Nelson v. City of Horn Lake
| Docket Number: | 2006-CA-02122-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 11-15-2007 Opinion Author: WALLER, P.J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Public contract - Denial of lowest bid - Section 31-7-13(d)(I) - Due process - Arbitrary and capricious decision - News release Judge(s) Concurring: SMITH, C.J., DIAZ, P.J., EASLEY, CARLSON, DICKINSON, RANDOLPH AND LAMAR, JJ. Non Participating Judge(s): GRAVES, J. Procedural History: Admin or Agency Judgment Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 12-01-2006 Appealed from: DeSoto County Circuit Court Judge: Robert P. Chamberlin Disposition: Affirmed Appellee's decision to reject Appellant's bid |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | WILLIE NELSON d/b/a NELSON PLUMBING
COMPANY |
CHRISTOPHER SOLOP
JOSEPH M. GIANOLA, JR. |
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| Appellee: | CITY OF HORN LAKE ACTING BY AND THROUGH ITS BOARD OF ALDERMEN | JOHN D. PRICE BILLY C. CAMPBELL, JR. | ||
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| Topic: | Public contract - Denial of lowest bid - Section 31-7-13(d)(I) - Due process - Arbitrary and capricious decision - News release |
| Summary of the Facts: | In 2005, the Mayor and Board of Aldermen of the City of Horn Lake advertised bids for the Goodman Road Sanitary Sewer Improvements project. The City required that bidders have a certificate of responsibility issued by the Mississippi State Board of Public Contractors and specified that the contract would be awarded to the lowest responsive, responsible Bidder. Additionally, the City reserved the right to conduct an investigation of the bidders’ capacity to perform the work and reserved the right to reject any bid if the City determined that a bidder could not carry out the obligations of the contract. Willie Nelson d/b/a Nelson Plumbing Company is a Mississippi sole proprietorship holding a valid certificate of responsibility for various classifications of work. Of the five companies that submitted bids for the Goodman Project, Nelson submitted the lowest bid in the amount of $2,294,035.50. Nevertheless, the City’s Board of Aldermen unanimously voted to award the contract for the Goodman Project to Freeland and Lemm Construction Company, who had submitted the second lowest bid at $2,298,761.62. Nelson submitted a letter to the mayor and city clerk protesting the City’s decision to deny him the Goodman Project contract. The City responded to Nelson’s written protest by affirming its decision to award the contract to Freeland. Nelson filed a Notice of Appeal and Bill of Exceptions in the DeSoto County Circuit Court. Nelson also filed a Motion to Compel, requesting that the circuit court order the mayor to sign the Bill of Exceptions. The City filed its Designation of Appeal Record, which included its Corrections to the Bill of Exceptions that had been signed by the mayor. The circuit court entered an order dismissing Nelson’s appeal and affirming the City’s decision. Nelson appeals. |
| Summary of Opinion Analysis: | Issue 1: Section 31-7-13(d)(I) The City awarded the Goodman Project contract to the second-lowest bidder based on complaints about Nelson and his conduct under previous contracts. Nelson argues that the City’s minutes failed to include detailed calculations specifying costs that would have been incurred had his lowest bid been accepted, including costs for additional supervision, and that detailed, mathematical calculations are an objective requirement essential to protecting the integrity of the public procurement system. Section 31-7-13(d)(i) requires a city to place on its minutes detailed calculations and a narrative summary when accepting a bid other than the lowest bid submitted. The term “detailed calculations” requires, at least, that the dollar amount of the accepted bid and the dollar amount of the lowest bid be included in the governing authority’s minutes. When awarding contracts, a governing authority may consider a bidder’s responsibility concerning matters that relate to the prompt and efficient performance of a contract, including the bidder’s honesty and integrity, skill and business judgment, experience and capability of performing the contract, conduct under previous contracts, and the quality of previous work. When a lowest bid is denied based upon such considerations, as in the subject case, there will most likely be little in the way of “detailed calculations” to include in the governing authority’s minutes. Here, the City’s minutes provided the minimal, requisite “detailed calculations” by citing the dollar amounts of the lowest bid and the accepted bid. Because the City’s advertisement for bids allowed for consideration of bidders’ “responsibility” and because the City also reserved the right to investigate bidders, the City had the right to reject Nelson’s bid for the reasons it set forth. Issue 2: Due process Nelson argues that he acquired a property interest in the Goodman Project contract because he was the lowest, responsive bidder, and that the City violated his procedural due process rights by not affording him notice and a hearing. Having never been awarded the Goodman Project contract, Nelson never had a legitimate claim of entitlement to such contract. Because Nelson had no constitutionally protected right in the Goodman Project contract, procedural due process is not invoked. Nevertheless, Nelson received the requisite procedural due process provided under Mississippi law. Issue 3: Arbitrary and capricious decision Nelson argues that the City acted arbitrarily and capriciously in denying him the Goodman Project contract. The record provides some evidence that the City investigated other bidders, but the City’s investigation was focused primarily on Nelson because he had submitted the lowest bid. The City’s consideration of Nelson’s past performance was not an arbitrary and capricious act. Nelson argues that complaints concerning his payment disputes with previous suppliers should not have been considered by the City because these suppliers were protected by Nelson’s payment bond. The aggregate of such disputes may bear upon the contractor’s honesty, integrity, business judgment, conduct under previous contracts, and pecuniary ability—all of which have been held to be appropriate considerations in awarding a public contract. Additionally, the complaints regarding Nelson were not isolated to payment disputes with suppliers. Thus, substantial evidence that the City did not act arbitrarily and capriciously in reaching its decision to award the contract to Freeland rather than Nelson. Issue 4: News release In Nelson’s reply brief before the circuit court, he referenced and attached as an exhibit a news release from the OSHA which showed that Freeland had been fined $96,400 for safety violations which resulted in the death of one of its employees. Nelson argues that the circuit court erred by not including the news release as part of the record. Because the press release was not included in the bill of exceptions, the circuit court did not err in excluding the OSHA news release from the record. |
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