive sealed bidding "in order to secure acceptable products at the lowest possible cost to the taxpayers of the State," the purpose being to encourage maximum open competition and "at the same time assure all agencies of quality supplies, materials, equipment or services; reasonable delivery and the best possible price." Section 3, Chapter II, Rules and Regulations, Department of Administration and Fiscal Control, Purchasing and Property Control Division. It is set out that the purpose of advertising a call for bids is to secure for the state the benefits from competition "and to prevent collusion and fraud in letting contracts." Section 3, Chapter V, Rules and Regulations, supra.

The work to be done on the project was made possible by a grant from the federal government, so DEQ and DAFC were also bound by applicable federal regulations in letting a contract. Such regulations appear in Circular A-102 (Revised), Uniform Requirements for Assistance to State and Local Governments, Office of Management and Budget, Executive Office of the President of the United States. Amongst the selection procedures there set out are minimum requirements for solicitation of offers and requiring competitive sealed bids for contracts over $10,000, with a public opening and "[a]ny or all bids may be rejected when there are sound documented business reasons in the best interest of the program." Procedures followed by DEQ and DAFC appear to conform to federal requirements.

Under the working arrangement between DAFC and the various agencies, the agency, DEQ in this instance, puts together the information necessary to call for bids. DAFC actually handles the procurement by advertisement, receiving bids, and the opening. The agency requesting a call for bids is then called upon in an advisory capacity for its recommendations for letting a contract.

Personnel of DEQ did not consider themselves technically qualified to compile the information necessary to advise DAFC of what was necessary to engage a qualified contractor to complete the slurry project. In order to provide that technical skill in drafting a call for bids, bidding specifications, project specifications and contract documents, DEQ employed the services of Midwest Mining Company. The project necessitated the drawing of bidding specifications and project specifications in order to obtain three contractors: one to drill holes from the land surface into the underground voids, another to gather and stockpile material for mixing with water into a slurry, and a third contractor to mix and inject the slurry through the holes and into the voids. Midwest Mining Company was to also furnish the project engineer on the job to coordinate the efforts of the three contractors so that, in the overall project, holes and materials will be available for the slurry contractor, as needed, to minimize down or standby time. The engineer, in addition, would oversee the work to assure compliance with the specifications and contract terms. Along with representatives of DEQ, Midwest Mining Company, through its engineers, was also to be part of the review process to perform the evaluation of bids received.

In accordance with its contract, Midwest Mining Company made a preliminary study and survey to acquaint itself and DEQ personnel with the project needs. It thereupon prepared specifications, a form of contract, a call for bids, bidding specifications, and bid forms for bidder response. The resultant bulky volume was submitted to DAFC, which it approved and advertised by the required means for soliciting offers.

Five bids were received:

                Mining Corporation        $3,001,187.00
                Northern Improvement Co.   2,647,370.00
                Larry's Plumbing           2,594,920.00
                Eby Mine Service           1,775,375.00
                Weisz & Sons               1,467,078.00
                

The engineers' preliminary estimate of project cost had been $2,264,950.

After evaluating the bids in accordance with the method of which prospective bidders were advised, in the call for bids furnished as part of the solicitation package, DEQ submitted the following report and recommendation to DAFC:

"The intention and interest of the State is to award this contract to the 'lowest qualified bidder.' In order to evlauate [evaluate] qualifications of bidders, materials provided as set out in Sections B-1F and B-1G of the bid proposal were used to establish the minimum requirements of being responsible and responsive. The information required by Sections B-1F and B-1G must be submitted with the bid as set out in Sections B and C of the bid proposal. The method of evaluation followed Section B-1J. Because of the complexity, knowledge and skills required for this work, extensive evidence was required to be submitted to demonstrate the bidders['] capabilities and qualifications.

"Upon initial evaluation of the apparent low bidders' proposal, (Weisz & Sons, Inc.), the following concerns, as related to the requirements of Sections B-1F and B-1B [B-1G], were noted:

"1. The bidder was to provide, as part of his bid, documentation from proposed supplies [suppliers] of equipment commitments on the availability of equipment. This documentation was not in Weisz & Sons['] bid.

"2. The bidder was to provide, as part of his bid, information on key personnel (project manager, site supervisors, forman [foreman] including, the extent that senior personnel will be used on the project, the experience of each person, employment history, etc. Weisz did provide information on personnel but failed to describe the extent to which each senior person would be used on the job. Because the bid was lacking this information, we were unable to determine if Weisz & Sons would have qualified personnel (supervision) at the site at all times.

"3. Section B-1F and Section I-2.2.6 requires [sic] the bidder to indicate in his bids the means by which the backfill which is injected will be weighed, and the method and frequency of calibration of the measuring device. This is a very important...