One measure of the effective operation of any park district is the extent to which it successfully maneuvers through the complex body of law that meticulously prescribes the various requirements for a governmental entity to enter into contractual relationships. The purpose of this article is to highlight some basic issues which need to be addressed by park districts when contemplating a particular contractual relationship.

Nature of park district entity
Chapter 105, Section 8-1 of the Illinois Revised Statutes (the "Park District Code") provides that park districts are bodies corporate and politic. Furthermore, park districts are non-home rule units which can only exercise those powers expressly granted to them by statute or necessarily implied by such grant. Charleston v. Champaign Park District, 110 Ill. App. 3d 554, 442 N.E. 2d 915 (1982).

Purpose of competitive bidding
The purpose behind requiring governmental units to engage in competitive bidding is to invite competition, to guard against favoritism, improvidence, extravagance, fraud and corruption, and to secure the best work or supplies at the lowest price practicable. Smith v. FWD Corporation, 106 Ill. App. 3d 429, 436 N.E. 2d 35 (1982). However, in the absence of some statutory provision, competitive bidding is not an essential prerequisite to the validity of contracts by and with public bodies. Moreover, a statute requiring bids is restrictive and should not be extended beyond the language used. Adamouski v. Daley, 22 Ill. App. 2d 87, 159 N.E. 2d 15 (1959).

Requirement of competitive bidding
Section 8-l(c) of the Park District Code requires that all contracts for supplies, materials or work involving an expenditure in excess of $10,000 shall be let to the lowest responsible bidder. Personal service contracts, printing contracts, book or periodical contracts, utility service contracts, or contracts arising out of an emergency situation are all permitted exceptions to competitive bidding procedures.

Necessity of a prior appropriation
The general contractual provisions of Section 8-1(c), alone, are without significance in determining whether a park district has the power to enter into a particular contract. City of Marquette Heights v. Vrell, 22 Ill. App. 2d 254, 160 N.E. 2d 593 (1959). For example, Section 4-4 of the Park District Code requires an appropriation prior to the entry into a specific contract.

Necessity of proper park district board action
The contracting ability of a park district is also restricted by Section 4-6 of the Park District Code which warns that no member of a park district board nor any person, whether in the employ of the board or otherwise, shall have the power to create any debt, obligation, claim or liability, except with the express authority of the park district board conferred at a meeting thereof and duly recorded in a record of its proceedings. In D. C. Consulting Engineers, Inc. v. Batavia Park District, 143 Ill. App. 3d 60, 492 N.E. 2d 1000 (1986), the park district superintendent told a structural engineer "that since repair work had to be done, he might as well start doing it." Several initial invoices submitted to the park district board were paid but the work was never paid for in full. The engineer filed suit for the balance due. The court denied relief citing the general rule that when an employee of a governmental entity purports to bind that entity, in violation of an applicable statute, such a contract is void. The court found that there was no evidence that the park district board had voted to authorize such an expenditure. The purported contract was void from the beginning and the fact that the district may ultimately have benefited could not serve to validate the contract.

Ultra vires versus irregular actions
In order to mitigate the rather harsh consequences of having a contract rendered void, the courts have distinguished between instances where a governmental entity's entry into a contract was ultra vires, requiring the voiding of the contract, and instances where a governmental entity was authorized to contract but exercised its power irregularly with respect to that particular obligation. In this latter circumstance, a governmental entity may not assert its want of authority, where to do so would give it an unconscionable advantage over the other party. Stahelen v. Board of Education, 87 Ill. App. 2d 28, 230 N.E. 2d 465 (1967). The remedy available to the aggrieved party is recovery in quantum meruit. Ryan v. Warren Township High School District 121, 155 Ill. App. 3d 203, 510 N.E. 2d 911 (1987). The courts have noted, though, that the lines distinguishing between void, ultra vires actions and irregular actions of a governmental body are not always clearly drawn by the cases. Allen v. Treat, 72 Ill. App. 2d 466, 218 N.E. 2d 250 (1966).

Prohibition of conflict of interest
Statutory conflict of interest prohibitions also affect the validity of contracts. Chapter 102, Section 3 of the Illinois Revised Statutes provides that no person holding office either by elec-

tion or appointment may be interested, either directly or indirectly, in any contract which such officer may be called upon to act or vote. There are several exceptions to this provision including public disclosure of an official's interest, abstaining from voting on the contract in issue, or a minimal percentage of ownership by the official in the contracting entity. Any contract procured in violation of the statute's provisions is void. This Chapter, prohibiting public officers from having an interest in contracts executed in their official capacity, is declaratory of the common law. Panozzo v. City of Rockford, 306 Ill. App. 443, 28 N.E. 2d 748 (1940).

Residency or citizenship requirements for bidders
It is a violation of the Privileges and Immunities Clause of the U.S. Constitution, Article I, Section 8, clause 3, to require a contractor on any public works project to employ only Illinois laborers. Bemardi v. Leary Construction Co., 102 Ill. 2d 295, 464 N.E. 2d 1019 (1984). Likewise, it is unconstitutional to include a citizenship requirement among bid specifications. Holland v. Bleigh Construction Co., 61 Ill. 2d 258, 335 N.E. 2d 469 (1975).

Prompt Payment Act
Section 4-4b of the Park District Code provides that all purchases under the Code must be made in compliance with the Local Government Prompt Payment Act. The Prompt Payment Act, Chapter 85, Section 5601 of the Illinois Revised Statutes requires, in substance, that the governmental agency receiving goods or services must pay for them within 30 days after the receipt of the vendor's bill or within 30 days after the date on which the goods or services were received, whichever is later. If payment is not made within such time frames, interest at a rate of 1% per month accrues on the unpaid balance.

Broad contours of the term "lowest responsible bidder"
The term "lowest responsible bidder" is incapable of an exact definition, Armstrong v. Crystal Lake Park District, 139 Ill. App. 3d 991, 487 N.E. 2d 648 (1985), but the concept involves considerably more than solely the monetary amount of the company's bid. Willett Motor Coach Co. v. Board of Education, 171 Ill. App. 3d 166, 524 N.E. 2d 1155 (1988). The term contemplates that the bidder discharge its contractual obligations in accordance with what may be expected or demanded under the terms of the contract. Hallett v. City of Elgin, 254 Ill. 343, 98 N.E. 530 (1912). In the proper circumstance, a contract may be awarded to one who is not the lowest bidder, where this is done in the public interest, in the exercise of discretionary power granted under the laws, without fraud, unfair dealing, or favoritism, and where there is a sound and reasonable basis for the award. McQuillan, Municipal Corporations, 3rd Ed., Vol. 10, Section 29.73. Where an entity has exercised its discretion, the presumption obtains that the action was regular and lawful. Hallett. In Cardinal Glass Co. v. Board of Education, 113 Ill.App. 3d 442, 447 N.E. 2d. 546 (1983), the sole reason for not awarding the contract to the lowest bidder was the desire to award the contract to a local contractor. The court held that such action indicated clear favoritism, without adequate and sufficient justification, thus constituting arbitrary and capricious action.

Tailoring bid specifications
Bid provisions which mandate the use of very specific or unique items by a bidder often run afoul of competitive bidding requirements. "Trinidad Pitch Lake Asphaltum obtained from the Pitch Lake in the Island of Trinidad," Fishburn v. City of Chicago, 171 Ill. 338, 49 N.E. 532 (1898) as well as an item manufactured under the "Warren Bros. patent" were held to be invalid bid specifications. Village of Rossville v. Smith, 256 Ill. 302, 100 N.E. 292 (1912). It is not unusual for specifications to bidders to list a specified manufacturer or product as a benchmark so that bidders know the type of product the contracting entity is seeking. Typically though, the specification of a particular product is followed by the term "or approved equal". Armstrong.

Return or forfeiture of bid deposits
The request for bids is merely an invitation for an offer, not an offer to contract. A bidder's offer results in a contract only on the acceptance of the bid by the governmental entity. Hassett Storage Warehouse, Inc. v. Board of Election Commissioners, 69 Ill. App. 3d 972, 387 N.E. 2d 785 (1979). A bid may be withdrawn prior to the opening of bids absent a legislative or contractual provision to the contrary. McQuillan, Section 29.67. If a deposit is required with a bid, the bidder's deposit should be returned if that bid is rejected by the governmental entity. Oscar George Electric Company v. Metropolitan Fair & Exposition Authority, 104 Ill. App. 3d 957, 433 N.E. 2d 958 (1982). But where a bid is accepted and the bidder refuses to enter into the contract that bidder may forfeit the deposit. Village of Morgan Park v. Graham, 136 Ill. 515, 26 N.E. 1085 (1891).

Rejection or readvertisement of bids
A governmental entity may reject all bids and rebid the contract. McQuillan, Section 29.77. Where the lowest bidder was deemed not responsible, a contract may permissibly be awarded to the next lowest responsible bidder without readvertising for bids. Johnson v. Sanitary District, 163 Ill. 285, 45 N.E. 213 (1896). In instances where only one bidder submits a bid, a governmental entity is permitted to award the contract to that sole bidder. McQuillan, Section 29.74.

Variances contained in bids
Bids must conform to the advertised requirements of the invitation to bid. A bid which contains a material variance is an unresponsive bid and may not be corrected after the bids have been opened in order to make it responsive. Although a minor variance does not require rejection of the proposal, a material variance will require such a rejection. The test of whether a variance is material is whether it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Leo Michuda & Sons Co. v. Metropolitan Sanitary District, 97 Ill. App. 3d 340, 422 N.E. 2d 1078 (1981). In City of Chicago v. Mohr, 216 Ill. 320, 74 N.E. 1056 (1905), the bidder agreed to install additional items after the bids were opened. In George W. Kennedy Construction Co. v. City of Chicago, 135 Ill. App. 3d 306, 481 N.E. 2d 913 (1988), the plaintiffs president omitted to sign the signature page of the bid documents.

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As a result of this failure to sign, the bidder was not bound by the terms of its contract and could have disavowed its bid at any time. In the Michuda case, a bidder attempted to list minority subcontractors after the bid was awarded. The courts in all cases held that each bid contained a material variance which rendered it unresponsive. In contrast, the successful bidder in Stanley Magic-Door, Inc. v. City of Chicago. 104 Ill. App. 3d 380, 432 N.E. 2d 1016 (1982) neglected to list its prior work experience. This information was added after the bids were opened. The court found that the addition of this information did not harm other bidders as the bidder could not alter the extent of its prior work experience.

Affirmative action requirements for bidders
A governmental entity has been permitted to adjust a bidder's proposal to take into account the percentage of minority participation. S.N. Nielson Co. v. Public Building Commission, 81 Ill. 2d 290, 410 N.E. 2d 40 (1980). Similarly, a minority set-aside program for city construction contracts that required 30% of the dollar amount of each project to go to minority subcontractors has also been approved.J.A Croson Co. v. City of Richmond, 779 F2d 181 (4th Cir. 1985). However, on January 23, 1989, the U.S. Supreme Court ruled that such set-asides constituted an unlawful form of reverse discrimination. Richmond v. J.A. Croson Co., No. 87-998.

Standing to contest an award of a contract
An unsuccessful bidder has standing to contest the award of a contract. Stanley Magic-Door, Inc. v. City of Chicago, 74 Ill. App. 3d 595, 393 N.E. 2d 535 (1979) and the successful bidder is a necessary party to such a lawsuit. Burt v. Board of Education, 132 Ill. App. 3d 393, 477 N.E. 2d 247 (1985). But where a governmental entity's bidding specifications required the hiring of minorities by construction contractors bidding on a project, a trade association of construction contractors was held not to have standing to challenge the minority hiring standards. Underground Contractors v. City of Chicago, 66 Ill. 2d 371, 362 N.E. 2d 298 (1977).

Relief sought in contesting an award of a contract
A lawsuit challenging the award of a contract by a governmental entity typically seeks declaratory and injunctive relief. A writ of mandamus is not usually granted as it commands a governmental body or officer to perform a specific duty to which the petitioner is entitled by right. Leo Michuda & Son Co. The award of a contract to the lowest responsible bidder involves the exercise of judgment or discretion, however, and generally a disappointed bidder is unable to prove it had a clear right to receive the contract. A rare example of a bidder demonstrating such right was the decision in Cardinal Glass Company where the plaintiff proved manifest arbitrary and capricious conduct by the governmental body in the award of the contract and was granted mandamus.

Federal claims of a disappointed bidder
The acceptance by a governmental entity of a bid by a rival bidder does not, standing alone, afford the unsuccessful bidder a civil rights action under 42 USC 1983. A bidder has no protectable property interest in bidding for the sale of goods and services to a governmental body. Northwest Disposal Co. v. Village of Fox Lake, 119 Ill. App. 3d 546, 456 N.E. 2d 691 (1983). This is true even when the bidder received the contract in prior years; the unilateral expectation the award would continue does not constitute a protectable property interest within the meaning of the due process clause. Polyvend, Inc. v. Puckorius, 77 Ill. 2d 287, 395 N.E. 2d 1376 (1979).

Nor is it a federal civil rights violation for a governmental entity to use political criteria in awarding public contracts. In La Falce v. Houston, 712 F2d 292 (7th Cir. 1983), a contract was awarded to a bidder who was a political supporter of the governmental officials. The court noted the practice of favoring political supporters in awarding public contracts but denied relief. The rationale of this decision appears to be that First Amendment rights of political expression would not be unconstitutionally impaired because a disappointed bidder could bid on private or other public contracts.

In and of itself, a governmental entity's decision to undertake a public works project without competitive bidding will not constitute an anti-trust violation of the Sherman Anti-Trust Act, 15 USC 1 or the Illinois Antitrust Act, Chapter 38, Section 60-3 of the Illinois Revised Statutes. Richard Hoffman Corp. v. Integrated Building Systems, 581 F. Supp. 367 (N.D.Ill., 1984). However, where it was alleged that a park district improperly tailored bid specifications and awarded a "sham" contract for the operation of the district's golf pro shops in order to coerce the current holders of the pro shop concessions to raise prices, the court determined a claim for Sherman Act violations occurred. Kurek v. Pleasure Driveway and Park District, 557 F2d 580 (7th Cir. 1977).

Measure of damages sought by disappointed bidder
A disappointed bidder cannot recover alleged lost profits it would have received under a contract. Hassett Storage Warehouse. The court, in State Mechanical Contractors, Inc. v. Village of Pleasant Hill, 132 Ill. App. 3d 1027, 477 N.E. 2d 509 (1985), explained that no public purpose would be served by requiring the taxpayer to pay not only the full contract price to the bidder awarded but also to pay the bidder, who should have received the contract, the profits that bidder would have received if it had been awarded the contract. However, the court did rule that an unsuccessful bidder who submits the best responsive bid has a cause of action to recover from the public body expenses incurred in preparing and presenting that bid.

Conclusion
The treatment of the issues contained in this article has by no means been exhaustive. However, the recognition and satisfactory resolution of park district attorneys and officials of the various issues discussed herein, are essential to the avoidance of contractrelated obstacles.

ABOUT THE AUTHOR: Michael S. Reich, a graduate of John Marshall Law School, earned his J.D. in 1978 and his LLM in Taxation in 1984. He is currently Senior Attorney in the Finance and Economic Development Division of the Corporation Counsel's Office for the City of Chicago.