Preferred Transport Co., LLC v. Claiborne County Bd. of Supervisors


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Docket Number: 2008-CA-01532-COA
Court of Appeals: Opinion Link
Opinion Date: 04-06-2010
Opinion Author: Barnes, J.
Holding: Affirmed
Additional Case Information: Topic: Solid waste disposal - Award of bid - Exceeding authority - Section 31-7-13(r) - Statutory relief - Reopening proposal process
Judge(s) Concurring: King, C.J., Lee and Myers, P.JJ., Irving, Griffis, Ishee, Roberts and Maxwell, JJ.
Non Participating Judge(s): Carlton, J.
Procedural History: Admin or Agency Judgment; Bench Trial
Nature of the Case: CIVIL - OTHER
Trial Court: Date of Trial Judgment: 08-04-2008
Appealed from: Claiborne County Circuit Court
Judge: Lamar Pickard
Disposition: ORDERED DEFENDANT TO RE-BID CONTRACT BUT DECLINED TO ADDRESS ISSUE OF PLAINTIFF’S DAMAGES
Case Number: 2008-46
Note: Due to a military leave of absence, Hon. Virginia C. Carlton did not participate in this hand down.
  Party Name: Attorney Name:   Brief(s) Available:
Appellant: Preferred Transport Company, LLC




 ROBERT C. LATHAM, JEREMY PETER DIAMOND



  
  • Appellant #1 Brief
  • Appellant #1 Reply Brief
    		•
    Appellee: Claiborne County Board of Supervisors J. LAWSON HESTER, JACQUELINE H. RAY  
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    Topic: Solid waste disposal - Award of bid - Exceeding authority - Section 31-7-13(r) - Statutory relief - Reopening proposal process
    Summary of the Facts: Preferred Transport Company, LLC filed a complaint alleging that award of a bid for solid waste disposal by the Claiborne County Board of Supervisors to another company was in violation of statutory authority as the bid award was based on factors not contained in the Request for Proposals. The circuit court agreed with PTC, ruling that the Board violated statutory authority in its consideration of factors outside the bid documents and ordering the bid process to be reopened. PTC appeals, and the Board cross-appeals.
    Summary of Opinion Analysis: Issue 1: Exceeding authority PTC argues that the circuit court correctly held that the Board exceeded its authority in considering other factors not contained in the request for proposal documents. Where the law allows a governing authority to determine the lowest and best bidder, it is permissible for factors other than price to be considered. These factors may include the bidder’s honesty and integrity, the bidder’s skill and business judgment, the bidder’s experience and facilities for carrying out the contract, the bidder’s conduct under previous contracts, and the quality of work previously done by the bidder. Although governing authorities have a measure of discretion in awarding public contracts, this discretion only exists where it is supported by statute. Although both parties reference section 31-7-13(d)(i) to support their differing views on what constitutes the “lowest and best bid,” this portion of the statute is not applicable to the type of contract in this case. Subsection (r) is the sole authority of the proposal process for solid waste disposal; therefore, the Board was not under the obligation to select the “lowest and best bid,” but “the most qualified proposal or proposals.” There was no issue with the quality of PTC’s prior services to the County or the fact that it submitted the lowest proposal. However, the Board based its award on factors which HomeBase unilaterally included in its proposal (i.e., the company is owned by a local resident, would offer special services for elderly customers, and provide employment for local residents). PTC was unaware until the hearing before the Board that these factors, which were not included in the RFP, were even to be considered. Local economic development and services for the elderly are certainly factors worthy of the Board’s consideration, and HomeBase’s proposal may have been the “most qualified” based upon these factors. However, the Board’s consideration of these “other relevant factors” in awarding the contract, when it had failed to include them in the RFP, was a violation of section 31-7-13(r) which requires that “all factors determined relevant by the governing authority . . . shall be duly included in the advertisement to elicit proposals.” Once the Board determined that it was going to consider these “other relevant factors,” the Board should have re-instituted the request for proposal process. Merely raising these factors at the hearing on the proposals did not cure this error. Issue 2: Statutory relief PTC argues that the circuit court had the statutory authority to award the contract to PTC pursuant to section 11-51-75 or, alternatively, to award it compensatory damages and attorney’s fees. Section 31-7-13 (r) provides that if the governing authority or agency deems none of the proposals to be qualified or otherwise acceptable, the request for proposals process may be reinitiated. Therefore, as the Board had statutory authority to reopen the proposal process, there was no error in the circuit court’s use of this procedure as an available remedy. Since this case involves an ongoing services contract which can be renewed upon the award of a new contract at the closing of the request for proposal process, an award of compensatory damages was not warranted.


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