Lanier Worldwide, Inc. v. State of Tennessee ( 2007 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
March 7, 2007 Session
LANIER WORLDWIDE, INC. v. STATE OF TENNESSEE, ET AL.
A Direct Appeal from the Chancery Court for Davidson County
No. 06-2030-II The Honorable Carol McCoy, Chancellor
No. M2006-02630-COA-R3-CV - Filed on April 17, 2007
This case involves the protest of a bid made pursuant to an invitation to bid issued by the
State for copy machines. Upon protest made by several of the bidders as to the bid made by the
selected bidder, the board of standards, after review, awarded the contract to the selected bidder. The
next qualified bidder filed suit in chancery court, and the chancery court reversed the decision of the
board of standards and awarded the contract to the complaining bidder. The State-defendants and
the selected bidder appeal. We reverse and remand.
Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Reversed and
Remanded
W. FRANK CRAWFORD , P.J., W.S., delivered the opinion of the court, in which ALAN E. HIGHERS,
J. and DAVID R. FARMER , J., joined.
Robert E. Cooper, Jr., Attorney General and Reporter; Janie C. Porter, Senior Counsel, for
Appellants, State of Tennessee
William B. Hubbard and Marc Jenkins of Nashville, Tennessee; J. Richard Lodge Jr., and Russell
S. Baldwin of Nashville, Tennessee for Appellant, Océ Imagistics, Inc.
James A. DeLanis, Darwin A. Hindman, III and Mary Ann Miranda of Nashville, Tennessee for
Appellee, Lanier Worldwide, Inc.
OPINION
This case arises from protests filed by Lanier Worldwide, Inc. (“Lanier,” “Plaintiff,” or
“Appellee”) and Oce! Imagistics, Inc. (“Oce!”) concerning the State of Tennessee’s (“State”)
procurement of leases for copy machines (the “Copier Contract”) through its General Services
Department (“General Services”). T.C.A. § 12-3-214 (Supp. 2006) outlines the procedure for such
protests. Under this statute, General Services has the initial authority “to settle and resolve a protest
of a bidder....” T.C.A. § 12-3-214(c). If the protester is not satisfied with the resolution by General
Services, then the protester may appeal the General Services’ decision to the Board of Standards (the
“Board”). T.C.A. § 12-3-214(c)(2). The Board is comprised of the Comptroller of the Treasury,
(John G. Morgan) the Commissioner of General Services, (Gwendolyn Sims Davis) and the
Commissioner of Finance and Administration (Dave Goetz) (together with Mr. Morgan, Ms. Davis,
and the State, “State Defendants,” and, together with Oce!, “Appellants”). The statute also provides
that the protester may request a stay of proceedings with award of the disputed contract. T.C.A. §
12-3-214(d). Following the execution of any contested contract, the administrative process provides
that the protester may file a claim against the State for money damages in the Claims Commission.
T.C.A. § 12-3-214(e).
Beginning in September 2005, General Services, through its Purchasing Division, publicly
advertised for bids for the Copier Contract. On January 6, 2006, the State issued an Invitation to Bid
(“ITB”) soliciting competitive bids for the Copier Contract. Two of the bidders were Oce! and
Lanier. When the bids were opened on January 23, 2006, the Purchasing Division recommended that
the Copier Contract be awarded to Oce!. Lanier was the second lowest bidder. The bids were made
available for public inspection on February 14, 2006. Thereafter, Lanier and others filed protests
with General Services concerning the State’s decision to award the Copier Contract to Oce!.
Specifically, Lanier asserted that Oce!’s bid was non-responsive in that the productivity level of one
of Oce!’s copy machines (the Oce! 2110) did not meet the ITB’s specifications for the productivity
of the document feeder. By letter of March 3, 2006, General Services suspended the Copier Contract
award until the matter could be resolved. Following an informal hearing on March 23, 2006,
General Services addressed Lanier’s protests by letter dated April 10, 2006. In that letter, General
Services states that, “[i]n order to ensure securing adequate competition for the solicitation of bids
for the statewide copier contract, all bids on [the Copier Contract] should be rejected, and the process
begun anew....” Because General Services decided to re-bid the Copier Contract, it did not reach the
issue of Oce!’s alleged failure to submit a responsive bid and, instead, specifically pretermitted that
issue.
Lanier and Oce! both appealed General Services’ decision rejecting all bids to the Board. The
Board held a hearing on July 27, 2006 and found, inter alia, that the bids should not have been
rejected, and that Oce!’s bid was responsive to the ITB. The Board’s findings were set out in a letter
to the protesters dated August 7, 2006.
On the morning of August 15, 2006, the Copier Contract was fully executed and awarded to
Oce!. Later, on that same day, Lanier filed a “Verified Complaint for Declaratory Relief, To Extend
the Stay of the Award of a State Contract, or for Temporary Restraining Order, Preliminary
Injunction and Injunctive Relief” (the “Complaint”) against the State Defendants.1 By its Complaint,
Lanier sought, inter alia: a declaration that the selection or attempted selection of Oce! for the Copier
Contract was illegal and void; a temporary restraining order, preliminary injunction, and a permanent
injunction against the award of the Copier Contract to Oce!, and for other further and general relief.
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On August 18, 2006, Lanier filed an amendment to the original Complaint in order to add additional
allegations and requests for relief.
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Also on August 15, 2006, Lanier filed its “Motion to Continue Stay and for Entry of Temporary
Restraining Order, Temporary Injunction or Other Injunctive Relief” along with a Memorandum in
support thereof.
On August 16, 2006, Oce! filed a “Motion to Intervene and Opposition to TRO.” Attached
to this Motion is an exhibit titled “Statewide Contract Award,” which reflects that the Copier
Contract had been awarded to Oce!. By its Motion, Oce! asserted that, because the Copier Contract
had been awarded, Lanier’s request for a TRO was moot and should be denied. Oce! also asserted
that Lanier’s “exclusive remedy” was “before the Claims Commission on damages.” An “Agreed
Order of Intervention” was entered on August 23, 2006. Thereafter, the trial court denied Lanier’s
request for a TRO and, in denying same, noted that “[c]opy of contract reflects contract awarded
August 15, 2006.” On August 21, 2006, the State filed the administrative record.
On August 21, 2006, Oce! filed a Motion to Dismiss on the grounds that the Lanier’s
Complaint was moot because it sought to enjoin a contract that had already been awarded. Oce!
further asserted that the trial court lacked jurisdiction over claims for monetary damages.
Contemporaneous with the Motion to Dismiss, Oce! moved the court for an expedited hearing on that
Motion and specifically requested that the Motion be heard on August 24, 2006 at the same time as
Lanier’s Motion for Temporary Injunction. However, Oce! did not set the Motion to Dismiss or the
Motion for Expedited Hearing on the court’s docket as required by the Davidson County Local Rules
of Practice. By Order of September 1, 2006, the hearing on Lanier’s Motion for Temporary
Injunction was postponed to September 8, 2006.
Various filings took place in the following weeks. On November 2, 2006, a hearing on the
merits took place. At that hearing, the trial court denied Lanier’s request for a temporary injunction
as reflected by the Order entered on November 28, 2006. On November 14, 2006, the trial court
entered its “Memorandum and Order,” in which it found, in relevant part, that: [tr 4 509]
[T]he Board of Standards violated state statutes, the Rules of the
Purchasing Division and fundamental principles of the bid process by
allowing Oce! to make substantive bid modifications after the bid
opening. The action of the Board was illegal and absent the illegally
permitted supplemental documents and explanations, arbitrary.
Accordingly, the award to Oce! is declared void and of no effect. The
State is enjoined from proceeding any further with Oce! contract.
Bond is set at $500,000.00. This cause is remanded to the Board with
instructions to adhere to fair and proper bid procedures and to make
an appropriate award in keeping with the sound principles of the
competitive bid process.
At the November 14, 2006 hearing, the trial court also denied Oce!’s request for stay as reflected in
the November 28, 2006 Order.
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On November 20, 2006, Oce! filed its Notice of Appeal. On December 13, 2006, the State
Defendants filed their Notice of Appeal and motion for stay. On December 15, 2006, this Court
entered an Order staying the trial court’s November 14, 2006 Order pending the resolution of the
appeal.
The State Defendants raise the following issues for review as stated in their brief:
1. Whether the Chancery Court erred in failing to dismiss Lanier’s
claim for lack of subject matter jurisdiction and failure to state a
claim upon which relief may be granted.
2. Whether the Chancery Court erred by improperly substituting its
judgment for the decision of the Board of Standards, finding that the
Board of Standards acted illegally and arbitrarily, enjoining the State,
and voiding the contract.
3. Whether the Chancery Court erred in finding that no authority
exists for a post bid opening clarification procedure.
Oce! raises four issues for review as stated in its brief:
1. Whether Oce!’s bid is responsive to the Invitation to Bid (“ITB”).
2. Whether the Chancery Court had jurisdiction to entertain the
appeal after the award of the contract and after performance under the
contract.
3. Whether the Chancery Court erred in relying on provisions of the
State’s Invitation to Bid {“ITB”) that are not applicable to [the]
dispute before it.
4. In the event the State’s contract award was improper, whether the
Chancery Court erred in holding the contract void ab initio.
We will consider the State’s first issue for review:
1. Whether the Chancery Court erred in failing to dismiss Lanier’s
claim for lack of subject matter jurisdiction and failure to state a
claim upon which relief may be granted.
The board of standards, by letter dated August 7, 2006, held that the Océ bid was responsive,
and the contract would be awarded to Océ, which was done upon its execution August 15, 2006. On
August 15, 2006, subsequent to the award and execution of the contract to Océ, Lanier filed this
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action, which seeks, among other things, an injunction to enjoin the award of the contract to Océ and,
as subsequently amended, to enjoin the continued operation of the contract. Pursuant to the
provisions of T.C.A. 12-3-214 (2006 Supp.), bidders have a right to protest to the commissioner of
general services any aggrievement they might have in connection with the bid process, and the
commissioner is authorized to resolve the protests so made. T.C.A. 12-3-214 (a)(b)(c)(1). If the
controversy is not resolved by the commissioner in a manner satisfactory to the protestor, the matter
may be considered by the board of standards. T.C.A. § 12-3-214 (c)(2).
T.C.A. § 12-3-214 further provides specifically:
(d) Stay of Procurements During Protests. Prior to the award of a
contract, bidders who have protested may submit to the commissioner
a written petition for stay of award. Such stay shall become effective
upon receipt by the state. The state shall not proceed further with the
bid process or with the award of the contract until the protest has been
resolved in accordance with this section, unless the board of standards
makes a written determination that continuation of the bid process or
the award of the contract without delay is necessary to protect
substantial interests of the state. It shall be the responsibility of the
commissioner, with the assistance of the procuring agency, to seek
such a determination by the board of standards.
(e) Protests Subsequent to Award. The Tennessee claims
commission has exclusive jurisdiction to determine all monetary
claims against the state under this section for the negligent
deprivation of statutory rights
Significantly, the general assembly provided that protestors would be protected by a stay
prior to the award of a contract and, moreover, specifically provided that protests subsequent to the
award belong in the exclusive domain of the Tennessee Claims Commission. The legislature is
deemed to be aware of the long-standing common law of the state that where it appears that the act
to be enjoined has been consummated, an action for an injunction presents only a moot question and
will be dismissed. See Badgett v. Broome, 409 S.W.2d 354 (Tenn. 1966)(citing Malone v. Peay,
157 Tenn. 429, 7 S.W.2d 40 (1928)); Boyce v. Williams, 389 s.W.2d 272 (Tenn. 1965).
In construing statutes, the Court’s role is to ascertain and give effect to the legislative intent
without unduly restricting or expanding a statute’s coverage beyond its intended scope. Sallee v.
Barrett, 171 S.W.3d 822 (Tenn. 2005); McGee v. Best, 106 S.W.3d 48 (Tenn. Ct. App. 2002). In
McGee, the Court said:
The rule of statutory construction to which all others must
yield is that the intention of the legislature must prevail. Mangrum
v. Owens, 917 S.W.2d 244, 246 (Tenn. Ct. App. 1995)(citing Plough,
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Inc. v. Premier Pneumatics, Inc., 660 S.W.2d 495, 498 (Tenn. Ct.
App. 1983); City of Humboldt v. Morris, 579 S.W.2d 860, 863
(Tenn. Ct. App. 1978)). "[L]egislative intent or purpose is to be
ascertained primarily from the natural and ordinary meaning of the
language used, when read in the context of the entire statute, without
any forced or subtle construction to limit or extend the import of the
language." Id. (citing Worrall v. Kroger Co., 545 S.W.2d 736, 738
(Tenn. 1977)). The Court has a duty to construe a statute so that no
part will be inoperative, superfluous, void or insignificant. The Court
must give effect to every word, phrase, clause, and sentence of the
Act in order to achieve the Legislature's intent, and it must construe
a statute so that no section will destroy another. Id. (citing City of
Caryville v. Campbell County, 660 S.W.2d 510, 512 (Tenn. Ct. App.
1983); Tidwell v. Collins, 522 S.W.2d 674, 676 (Tenn. 1975).
Id. at 64.
The trial court, in its opinion, states: “This court may entertain judicial review of any
agency’s administrative action, even though the agency has already awarded the contract.
Metropolitan Air Research Testing Authority, Inc. v. Metro Gov’t of Nashville and Davidson
County, 842 S.W.2d 611 (Tenn. Ct. App. 1992), perm. app. denied (Nov. 30, 1992).” This Court
has no quarrel with the statements by the trial court; however, it appears that in the Metropolitan Air
Research case, the question of mootness was not raised and, in fact, this Court affirmed the trial
court’s judgment and remanded the case to the trial court for the entry of an order granting the city
a summary judgment and dismissing the claim against the city for allegedly acting arbitrarily and
unreasonably. We do not consider the decision in Metropolitan Air Research to mean that the Court
may enjoin an act that has already happened.
In this case, Lanier failed to act promptly and file suit to seek a stay and other relief.
Accordingly, the judgment of the trial court is reversed. We will, however, consider the other issues
for review.
The second issue for review raised by the State is:
2. Whether the chancery court erred by improperly substituting its
judgment for the decision of the Board of Standards, finding that the
Board of Standards acted illegally and arbitrarily, enjoining the State,
and voiding the contract.
In International Business Machines Corp. v. Board of Standards of the State of Tennessee,
1992 WL 184805 (Tenn. Ct. App. Aug. 5, 1992), one of the issues for review was whether the proper
standard of review of the decision of the board of standards is under the common law writ of
certiorari. The Court held that “where the administrative agency is performing a function that is
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essentially legislative or administrative, only a narrow review under the common law writ is
available. Hoover Motor Express Co. v. Railroad and Public Utilities Commission, 195 Tenn. 593,
261 S.W.2d 233 (1953); People’s Bank of Van Leer v. Bryan, 55 Tenn. App. 166, 397 S.W.2d 401
(1965). The Court explained:
In hearing the protest, the Board performs a function that is
essentially administrative. Evaluating a bid to see if it complies with
the ITB is a function of the Department of General Services, one
which the agency must perform daily in carrying out its
administrative duties. Where disputes arise in connection with the
department's administration of the state procurement system, the
power to resolve the dispute is given to the Board. But the function
is still administrative, much like the functions performed by the
Commissioner of Insurance in ruling on an application for a rate
increase, Pack v. Royal Globe Ins. Co., 224 Tenn. 452, 457 S.W.2d
19 (1970), or the Superintendent of Banks in ruling on an application
to establish a branch bank. People's Bank of Van Leer v. Bryan, 55
Tenn.App. 166, 397 S.W.2d 401 (1965).
Therefore, the courts must limit their review of the Board’s
decision to the narrow scope of the common law writ.
Id. at *2.
Proceedings under the common law writ of certiorari are limited in the courts to the question
of whether an administrative board acted fraudulently, illegally, or exceeded its jurisdiction and if,
upon the examination of the evidence before board, the court finds that there is any material evidence
to sustain the board’s finding, its action could be affirmed. City of Memphis v. Sherwood Bldg.
Corp., 208 Tenn. 17, 343 S.W.2d 869 (1961).
In Robinson v. Clement, 65 S.W.3d 632 (Tenn. Ct. App. 2001), this Court stated:
A common-law writ of certiorari is an extraordinary judicial
remedy. Robinson v. Traughber, 13 S.W.3d 361, 364
(Tenn.Ct.App.1999); Fite v. State Bd. of Paroles, 925 S.W.2d 543,
544 (Tenn.Ct.App.1996). It is not available as a matter of right, Boyce
v. Williams, 215 Tenn. 704, 713-14, 389 S.W.2d 272, 277 (1965);
Yokley v. State, 632 S.W.2d 123, 127 (Tenn.Ct.App.1981), but rather
is addressed to the trial court's discretion. Blackmon v. Tennessee
Bd. of Paroles, 29 S.W.3d 875, 878 (Tenn.Ct.App.2000).
Accordingly, decisions to grant or deny a common-law writ of
certiorari are reviewed using the familiar “abuse of discretion”
standard. Robinson v. Traughber, 13 S.W.3d at 364. Under this
standard, a reviewing court should not reverse a trial court's
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discretionary decision unless it is based on a misapplication of
controlling legal principles or a clearly erroneous assessment of the
evidence, Overstreet v. Shoney's, Inc., 4 S.W.3d 694, 709
(Tenn.Ct.App.1999), or unless it affirmatively appears that the trial
court's decision was against logic or reasoning, and caused an
injustice or injury to the complaining party. Marcus v. Marcus, 993
S.W.2d 596, 601 (Tenn.1999); Douglas v. Estate of Robertson, 876
S.W.2d 95, 97 (Tenn.1994).
The scope of review under a common-law writ of certiorari is
extremely limited. Courts may not (1) inquire into the intrinsic
correctness of the lower tribunal's decision, Arnold v. Tennessee Bd.
of Paroles, 956 S.W.2d 478, 480 (Tenn.1997); Powell v. Parole
Eligibility Review Bd., 879 S.W.2d 871, 873 (Tenn.Ct.App.1994), (2)
reweigh the evidence, Watts v. Civil Serv. Bd. for Columbia, 606
S.W.2d 274, 277 (Tenn.1980); Hoover, Inc. v. Metropolitan Bd. of
Zoning Appeals, 924 S.W.2d 900, 904 (Tenn.Ct.App.1996), or (3)
substitute their judgment for that of the lower tribunal. 421 Corp. v.
Metropolitan Gov't, 36 S.W.3d 469, 474 (Tenn.Ct.App.2000).
Rather, the writ permits the courts to examine the lower tribunal's
decision to determine whether the tribunal exceeded its jurisdiction
or acted illegally, fraudulently, or arbitrarily. Turner v. Tennessee
Bd. of Paroles, 993 S.W.2d 78, 80 (Tenn.Ct.App.1999); Daniels v.
Traughber, 984 S.W.2d 918, 924 (Tenn.Ct.App.1998).
Id. at 635.
The trial court concluded that Océ submitted to the State a series of late bid
modifications in order to cure a facially non-responsive bid and that, in effect, it was not a
clarification of the bid. It thus appears that the seminal question involved is whether the State
allowed and Océ proposed modifications to its bid as opposed to a clarification of what it had
previously contained in its bid. Apparently, Lanier asserts that Océ was allowed to submit a different
copying machine or different specs for a copying machine than the one on which it had initially bid.
The record reflects, however, that the bid made by Océ, along with the other bidders, had been on
machines that were capable of being networked, and the question really boiled down to whether the
machine bid by Océ had the capability of a document feeder at 75 pages per minute. It is undisputed
that Océ’s bid price never changed, and it appears to contradict Lanier’s assertion that a different
machine at a higher cost was being offered the State after the bids had been opened. Océ’s bid was
considerably higher than Lanier’s bid, because it included its sophisticated equipment that feeds 90
pages per minute.
The proceedings before the board reflect that Mr. Matt Ross, a buyer with general services,
testified concerning the clarification required and how it arose.
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MR. ROSS: With respect to specs with the Buyer’s Lab on
OCÉ, I know that it does include – 2110 does have options, PRISMA
options.
I declared an intention to award. That’s just merely an
intention. After the intention, we then opened up the file for review
so all these professionals from Lanier and Océ could come in and
others to examine the file and look it over and raise questions. If in
the case, like there was in this case, about engaging the document
feeder and whatnot, they’re almost a tool that helps us evaluate it as
well.
So after my, you know, granting an intending to award, that’s
when Lanier posed a valid question. And I agreed with the question.
That’s when I went back to Océ and sought clarification because I
couldn’t find it in the BLI. So when Lanier raised that question,
that’s when we engaged in –
COMMISSIONER GOETZ: What clarification did you
receive?
MR. ROSS: Clarification from Océ saying that – that’s when
the communication began with the letter dated February 21st in the
protest packet there. That’s the one where they spoke about it does
indeed meet the specs. They mentioned the DocSetter, explained
that. So therefore I prepared the intending –
COMMISSIONER GOETZ: So you have no reason to believe
there was no intent not to bid the additional document feeder to
improve the speed to meet the qualifications?
MR. ROSS: Honestly, sir, no. On the bid there’s not a place
for you to write in all the accessories that’s going to be included with
these machines. So you write your model in; you write your bid
price. Therefore, you know, I agreed.
COMMISSIONER GOETZ: That’s why you have to go seek
clarification sometimes?
MR. ROSS: Absolutely. Yes, sir.
Mr. Thad Watkins, general counsel for the board of standards, then questioned Mr. Ross:
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MR. WATKINS: Members of the Board, I want Matt Ross –
Matt, if you could stand up. Matt, I want you to explain to the Board
what you were just telling me, the issue that was raised by Lanier
after it reviewed the file. I forget which tab where they allege that on
its face it showed that it fell below performance standards.
Had you seen that or was that the first time you saw that
problem was when Lanier brought it to you?
MR. ROSS: That was the first time I was aware of the
problem.
MR. WATKINS: Did you miss it?
MR. ROSS: Right.
MR. WATKINS: You missed it.
MR. ROSS: That’s why we open the file for inspection, to get
people in the industry actually to point out mistakes or instances
where we may have overlooked something. In this case that’s what
happened.
Let’s propose I caught that on the front end and recommended
to bypass Océ Imagistics for failing to meet the spec. Before we
bypass them, we would have clarified with the company and sought
clarification before we bypassed them and went on to the next low
bidder so –
MR. WATKINS: The reason –
COMMISSIONER GOETZ: We’ve had clarifications before.
MR. WATKINS: Yes. And the reason you brought it up was
not just because Lanier brought it up and you were trying to salvage
the intended award, but that you just hadn’t seen it before?
MR. ROSS: Exactly.
MR. WATKINS: And if you had seen it before, you would
have sought clarification?
MR. ROSS: Absolutely.
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MR. WATKINS: Before bypassing?
MR. ROSS: Right.
MR. WATKINS: That’s exactly the same thing you did after
Lanier brought the issue out.
MR. ROSS: The fact that Lanier caught it and I didn’t catch
it, that’s regrettable. But they did catch it and once it was caught we
acted in the way I would have acted if I had caught it.
MR. WATKINS: And you were satisfied with the
clarifications that cured any potential – that clarified and satisfied you
that they would, in fact, meet the entire level of the specification?
MR. ROSS: Yes, sir, I was.
The board of standards rendered its decision, and we quote from the record the comments
made by each member:
COMMISSIONER GOETZ: There are a couple of things
though that I think to me, at least, seem to be fairly clear indicators,
two things. One is the amount of money on the bid documents
submitted. That would seem to inlcude – it would seem to bear out
the contention by Océ that they had included this high-speed
document imager in their original proposal that was submitted at the
time. It was there.
Secondly, in the letter cited on February 20th it does cite the
90-page-per-minute, which is the same as the ScanSubmit spec, at
least as I understand it at this point.
It seems unclear as to exactly what the document was. It was
at least unclear enough to get the – once it was brought to your
attention, to get our buyer to seek a clarification. And it does not
seem to have changed the substance of the bid given the apparent
evidence that it was included in the original bid price. I find that, in
my opinion, that the bid does not deserve to be disqualified.
COMPTROLLER MORGAN: I concur with that. I think
you’ve stated it well. And, frankly, I don’t know exactly – I don’t
know how – what we asked for was the machine manufacturer and
model number. That’s what they responded in their bid. It almost is
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essential then to go behind in this case because it’s – there’s nothing
in the literature suggesting there’s a different model number as
published in Buyer’s Lab for this copier with the 90-page document
feeder on it. So I’m not sure how they would ever be any more
responsive than they were based on what they submitted.
So I concur with the Commissioner. I think it was perfectly
appropriate. If the question be raised, I think it was perfectly
appropriate the clarification be sought. There’s nothing here to
suggest to me that there would be anything different today than they
[sic] were when the bid was originally submitted. I concur with the
Commissioner.
COMMISSIONER DAVIS: I guess for me it was pretty clear
to me just looking at the prices, your difference between the price of
Océ.
As far as the clarification is concerned, I think you answered
that very well. And to seek clarification on an item that you’re not
really sure of, that was appropriate. . . . Looking at the documents, it’s
evidence to me that – I don’t feel this bid should be disqualified. I
think there’s sufficient documentation.
This Court noted in Marta v. Metro. Gov. of Nashville, 842 S.W.2d 611 (Tenn. Ct. App.
1992):
Courts are wary of unwarranted judicial intrusions into the
performance of ordinary governmental activities . . . .
Since procuring goods and services is a type of routine activity
that is best left to governmental officials, most courts have recognized
that public procurement authorities have wide discretion with regard
to accepting bids or any of the other details of entering into a contract.
(citations omitted)
Purchasing officials must not be arbitrary, unreasonable, or
capricious.” Wood-Hopkins Contracting Co. v. Roger J. Au & Son,
Inc., 354 So. 2d 446, 449-50 (Fla. Dist. Ct. App. 1978). Thus, in the
absence of fraud, corruption, or palpable abuse of discretion, the
courts will ordinarily not interfere with governmental procurement
decisions.”
Id. at 619.
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From our review of the record, we find that there is substantial and material evidence in the
record to support the decision of the board of standards that Océ met the specifications in the ITB.
We further find that it was not improper for the department of general services to seek clarification
for some of the issues raised by Lanier in order to be sure that the State was getting the best properly
made bid in this proposed procurement. It appears that the trial court substituted its judgment for
the board of standard’s judgment.
The State’s next issue for review is:
3. Whether the Chancery Court erred in finding that no authority
exists for a post bid opening clarification procedure.
The trial court found that the purchasing department had no authority for seeking clarification
of the bids proposed. Lanier cites no authority prohibiting clarification, and it appears from a review
of the record that clarification is sought on occasion to prevent needless and unwarranted procedural
difficulties in completing the bidding process. It certainly is not in dispute that clarification should
not be used to correct an otherwise nonresponsive bid. That is not the case before us. The record
does not indicate any unfair dealing or practices on the part of the State, and the clarification made
by Océ established that its bid at the cost stated complied with the specifications of the ITB.
Accordingly, the judgment of the chancery court is reversed, and the case is remanded to the
chancery court with instructions to dismiss the petition for writ of certiorari. Costs of the appeal
are assessed against Appellee, Lanier Worldwide, Inc. All other issues are pretermitted.
__________________________________________
W. FRANK CRAWFORD, PRESIDING JUDGE, W.S.
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