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Court of Appeal:
City Did Not Abuse Its Broad Discretion in Competitive Bidding by Modifying Terms
By a MetNews Staff Writer
The Court of Appeal for this district held yesterday that a judge erred in snatching a contact from a company that provides an ingredient in asphalt concrete because it failed to attend a mandatory bidders’ conference and supplied a sample past the deadline for doing so, holding that the City of Los Angeles has broad discretion in conducting competitive bidding.
Presiding Justice Lee Edmon authored the unpublished opinion. It affirms a judgment by Los Angeles Superior Court Judge James Chalfant to the extent it denies the petition of Lunday-Thagard Company dba World Oil Refining (“LTC”) for a writ ordering the city to award the contract to it, but reverses the invalidation of the award to the sole other bidder, San Joaquin Refining Co., Inc. (“SJR”).
Edmon said Chalfant correctly found that LTC’s own bid was non-conforming, but erred in finding the city had a mandatory duty to reject SJR’s bid.
“[I]n the absence of evidence of corruption, a public entity has discretion to accept a bid that ‘substantially conforms’ to its specifications so long as the variance cannot have affected the amount of the bid or given a bidder a competitive advantage not allowed other bidders,” she wrote.
SJR’s Non-Attendance
LTC contended that attendance at a pre-bid conference had been denominated “mandatory” in the request for quotations and that SJR’s non-attendance was fatal to its bid. It argued that “where a bid includes admonitions that it will be deemed ‘non-responsive’ if specific requirements are not met, those requirements are always deemed material and thus unwaivable.”
Edmon responded:
“LTC’s contention erroneously equates the distinct concepts of waiving and modifying bid requirements.”
She explained that a public entity has the power “to modify bid specifications prior to the bid submission date,” and the city issued an amendment to the specifications prior to the bidding removing the requirement of presence at the meeting.
Untimely Submission
Edmon said the city did waive the untimeliness of SJR’s submission of a sample.
Under the Court of Appeal’s 1988 decision in Konica Business Machines U.S.A., Inc. v. Regents of University of California, she noted, a public entity abuses its discretion if it waives deviations from the specifications to the extent that it enables one bidder to bid lower than a rival and win the contract, evincing favoritism and giving it a competitive advantage. There was no violation of Konica by the city, Edmon declared.
She wrote:
“The trial court’s conclusion that the City’s waiver gave SJR a competitive advantage because it held LTC, but not SJR, to strict compliance with performance specifications misunderstands what ‘competitive advantage’ means in the present context. Indisputably, any waiver ‘advantages’ the party whose noncompliance is waived because but for the waiver, that party could not be awarded the contract. But defining ‘competitive advantage’ in this way would prohibit the City from waiving any deviations, even immaterial ones. The Charter says otherwise, expressly permitting the City to waive a bid ‘informality’ if doing so ‘would be to the advantage of the City.’ ”
She specified:
“There is no suggestion in the present case that SJR’s late sample submission either affected its bid price or would have allowed it to withdraw its bid bond without penalty, and thus the City’s waiver did not give SJR a competitive advantage as a matter of law.”
The case is Lunday-Thagard Co. v. City of Los Angeles, B307777.
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