Whether required by state law or
by local ordinance or practice, municipalities often use the competitive
bidding process to purchase property, equipment and most types of
services.
In
the recent case of Design Dwellings,
Inc., d/b/a DDI Construction v. Town of Windham, (Sup. Ct. Cumberland
County, March 13, 2017) the plaintiff challenged an award of a road
construction contract by the Town of Windham to a contractor who was not the
low bidder. In denying DDI’s request for
preliminary injunction, the Court reiterated that Carroll F. Look Construction Company v. Town of Beals, 2002 Me. 128,
¶9, 802 A.2d. 994, holds that when a municipality sends out a request for bids
it is making a request for an offer, not an offer which may be accepted to form
a contract. By soliciting responses to
the bid, the municipality then has the right to make a choice of whether or not
to enter into a contract by accepting one of those bids as an offer. This is particularly so when a municipality
makes it clear that it is free to accept or reject any and all bids.
After
the preliminary injunction was denied, the Town of Windham filed a Motion for
Judgment on the Pleadings on an amended complaint. The plaintiff argued that even if the request
for bids was just a request for offers, a disappointed bidder may still recover
its bid preparation costs and possibly lost profits if they rely on statements
made in the bidding documents. Justice
Lance Walker ruled that for the same reasons that a request for bids is not an
offer, it is not reasonable to rely on any statements made in those requests
for bids, and granted the Motion for Judgment on the Pleadings.
The
point of all this is that municipalities simply need to be careful about how they
use language in requests for bids, to ensure that the process being followed is
simply a request for offers. After the
offer is received, the municipality can then make a decision as to whether or
not to enter into a contract, and with which bidder.
Preti Flaherty represented the
Town of Windham in this case.
