EVEN AT THE RISK of forgoing the lowest price, a city may properly reject a bid for waste collection services if a contractor fails to strictly meet its pre-bidding obligations, according to a ruling by a California appeals court. By a request for proposals (RFP), the city of Irwindale, Calif., solicited bids from contractors for waste and recyclables collection, processing and disposal services.
Under the RFP, the city could, among other things, reject any proposals, waive irregularities in any proposal and “waiv[e] any requirements of the RFP … in the best interest of the city.” The RFP banned contact between a bidder and city officials regarding the procurement and required bidders to participate in a process that included a mandatory pre-bid conference.
A representative from Valley Vista Services Inc. (VVS), Industry, Calif., planned to attend the conference, but due to a serious emergency at one of the company's recycling centers, he arrived an hour and a half late. He was at the facility when an injury occurred, and he stayed to assist the injured party. He did not contact the city during the meeting to explain his situation. At the conference, a competitor insisted that VVS be disqualified from the bidding process and threatened a lawsuit if the city ignored VVS's tardiness.
Following the bidding conference, the city manager briefed the city council about the circumstances and announced that he intended to disqualify VVS from the bidding process because of the representative's late arrival. After the council took no action to waive the disqualification, the city manager informed VVS that it would not be allowed to submit a bid.
VVS objected to its exclusion, asking that its bidding rights be reinstated. In a pre-emptory move, it submitted its bid and the related fee to the city before the deadline. The city responded by reaffirming its decision, returning VVS's check and directing the company to pick up its bid package.
Shortly thereafter, VVS filed suit against the city, seeking an order that would require the city either to consider its bid or terminate the procurement. While the matter was pending, the city council held a special meeting and voted to disqualify the company from the RFP process. The trial court dismissed VVS's action because the council's decision was within its authority even though it occurred after the bid submission deadline.
“The fact that someone could successfully drop off a sealed envelope at the City Clerk's office doesn't preclude … disqualify[ing] the bid whether it's done the day after the envelope is dropped off or 90 days later,” the judge observed.
On appeal, the decision was upheld. “The city council was faced with two competing interests,” noted the appellate court. “Requiring compliance with the mandatory provisions of the RFP and acquiring the lowest bid.” The court ruled that the city council did not abuse its discretion by “preserv[ing] the sanctity of the bidding process.”
[Valley Vista Services Inc. v. City of Irwindale, No. B158888 (Cal.App.Dist.2, Feb. 28, 2003]
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The columnist is a Rockville, Md., attorney and serves as general counsel of the Solid Waste Association of North America.