No. CV 09-5032680S
June 7, 2010
MEMORANDUM OF DECISION
The facts are not in dispute in this case. The plaintiff Meta-Life Inc. seeks an injunction that precludes the defendant town from executing a contract with Fabcor Inc. which was the low bidder on various work to be done at the town hall building in Hamden. The work on this building was to be performed by various contractors and AP Construction was hired by the town to be the project's construction manager; AP selected Frank Fazekas as its Project Manager. AP developed so-called Requests for Proposals (RFP) which sets forth the requirements for the bids on various aspects of the project. The RFP included an invitation to bid and instructions to bidders. As the plaintiff notes these portions of the RFP "speak directly to the requirements of a Bid Bond Security and set forth other bidding requirements." The plaintiff and Fabcor were the two bidders for certain work on the project.
The Court will now quote directly from the "Facts" portion of the plaintiff's post-trial memorandum. It, of course, correctly sets forth the factual background to the plaintiff's claim. But its points of emphasis underline for the Court important issues in the case
The RFP required potential bidders to identify in their bids, among other things, unit labor rates, a list of other similar construction projects undertaken by the bidder, the name of the bidder's surety, the bidder's bonding capacity and bond premium rate, and the name and rating of its insurance carrier. Most significantly, however, RFP required all bidders to submit a bid bond with their proposals, failure of which would render the bid non-responsive. (Emphasis by Court.) Indeed, the "Invitation to Bid" and "Instructions to Bidders" portions of the RFP expressly stated:
A Bid bond executed by the Bidder and an acceptable Surety company or companies as are authorized to do business in the State of Connecticut in an amount equal to ten percent (10%) of the total Bid shall be submitted with each bid. Bids which fail to contain a Bid Bond Security as stated above will be rejected as non-responsive. (Emphasis added by the plaintiff.)
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"Instructions to Bidders" shall be followed in all respects.
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The following documents shall also be submitted along with the Bid Proposal and completed in its entirety:
• Bid Form
• Bid Bond (Emphasis added by the plaintiff.)
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Each abider, by submitting their bid, represents that they have read and understand the Bidding Documents and their Bid is made in accordance therewith . . .
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Individual bids must be sent in separately sealed envelopes with accompanying bid security [i.e., a bid bond] for each bid package. (Emphasis, added by the plaintiff.)
Moreover, the Form of Proposal included with the RFP on which all bidders were to submit their bids expressly stated that a "Bid bond [is] required" for Package #11.01.
Although the RFP permitted the Town and the Construction Manager the right to reject any and all non-conforming or non-responsive bids, it did not permit the Town or the construction Manager the right to accept non-conforming or non-responsive bids. At most, the RFP permitted the Town "the right to waive irregularities in the bidding," but the author of that language, Frank Fazekas, testified that he did not view the lack of a bid bond to be an "irregularity" that the Town could waive. Rather, he testified that the "right to waive irregularities language: was intended to permit the Town to waive minor typographical errors and the like.
Also, although the RFP allow the Town and the Construction Manager the right to "determine on an individual contractor basis if the Performance and Payment Bond may be waived," it included no such right to waive the requirement of a Bid Bond. To the contrary, the RFP was clear that any bid received without the requisite bid bond would be rejected as non-responsive.
Moreover, although the RFP allowed the Construction Manager "the right to negotiate contract terms with one or more bidders without reopening the bidding process," the RFP was clear that such negotiations were permitted only if "not violative of applicable competitive bidding statutes or law." There was nothing in the RFP which permitted, either expressly or impliedly, that the requirement of a mandatory bid bond at the time of bid could be waived by the Town. Nor did the RFP allow bidders to cure apparent non-conformances in their bids after bidding opening.
The discussion goes on to note that on August 13, 2009 Meta-Life submitted a bid in response to the RFP for Package #11.01 (the particular job for which bids were sought) in the amount of $999,588.
The memorandum goes on to state the following:
Defendant Fabcor also submitted a bid in response to the RFP for Package #11.01 in the amount of $784,000. Fabcor failed to supply much of the information requested in the RFP, including, inter alia, unit labor rates, a list of other similar construction projects, the name of Fabcor's surety, Fabcor's bonding capacity and bond premium rate, and the name and rating of its insurance carrier. Most significantly, however, Fabcor failed to supply the mandatory bid bond. Rather, included with its proposal was a letter stating:
(Emphasis by the Court.)
We are currently seeking bonding with an insurer approved to do business in the State of Connecticut. We expect to receive approval within 30-45 days of the bid date.
The memorandum then says that when the bids were opened on August 13, 2009, "it was apparent on the face of Fabcor's bid that it had failed to supply the mandatory bid bond. Yet the town and Construction Manager failed to immediately reject Fabcor's bid as a non responsive." Fabcor was identified as the low bidder and upon review of the latter's bid it was apparent there was not only no bid bond but "other required information" was missing from the bid.
"Oddly" says the plaintiff a month passed before Fabcor was asked to supply the missing information and the bid bond. This was all provided on September 18, 2009 but "up until that point of time Fabcor could have walked away from its bid and "the bid bond was the only recourse against Fabcor had it chosen to walk away."
The final point based on the underlying facts is that the contract was awarded October 30, 2009 and the "apparent cause of the delay was Fabcor's unwillingness to sign the Project Labor Agreement — "a requirement of both the RFP and the proposed contract." Fabcor wanted to use more of its own people on the job. The plaintiff goes on to note that Fabcor by an October 29, 2009 agreement was "permitted to deviate from the strict compliance with the labor agreement, and "notably Meta-Life was never afforded the opportunity to deviate from the Project Labor Agreement, nor was it permitted to make adjustments to its bid price based upon the exception to the Project Labor Agreement afforded to Fabcor."
The defendant town in its summary of the case sets forth other evidence admitted at trial to support its position. It first notes that "as is typical in most bid protest cases . . . the pertinent facts are not in dispute;" then with appropriate reference to the exhibits states the following:
The Invitation to Bid in pertinent part, explicitly advised bidders that (1) the Town "shall approve" all awards to trade contractors; (2) the trade contracts would be held by the Town; (3) the Town reserved the right to reject any or all bids, without stating reasons therefore, if it deemed such rejection to be "in the best interest of the Town of Hamden or the Project;" (4) the Town reserves the right to waive irregularities in the bidding and to award the contract to other than the low bidder if deemed in the best interest of the Town; (5) the Construction Manager reserves the right to award the contract to other than the low bidder "deemed in the best interest of the Town;" (6) in evaluating bids, the Town and/or Construction Manager reserves the right to require, prior to Notice of Award, information regarding the financial resources of the bidders, present commitments and the experience of the bidder in performance of comparable work. One of the "prescribed requirements" for bids was the inclusion of a bid bond equal to ten percent of the total bid.
The instructions to bidders . . . in pertinent part, explicitly advised bidders that (1) the Town had the right to make such investigation as it deemed necessary to determine the ability of a bidder to perform the work and (2) the Town had the right to reject any bid if evidence submitted by the bidder or investigation of the bidder failed to satisfy the Town that the bidder is properly qualified to carry out the work.
The Town's General Bid Specifications — Part A . . . provides, in pertinent part:
RESERVED RIGHTS OF TOWN
The Town of Hamden reserves the right to accept or reject any or all options, modifications, bids or proposals; to waive any technicality in a bid or proposal or part thereof submitted, and to accept the bid deemed in the best interest of the Town of Hamden. Further, we reserve the right to split bids and quotations among two or more bidders.
Town Ordinance 124, Section 36.12 . . . provides, in pertinent part, that the Town's Purchasing Agent shall award a contract to the lowest responsible bidder, "subject to the best interest of the Town." This Ordinance reflects the intent of the legislative body of the Town to vest the Town's Purchasing Agent with discretion in awarding publicly bid contracts. It is conceded by the plaintiff that this Ordinance is part of the bid documents for the Project.
The Court will now try to discuss the law that should be applied to the issues raised by this case. It would also note it finds the foregoing facts as stated by both counsel as established in this case by the evidence and the exhibits.
Our case law, in dealing with the issue of whether in particular case and unsuccessful bidder on a public contract has a right to secure relief, relies heavily on the analysis presented in Volume 10 of McQuillan, Municipal Corporations §§ 29:32 et seq., see Austin v. Housing Authority, 143 Conn. 338 (1956), John J. Brennan Construction Corp. v. Shelton, 187 Conn. 695 (1982); Spinello Construction Co. v Manchester, 189 Conn. 539 (1983); Ardmare Construction Co. v. Freedman, 191 Conn. 497 (1983). Lawrence Brunoli Inc. v. Town of Branford, 247 Conn. 407 (1999), which does not explicitly refer to this authority relies, of course, on the just mentioned prior case law.
Section 29:34 of McQuillan underlines the fact that the issue of standing of an unsuccessful bidder to enjoin the award of a contract to another company is directly related to the merits of whether ultimately the relief should be granted and the purpose behind requiring competitive bidding. The Court will first quote from that discussion and then Connecticut case law.
McQuillan notes that provisions in statutes or local ordinances requiring competitive bidding "are for the purpose of inviting competition; to guard against favoritism unproviding, extravagance fraud, and corruption; and to secure the best work or supplies at the lowest price practicable and they are enacted for the benefit of property holders and taxpayers and not for the benefit or enrichment of bidders and should be so construed and administered as to accomplish such purpose fairly and reasonably with sole reference to the public interest." McQuillan goes on to say that "a fair opportunity must be afforded for free competition. Inherent in competitive bidding is the requirement that the public body shall prescribe a common standard on all matters that are material to the proposals, to the end that all interested persons may bid intelligently and will be induced to bid by the promise of impartiality," id. pp. 477-85.
As early as 1956 the court in Austin v. Housing Authority, 143 Conn. at page 349, said that: "The better authority holds that lowest responsible bidder statutes are enacted solely for the benefit of the public and in no sense create any rights in those who submit bids."
This observation and McQuillan's comments and their interpretation have a direct bearing on the issue of standing of an unsuccessful bidder to seek injunctive relief. In other words under what circumstances does such a person or entity have "a right to set judicial machinery in motion," Ardmare Construction Co. v. Freedman, 191 Conn. 497, 501 (1983), at page 501, the court said that:
Only where fraud, corruption or favoritism has influenced the conduct of bidding officials or when the very object and integrity of the bidding process is defeated by the conduct of municipal officials, does an unsuccessful bidder have standing to challenge the award. Also see Lawrence Brunoli, Inc. v. Town of Branford, supra, 247 Conn. at page 412.
But this statement must be viewed in the context of the language of John J. Brennan Construction Corp. v. Shelton, 187 Conn. 695 (1982), where the court underlined the point or goal of any favoritism, fraud, or corruption inquiry as a predicate to a finding of standing and ultimate success in the merits for the unsuccessful bidder. The court said at page 702:
Municipal competitive bidding laws are enacted to guard against such evils as favoritism, fraud or corruption in the award of contracts, to secure the best product at the lowest price and to benefit the taxpayers, not the bidders; they should be construed to accomplish these purposes fairly and reasonably with sole reference to the public interest. (Emphasis by this court.) This language quoted in Spinello Construction Co. v. Manchester, supra, 189 Conn. at 543.
A necessary result of these observations is that the only remedy afforded to unsuccessful bidders is injunctive relief preventing the decision to award a bid held to be improper — permitting money damages would defeat the purpose of competitive bidding which is to secure approved work at the lowest price. Furthermore it defines the role of the unsuccessful bidder in any litigation. The Ardmore case noted our court has adopted the position set forth in Scanwell Laboratories, Inc. v. Shaffer, 424 F.2d 859, 191 Conn. at 504 and the Lawrence Brunoli case also cited Scanwell for the proposition that that "court concluded that an unsuccessful bidder may bring an action against the municipality, but rather than bring an action to indicate the personal harm the bidder perceives it has suffered `the (action) itself is brought in the public interest by one acting essentially as a private attorney general,'" 247 Conn. at page 413, quoting Scanwell at 424 F.2d page 864.
The observation in the John T. Brennan case must also guide a trial court's analysis of whether any municipal conduct can be said to be that fraud, corruption, or particularly favoritism which are a predicate to injunctive relief. The test is whether a failure to follow bidding requirements conditions, and provisions, supposedly applicable to all bidders but relaxed as to one, is of the type that would in fact defeat the purposes of competitive bidding which is "to secure the best product at the lowest price" for the municipality.
The foregoing is not an invention of our court and of this writer, it is an observation repeated in cases in other jurisdictions where claims of favoritism because of departure from bidding requirements are raised.
Thus the court in In the Matter of On-Line Games Production, 279 N.J.Super. 566, 653 A.2d 1145 (App.Div., 1995), held on the one hand: "Conditions and specifications . . . apply equally to all prospective bidders. Otherwise, there is no common standard of competition." But the court also went on to say: "So it follows that all bids must comply with the terms imposed, and any material departure therefrom invalidates a nonconforming bid and any contract based upon it," 279 N.J.Super. at page 295 (emphasis by this court)."
But what is a "material departure" for New Jersey purposes? In Meadowbrook Carting Co. v. Borough of Island Heights, 138 N.J. 307, 650 A.2d 748 (1994), the New Jersey Supreme Court gave a two part test of materiality:
First, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract would be entered into, performed, and guaranteed according to its specified requirements.
Second, whether it is of such a nature that its waiver would adversely affect the competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition.
138 N.J. at page 315. This law cited in U.S. v. Joint Meeting of Essex Union Counties, 997 F.Sup. 593, 600 (N.J., 1998.).
But prior to these comments the Meadowbrook Carting court referred to prior New Jersey case law to say that "the purpose of competitive bidding for local public contracts is not protection of individual interests of bidders, but rather advancement of public interest in securing most economical result by inviting competition in which all bidders are placed on an equal footing and guarding against favoritism, improvidence, extravagance, and corruption" id. at page 313.
Or more concisely put, the question is "whether waiver of the deviation (from bid conditions) would thwart the aim's of the public bidding laws." In the Matter of the Protest of the Award of the On-Line Games Production Operations Contract, 279 N.J.Sup. 566, 596 (App.Div. 1995), see generally Solid Waste SUC v. Morris County Municipal Utilities Authority, Civil Action No. 08-327, U.S. District Court, D.N.J. (2008). The foregoing also appears to reflect New York law, see Hamlin Construction Co. v. County of Ulster, 753 N.Y.S.2d 602, 604 (App.Div., 2003), cf also H W Contracting v. City of Watertown, 633 N.W.2d 167, 174 (S.D., 2001), also see Mickey O'Connor General Contractor v. Westwego, 804 So.2d 128, 131 (La.App. 2001), where court said that "where there is only an insubstantial deviation from the bidding requirements, there has been competitive bidding as contemplated by the public bid law." But the court began its discussion by saying the public policy behind competitive bidding was to protect citizens "against contracts of public officials awarded through favoritism and possibly involving exorbitant and extortionate prices," id. p. 130.
Thus courts are not to engage in abstract definitions of favoritism, for example, when the issue is whether injunctive relief should be granted to prevent the contract awarding a bid from going forward. Any characterization must be discussed in terms of whether the object and goals of competitive bidding has been compromised.
The Court will try to apply the foregoing law to the particular facts of this case and the issues raised.
The Court will first briefly refer to the issue of standing and then briefly try to define the terms of "fraud, corruption and favoritism" before addressing the particular claims made in this case. Standing has been defined as the "legal right to set the machinery of the court in motion" a person or entity desirous of initiating and pursuing litigation must have "some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy," Hiland v. Ives, 28 Conn.Sup. 243, 245 (1966), adopted in Ardmare Construction, 191 Conn. 497. In the context of these bid protest cases an unsuccessful bidder has standing only "where fraud, corruption, or favoritism has influenced the conduct of the building officials or when the very object and integrity of the competitive bidding process is defeated by the conduct of municipal officials," Spinello Construction Co. v. Manchester, 189 Conn. 539, 544 (1983). Since by definition these suits arise because one bidder is selected who it is argued did not meet bidding criteria, this is a type of favoritism because the integrity of the competitive bidding process could have been defeated. That, as the Court has discussed, is a matter of proof to be assumed by the plaintiff unsuccessful bidder. The question of standing is intricately involved in these cases with these cases with the merits of a plaintiff's claim as an unsuccessful bidder. The Court agrees with the plaintiff that Meta-Life has standing to pursue its request for injunctive relief because of the uncontested fact that there was a departure from bid requirements — having made that showing then a plaintiff as an unsuccessful bidder has the right to try to establish that the purposes of competitive bidding were subverted by fraud, corruption, and or favoritism. How else could the machinery of the courts be set in motion to correct improper actions in these cases? In H W Contracting, supra, the court held that "the disappointed bidder need not, to establish standing "prove the merits of its case (but the) bidder must at least establish at a pre-evidentiary hearing, a colorable claim or prima facie case, of such activity, before it will be allowed to proceed with its claim" 631 NW2d 172.
The president of Meta-Life, Mr. Coppola, testified and at one point said he was not claiming fraud or corruption influenced the town's action in accepting Fabcor's bid and awarding that company the contract. There was no evidence of any kind that fraud or corruption was involved here as a motive for the town's actions. No long term relations with the town or its employees or agents was shown. Fabcor is not located in the State of Connecticut. No money was paid to the project manager of AP construction, Mr. Fazekas, to induce him to award Fabcor the job as the low bidder nor was there an offer to do so. Mr. Razor, the senior estimator for Fabcor testified that his company had never even done work for the town or AP Construction and he was unaware of any relationship Fabcor had with town officials or AP Construction. Prior to submitting the bid Fabcor did not disclose the amount of its bid. Mr. Razor also testified that he was not told that the bid bond requirement would be waived. The opportunity for fraud or corruption let alone the motive for exercising them are not apparent. This is not a case where a low bidder was rejected for no apparent reason — Fabcor's bid was over $200,000 less than the only other bidder, Meta Life. No evidence had been presented to indicate Fabcor did not have the skills or resources to do the job — there was no need for an old boy's network to operate.
Furthermore it is also true that the bid opening procedure just identifies the low bidder, the award of the contract is not made at that point. Here there was testimony that a so-called scope of review was done regarding Fabcor's bid and it was determined it could do the work. Apparently the same review was also done as to Meta-Life. No evidence or testimony was presented attacking the integrity or extent of such reviews. It is difficult to see how a fraud or corruption claim can be made unless all this post-bid activity is characterized as some giant charade — as to which no evidence has been presented.
As far as favoritism, at one point Mr. Coppola, seemed to claim Meta-Life was not even claiming favoritism. But that testimony should not be a reason for ending further discussion and dismissing the case without more. Mr. Coppola is a layperson and the concept of favoritism, the court believes, has a specialized meaning in these disappointed bidder cases. It simply appears to mean a situation where the chosen bidder has received an advantage not afforded to other bidders, thereby skewing the competitive bidding process and its aims: Good faith will not insulate a municipality from claims for injunctive relief against the awarding of a contract. In this regard McQuillin says in Volume 10 at § 29:90.6, pp. 719-20.
Furthermore, where the possibility of partiality or fraud is present, or where the municipal action amounts to a fraud on the bidding statute, such action will be set aside even in the presence of good faith; there is no need to prove actual fraud or favoritism or collusion; the absence of proof or corrupt motives does not preclude the judicial remedy. Practices which affect the public bidding process adversely are prohibited and awards made or contracts entered into where unlawful or prohibited practices may have played a part will be set aside even though there was no corruption or any actual adverse effect on the bidding process.
The primary ground on which the claim of favoritism is based lies in the undisputed fact that Fabcor did not submit a bid bond with its bid. This bond was to be 10% of the bid submitted. Fabcor's bid was $784,000. That meant that if Fabcor was awarded the contract then failed to execute the contract it would have to pay $78,400 as a penalty to the town. The reason for this is that if Fabcor did walk away from the contract the city, having gone through the scope of review and made its plans based on the Fabcor bid would also have had to pay more money to the next lowest bidder — here the "more money" involved would have been in the area of $200,000 in a project that only had budgeted $800,000 for the work in question which prompted the bidding process in the first place.
A bid bond is to be distinguished from a so-called performance bond which is submitted after the contract to do the job is awarded. In this case the performance bond was to be for 100% of the whole project so that the protection provided is that if a contractor defaults a claim can be made against the bond.
Mr. Fazekas the project manager was of the opinion that bid bonds are a mechanism to keep unqualified bidders from making bids on a job that may be too big for them to handle. He also testified that he requested a bid bond because he "wanted to be convinced they could get a payment performance bond . . . if they could get a bid bond, then they can get a payment performance bond." Fazekas also agreed that in requesting bonds entities requesting bids rely on the due diligence investigation done by sureties. If a bond cannot be obtained it "may be an indicator that there's something in the company's history or (finances) that gave the surety pause such that they wouldn't issue a bond."
Mr. Fazekas said that in his experience when a bid bond is not attached to the bid, it is summarily rejected. Mr. Compston, the town's purchasing agent, stated he was aware of only one case where the bid was considered although no bid bond was submitted with it.
A few more factual observations should be made before the Court addresses the merits of the request for injunctive relief based on the fact that a bid bond was not submitted with Fabcor's bid proposal. In this case the contract was awarded to Fabcor on October 30, 2009. The bid bond or a copy thereof was sent to the town September 18, 2009. Fabcor told the town representatives on August 12th or 13th, 2009, prior to the bid opening and said they could not get a bid bond in our state but they were working on it although it would not be attached to the bid. Included with the proposal was a letter stating: "we are currently seeking a bonding with an insurer approved to do business in the State of Connecticut. We expect to receive approval within 30-45 days of the bid date." The prediction proved accurate.
The question presented is whether the fact that a bid bond was not submitted with Fabcor's proposal meant that the proposal, despite the fact that it was the low bid, should have been rejected forthwith on the date the bid was opened in August 2009.
First the Court should note that the invitation to bid and instructions to bidders did appear to make the bid bond requirement mandatory. As noted at one point the requests for proposals (RFP) sent to all prospective bidders said that: "Bids which fail to contain a Bid Bond Security as stated will be rejected as non-responsive." At another point it says a bid bond shall be submitted along with the Bid Proposal. The RFP allowed the town to waive irregularities in the bidding but Fazekas testified he did not view the bid bond and irregularity the town could waive — an odd piece of testimony when one considers it since he as project manager was part of the process which went on after the bids were opened absent a Fabcor bid bond and eventually led to the contract being awarded to Fabcor.
The defendant Town cites sections of the RFP and a Town Ordinance arguing for the position that, of course, the town could waive the bid bond requirement could be waived despite the mandatory language just referred to above.
The Court respectfully suggests that these arguments are in some measure irrelevant to the issue at hand. The issue is not whether the request to bid documents gave rights to prospective bidders which in the abstract they can enforce through equitable relief if their "rights" were violated nor is it relevant as to whether the town can waive any requirements in the request to bid papers. As said in the Brunoli case: "It is axiomatic that a party cannot be liable for breaching a contract with another party unless a contract exists between the parties that could be breached. In the realm of competitive bidding, it is well settled that a contract is created through the municipality's action of awarding a contract not through the submission of a bid by a contractor," 247 Conn. at page 411.
If the only predicate for injunctive relief against the awarding of a contract were the fact that the "successful" bidder was not obligated to satisfy a requirement otherwise imposed generally on all bidders in the request for bid documents there would be more than the multitude of cases in this area that McQuillan refers to in his discussion. As indicated in the general discussion of this problem the "favoritism" factor can only be considered as a factor in deciding whether equitable relief is warranted, if the "favoritism" interfered with the competitive bidding process and its object which is "to secure the best work or supplies at the lowest price practicable" with the object of statutes or ordinances requiring such bidding being "for the benefit of property holders and taxpayers, and not for the benefit or enrichment of bidders . . ." McQuillan, Municipal Corporations, Vol. 10, § 29:34 pp 477-78.
What about the bid bond requirement and the undisputed fact that none was submitted by Fabcor with its bid proposal? Again McQuillan is instructive in Volume 10 at § 29:73 "Deposit or other security" he says:
As a guaranty that they will meet the requirements of their bids, bidders for public contracts frequently are required to accompany their bids with a deposit or other security in a prescribed amount and form. Such a requirement is valid, and if not complied with, a bid may be rejected. Usually, however, substantial compliance with the requirements concerning the security of bids is deemed sufficient, and a bid or the subsequent proceeding relating there to will not be invalidated by reason of minor irregularities regarding the security or the time at which it is produced or perfected. Although there is some authority to the contrary, this requirement is for the protection of the city, and failure of the city to require it affords no ground of objection to the contract by a taxpayer.
The same logic would apply to any objection along these lines by an unsuccessful bidder.
In Adelhart Constrco v. U.S., 107 F.Sup. 845 (US CT of claims, 1952) the general conditions of the invitation to bid contained a mandatory provision in the invitation to bid said that "where security is required to insure the execution of contract and bond for performance of the service, no bid will be considered unless it is so guaranteed." The Court said: "These provisions are obviously intended for the benefit of the government. Regardless of factual variations which may define the limits of such a principle, it is well established that there are circumstances in which a party for whose protection a requirement is made may waive that requirement," id. page 846.
In Shannon Holloway Construction Co. v. Louisville Jefferson County, 674 SW 2d 523 (Ky App. 1983), the successful bidder submitted a bid bond for five instead of the ten percent. When brought to the lowest bidder's attention the discrepancy was immediately corrected. The court upheld the lower court's denial of an unsuccessful bidder's attempt to invalidate the contract award. The court noted: "In this case, the correct bond was posted before the contract was actually awarded, so the municipality was not deprived of assurance that the contract would be entered into and performed. Further, since the mistake was immediately rectified, there was no irregularity accepted that would discourage or affect the competitive bidding process," id. page 525. The court noted Hillside Township v. Sternin, 136 A.2d 265 (N.J., 1957), which found material noncompliance "only . . . where the low bidder did not accompany the bid with any form of security, and never attempted to cure the defect."
In this case the bid bond was secured before the contract was awarded and at the time the bid was submitted by phone and letter Fabcor had told the town the problem they were having as an out of state company, said they would post a bid bond in 30 to 45 days and in fact did so. And the critical point remains — how can it be said the failure to include the bid bond interfered with the competitive bidding process by subverting its aims In Re Route 280 Contract, 179 N.J.Sup.App.Div. 280, 431 A.2d 848 (1981), involved the bidding process for highway construction by the Commissioner of Transportation. At 179 N.J. page 285 the court said: "A contractor's financial capacity is a matter of primary concern to the commissioner in order to assure performance in the public interest. It is not a basis on which other bidders can compete; it cannot alter the bids submitted by other contractors." The waiver of the bid bond in this case, to use the language of a New York case did not result in any "meaningful disadvantage" to Meta-Life. In Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 650 A.2d 748, 138 N.J. 307 (1994), the New Jersey Supreme Court said "advertised conditions whose waiver is capable of becoming a vehicle for corruption or favoritism, or capable of encouraging improvidence or extravagance, or likely to affect the amount of any bid or to influence any potential bidder to refrain from bidding, or which are capable of affecting the ability of the contracting unit to make bid comparisons, are the kind of conditions (that) may not under any circumstances be waived" — thus entitling an unsuccessful bidder to equitable relief.
None of those considerations apply here. The two bidders were locked into their actual bids when they submitted them. The very amount of the bid bond is directly related to the amount of the bid submitted. Mr. Coppola tried to explain the "disadvantage" of allowing Fabcor to make a bid without a bid bond. His answer, at least for the court, was difficult to follow. If no bid bond was submitted, Fabcor could walk away from any obligations he had incurred by submitting its bid — but how does or would that have affected the amount of the bid submitted by Meta-Life? Mr. Coppola suggested that by not having a bid bond Fabcor when it "walked away" would have had the chance to see the prices of other bidders. What prices, what does that mean and does not that only become relevant if rebidding were to be ordered which assumes the result will be reached which the plaintiff desires. In any event for the foregoing reasons the waiver of the bid bond requirement at the time of the submission of the proposal was not, in the Court's opinion a material violation of the bidding requirement and therefore does not provide a grounds to enjoin the awarding of the contract to Fabcor at the behest of Meta-Life, an unsuccessful bidder.
The plaintiff at trial and in a footnote in its brief stated that although Fabcor claimed to have supplied the town with an original bid bond at some point after September 22, 2009 the original was not produced during discovery or at trial and there is no record of its transmittal to the town. However, Fabcor's senior estimator, Mr. Razor testified that an original was supplied. Mr. Fazekas the construction manager testified he was provided only with a copy of the bid bond not the original. He requested the original be supplied by Fabcor but does not remember if that was done and does not remember if he saw the original. But in response to Fabcor's attorney Fazekas agreed that in his opinion a bid bond was eventually procured. In Brookfield v. Candlerod Shores Estates Inc., 201 Conn. 1, 12 (1986), the court said at common law is a preferential not an exclusionary rule and quoting from a Vermont case said "it is merely a rule of preference operating as a special exception to the rules of testimonial preference. Section 10-2 "Admissibility of Copies" of the Code of Evidence allows the introduction of copies unless there is a "genuine question" as to the "Authenticity of the original or accuracy of the copy" or for some other reason it would be "unfair" to submit the copy. In light of the testimony submitted the court does not believe the exceptions to the allowance of copies has been met.
In addition to the failure to supply a bid bond upon submission of its bid, Fabcor also failed to supply at that time much of the information requested in the RFP including unit labor rates, a list of other similar construction projects the name of Fabcor's surety, Fabcor's bonding capacity and bond premium rate and the name and rating of its insurance carrier. As noted, however, twice in its brief the plaintiff described the bid bond issue as the most significant aspect of its claim for injunctive relief. Also in the examination of Mr. Coppola at trial reference was made to a letter he wrote to the town on August 19, 2009 as president of Meta-Life. In the first paragraph Mr. Coppola said he examined Fabcor's form of proposal and: "it was immediately determined that they (Fabcor) failed to include the mandatory bid bond. They also did not include their bonding capability, bond cost, labor rates, work in house or list of previous similar modular steel all projects. While some of the latter items may or may not be viewed as a medium to serious formality infractions, the willful omission of the bid bond must clearly result in their bid being denied and thrown out. "At trial Mr. Coppola agreed with the characterization of these matters, as opposed to the omission of the bid bond, as "not a big deal." At another point he seemed to say that if a bid bond had been submitted "we wouldn't be here." In his letter to the mayor he indicates his company has been in business over thirty years.
The test for the validity of a waiver of any provisions in the RFP is whether, under a favoritism argument — the only one made — permitting waiver would unfairly skewer the competitive bidding process whose aim is to secure the best job at the lowest price. An experienced business person, a competitor of Fabcor in this process, who struck the Court as highly intelligent and candid, and in the business for thirty years in effect, admitted the non-bid bond failure to comply aspects of his claim were no big deal. And it has not been articulated as to how a waiver of these requirements at the time of the bid proposal would adversely affect the integrity of the bidding process. As opposed to the bid bond position of the plaintiff it does not even appear to be claimed that these requirements were mandatory under the terms of the RFP.
In any event there was a scope of review of Fabcor's ability to do the work after the bids were submitted and it was determined Fabcor, to the town's satisfaction, could do the job and many of the items not covered in the bid proposal were answered apparently to the town's satisfaction. There is no claim made and no evidence was offered to show that absent its initial failure to provide the information requested or for any other reason Fabcor was incapable of fulfilling its contractual responsibilities if the job were to go forward under the contract awarded to that company. It escapes the Court as to how the failure to supply the information cited put the plaintiff at a competitive disadvantage. Or even if that hypothetical were viable, why the scope of review done for both companies would not have resolved that problem.
It should also be noted that in its brief the plaintiff claims it was only at trial that it was learned that the delay in the actual awarding the contract to Fabcor after the "missing bid information was supplied was Fabcor's unwillingness to sign the Project Labor Agreement which was also a requirement of the RFP and the proposed contract. Fabcor wanted to use more of its own labor than the union agreement with the town provided. It is therefore argued that "the town again afforded Fabcor a concession to the RFP requirements not afforded to other bidders for (this job) and permitted it to deviate from strict compliance with the Project Labor Agreement." The issue was resolved and the unions agreed to the concessions. Mr. Razor, the senior estimator for Fabcor testified at trial that as a result of negotiations with the unions more union labor would have had to have been utilized than originally planned. But post "concession." Fabcor did not try to adjust its price and any loss from using union labor was one Fabcor had to absorb. These developments were post bid by both Fabcor and Meta-Life, and the Court fails to see how no such "concession" to Meta-Life put it at a competitive disadvantage in the bidding process if hypothetically Meta-Life has asked for the same "concession" prior to making its bid would its bid have been lower — would Meta-Life want the same "concession?" How is the competitive bidding process affected, even if the town could not waive the Project Labor Agreement Project Labor Agreement aspects of the RFP.
In any event the non-bid bond failure to comply with the RFP conditions referred to in this case do not afford a basis for injunctive relief.
For the foregoing reasons injunctive relief is denied on the bases of the discussion in 3(a) and (b) of this decision.
Another separate way of approaching the issues before the court is simply to first focus on the propriety of or circumstances in which injunctive relief should be afforded in suits by unsuccessful bidders. First what relief is available? As noted, Brunoli made clear money damages may not be sought by the unsuccessful bidder 247 Conn. at p. 411. At the following page the court said: "A review of our prior cases illustrates, however that the only remedy afforded to unsuccessful bidders under the municipal bidding statutes has been injunctive relief against the awarding of the contract to the illegally favored bidder" id. p. 412. Even if this does not preclude the possibility of a mandatory injunction awarding the contract to the next lowest bidder, here Meta-Life, it is strong indication that our court would regard such relief appropriate in all but the rarest circumstances. In any event as the defendant notes mandatory injunctive relief "is an extraordinary remedy granted in the sound discretion of the court and only under compelling circumstances," Cheryl Terry Enterprises LTD v. Hartford, 270 Conn. 619, 650 (2004).
The relief sought here is in effect, a request for mandatory relief. At pages 2-3 of its brief the plaintiff says "the town must be enjoined from executing a contract with Fabcor" — so far just a prohibitory injunction — but then it is argued (as the only possible result of such a ruling); "as the next lowest responsive bidder for the work, the contract should be awarded to Meta-Life, or in the alternative the work should be rebid."
Even apart from all the court's ruminations on the definition of "favoritism" under the law in this area and whether any grounds to consider injunctive relief have been presented, the question remains as to what factors a court should take into consideration in deciding whether to grant injunctive relief in a case brought by an unsuccessful bidder. In other words as to the appropriate relief the court would refer to the beginning general discussion to the effect that these competitive bidding requirements are enacted for the benefit of the towns or other government agencies so the lowest price for the best work can be secured, the enrichment of the rejected bidder is not the object, the unsuccessful bidder bringing suit acts as a private attorney general etc.
The Court believes these factors should be considered in deciding whether to give injunctive relief if the court were to order that Meta-Life be awarded the contract the town would lose the benefit of over $215,000 in savings and have to spend many thousands more to Meta-Life to do the same job — all this in a scenario where the town has already determined Fabcor can do the work to the town's satisfaction. If rebidding is ordered the town may lose the advantages of the Fabcor bid if the latter does not wish to make a new proposal. The delay would be great, much time has been already consumed in this litigation in a project that is still not completed.
The Court has found very instructive the comments of the court in Sea-Land Service Inc. v Brown, 600 F.2d 429 (eA3 1979), where at page 434 the court said:
when jurisdiction is exercised in the field of governmental procurement, there are three interests that must be weighted: the practical considerations of efficient procurement of supplies for continuing government operation; the public interest in avoiding excessive costs; and the bidder's entitlement to fair treatment through agency adherence to statutes and regulations. Judicial intervention in procurement disputes necessarily results in delay and the expenditure of funds on behalf of all parties, usually without measurable benefit to the public. Although much must depend on the circumstances, by and large, the courts have recognized the necessity of exercising restraint in interfering with procurement decisions and of recognizing a large measure of discretion in the contracting officers.
For the foregoing reasons the court rules in favor of the defendants and denies the injunctive relief sought.