HomeMy WebLinkAbout3/17/2010 - STAFF REPORTS Law Officos Of
Woodruff, Spradlin & Smart
A Professional Corporation
MEMORANDUM
TO: Hon Mayor Pougnet and Members of the City Council
FROM: Douglas Holland, City Attorney
DATE: March 16, 2010
RE: Supplemental Materials; City Council Agenda Item 2-1-— Disposition of Bid
Protest for the Palm Springs Animal Care Facility, City Project 07-24
As part of your agenda materials on the above agenda item, the City Council
received a copy of Parkwest's protest of W.E. O'Neil's apparent low bid for the
construction of the Palm Springs Animal Care Facility and a copy of my letters to
Parkwest and O'Neil indicating that this Office would recommend that the Council that
the protest be denied and that O'Neil's bid be found to be the lowest responsible bid.
Attached for your information is a copy of letter dated March 10, 2010, from the
law firm of Monteleone & McCrory, the attorneys for Parkwest, supporting the Parkwest
protest, and a letter dated March 15, 2010 from the law firm of Hunt Ortman, the
attorneys representing W,E, O'Neil Construction, urging the denial of the protest.
This Office has reviewed the attached correspondence and considered the
arguments presented. It remains our opinion that the failure of O'Neil to comply with
the instructions regarding the entry of the "base bid amount" in numbers and written
form for the "base bid price" is not a material error that provides O'Neil with an unfair .
competitive advantage. Although the City certainly would prefer that bids be error free, it
is not always possible to secure such results. The courts recognize that bids are not
required to be flawless and as a general rule an error that does not affect the amount of
the bid or provides a bidder with an advantage or benefit that was not available to other
bidders can be waived. The bid instructions clearly slate that the controlling bid is the
"adjusted base bid" and not the "base bid amount." O'Neil fully complied with all
requirements regarding the "adjusted base bid" amount.
We recommend that the City Council deny the protest and determine that the
error in the O'Neil bid was not material and that O'Neil's adjusted base bid of
$6,529,000.00 is the lowest responsible bid. No other action is required at this time and
the actual award of the contract will be presented to the City Council for consideration
at a later date.
$rEPHCN MONTCLCONE Mowrgi,coNL+ & Mt Cit ox Y P oHANOr rou NTY orrlcr
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725 SOUTH YIOUCNOA STREET SUITE 3200 TELEPHONE
_ LOS ANOCLCS. CALIYOIiNu fl0017•B446 I1I91 S05-JI70
TCLCWNONe I21JI 612 9900 rAC$IMILE
I'ARIIIJ IiSP FACSIMILE 121JV 61r^. 9990 PI41 y05•J104
nNINI N
March 10, 2010 OUR FILE NUMBER
6929-16185
VIA FACSIMS•LE (714) 835-7787
AND U.S. MAIL
Douglas C. Holland, Esq_
Woodruff, Spradlin & Smart
555 Anton Boulevard, Suite 1200
Costa Mesa, California 92626-7670
Re: Bid Protest of Parkwest Construction Company
City of Palm Springs Project No. 07-24
(Anima]. Care Facility)
Dear Mr, Holland:
This firm represents Parkwest Construction Company in
connection with its bid protest submitted to the City of Palm
Springs (the "City" ) on February 25, 2010 . Parkwest submitted
the second low bid on the project identified as the Palm Springs
Animal Care Facility Project No. 07-24 (the "Project") . The
apparent low bidder on the Project was W.E. O'Neil Construction
("WEOC11) .
As discussed below, California law clearly and
unequivocally points to the conclusion that the error contained
in the WEOC bid is material and provided WEOC with an unfair
competitive advantage. The error committed by WEOC goes to the
most essential term of any bid -- price. The City cannot Simply
label the error as "not material" and award the Project to WEOC.
The error in the bid of WEOC requires that the City treat the
bid as non-responsive. Accordingly, Parkwest respectfully
requests that the WEOC bid be rejected by the City and the
Project awarded to Parkwest as the lowest resloagive bidder,
We have had an opportunity to review the bid submitted
by WEOC and your March 8, 2010 letter, As you acknowledge in
your letter, the bid documents require that the written base bid
figure provided by WEOC ($6, 000, 420) take precedence over the
numerical base bid figure ($6, 420, 000) . Because of the
LAW PF FiCCS
PIONTFULOnr & MCCRaer, LLP
Douglas C. Holland, Esq.
March 10 , 2010
Page 2
conflict, and the explicit rules set forth in the bid documents
issued by the City, the Adjusted Base Bid Amount of WEOC must be
calculated using the lower figure of $6, 000, 402 , not $6,402, 000.
If the City follows its own bidding guidelines and calculates
the bid of WEOC using the written base bid figure, then WEOC
would have the ability to argue the bad contained a material
mistake and seek to avoid being bound by its bid. This is the
very situation California law prohibits.
Stated differently, the failure of WEOC Cc submit a
definitive bid amount leads to the conclusion that WEOC did not
submit a ' bid" capable of acceptance by the City. Because WEOC
failed to include a material term of the proposed agreement, the
City was not presented with an offer the City could accept to
form a binding contract.
Because of its mistake, and assuming the City follows
its own bid guidelines, WEOC can seek relief from its bid under
Public Ccntr'act Cade section 5103 . Alternatively, the City may
not have the ability to bind WEOC to its lower bid figure since
WEOC did not make an offer capable of acceptance. As a result,
WEOC has provided itself with a convenient escape route and, in
turn, gained an unfair advantage over competitors such as
Parkwest .
California case law is clear on this point . If a
bidder gains an unfair advantage over competitors as a result of
its mistakes in filling out the bid form, the bid must be
rejected as non-responsive. As the Court stated in valley Crest
LandSC pe Inc v City Councij, of the City of ❑avis (1996)
41 Cal .App.4th 1432, 49 Cal .Rptr.2d 184 :
"... M e conclude [the successful bidder] had
an unfair advantage because it could have
withdrawn its bid. Misstating the correct
percentage of work to be done by a
subcontractor is In the nature of a
typographical or arithmetical error. It
makes the bid materially different and is a
mistake in filling out the bid. As such,
under Public Contract Code section 5103 ,
[the successful bidder] could have sought
relief by giving the City notice of the
mistake within five days of the opening of
the bid. That fth2 successful bidderl did
not seek relief is of no moment . The key
point is that such relief was available.
Thus, [the successful bidder] had a benefit
LAW or ri C.e.
Mc �re(.(suti(. & mcclumY, I'Ll,
Douglas C. Holland, Esq.
March 10, 2010
Page 3
not available to the other bidders, it could
have backed out . Its mistake _.could not be
corrected by waiving an "irregularity. "
Id. at 190 (emphasis added) .
WEOC clearly enjoyed a benefit not available to its
competitors. WEOC had the ability to obtain relief from its bid
if WEOC determined its bid was too low. Because of the
ootenti 1 for abuse, California Courts strictly enforce the
competitive bidding laws. In Konica Svsiness Machines !IS& v.
The Regent of the I7 iversity of, California (1988)
206 Ca1 .App. 3d 449, 253 Cal . Rptr. 591 , the court summarized both
the purpose of the competitive bidding laws and the role of the
courts in their interpretation as follows :
"Because of the potential for abuse arising
from deviations from strict adherence to
standards which promote these public
benefits, the letting of public contracts
universally receives close judicial scrutiny
and contracts awarded without strict
compliance with bidding requirements will be
set aside. This pre enZative_annroach is
applied avan where it is gertain there was
in fagt no corr d o r adverao pffec ipqn
the bidding prQcpgs and the deviations
would save the entity monev . The importance
of maintaining the integrity in government,
and the ease with which policy goals
underlying the requirement for open
competitive bidding may be surreptitiously
undercut, mandate strict compliance with
bidding requirements."
Id, at 4S6 (emphasis added) .
While the bid of WEDC must be rejected, we see no
reason why the Project should not be awarded to Parkwest_
Parkwest has quoted a fair price - a price just a few percent
higher than the bid of WEOC and significantly lower than all
other bidders. Parkwest complied with the bid proposal of the
City and is ready, willing and able to commence work. This
crucial public works project should not be delayed simply
because WEOC submitted a grossly non-responsive bid.
More importantly, the City will not he exposed to any
legal action if the bid of WEOC is rejected as non-responsive.
LAW 011FICC`
MONTIiIXP NE & MCCROI Y, UP
Douglas C. Holland, Esq.
March 10, 2010
Page 4
The City was not presented with an offer from WEOC capable of
acceptance. The City is under absolutely no legal obligation to
unravel the problems created by the failure of WEOC to submit a
responsive bid.
The bid of WEOC must be rejected and the Project
should be awarded to the lowest responsive, responsible bidder,
Parkwest . If the City fails to act properly with respect to the
bid of WEOC, Parkwest will take the appropriate legal action.
Thank you in advance for your careful consideration of
this matter. if you have any questions, please call.
Very truly yours,
MONTELEONE & MCCRORY, LLP
By
REY a5
JSH/sr
DALE A.OFUMANN Bunt
Ortmann
Hunt
&mgil;pi(tpgnU tt hanl6nmRntt.cum Palfty
oxs2.00t OPtmann Nkyes
LuUkq
Atcomeys At Law ���.�9 Darling
E Mnh,
Inc.
March 15,2010
YIA E-MAIL FAX AND U.S. MAIL
Douglas C. Holland,Esq.
Woodruff, Spradlin& Smart
555 Anton Boulevard, Suite 1200
Costa Mesa,CA 92626-7670
Ile: City,of Palm Springs Animal Care Facility
City Project No. 07-24
Our Client: W.F. O'Neil Construction Co. of California
Dear Mr,Holland:
The undersigned represents W.E, O'Neil Construction Co, of California ("WEO"), We
are responding to the March 10, 2010 correspondence of Jeffrey Hurst which was submitted in
support of a bid protest by Parkwest Construction Company ("Parkwest"). In said letter,
Parkwest contends that there was a material error in the WEO bid, and specifically contends that
the difference between the vrtztten base bid figure ("six million four hundred twenty dollars")
and the numerical base bid figure("$6,420,000.00'�was a material error.
WEO disagrees, The WEO bid cannot reasonably be construed as containing a material
error.
We are aware of the fine print below the base bid price section that states, "In the case the
words and figures do not match, the words shall govern and the figures shall be disregarded,'
Importantly, this same language appears below the adjusted base bid section, in which WEO
indicates consistently, both in numbers and words, an adjusted base bid amount of$6,529,000.
Moreover, an itemized breakdown of this amount appears on the adjusted base bid worksheet,
which reflects a base bid amount of $6,420,000, and the itemized additive and deductive
alternates which mathematically confirm that the adjusted base bid amount is $6,529,000, and is
derived from the base bid amount of$6,420,000.
Further, the contract for work under this bid proposal is required to be awarded to the
lowest adiusted base bid and not the lowest base bid,
"The lowest responsive bid shall be determined by adjusting the
Base Bid Price by subtracting all the deductive alternates and
adding all the additivc alternates to achieve the Adjusted Base
Bid,"
311472 1 DAn 0232,001
1
301 North LAO Amm.701 Fioor,PRsndenn,CA 91101 - Phone.626-440-5200 - ryx:626-796-0101 • ftimat mfpQ6unmxtmnnn.rom
Douglas C. Holland, Rsq.
March 15,2010
page 2
For the adjusted base bid, WEO entered the amount of"six million five hundred twenty nine
thousand dollars and no cenrs"and'$6,529,000.00,"amounts which do not conflict,
The WEO bid is therefore clear, unequivocal and responsive: the base bid was
S6,420,000 and the adjusted base bid is $6,529,000. Because the WSO bid was unequivocal,
there was clearly no unfair competitive bidding advantage, WE-0 could not have obtained relief
from its bid under Public Contract Code Section 5103, and could not have plausibly argued that
its base bid amount was$6,000,420 when the base bid clearly was$6,420,000.
In Vallcy Crest Landscape, Inc. v. City Council of the 00) of Davis (1996) 41 Cal.App
4th 1432,the Court of Appeals stated:
"However, it is further well established that a bid which
substantially conforms to a eall for bids may, though it is not
strictly responsive,be accepted if the variance cannot have affected
the amount of the bid or given the bidder an advantage or benefit
not allowed other bidders, or in other words, if the variance is
inconsequential" Id at 1440. 1441,
Under Konica BzWness Machines USA, Inc. v. Regents of the University of California
(1988) 206 Cal.App. 3d 449, a variance is allowed if it was minor such that there was no
advantage to the awarded bidder to the detriment of other bidders.
For all of the foregoing reasons, W.E. O'Neil Construction Co, of California requests that
the bid protest of Parkwest be declined, that the City determine that the error in the WEO bid
was not material, and the WEE adjusted base bid of$6,529,000 is the lowest responsible bid,
and the contract should be awarded on this basis
Thank you.
very truly yours,
ICI
I
Dale A. Ortmann
DAO:Id
cc: W.B. O'Neil Construction Company(via e-mail)
311472.1 DAD D232-ODI
I
0
Parkwest
ConstTuction
Company
March. 12, 2010
City of Palm Springs
3200 East Tahquitz Canyon Way
Palm Springs, CA 92262
Dear Chris Mills,
We are forwarding copies of our protest letter regarding the Palm Springs Animal
Care Facility project, the City's attorney's answer and our attorney's rebuttal letter in
preparation for Wednesday's board meeting.
Sincerely,
Ron Moore
President
Lifetime industries,Incorporated DBA:Parkwest Construction Company
P_O.Box 790,Redlands,CA 92373 Phone 909-798-1333 Fax 909-793-2485 Lic.k 580133.
�oIGC l7lo/'�vr i rtiT�`�wl'
Par kivest
COnstrUC tiOxd
Company
lohner)
4 lzy of PAM Springs
Procurement & C:nniractin, %Lana>>cr
3200 Lam !ahgnit7Car1yon 'kay
Pals: Springs, CA 92362
Am)- Craig L Glnddern, C.P.M.
Rv Palm Springs Animal Carc Facilily Project No. 07-24, Sk Corner of Mesquite. Rd, 8c Vella Rd,
Parkwest Construction formally prolcsls and appeals the appawnt low hid of ICE! (broil C'onstrucdov, on the
ahnve rctcrenced project. The appeal/protest is submitted bated on errors node by WE Uncil on the bid fnrtn,
page 16, "Aatse Aid Price". The price in words and the }trice in figures are nol the saran am+rani. T�Itich
estabii-4hcd errors to occur on page 20, "Adjusted Fsaic Rid %k(wkshcct-.
1%bid documents are ver, clear regarding figures and words of the numbers as eaiird out in the InforntatiLTI no
me,,&,ra item 8, Aid Schedule - pace 16 and Adjusted [aid Workshe t—pa e 20 clearly state "In ease the l ords
and litnurcs do not agree. The V• orJ,shall =o%ern an,i the ti >uri,.brill he disregardcd, See thattached pages.
At',L-.. Uncsl Construction's Base Bid Price on page 16 fo� n Kcrepanc) hetuOen the MOM anti tit+ores. This
LteulLl cause AN A4justcd Rase Bid to he incorrect
I'here are ;ela:r discrepancies liar ahcrzttttc I- there am taut numbers in woids: one is typed (\incwcn thousand) nor
lined out and nut acknowrlcdged, the other Jwenty thousand) i5 hand written,and the typed figure{$19,000) is
imed out hat not acknowledged.
Due to the numerical errors made in the bid documents submitted by W.F.. Oneil Coustrucitttn, we request That the
Cily of Pahn ,Springs reject MO. Oncil Construction's bid proposal as non-responsive, and a%ard the contract tv
ParkwuNt Construction Company as tic lowest responsive and responsible bidder.
Please fuel tree to contact me if you creed any additional infonatation ill support 01 our protest, and please keep us
informed of the City of Palm Springs' decision rcgardinvg Allis matter
Ron ,Moore
Pre:idem
I..ifeunee Inductnea_ hicorporaled DBA, Pdrk'MCNI l:ir71,5lruvuon Ckmpa l�
V.U, I;o�790 lwdlund.i,VA 92373 Phone 90-798-1333 1 ac%9-7930$85 IN A 5ROI 33
rlu TI io lill`[S updn `vhlrh Ihr +Vcl1, Is to rHT cmI If,d Ili=• rights-of-way arrl =ascingnl;, f<Jr ,c,Cps themto
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6- 'BID SECURITY, BONDS, AND INSURANCE - L:ol-h Bid shall oe al-col'Ipaniil by a ccrilfic'd or cashier'o
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City Ind v'.'TII turnnsh thr, necessary Insurrince crrlifiralc`; Rlymonl Bonci, and Por-forrnanr.<: Bunci. leech o'sald bonds
and insurance cerl mcates shall nu 111 the amounts 512I6,ld III trip-: Supplementary General Gunditicms In case of refusal or
1�111urr G` the successful Bidder In enter into said aureunlrnl (ill,, Chdc.k or Bih buno ors Ihe: casu may be shell ;)(l
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9. SUBMITTAL OF BIDS - 1'Jli Bids alit+ 1 Le dcllv1:Ir2'.I u', IPIc brie end lu tln; pl,l,.r. soll nl the Notrcc;
Inviting Bids. It is the Biddci'!; sl rD responsibl"alty to k:ee Thal us Bid i\rnceiveu It, prupel 11111u Bid', wfll lilt oe accepted
afliir the oppoinn�-d timo Ifni-opc'niny ni bids no matter what the reason-
10 DISCREPANCIES IN BIDS - In the evenl that tlicra I mom. than one Bid !tom in trip. find Schedule the Biddci
shall famish a princ `or nll Rid Iliad" In the sch:=Jule Lind f"311 Jrc lu no so vJ11 'LndLr the Bln is non-re:sporislve and mJy
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14 QUANTITIES OF WORK •. _+:,ri"r r�•,• I),F11 r'a +',I- '_ , 1 I• •'} srn.; F-�'
12. WITHDRAWAL OF BID - T-,r- on r-'c ,r. .:rr r`:I{ . Bic-er r'r,i r� u
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pr'a'n ns stter m -n• -rd, ta election as : ing win-ruspunsi�c The compieiecmI'
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e�pre551y Called for In tna WcUrc Inviting Bins Oral FAX PJleuraphic nr telapnane Bn.ls; or nttaJitic2ions w16' not hi.
c;n in51d,srsd
BID SCHEDULE
Llnli Sc.ir' r"'ICe TC of
CITY OF PAUM SPRINGS ANINIAL CARE FACILITY
PPP) iECT No 07 - 24
it o_,i�- Sprlrg_ ...;bfn•nls
Description: Providte ill materials, sul)plle� services equipment and ma:npcwer
necessary to crir= piote the grading, londscapirig, irrigation fenclnq. lighting. street
Improvements and general bullclugl construction woik, Fonds and Inaurr-irc.e for
the Palm Spri=s Animal Care F.ic:dity prolecl ;,; detailed in gtrp P1ars &
Spec:ifica7iom', r*Mdled City of alrn Spr'mgs Arnmal (:arc F8dlily Cily Prolec+ Nn
(7."1 '
BASE BID PRICE for tl-e I= SLIM, ,f.
r
in
do case the e^.rinds :arid fiqureiE do nol mai.h the w,)rCq hall govorn and the 1lquia aha9 iie disrcy_,irCJud ME '
�ALTERNiATE BID PRICES
Bidders are advised that aIP of the following alternates Must be riced for the bid to
be considered responsive. The lowest responsive hid shall be determined
by adjusting the BASE BM ERiCE by subtracting all of "the Deductive
Afternates and adding aH or the Additive Alternates to achieve an
ADJUSTED BASE BID. IL Should be noted chat the City reserves r_he right artEr
determining the responsive low bidder to accept all, a portion of, or none of the Alternate
pricing. In case the words and figures do not agree, the words shall govern Ind the
floures shall be disregarded-
NOTE: �
Bidders are acvlsed than the f u!I descriptions of the alternates and related work can
be found in Speoiflcat�or SecTion 01230 or on Plan sheet A0.-50.
Deductive Alternate 1: ❑Veie Sc,uTr' F'I:nt r= fC th.; I-Js-IP SLfvl PR, CL Ji-
Dedurt S
00nce in Rgprr 'l
- - -- -- (PnCe in Words)
i c
ADJUSTED BASE BID V,/ORKSHEET
Bidders shall transfer the Base Bid and the Alternate Bids to this worksheet to determine the final
ADJUSTED BASE BID AMOUNT- Th1e Lowest Responsible Bidder snail Lie acternlned
using the Adjusted Base Bid Amount
Se El J
i.11^ls C'6GJCi'Vp; �,{IPfI'�?? CS I
i.''nL's Je:-u�L�2 yli�.'rl'c ii; � lea i
f;lln L'S aQ'�LICtI`JB HIiF,rn AtQ 5 l
Minus Dcduclivc Alternate= l5
Mmus Deductive Nternnfe 5
Plus Addltivc Aliernate G 3
Minus DeduCtivo Altpma:e 7 (5
Minus Deductive 4ltcrnale 2 (S I
fA mi.s D&ducti`dc 411er'TI r, I'
P,'i,nus Deductive
lvfn,is Dacueti,.:,41t�' ra±e: 1 1
lllrnus Decuctiv9 17 'S
k1c,Adrimve. Altcmaae i„ J J 6Ou LI�
Add Additive Altematal-' 5501:'JJ(nll10
Minus" Deductive Alttirnratc 15
ADJUSTED BASE BiD s
(Price in ,Figures)
(Price In Words)
Ir n-..YYJS n:ii o,_r'•. 4 C I..r,diryH 'hy..,r:Is shell a v..rl jr Ly s`12' I)-'I r'Iv.a arrle.rtl !,
5lDD^^
LAW OFHCES Or
WOODRUFF, SPRADLIN & SMART
A PROFESSIONAL CORPORATION
555 ANTO'11101A.GVARD,SUITR 1200 X COSTA MP,SA,CA 92626.7670 (714)558-7000 E FAX(714)835-7787
DIRECT•DIAL:C1 I4)d L5.1 N2
O1RL'CI FAX (714)415.1142
E-MAIL:PHOLLANn@WSS.LAW COM
March 8, 2010
VIA E-MAIL AND FIRST CLASS MAIL
Ron Moore
President
Lifetime Industries, Incorporated
DBA' Parkwest Construction Company
P.O. Sax 790
Redlands, CA 92373
Re: City of Palm Springs Animal Care Facility
City Project No. 07-24
Dear Mr. Moore:
Thank you for your protest letter of February 25, 2010, discussing W.B. O'Neil's error in
its bid to the City, W.E. O'Neil, the apparent low bidder, provided the amount of
"$6,420,000.00" as the "Price in figures" for the base bid amount. For the 'Trice in words" for
the base bid amount, however, W.E. O'Neil wrote "six million four hundred and twenty dollars
and no cents,"an amount that is$419,580.00 less than the amount in figures.
This Office has reviewed your protest and the relevant portions of the bid schedule and
related documents. The bid documents expressly provide that "Bid price shall be shown in
words and figures, and in the event Of any conflict between the words and figures, the words
shall govern." Nevertheless, the contract for work under this bid proposal is required to be
awarded to the lowest adjusted base bid and not the lowest base bid. "The lowest responsive bid
shall be determined by adjusting the BASE BID PRICE by subtracting all the Deductive
Alternates and adding all the Additive Alternatives to achieve the ADJUSTED BASE BID." For
the adjusted base bid, W.E. O'Neil entered the amount of"Six Million Five Hundred Twenty
Nine Thousand Dollars and No Cents"and"$6,529,000.00,"amounts which do not conflict.
This Office in consultation with the Purchasing Division will recommend to the City
Council that the Council set the protest aside, determine that the error in the O'Neil bid in the
"base bid price" is not a material error, and the adjusted base bid of$6,529,000.00 .from W.E,
O'Neil is the lowest responsible bid. Please now that the City Council will make the final
BEN AMMERJdAN 11 TERRY(-ANDRUS■EDWABD L.BERTRAND■M.LOIS BOBAK N CARCIMEA.BYRNE N PATRICKM DESMOND
JAMESM-DONICN■CHRiSTINAM.DOYLE m JAMES H.EGGART E CRAIOG.FARRBIGTON M JO,¢FMW.'FORAATH Y RiCiAR LACER
BRA➢LEYSL HOGIN■DDUGLAS C.HOtiA.NO■OAVRDE,1(ENS1O u CYNTHiA W,KOLE■EDWARD2,K07t.IN■ROBERTAAKRAUS
MAGDALVALONA•WIANr ■JASONM.Mc EWEN■MARKM MONACFIRIO■1AURA A.MORGAN•TIIOMAS F.MXCFN 11 JENMrER L.RAlDAICti
STEVENL.RADER F BARBARA RAiLPANU■ANNA R,8ALVSKY■OMAR SANDO'VAL a DIEGO SANTANA■JOHNR.SHAW(OFCOUNSEL)
GREGORYF—MMONIAN■KENNARDR SMART,JR.•DAMP,LK.SPRADLR4•ALYSONC SUH■THOMAS L.WOODRUFF(OFCOUNSEI.)
673485.1
Ran Moore
March 8, 2010
Page 2
decision on this matter. In addition, we will also note that the Council also has the authority to
reject all bids for any reason and not approve any agreement with any bidder. The City will
advise you of the date and time of the Council's meeting on the award of any construction
agreement on this project.
Very truly yours,
WOODRU F, SPRADI,IN& SMART
A 1'rofcs al Cnrpor
Ii
DOi} AS C,I3OLLANA
ACH:nI
fi73dS5,1
MONTELLONL: & .MtTi io, LLP
9TEPHEN MONTELEONE ORANGE COUNTY OFFICE
(166619621 u�iv u xp LAWYERS
xrxP ZOO wCiY ANA. RLVO �UqE •00
ICO t SANTA AN A. CALinUFORrv1A ):)OI
onG • n✓Ounnpmr
Tee bOurM n10uL"MOA SYUCCT SUlrC ]200 TELECNONg
f>Iwl e613170
LOS ANGELES CALII'ORNIA 90017 SA4U
TELEPHONE 12131 G12 9900 FACSIMILE
JU11 k�1V Is ❑I,kh, FACSIMILE RI31 612 9930 (2141 565.3194
PAN 1'NI R
March 10, 2010 OUR RILC NUMBER
6929-16165
VIA FACSSMSLE (714) 935-7787
AND D.S. MAIL
Douglas C. Holland, Esq.
Woodruff, Spradlin & Smart
5155 Anton Boulevard, Suite 1200
Costa Mesa, California 92626-7670
Re : Bid Protest of Parkwest Construction Company
City of Palm Springs Project No. 07-24
(Animal Care Facility)
Dear Mr. Holland:
This firm represents Parkwest Construction Company in
connection with its bid protest submitted to the City of Palm
Springs (the "City" ) on February 25, 2010 . Parkwest submitted
the second low bid on the project identified as the Palm Springs
Animal Care Facility Project No. 07-24 (the "Project") . The
apparent low bidder on the Project was W-E. O'Neil Construction
( "WEOC") .
As discussed below, California law clearly and
unequivocally points to the conclusion that the error contained
in the WEOC bid is material and provided WEOC with an unfair
competitive advantage. The error committed by WEOC goes to the
most essential term of any bid -- price. The City cannot simply
label the error as "not material" and award the Project to WEOC.
The error in the bid of WEOC requires that the City treat the
bid as non-responsive. Accordingly, Parkwest respectfully
requests that the WEOC bid be rejected by the City and the
Project awarded to Parkwest as the lowest responsive bidder.
We have had an opportunity to review the bid submitted
by WEOC and your March 6, 2010 letter. As you acknowledge in
your letter, the bid documents require that the written base bid
figure provided by WEOC ($6, 000, 420) take precedence over the
numerical base bid figure ($6, 420, 000) _ Because of the
LAW OI F11=E5
MONTELEONE & MCCRORY, LLP
® Douglas C. Holland, 6sq.
March 10 , 2010
Page 2
conflict, and the explicit rules set forth in the bid documents
issued by the City, the Ad7ust'ed base Sid Amount of WEOC must be
calculated using the lower figure of $6, 000, 402, not $6, 402 , 000 .
If the city follows its own bidding guidelines and calculates
the bid of WEOC using the written base bid figure, then WEOC
would have the ability to argue the bid contained a material
mistake and seek to avoid being bound by its bid_ This is the
very situation California law prohibits .
Stated differently, the failure of WEOC to submit a
definitive bid amount leads to the conclusion that WEOC did not
submit a "bid" capable of acceptance by the City. Because WEOC
failed to include a material term of the proposed agreement, the
City was not presented with an offer the City could accept to
form a binding contract _
Because of its mistake, and assuming the City follows
its own bid guidelines, WEOC can seek relief from its bid under
Public Contract Code section 5103 . Alternatively, the City may
not have the ability to bind WEOC to its lower bid figure since
WEOC did not make an offer capable of acceptance. As a result,
WEOC has provided itself with a convenient escape route and, in
turn, gained an unfair advantage over competitors such as
Parkwest .
California case law as clear on this point . If a
bidder gains an unfair advantage over competitors as a result of
its mistakes in filling out the bid form, the bid must be
rejected as non-responsive- As the Court stated in Valley Crest
Landscape, Inc , v_ _City Council of the City of Davis (1596)
41 Cal .App.4th 1432, 49 Cal .Rptr.2d 184 :
"__. [w] e conclude [the successful bidder] had
an unfair advantage because it could have
withdrawn its bid. Misstating the correct
percentage of work to be done by a
subcontractor is in the nature of a
typographical or arithmetical error_ It
makes the bid materially different and is a
mistake in filling out the bid. As such,
under Public Contract Code section 5103 ,
[the successful bidder] could have sought
relief by giving the City notice of the
mistake within five days of the opening of
the bid. That fthe successful bidder] did
not seek reli f is of no moment. The key
ooinL is that such relief was available.
Thus, [the successful bidder] had a benefit
IAW Or FICES
MONTrLrONE & ,McCRoRY. L L P
Douglas C. Holland, Esq.
March 10 , 2010
Page 3
not available to the other bidders, it could
have backed out . Its mistake ...could not be
corrected by waiving an "irregularity. "
Id. at 190 (emphasis added) _
WECC clearly enjoyed a benefit not available to its
competitors. WECC had the ability to obtain relief from its bid
if WEOC determined its bid was too low. Because of the
potential for abuse, California courts strictly enforce the
competitive bidding laws . In Konica Business Machines USA v_
The Regents of the University of California (1988)
206 Cal .App. 3d 449, 253 Cal .Rptr. 591, the court summarized both
the purpose of the competitive bidding laws and the role of the
courts in their interpretation as follows:
"Because of the potential for abuse arising
from deviations from strict adherence to
standards which promote these public
benefits, the letting of public contracts
universally receives close judicial scrutiny
and contracts awarded without strict
compliance with bidding requirements will be
set aside. This preventative aporoach_is
applied even where it is certain there was
in fact no corruption or adverse effect upon
the bidding process, and the deviations
would save the entice money The importance
of maintaining the integrity in government,
and the ease with which policy goals
underlying the requirement for open
competitive bidding may be surreptitiously
undercut, mandate strict compliance with
bidding requirements _"
Id. at 456 (emphasis added) .
While the bid of WEOC must be rejected, we see no
reason why the Project should not be awarded to Parkwest .
Parkwest has quoted a fair price -- a price just a few percent
higher than the bid of WEOC and significantly lower than all
other bidders. Parkwest complied with the bid proposal of the
City and is ready, willing and able to commence work. This
crucial public works project should not be delayed simply
because WEOC submitted a grossly non-responsive bid_
More importantly, the City will not be Exposed to any
legal action if the bid of WEOC is rejected as non-responsive_
�nw or-r iC L'S
DOuglas C. Holland, Esq.
March 10 , 2010
Page 4
The City was not presented with an offer from WEOC capable of
acceptance . The City is under absolutely no legal obligation to
unravel the problems created by the failure of WEOC to submit a
responsive bid.
The bid of WEOC must be rejected and the Project
should be awarded to the lowest responsive, responsible bidder,
Parkwest . If the City fails to act properly with respect to the
bid of WEOC, Parkwest will take the appropriate legal action.
Thank you in advance for your careful consideration of
this matter. If you have any questions, please call .
Very truly yours,
MONTELEONE & MCCRORY, LLP
Sy
RE S . RS_
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