Holly's, Inc. v. County of Greensville

Present: All the Justices
HOLLY'S, INC. OPINION BY
v. Record No. 941572 CHIEF JUSTICE HARRY L. CARRICO
June 9, 1995
COUNTY OF GREENSVILLE
FROM THE CIRCUIT COURT OF GREENSVILLE COUNTY
Robert G. O'Hara, Jr., Judge
This litigation commenced with the filing of a bill of
complaint by Holly's, Inc. (Holly's) against the County of
Greensville (the County). The dispute involves certain provisions
of the Virginia Public Procurement Act, Code §§ 11-35 through -80
(the Act). Section 11-42(B) provides that "[a] public body may
waive informalities in bids," and the primary question on appeal
is whether this provision permits a public body to waive a
requirement concerning the timeliness of bids.
The facts germane to the issues in the case were stipulated
by the parties. As pertinent here, the stipulated facts reveal
the following situation:
5. The bid invitation stated in part as follows:
"On Thursday, March 17, 1994, at 2:00 p.m. all
bids received for provision of residential
solid waste collection in Greensville County
will be opened."
. . . .
8. On March 17, 1994, Holly's submitted its bid at
1:34 p.m. and had the same stamped and time-dated by the
County . . . . [Browning-Ferris Industries of S.
Atlantic, Inc. (BFI)] had also submitted its sealed bid
to a County official prior to 2:00 p.m. that day.
9. At 1:50 p.m. a representative from [ARS-Waste
Management, Ltd. (ARS)] was present in the room where
the bid opening was to be conducted and had with him the
sealed bid of ARS.
10. Mr. Fred Maldonado, the County employee in
charge of the bid opening process, was not in the
designated room at the time the ARS representative
arrived, and did not arrive in the designated room until
either 2:02 p.m. or 2:03 p.m.
11. Between 1:50 p.m. and Mr. Maldonado's arrival
in the designated bid-opening room . . ., the
representative of Holly's, the representative of BFI,
the representative of ARS and the bid of ARS were
continually present together in the designated bid-
opening room, and throughout that time Mr. Maldonado was
apart from them and continually had in his possession
the sealed bids of both BFI and Holly's.
12. When Mr. Maldonado entered the designated bid-
opening room, the bid of ARS was either lying upon the
table to be utilized by Mr. Maldonado (which is the
recollection of the ARS representative and of Mr.
Maldonado), or instead the ARS representative handed its
bid to Mr. Maldonado (which is the recollection of the
representative of Holly's and the representative of
BFI).
13. Upon opening the bids ARS was the apparent low
bidder . . ., and Holly's was the next lowest bidder
. . .
. . . .
15. A regularly scheduled meeting of the
Greensville County Board of Supervisors was scheduled
for Monday, March 21, 1994, beginning at 7:30 p.m., and
an agenda item for that evening was the review of all
bids received on March 17 and an award of the contract.
16. Prior to 5:00 p.m. on March 21, [the attorney
for Holly's] communicated Holly's protest of the bid of
ARS in two separate letters which were sent that day by
telefax, one to Mr. Maldonado and the other to the
County Attorney.
17. At their meeting Monday evening, March 21, the
County accepted the bid of ARS and awarded the contract
to it.
18. As requested by [the attorney for Holly's],
the County Attorney left the Supervisors' meeting as
soon as that action was taken by the Board of
Supervisors . . . and called [the attorney for Holly's]
at his home to advise that the Board had given
consideration to the matters raised in his two letters
sent by telefax earlier that day, and thereafter taken
action awarding the contract to ARS.
19. On March 23, 1994, the County's authorized and
designated representative afforded Holly's written
notice of County's decision to award the contract to the
low bidder, ARS.
On May 13, 1994, Holly's filed its bill of complaint alleging
that the County's award of the contract to ARS did not constitute
an honest exercise of discretion but was arbitrary and capricious
and not in accordance with the Act, the County purchasing
procedures, or the terms and conditions of the invitation to bid.
Holly's sought a permanent injunction against award of the
contract to ARS and also sought the entry of an order declaring
Holly's the low bidder.
After a hearing, the trial court held that the acceptance of
the ARS bid constituted a proper exercise of the County's "right
to waive informalities in the sealed bid process, which right is
afforded to County by Virginia Code Section 11-42." Consequently,
the court denied the prayer of Holly's for a permanent injunction
and ordered the matter stricken from the docket.
We first consider an argument made by the County that
"Holly's claim is barred by its failure to institute this action
within the time limits imposed by Virginia Code Section 11-66.A.
*
and by the doctrines of laches and equitable estoppel." However,
in its final decree, the trial court ruled that Holly's was not
"barred from prosecuting its interests in this matter, whether by
*
As pertinent here, Code § 11-66(A) provides that a bidder
desiring to protest the award of a contract shall submit such
protest in writing no later than ten days after the award, that
the public body or designated official shall issue a decision in
writing within ten days, stating the reason for the action taken,
and that the decision shall be final unless the protesting bidder
institutes legal action within ten days of the written decision.
operation of Virginia Code Section 11-66, . . . by the doctrine of
equitable estoppel, by the doctrine of laches, or by any other
statute or doctrine," and, as Holly's points out, the County did
not object to this ruling; indeed, the decree is endorsed by
counsel for the County in these words: "I ask for this decree."
Accordingly, we will not consider the County's argument. Rule
5:25.
This brings us to the primary issue in the case, viz., the
timeliness of the ARS bid. The County devotes a considerable
portion of its brief to a contention that the bid of ARS was
"submitted" prior to 2:00 p.m. on March 17, 1994, and that this
submission satisfied the requirements of the invitation to bid. A
distinction must be made, the County maintains, between the word
"submit" and the word "receive." Quoting a dictionary definition,
the County says that the word "submit" means "to commit
(something) to the consideration of another" while the word
"receive" means "to take or acquire (something given, offered or
transmitted)."
The County then argues it is undisputed that a representative
of ARS was in the bid-opening room at 1:50 p.m., that he had with
him the bid of ARS, that from the time he arrived until the
arrival of Mr. Maldonado at 2:02 or 2:03 p.m., the representative
of Holly's, the representative of BFI, the representative of ARS,
and the bid of ARS were together in the room, and that when Mr.
Maldonado entered the room, the bid was either lying on a table in
that room or forthwith handed to Mr. Maldonado. Accordingly, says
the County, "the bid of ARS was in the place where it was required
to be before the time when it was required to be there," and the
only reason the bid was not received prior to 2:00 p.m., as
opposed to being submitted prior to 2:00 p.m., was Mr. Maldonado's
failure to be in the designated place at the designated time. In
short, the County asserts, "the bid of ARS was submitted both
properly and timely."
The County opines that had the General Assembly shared the
enthusiasm of Holly's for form over substance, it would have
provided in the Act "that no bids received (as opposed to
submitted) after the designated bid-opening hour would be
considered." The County points out that the General Assembly
declined to impose such a rigid and inflexible standard, and the
County requests that this Court "likewise adopt a policy of
substance over form."
We decline the request. To refuse to adopt the County's
views on this subject would not involve elevating form over
substance but rather would involve merely giving a word its plain
and ordinary meaning. The invitation to bid in this case stated
that on the given date all bids "received" for provision of solid
waste collection would be opened at 2:00 p.m. Under this
language, a bid could not be opened at 2:00 p.m. unless it was
received before 2:00 p.m. Hence, it was not sufficient merely to
submit a bid to the County prior to the appointed hour; in
addition, the bid must have been received by the County before
that time. And the risk that some untoward event might occur to
prevent the bid's timely receipt must fall upon ARS, whose
representative waited until almost the last minute to submit its
bid.
Remaining is the question whether the County could waive the
2:00 p.m. filing requirement. The answer to this question turns
on whether the requirement is an informality that may be waived
under Code § 11-42(B).
The County argues that the requirement does constitute an
informality that may be waived. The County points out that § 11-
37 defines an informality as "a minor defect or variation of a bid
. . . from the exact requirements of the Invitation to Bid . . .
which does not affect the price, quality, quantity or delivery
schedule for the . . . services . . . being procured," and the
County cites three out-of-state decisions as authority for the
proposition that "a bid tendered late by a bidder may be
accepted": Townsend v. McCall, 80 So. 2d 262, 266 (Ala. 1955);
Nielsen v. City of St. Paul, 88 N.W.2d 853, 859 (Minn. 1958);
Gostovich v. City of West Richland, 452 P.2d 737, 740 (Wash.
1969). Our research has disclosed two other decisions holding to
the same effect: Hewitt Contracting Co. v. Melbourne Regional
Airport Auth., 528 So. 2d 122, 122 (Fla. Dist. Ct. App. 1988);
William M. Young & Co. v. West Orange Redev. Agency, 311 A.2d 390,
392 (N.J. Super. App. Div. 1973).
Holly's also cites a number of out-of-state decisions but
they do not address the question whether a time requirement for
filing bids may be waived. However, our research discloses four
decisions supporting the view that such a time requirement may not
be waived. City of Atlanta v. J.A. Jones Constr. Co., 392 S.E.2d
564, 569 (Ga. Ct. App.), rev'd on other grounds, 398 S.E.2d 369(Ga. 1990), cert. denied, 500 U.S. 928 (1991); Hawaii Corp. v.
Kim, 500 P.2d 1165, 1169 (Haw. 1972); Rexton, Inc. v. State, 521
N.W.2d 51, 53-54 (Minn. Ct. App. 1994) (distinguishing Nielsen v.
City of St. Paul, supra); Wiltom Coach Co. v. Central High School,
232 N.Y.S.2d 876, 877 (N.Y. Sup. Ct. 1962).
Hence, five out-of-state decisions support waiver and four
support non-waiver. We think the non-waiver decisions express
the better view for it fosters the establishment of a bright-line
rule for determining whether a bid is timely. As we said in
Newport News v. Doyle & Russell, Inc., 211 Va. 603, 179 S.E.2d 493(1971), where we enforced a provision in a bid form prohibiting a
plea of mistake:
To hold otherwise would . . . seriously jeopardize the
sanctity of the system for bidding on public contracts
and lead to the uncertainty and unreliability of bids.
The system followed here for awarding such contracts
saves the public harmless, as well as the bidders
themselves, from favoritism or fraud in its varied
forms.
Id. at 608, 179 S.E.2d at 497.
In our opinion, a requirement in an invitation to bid that
fixes the time within which bids must be received is not a minor
defect or an informality that may be waived but, rather, a
material and formal requirement that, under the circumstances
present here, must be fulfilled to the letter of the law.
Accordingly, we hold that the trial court erred in ruling that
ARS's late filing of its bid could be waived. By way of remedy,
Code § 11-70(C) provides that the award of a contract "shall be
reversed only if the [challenger] establishes that the . . . award
is not an honest exercise of discretion, but rather is . . . not
in accordance with the . . . terms and conditions of the
Invitation to Bid." Here, the award was not in accordance with
the terms and conditions of the invitation to bid and,
accordingly, Holly's is entitled to the relief it seeks, viz., the
reversal of the judgment of the trial court, a declaration that
the contract between the County and ARS is void as a matter of
law, and a remand of the matter to the trial court for
consideration of the prayer of Holly's for injunctive relief.
Reversed and remanded.
JUSTICE STEPHENSON, with whom JUSTICE WHITING joins, dissenting.
I would hold that ARS's bid was "received" timely. According
to the stipulated facts, "[a]t 1:50 p.m. a representative from ARS
was present in the room where the bid opening was to be conducted
and had with him the sealed bid of ARS." However, "the County
employee in charge of the bid opening process . . . was not in the
designated room at the time the ARS representative arrived, and
did not arrive in the designated room until either 2:02 p.m. or
2:03 p.m." Between 1:50 p.m. and the time the County employee
arrived in the room, "the representative of ARS and the bid of ARS
were continually present together in the designated bid-opening
room." When the County employee entered the designated bid-
opening room, "the bid of ARS was either lying upon the table to
be utilized by [the County employee] . . . or . . . the ARS
representative handed its bid to [the County employee]."
Thus, ARS had its sealed bid in the designated bid-opening
room ten minutes before the deadline. I think that ARS's bid
should not have been voided due to circumstances that were beyond
its control, i.e., the tardiness of the County's employee.