Hirsch v. Mayor and Aldermen , 141 Miss. 827 ( 1924 )

The suit was instituted in chancery by two resident taxpayers of the city of Vicksburg to restrain the city from entering into a contract with Finch et al., appellees, for the paving of certain streets in the city; the ground of complaint being that the letting of the contract by the city to Finch was void because the mayor and aldermen violated the provisions of the city charter authorizing them to let contracts for such work to "the lowest and best bidders." After hearing all the testimony, the chancellor dismissed the bill, and the two complaining taxpayers appeal.

The record discloses that, while the suit is brought and prosecuted in the name of the two taxpayers, appellants, the real party complainant in interest is the Merrill Road Improvement Company, which was an unsuccessful bidder; its bid being about nine thousand dollars higher than the bid of the appellee Finch, at the letting of the paving contract. This Merrill Company was an uncomplaining bidder at the letting of the contract, and its testimony, through Mr. Merrill, shows that the plans and specifications embodied in the contract for the proposed paving were the standard specifications used by the city for such work for many years, and that the Merrill Company had bid and secured many contracts under these standard specifications in the past. The Merrill Company, after failing to secure the paving contract, instigated this suit through the two appellant taxpayers to cancel the paving contract let to appellee Finch, and restrain the city from proceeding to pave the streets under the letting to appellee Finch. And while it is clear from the record that it is really a suit by an unsuccessful bidder, and recognizing that there would be, legally speaking, a difference in the rights of an unsuccessful bidder and the rights of taxpayers of the city, we shall consider the case as though it were a suit by two taxpayers to cancel a void contract detrimental to the public interest.

Briefly stated, the appellants contend that on account of the specifications for the proposed paving being so indefinite, there could be no competition between the bidders at the letting of the contract, and that, the competition in the letting of the contract having been destroyed on account of the indefinite specifications, which also afforded opportunity for favoritism to bidders, there could be no letting of the contract "to the lowest and best bidder," as required to be done by section 25 of the Charter of Vicksburg, which is the only authority given the board of mayor and aldermen to let contracts for such public improvements.

The record shows that all of the requirements of the charter, in reference to publication of notice to bidders, etc., were complied with by the board, and the only complaint is with regard to the indefinite and insufficient specifications submitted by the city to the bidders for the proposed paving.

The appellant presents four reasons, which merit discussion, why the specifications were so indefinite as to prevent the bidders from competing in their bids for the contract for paving. The reasons are as follows: First, "that the specifications left to the bidders to state the time within which they would complete the work;" second, "that the provisions for payment were vague and indefinite and confusing," in that the city reserved the option to withhold from payment fifty thousand dollars to one hundred thousand dollars, for six to nine months, without interest, due on the contract; third, "that the method of payment violated chapter 209, Acts of 1918;" and, fourth, that the provision in the specifications that all typewritten sections of the specifications shall have precedence over printed sections, though left with the engineer as to which shall prevail, makes the contract to be bid upon confusing and indefinite, to the extent that bidders cannot intelligently compete upon the price at which they will do the work.

We do not think the form of specifications submitted by the city for competitive bids was such as to make the letting of the contract void. The testimony in the record, as passed upon by the chancellor, shows that the plans and specifications here involved were standard, and that all of the bidders, it appearing that there were several bidders at the letting, had an equal chance to bid for the contract on a common basis, and that the provisions and variations in the specifications complained of by the appellants are not such as to destroy competitive bidding, and thus prevent the letting of the contract "to the lowest and best bidder," under the said city charter provision. It appears from the record that the contract was awarded, in fact, to the lowest and best bidder, whose bid was submitted along with several others, and was several thousand dollars lower in price than that of the others.

The provision in the specifications which requires the bidding contractor to specify the time in which he can complete the work was submitted to all the bidders alike, and was a competitive part of the letting of the contract, and at which no bidder could complain. This provision was made for the advantage of the city in getting the lowest possible bid submitted for the work, and to induce competition in the bidding by contractors who might be at the time engaged in work in other parts of the country, who could do the work for a less price, if given a longer or a particular time in which to do it.

As to the second point, with reference to the withholding of the payment of fifty thousand dollars to one hundred thousand dollars, for six to nine months, without interest, at the option of the city, we are unable to see wherein this provision in the specifications, which was intended to be an advantage to the city, could materially affect or destroy competition between the bidders for the contract. It is true the city might not exercise the option to withhold payment of the money, yet it reserved this advantage and benefit, if it desired to exercise it, and the stipulation in the specifications was before all of the bidders alike, and they were afforded the same chance to bid on an equal basis for the contract of construction. We do not think this provision of the specifications destroyed competition and thus violated the charter provision, which requires that in such contracts "the board shall accept the lowest and best bid."

The contention that the delay in the payment of the amount due the contractor by the city is in violation of chapter 209, Laws of 1918, which provides in section 2 that no interest-bearing debt shall be incurred by a municipality unless authorized by a majority vote, is not maintainable for several reasons; one of them being that there is no incurrence of an interest-bearing debt by the municipality as contemplated by the statute, because the debt here involved, if the city exercises its option to do so, does not bear interest, and, besides, the money secured to pay for the paving contract is obtained from some other source, or by a bond issue determined by the people in the way authorized and the funds to pay for the paving are presumed to be on hand.

It would be too far-fetched, and not in accord with the language and intent of the statute, to say that the bidders might make their bids on a basis that, since the money to be withheld by the city would draw no interest, they must provide for such interest in their bids for the paving, and that in this way the debt would be interest-bearing and one incurred within the contemplation of the said chapter 209, Laws of 1918. We do not think this provision violates the statute in question.

As to the fourth and last ground urged, to-wit, that the contract here let was void because the specifications provided that, where any of the sections of the specifications were written by typewriter and also printed, the typewritten part should prevail over the printed, though it shall be left with the engineer as to which shall be used, we do not think the position is tenable, because the variation or conflict between the typewritten and printed part of the specifications here involved cannot materially affect the question of competition between the biders in the letting of the contract. The principal change from printed to typewritten sections of the specifications is with reference to the withholding of the amounts due the contractor by the city, which withholding of payment was to be at the option of the city, and we do not think the stipulation, providing that the engineer shall decide whether the printed or typewritten part shall have precedence, could materially affect or tend to destroy the competition in the bidding, which is necessary in order that the charter of the city may be complied with in letting the contract to the lowest and best bidder.

No fraud is charged in the case. The argument made that the indefiniteness of the specifications affords opportunity for the city authorities to show favoritism to the successful bidder by not exercising the option to withhold the payment of the money due the contractor, etc., is unavailing, because the members of the board are presumed to be honest servants of the city, and are entrusted by the people to act for the best interest of the city; and furthermore, if any favoritism could be shown, it would be after the bidding is over and the contract is let, favoritism in advance apparently could not exist, so far as this record discloses, there being no fraud charged; and, even though indulgences were afterwards extended by the board to the contractor, which may be considered as a favor, and which is often done by public authorities in the way of extending the time in which to finish the contract, etc., this would be no more than what is a common, and not improper, practice.

The board is vested with a certain amount of discretion in letting the contract to the lowest and best bidder. It is true that the ideal specifications would be so definite that the competition would be confined entirely to the exact amount of the bid for the work; such a perfect proposal by the city is conceivable, but not always practicable, from the city's standpoint, and where the specifications contain some indefinite provision wherein the city reserves to itself certain advantages in the letting of the contract the method of proposal by the city is such as permits effectual competition, is valid, and complies with the requirement that the contract be let to "the lowest and best bidder."

The bid of the appellee Finch seems to have been the lowest and best bid offered among the several competitors at the letting of the contract, and it does not appear that any better bid could have been obtained, or could be secured now, for the paving contract involved; and Mr. Merrill in his testimony admits he had a fair and even opportunity in bidding with the other bidders on the plans and specifications covering the proposed paving improvement of the city of Vicksburg.

We have omitted discussing the question of whether Merrill, the unsuccessful bidder, but who is in this case the real party in interest, can maintain this suit through the two taxpayers, nominal complainants, since he shows no right in himself to have the contract, nor does he make it appear that the public interest has suffered on account of the letting of the contract to the appellee, because it is unnecessary to do so.

The judgment of the lower court is affirmed.

Affirmed.