Quality Fixtures, Inc. v. Multi-Purpose Facilities Board

W. H.“Dub” Arnold, Chief Justice, dissenting. I disagree with the majority. I believe that its holding represents a contribution to the compromise of integrity of the bidding process and the contracting industry as a whole.

While the facts in the instant case are undisputed, what is in dispute is the interpretation of the word “considered” as it is used in Ark. Code Ann. § 17-25-103 , the statute requiring that bidders have a current license from the Arkansas Contractors Licensing Board “before a bid will be considered.” The majority obviously agreed with the trial court that a bid is not actually “considered” until the full board compares the bids and awards a contract. I disagree.

The crux of this case is the integrity of the bidding process. There is no dispute that Plussey did not have a valid license from the Arkansas Contractors Licensing Board when it submitted its sealed bid on March 10, 1998, in the amount of $2,326,976.00. In fact, Frances Kelly, Assistant Treasurer of Hussey, in a sworn affidavit dated March 9, 1998, clearly stated that Hussey was not a party to any contract and would not bid until such time as the application for the license was approved. The affidavit clearly specifies that any bid submitted without a license must be withdrawn before the affidavit can be truthfully executed. In fact, Hussey used a false license number on its bid dated March 10, 1998.

While Hussey’s failure to reinstate its license may have simply been due to a clerical error, as they asserted, I believe the trial court nevertheless improperly separated the conduct on the part of Hussey in submitting its illegal bid on March 10, 1998, from the action of the Board in awarding the contract to Hussey on April 9, 1998, after Hussey had admitted guilt and paid a substantial fine.

I believe the majority’s interpretation of the term “considered” is improper for two reasons. To begin with, the first rule in considering the meaning of any statute is to construe it just as it reads, giving the words their ordinary and usually accepted meaning in common language, making use of common sense. Office of Child Support Enforcement v. Harnage, 322 Ark. 461 , 910 S.W.2d 207 (1995); Arkansas Dept. of Health v. Westark Christian Action, 322 Ark. 440 , 910 S.W.2d 199 (1995). Although there are no Arkansas cases specifically dealing with this issue, in reviewing the plain meaning of the statute, “considered” must mean the time at which the sealed bids are initially publicly opened and compared. Any statutory construction to the contrary would contravene the core purpose of the competitive bidding process.

Other than the statutory construction, another reason I believe the court improperly construed the term “considered” is that the Multi-Purpose Facilities Board in the pre-bid meeting minutes dated March 3, 1998, basically defined the term “considered,” when it used that term to note that bids by facsimile would not be “considered” at the time the bids were publicly opened. The pre-bid meeting minutes from March 3, 1998, at 1:00 p.m. state the following:

(4) Bids will not be considered if sent by facsimile. Bids sent by overnight mail or express delivery must be placed and sealed in an envelope with the bid package number and project marked on the outside. This envelope then needs to be placed into an overnight envelope with the bid package and project clearly marked on the outside and sent to: Pulaski County Purchasing.

The Facilities Board itself gave the term “considered” the same plain and ordinary meaning as defined in Ark. Code Ann. § 17-25-313 . The competitive bidding process requires sealed bids. To require otherwise would open the door to the inherent possibility of fraud, collusion, and other improper conduct concerning the award of public construction contract. Thus, the Facilities Board correctly required that if the bid was to be “considered,” it must be received in a sealed bid package, a requirement obviously not available through facsimile transmission. The Facilities Board itself construed the term “considered” to mean at the time the bids were opened and compared on March 10, 1998 — not on April 9, 1998, after Hussey, its hand called, had paid a significant fine and admitted to illegal and fraudulent activity. It seems rather arbitrary, indeed, (and unfair) to agree to disregard one’s own rules and regulations simply to accept the lowest bid, when the next lowest bidder has followed all the rules and regulations to the letter.

Further, Ark. Code Ann. § 29-9-203 (d) states the following:

On the date and time fixed in the notice, the Board, Commission, Officer or other authority in which or in whom authority is vested to award contracts, shall open and compare the bids and thereafter award the contract to the lowest responsible bidder, but only if it is the opinion of the authority that the best interest of the taxing unit would be served thereby. (Emphasis added.)

Obviously, Hussey was the lowest bidder, and accepting the lowest bid would be in the best interest of the taxing unit. However, the statute requires that the lowest bidder be a responsible bidder. By virtue of its illegal activity, requiring it to plead guilty and pay a substantial fine, it would seem that Hussey was not the “lowest responsible bidder,” but that Quality Fixtures was.

While it is true that the Facilities Board, pursuant to Arkansas law, did reserve the right to waive formalities, Hussey’s illegal (and suggestively fraudulent) actions certainly should not be considered “formalities” subject to waiver by the Facilities Board. The Arkansas Contractors Licensing Board did not retroactively grant Hussey a license. The license was effective April 1, 1998, some twenty days after the sealed bids had been opened and examined.

If the Facilities Board is able to act in such an arbitrary and capricious manner by disregarding its own requirements for bidders when it best suits the Board’s needs, then the integrity of the bidding process is being compromised. I regret that the majority has allowed such a compromise.