Great Lakes Heating, Cooling, Refrigeration & Sheet Metal Corp. v. Troy School District

197 Mich. App. 312 (1992) 494 N.W.2d 863

GREAT LAKES HEATING, COOLING, REFRIGERATION AND SHEET METAL CORPORATION
v.
TROY SCHOOL DISTRICT

Docket No. 129890.

Michigan Court of Appeals.

Decided December 7, 1992, at 10:30 A.M.

Lawrence D. Heitsch, P.C. (by Lawrence D. Heitsch), for Great Lakes Heating, Cooling, Refrigeration and Sheet Metal Corporation.

Dickinson, Wright, Moon, Van Dusen & Freeman (by Charles F. Clippert and Terry W. Milne), for Troy School District.

Grylls, Facca, Richter & Pregler (by Patrick A. Facca), for Mechanical Heat & Cold, Inc.

Amici Curiae:

Federlein, Grylls & Keranen, P.C. (by John K. Grylls), for the Construction Association.

Michigan Association of School Boards (by Linda L. Bruin).

Before: SHEPHERD, P.J., and WEAVER and TAYLOR, JJ.

WEAVER, J.

Defendant school district solicited bids from contractors to work on the construction of a new high school. The advertisement stated:

Notice is hereby given that sealed bids will be received by Troy School District, 1100 Urbancrest, Troy, Michigan XXXXX-XXXX — by delivery & mail on or before April 3, 1990, at 2:00 P.M.E.S.T.

Plaintiff was bidding on Bid Package No. 2-11, mechanical work. Within the bid-package proposal, there was a specific provision concerning late bids that read:

Bids must be received at the designated location prior to the time and date for receipt of bids indicated in the Advertisement to Bid or any extension thereof made by addendum. Bids received after designated bid receipt deadlines may at the discretion of the Owner, be returned unopened.

Plaintiff submitted its bid at 2:05 P.M. on April 3, 1990. The bid was marked "late." According to three of defendant school district's employees that were present and in charge of receiving bids, plaintiff's bid was submitted after 2:00 P.M., as shown on the clock located in the office at which the bids were to be received.

At 6:30 P.M. on April 3, 1990, all bids were opened except plaintiff's bid and one other that was also filed after 2:00 P.M. On April 19, 1990, plaintiff filed an action seeking an order requiring the school district to open and consider its bid before awarding a contract.

Following a hearing, the trial court found as a matter of fact that the bid was submitted five minutes after the deadline. The trial court further held that plaintiff's bid should still be opened and considered by the school district. Pursuant to the court's order, defendant allowed both late bids to be opened and considered. Defendant granted plaintiff the contract for the mechanical work.

Mechanical Heat & Cold, Inc., and Monte Costella & Company, Inc., who had entered timely bids, both intervened, asking for relief from the order, which the trial court denied. Defendant and Mechanical both appeal. We reverse and remand.

The essential question presented is whether the court erred in ordering the school board to open and consider the late bid submitted by plaintiff, substituting its discretion for that of the school board.

The exercise of discretion to accept or reject bids will be controlled by the courts only when necessary to prevent fraud, injustice, or the violation of a trust. The courts will indulge the presumption that the authorities acted in good faith. J J Zayti Trucking, Inc v Detroit, 137 Mich. App. 705; 359 NW2d 201 (1984); Leavy v City of Jackson, 247 Mich. 447; 226 N.W. 214 (1929).

We recognize that judicial intervention in procurement necessarily results in delay and the expenditure of funds on behalf of all parties. We hold that a trial court cannot disturb the decision of a school board on a bid unless there has been some form of fraud, abuse, or illegality. See Sea-Land Service, Inc v Brown, 600 F2d 429 (CA 3, 1979), Bud Johnson Construction Co, Inc v Metropolitan Transit Comm, 272 NW2d 31 (Minn, 1978), and In re Nole & Son, Inc v Bd of Ed of the City School Dist of Norwich, 129 AD2d 873; 514 NYS2d 274 (1987). We find that to hold otherwise would create the possibility of opening a floodgate of litigation that would benefit neither the public authority nor the citizens and taxpayers it is attempting to represent and serve.

We recognize and reject plaintiff's arguments concerning the factual question regarding when the bid was delivered and the effect of implementing daylight savings time.

We reverse the order directing the school board to open and consider the bid, and remand to allow the trial court to fashion an appropriate remedy. We do not retain jurisdiction.

Reversed and remanded.