Agency Discretion

When we hear about an agency having a certain amount of discretion, what is meant by that term?  Different courts have defined it differently, and this month we will look at two different court cases defining agency discretion for jurisdictions.   

The first case we will review is Robinson Electric Co. v Dade County, (417 So. 2d 1032). In this case, Dade County, Florida, issued an Invitation to Bid, (ITB), for electrical renovation. Dade County awarded Robinson as the lowest responsive and responsible bidder.  Another bidder filed a protest arguing that Robinson was non-responsive in that Robinson submitted a cashier’s check instead of a certified check, bank draft, or bid bond, as required in the ITB. Subsequent addenda clarified the requirement to be a bid bond of 5%.  The trial court vacated the award and ordered the County to reissue the ITB. On appeal, the appellate court reversed the trial court and ordered that the award to Robinson be reinstated.  In its opinion, the appellate court found the submittal of a cashier’s check was a minor variance, which did not affect the competitive process in any way.   

In the above opinion, the court also relied upon Bryan Const. Co., v Board of Trustees, (The Free Public Library of Montclair, NJ) 106 A. 2d 303. This NJ case provided persuasive authority to the Florida appellant court, stating in part: 

“Mere irregularity of a bid will not justify its rejection by a municipal body charged with a duty of awarding a contract to the lowest bidder. The form of the bid, not being embodied in the statute, is a regulation prescribed by the city; and failure to technically comply with the form required will not defeat the right of the lowest bidder, to have the contract, if, after the bids are opened, it appears there has been substantial compliance with the requirement…”  

Now, we will review a case involving the City of New Orleans, LA. In Hamp’s Constr., LLC v. the City of New Orleans, Supreme Court of Louisiana, No. 2005-C-0489.  The city advertised an ITB for demolition work. The bidding documents required that bidders return their bid, with a “…copy of the city’s Invitation to Bid issued for this project.”  After a review of the six timely bids received the city selected Concrete Busters (CONCRETE) as the lowest responsive and responsible bidder for the alternate bid.  Hamp’s Construction (HAMPS) (2nd lowest bidder) filed a protest arguing that CONCRETE was non-responsive as it failed to return a copy of the city’s ITB with its’ otherwise complete bid response.  The protest was denied by the city, and HAMPS then sought injunctive relief to prevent the city from awarding the contract.  

At trial, the court upheld the City’s right to waive minor informalities and found that CONCRETE complied with “the substantive formalities as outlined in the bid requirement.” The state supreme court reversed the trial court’s decision finding: 

…” when a public entity elects to place certain requirements for bids and on its bid forms, that entity is bound by those requirements and may not choose to waive them at a later date.”  

What is the lesson learned?  Procurement officials need to have a collaborative relationship with legal counsel and knowledge of their jurisdictions’ relevant case law.