Competitive Bidding in Illinois Park Districts

by Stanley P. Sklar Attorney, Northbrook Park District

I. INTRODUCTION

The purposes of the statute requiring competitive bidding in the awarding of contracts are to invite competition, guard against favoritism, improvidence, extravagance, fraud and corruption and to secure the best work or supplies at the lowest price practicable. Inherent in competitive bidding is the requirement that a common standard be prescribed on all matters material to the proposals and that all interested persons bid intelligently and be so induced by the promise of impartiality. It is uniformly held that where the requirement of public bidding is present, non-observance of the reqiurements will render a contract void and unenforceable.

The relevant statutory authority and restrictions for park district purchases is found in Chapter 105, Article 8, of the Illinois Revised Statutes, captioned "General Powers of Park Districts." Section 8-1 (c) states in part that every park district shall have the power

"to . . . purchase any personal property necessary for its corporate purposes provided that all contracts for supplies, materials or work involving an expenditure in excess of $2,500 shall be let to the lowest responsible bidder, after due advertisement, excepting contracts which by their nature are not adapted to award by competitive bidding . . ."

Usually no written contract need be executed by the parties but this, of course, depends upon whether or not a written contract was actually contemplated by them. After a contract is awarded and the bidder subsequently refuses to take the contract, some jurisdictions would permit the Board to rescind the award and without readvertising, re-award the contract to the next lower bidder; while other jurisdictions would require readvertising for bid. The subsequent refusal to execute a contract by the Park Board creates an action for damages on the part of the bidder.

II. SPECIFICATIONS

Where the plans and specifications are left to the bidder to be submitted with his bid, the effect is to stifle competition by denying a uniform standard to all bidders.

Although specifications may be modified prior to the time the bids are received and opened, notices sent to bidders changing the specifications after bids have been advertised for and received, render the contract involved void.

A patented article or process may be specified by the Park Board even under the requirement for competitive bidding, and in the absence of bad faith, the motives of the public body in so doing will not be inquired into. The rationale permitting this is that competitive bidding was never intended to prevent a public body from making use of new and valuable inventions, and that every bidder has a right to procure the right to make use of the invention.

III. ADVERTISING

All responsible bidders must have an equal opportunity to compete for the award, and unreasonable restrictions imposed by the Park Board which are designed to limit the list of bidders is illegal. This does not preclude the imposition of reasonable restrictions as to kind or quality of the material to be used, furnishing certificates of the manufacturer of the material used, requirements of a sample, the requirement of the posting of a bond by the bidder or prequalifying bidders.

Specifically, bidders should at least be informed by the advertisement and/or the specifications on file in the board office of (1) the quantity or amount of supplies or work, (2) time within which the work is to be finished or supplies furnished, (3) the manner in which the work is to be done, (4) the quality of materials to be furnished, (5) any other matters necessary to enable bidders to bid intelligently. Any bidder who has been furnished secret information will have his contract declared void and unenforceable.

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IV. HANDLING BIDS

Although bids may not be changed in substance after presentation to the board and the lapse of the designated time for opening the bids, mere irregularities in form may, after the opening, be corrected or disregarded. A change of the contract in any material respect after the bid is accepted requires that the bid be readvertised.

An honest mistake in bidding by a bidder due to clerical error, without an intent to mislead the Board or other bidders, and to which the bidder calls attention promptly, will not cause the bidder to be bound by the bid. However, a misunderstanding of the legal effect of the proposal is no ground to release the bidder from its obligation. Similarly, when the bidder's mistake was the result of its negligence, it cannot be released from its obligation.

A bid may be withdrawn before acceptance by the Board if proper notice of withdrawal is given by the bidder to the Board. After acceptance by the Board, no bid may be withdrawn. A proper written notice should be personally delivered by the bidder to the Board setting forth the specific ground for withdrawal.

If authorities are so empowered they may reject all bids, in which case the lowest bidder does not have a vested or property interest in the contract merely by reason of having submitted the lowest bid. The Board may thereupon proceed anew with the letting of the contract. In rejecting bids, the commissioners cannot act arbitrarily or capriciously, but must observe good faith and .accord to all bidders just consideration, avoiding favoritism, abuse of descretion or hint of corruption.

In situations where actual competition does not exist, there may be only one bid. The requirement for more than one bid is inapplicable where, for example, only one company is capable of supplying the material. In this situation, actual competition in bidding is not necessary so long as the Board has afforded an opportunity for all persons to participate in the bidding. If there is one bid only, and if the law has been followed in all respects, it is proper for the Park Board to award the contract to such single bidder and still preserve the requirement of competitive bidding. Similarly, the single bid may be rejected and the bid readvertised.

All bids must be opened in the designated place, at a public meeting by the proper Board member with at least three-fifths (3/5) of the Commissioners in attendance. The Board need not pass on the bids immediately on opening them or before adjournment of the meeting.

The Commissioners may take a reasonable time thereafter to consider the bids. However, when voting on the bids, there must be a roll call of the Commissioners and the yeas and nays recorded. Procedurally, sealed bids will be opened in the presence of a quorum of Commissioners, the names of the bidders recorded, and the amounts of each bid read aloud.

A clerical error in recording a bid by the Secretary of the

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Board has no effect on the bid as the bid speaks for itself. Bidders may also be present at the opening and should be encouraged to attend the bid opening.

V. STANDARDS FOR AWARDING CONTRACTS

A contract should be generally awarded to the lowest responsible bidder who complies with the advertised proposals and specifications and statutory requirements. Although this means the lowest responsible bidder is the one who is also financially responsible, it does not mean merely the lowest bidder whose financial ability to perform the contract is deemed the best, but the bidder most likely in regard to skill, ability, judgment and integrity, to do faithful, conscientious work and promptly fulfill the contract to its letter and spirit.

The term "responsible" includes the ability to respond by the discharge of the contract and the obligations thereunder, in accordance with what may be reasonably expected or demanded under the terms of the contract. The determination of the "lowest responsible bidder" does not afford the Commissioners an unlimited discretion; but is predicated upon a bona fide judgment based upon proper facts tending to support the determination. This determination will not be disturbed unless it is arbitrary, an unreasonable misuse of discretion, fraudulent, or lacks good faith.

A contract may under certain circumstances be awarded to one who is not the lowest responsible bidder, when the award is in the public interest in the exercise of discretionary power, without fraud, unfair dealing or favoritism and must be predicated upon a sound and reasonable basis disclosed at the public meeting.

Where there is no significant difference in the responsibility of bidders, the bid offering best quality should be accepted. Where there is no significant difference in responsibility or quality, then time of delivery should be the acceptable standard. If everything else is equal, preference should then be given to local residents. If all of the foregoing are equal in every respect, an award may be made by lot or split between bidders.

When the bid is not responsive to the specifications and other requirements imposed by the Park Board, the bid may be rejected. Similarly, a bid may be rejected even if it is the lowest bid when a supplementary investigation of respondent has disclosed that the respondent is not, in fact sufficiently responsible to assure adequate performance. Bear in mind that rejection based upon supplementary investigation will be permitted only in the absence of fraud.

Contracts in which Park District Commissioners or officers have a pecuniary interest should be rejected. Any attempt to influence an award by tendering, giving, offering, directly or indirectly, any article, money, or other thing of value to an officer, employee or Commissioner will cause any contract to be void regardless of the responsibility of the bidder.

If it appears to be in the best interest of the Park District, all bids may be rejected and the Board may reissue the bid invitation. In this case, all bidders will be notified at a regular or specially scheduled meeting of the reason why all bids were rejected.

VI. WAIVER OF COMPETITIVE BIDDING

If the commodities or equipment cannot by their nature be the subject of competitive bidding, they are exempt from the requirements of competitive bidding. For example, repairs or replacement parts which can only be purchased from a single source because they are needed for a particular piece of eqiupment need not be competitively bid. In Attorney General's Opinion (referred to hereinafter as A.G.O.) No. 1367 dated May 11, 1965 .and A.G.O. No. 1402 dated July 7, 1965, it was held that the lease or purchase of specially designed business equipment is not subject to the public bidding requirements as it is a product or service economically procured from one source. Similarly, any item for sale as surplus property by any agency of the state, unit of local government or by the United States government need not be competitively bid.

Provisions as to competitive bidding have been held not to apply to contracts for services of an attorney, accountants, advertising specialist, consulting engineer, and professional men such as appraisers and insurance brokers. It has also been held that contracts for advertising, leasing office space for Park District purposes and contracts granting licenses or concessions, are exempt from the requirements of public bidding.

A.G.O. No. 1473 dated October 20, 1965, exempts from the public bidding statute contracts for professional, technical or artistic skills, specifically referring therein to the services of an interior decorator. A.G.O. No. NP207 dated August 18, 1970, requires that moving contracts come within the purview of the bidding requirements as they do not fall within the exemption.

A.G.O. No. S-256 dated January 20, 1971, states that any person or service called a professional consultant is not automatically exempt from bidding requirements of the act. The opinion goes on to state that since the term professional does not have a definite and set meaning, it is not the name that is used that determines the inapplicability of the act, but rather the nature of the service rendered.

As used in the statute "professional ... is not limited to those of certain long established and recognized professions such as medicine, law, theology, etc ... these services are not work or labor in the usual sense but instead are basically a mental product.

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While many of the services are already within this exception as a natural result of the particular skill, some services may or may not be included, dependent upon the fact and particular circumstances."

VII. DOLLAR LIMITATIONS

You may not divide the work to let it under several contracts, where the amount for each contract falls below Two Thousand Five Hundred ($2,500.00) Dollars which is the amount required for competitive bidding.

Legally separable and factually separable transaction, each of which is below the amount required for competitive bidding, but which in the aggregate exceed such amount, do not require such bidding.

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