Worth James Const. Co. v. Jacksonville Water Commission

• Decision Date: 03 December 1979
• Docket Number: No. 79-278,79-278
• Citation: 590 S.W.2d 256,267 Ark. 214
• Parties: WORTH JAMES CONSTRUCTION COMPANY, Appellant, v. JACKSONVILLE WATER COMMISSION et al., Appellees.
• Court: Arkansas Supreme Court

Page 256

590 S.W.2d 256

267 Ark. 214

WORTH JAMES CONSTRUCTION COMPANY, Appellant, v. JACKSONVILLE WATER COMMISSION et al., Appellees.

No. 79-278.

Supreme Court of Arkansas.

Dec. 3, 1979.

Rehearing Denied Jan. 7, 1980.

Friday, Eldredge & Clark, Little Rock, for appellant.

Paul D. Groce, Jacksonville, for appellees.

GEORGE ROSE SMITH, Justice.

This is a suit by the appellant, Worth James Construction Company, to enjoin the Jacksonville Water Commission from awarding a construction contract to S & S Construction Company (also a defendant). Worth James contends that it should be awarded the contract, because it was admittedly the low bidder among the six contractors bidding for the job. The chancellor denied relief on several grounds, one of them being that Worth James has no standing to sue and another that the Commission was justified, in the city's best interest, in not awarding the contract to the lowest bidder.

The letting of the contract was governed by Ark.Stat.Ann. § 14-612 (Repl.1979). That statute, as we have said about a different law, does not provide "that the contract shall be let to the person whose bid is lowest in terms of money." Street Improvement Dist. No. 130 of Hot Springs v. Crockett, 181 Ark. 869, 28 S.W.2d 331 (1930). Instead, the present statute directs that the advertisement for bids contain a statement (as this one did) that the Commission reserves the right "to reject any or all bids." The statute also provides that after the Commission has opened and compared the bids, it shall award the contract to the lowest responsible bidder, "provided that (the Commission) be of the opinion that the best interests of the taxing unit would be served thereby." Here the advertisement for bids tracked that provision by reciting that the Commission reserved the right "to accept the proposal which will best serve the interest of the City of Jacksonville."

The contract was for the construction of more than two miles of 24-inch water line and almost one mile of 12-inch water line. The specifications provided that the pipe to be furnished by the contractor might be ductile iron pipe, prestressed concrete pipe, or pretensioned concrete pipe. The Commission's consulting engineers supplied the bidding forms, which contemplated that each bidder would insert in appropriate blanks a price per foot for at least one kind of pipe, extend the lowest unit price for the total footage, and include the resulting figure in the total bid. There were some 20 other items in addition to the pipe, but it is readily apparent that the bottom-line total was the important figure, since the constituent prices might be adjusted by the bidder pretty much at will.

The bids were opened on May 11, 1979. The figures were compiled in detail and certified by the Commission's engineers. The Worth James bid of $707,586.17 was the lowest of the six bids. Worth James had selected pretensioned concrete pipe for the 24-inch line and ductile iron pipe for the 12-inch line. The appellee S & S's bid of $714,755.10 was the third lowest bid, but it was the lowest bid specifying ductile iron pipe throughout. (The difference in the two bids lay in the other items, as the S & S bid was actually lower than that of Worth James for each of the three kinds of pipe. This is not really material, however, as it was the grand total that mattered. The only significance of the per-foot unit prices seems to stem from a clause stating that in the final settlement the total bid price will be adjusted for variations from the quantities listed on the form supplied to the bidders.)

After the opening of the bids on May 11, the three Commissioners met on May 16 to award the contract. The Commission's manager presented a statement strongly recommending the use of ductile iron pipe, because (a) both management and maintenance personnel had working experience with it, (b) it is a proven material in Arkansas, and (c) there is about 40,000 feet of existing ductile iron pipe in the Jacksonville Water System, which was stated to be a very important consideration in view of there being ductile iron maintenance equipment already on hand. The statement recognized that pretensioned concrete pipe was acceptable and in conformity with the specifications, but the manager thought that the $7,168.93 difference between the two bids (about 1%) could be justified for the reasons he gave. Of course, as Worth...