Merits Succeed, and Procedural Arguments Rejected, in Public Bid Law Case
The Public Bid Law mandates that a public entity award a contract to the lowest, responsive, and responsible bidder unless the public entity has just cause to reject all bids. In the recent case of Ryan Gootee Gen. Contractors LLC v. Plaquemines Par. Sch. Bd., 2018-0276 (La. App. 4 Cir. 11/7/18), the public entity refused to award the contract to the apparent second low bidder even after the low bidder was judicially determined to be non-responsive. Rather, the public entity asserted various arguments solely on procedural grounds in an effort to avoid awarding the contract. In November 2018, the Fourth Circuit Court of Appeal affirmed a judgment of the trial court which determined that the challenging bidder was entitled to the award of the contract on the merits of the case and further affirmed an award of attorney’s fees and costs in favor of the contractor.
The case involved a project where only two bids were submitted. The public entity initially awarded the contract to the low bidder. The apparent second low bidder, however, challenged that award on the basis that the low bidder had failed to submit written evidence of authority of the signatory with its bid. Due to a procedural move by the public entity, the lawsuit ended up on dual tracks with the claims against the low bidder proceeding in a separate parish from the claims against the public entity. Nonetheless, the challenging bidder obtained an injunction preventing the low bidder from performing the work due to its failure to submit written evidence of authority. The apparent second low bidder then sought to compel the public entity to award it the contract. The public entity refused to do so despite the fact that a court had already determined that that the low bidder was not entitled to the contract.
The public entity argued that while the low bid had been deemed non-responsive in the injunction proceeding, a judgment had not been rendered against the public entity declaring that the original award was void. As a result, the public entity asserted that unless and until the original award was specifically declared void, a second award of the contract was not required to be made to the challenging bidder. The Court rejected the public entity’s procedural argument and stated that the original award of the contract in violation of the Public Bid Law was an absolute nullity as a matter of law. As such, the original award had no legal effect and did not have to be separately declared void as the public entity asserted. Accordingly, the public entity was ordered to award the contract to the challenging bidder, Ryan Gootee General Contractors, LLC, and to pay the contractor in excess of $70,000 in attorney’s fees and costs.
The case serves as an example of an attempt by a public entity to utilize only procedural arguments to circumvent the merits of bid dispute. The Court, however, refused to allow the public entity to evade its obligation under the Public Bid Law and forced the public entity to recognize the proper lowest, responsive, and responsible bidder on the project.