Van Antwerp v. Board of Com'rs of City of Mobile

• Decision Date: 19 January 1928
• Docket Number: 1 Div. 454
• Citation: 217 Ala. 201,115 So. 239
• Parties: VAN ANTWERP et al. v. BOARD OF COM'RS OF CITY OF MOBILE et al.
• Court: Alabama Supreme Court

115 So. 239

217 Ala. 201

VAN ANTWERP et al. v. BOARD OF COM'RS OF CITY OF MOBILE et al.

1 Div. 454

Supreme Court of Alabama

January 19, 1928

Appeal from Circuit Court, Mobile County; Joel W. Goldsby, Judge.

Bill in equity by J.C. Van Antwerp and others against the Board of Commissioners of the City of Mobile, the members thereof, and the Superior Incinerator Company of Texas, to annul and enjoin performance of a contract between the City of Mobile and said Superior Incinerator Company of Texas. From a decree sustaining the demurrer to the bill, complainants appeal. Affirmed.

Smiths Young & Johnston, of Mobile, for appellants.

Vincent F. Kilborn and Harry T. Smith & Caffey, all of Mobile, for appellees.

BOULDIN J.

This is a taxpayers' suit to avoid for illegality and to enjoin the execution of a contract entered into by the board of commissioners of the city of Mobile with the Superior Incinerator Company of Texas, at Dallas, Tex., for the construction and installation of two incinerators for the municipality. The appeal is from a decree sustaining demurrers to the bill.

The contract is assailed upon the ground, among others, that it was made in violation of section 1911, Code of 1923, which reads:

"The award of each contract for which bids have been submitted shall be made to the lowest responsible bidder, who may comply with such reasonable regulations as may be prescribed before the bids are called for."

The pertinent averments of the bill in this regard are to this effect:

Sealed bids were invited by advertisement for the construction of two incinerator plants, each with a capacity of not less than 50 tons per day of 12 hours. Bidders were to submit detailed plans and specifications with their proposals, the price bid to cover the entire cost of construction according to such plans and specifications.

The advertisement for bids contained these further provisions:

"After the bids are received, the city commissioners will consider same and, after consideration and investigation into the merits of each bid, will award the contract to the bidder who, in their opinion, has submitted the most desirable proposal. *** The right is reserved to reject any or all bids."

Bids were submitted by the Superior Incinerator Company and the Nye Odorless Crematory Company, of Macon, Ga., each accompanied by plans and specifications of its own type of plant. The Nye Company submitted the lower bid. A committee appointed by the city commissioners visited plants installed by each company in several cities, reported plants of the "Superior" and "Nye" types were free from odors or offensive smoke, and, "In our judgment there is no difference in their efficiency in burning garbage, cost of operating, and cost of maintenance," and, "for the purposes of Mobile, either type would be acceptable." The bill further avers that the "Nye" incinerator is equal or superior to that of the Superior Company; that the Nye Company was a responsible bidder, and its bid was not rejected because it was not a responsible bidder; that nevertheless, the board of commissioners entered into negotiations with the Superior Company resulting in some modification of specifications, and letting the contract at a reduced price, but in excess of the original bid of the "Nye" Company, and largely in excess of a later proposal of that company, pending negotiations with the Superior Company; that in awarding the contract the commissioners "did not exercise a fair and just discretion in the premises, but that they exercised an arbitrary judgment in the matter, without a reasonable basis of fact to support the awarding of said contract;" that the excess cost was a mere waste of money at the expense of the taxpayers of Mobile.

Dealing with the application of the Code, § 1911, to this state of facts, it will be noted that section contains no mandatory requirement for letting municipal contracts on competitive bids. It is open to the corporate authorities to adopt this method, or to let contracts in such way as may be deemed best under the conditions. But it does require that when competitive bidding is selected as the method of letting a contract, it must be let to the lowest responsible bidder complying with the regulations prescribed before bids are called for. In such case, the statute makes applicable the general rules of law governing the awarding of contracts by competitive bids.

Judge by these rules, did the action of the commissioners inviting bids in this case bring it within the requirement that the contract be let to the lowest responsible bidder?

One of the essentials to competitive bidding is that bidders shall have opportunity to bid on the same thing. In case of public improvements or plants, the adoption of plans and specifications made available to all as a basis of their bids is a legal requirement. When bids are called for from manufacturers of different types of plants based on their own specifications, the necessity arises to determine whether any of them meet the specific needs of the city, and, if so, which is the better bid all things considered. This cannot be termed competitive bidding within the meaning of mandatory statutes requiring the awarding of contracts to the lowest bidder, and usually contracts so let are regarded as in violation of such statutes. McQuillin on Municipal Corporations, § 1211; City Council of Montgomery v. Barnett, 149 Ala. 119, 43 So. 92; Inge v. Board of Public Works, 135 Ala. 187, 33 So. 678, 93 Am.St.Rep. 20; Dunn Construction Co. v. White, 209 Ala. 460, 96 So. 444.

Where, as here, there is no mandatory statute requiring contracts to be awarded on competitive bids, it is within the power of the city authorities to invite bids on such basis as it may deem best, reserving the power to reject all bids, or let the contract to the bidder submitting the most desirable proposal.

Such bidding may become a decided aid in the selection of the most desirable plant and in letting a contract on a reasonable cost basis.

If the invitation for bids is not upon a proper basis for competitive bidding, but a call for proposals based upon the plans and specifications of the several bidders, the case does not come within our statute, but will be referred to the discretionary power to invite proposals subject to the right to reject all and enter into private negotiations.

In the absence of a statute requiring an ordinance defining the manner of letting contracts, an ordinance providing that in certain cases they shall be awarded on competitive bids does not limit the power to make future contracts by other methods. 3 McQuillin, § 1192; 19 R.C.L. 893.

Unless statutes require contracts to be authorized by ordinance, a proper resolution of the governing body identifying, approving, and directing the execution of the contract is sufficient authorization. 3 McQuillin, § 1179; Pierce v. City of Huntsville, 185 Ala. 490, 64 So. 301.

Code, § 1993 (1252), declares no ordinance or resolution or permanent operation shall be passed at the same meeting at which it is introduced, except by unanimous consent expressed by yea and nay vote entered on the minutes.

In Pierce v. City of Huntsville, supra, certain improvement ordinances and resolutions were held not of "permanent operation," within the meaning of section 1252, Code of 1907.

That section brought forward as section 1993, Code of 1923, was amended so as to provide:

"The council shall award no contract on bids except by resolution or ordinance of permanent operation."

The effect is to bring resolutions awarding contracts required by law to be upon competitive bids, and so awarded within the definition of a resolution of "permanent operation" under that section.

The letting of contracts by other methods, when authorized by law, is not within the terms of the amended section.

The Commission Form of Government Act, applicable to the city of Mobile (Acts 1911, § 8, p. 337), provides:

"A record of the proceedings of every such meeting shall be kept in a well-bound book, and every resolution or ordinance passed by the board of commissioners must be recorded in such book, and the record of the proceedings of the meeting be signed by at least two of the commissioners before the action taken shall be effective."

The bill avers the contract was executed on behalf of the municipality by Harry T. Hartwell, mayor, and by the Superior Company before the resolution authorizing same was recorded. Because the contract was so...