Petri v. Montana State University

NO. 93-190
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993

KEVIN PETRI, d/b/a
ALL PURPOSE SERVICES,
Plaintiff and Appellant,
v.
MONTANA STATE UNIVERSITY,
Defendant and Respondent.

APPEAL FROM: District Court of the Eighteenth Judicial District,
In and for the County of Gallatin,
The Honorable Thomas A. Olson, Judge presiding.

COUNSEL OF RECORD:

For Appellant:
J. David Penwell, Bozeman, Montana
For Respondent:
Leslie C. Taylor, Bozeman, Montana

Submitted on Briefs: August 27, 1993
Decided: October 4, 1993
Filed:
Chief Justice 3. A. Turnage delivered the Opinion of the Court.
Kevin Petri, d/b/a All Purpose Services, brought this action
against Montana State University (MSU) seeking damages for its
failure to accept his bids on two construction projects. Following

trial to the court, the District Court for the Eighteenth Judicial
District, Gallatin County, entered judgment for MSU. We affirm.
While Petri does not concisely state the issues he wishes to
raise on appeal, they can be characterized as follows:
1. Did the District Court err in concluding that MSU did not
act arbitrarily and capriciously by rejecting Petri's bid on the
Johnstone project?
2. Did the court err in failing to find that MSU violated a
duty to award state contracts to the lowest responsible bidder?
In June of 1991, MSU publicly requested bids for two construc-
tion projects. One project consisted of repainting the Paisley
Court buildings (Paisley project) and the other involved painting
the Johnstone-Mullen-Culbertson buildings (Johnstone project).
Opening of bids for the Paisley project was scheduled for 1:00 p.m.
on June 20, 1991, and opening of bids for the Johnstone project was
scheduled for one-half hour later, at 1:30 p.m.
Both bid openings were conducted by Cecilia Vaniman, an
architect for MSU. Petri submitted a timely bid for the Paisley
project, which Vaniman opened with the other bids at 1:OO. When it
was 1:30 p.m. by the clock in the bid opening room, Vaniman

2
announced the closing of bids for the Johnstone project. The sole

bid, submitted by Hobaugh Construction Company, was opened.

Minutes later, Petri appeared in the room and attempted to

submit a bid for the Johnstone project. Vaniman refused to accept

the bid. She confirmed that the bid room clock was accurate by

phoning the state government agency in Helena, Montana, which
supervised state construction projects. Petri then left the office.

Within a few hours, Petri returned to Vaniman's office and

asked her to reconsider whether to accept his bid on the Johnstone

project. When she again refused, he asked her to return his bid on

the Paisley project to him. Vaniman complied with that request.

The District Court ruled that Petri waived all rights on the

Paisley project by withdrawing his bid on that project. It further
ruled that MSU did not violate any Montana statute or bidding

requirement concerning the award of the contract for the Johnstone

project. It ordered that judgment be entered in favor of MSU.

I

Did the District Court err in concluding that MSU did not act

arbitrarily and capriciously by rejecting Petri's bid on the

Johnstone project?

The District Court concluded:

[Petri's] bid for the Johnstone project was not timely
according to the time-keeping pieces at the Montana State
University office in question. Although there was some
evidence to suggest that the MSU clock was slightly fast,
there is no evidence to support the contention that the
MSU employees acted arbitrarily or capriciously.

3
Petri testified that the clock in the bid opening room was three
minutes fast as compared with his watch. He called as a witness a
retired U.S. West telephone employee, Kent Dreier. Dreier
testified that later on the afternoon of June 20, 1991, at Petri's
request, he verified that the clock in the bid opening room was
three minutes and eight seconds fast according to a confidential
U.S. West phone number for obtaining the correct time.
As MSU points out, it cannot be held responsible for coordi-
nating its clock with a time source not available to it. Moreover,
the U.S. West time source has not been established as more accurate
than the watches of the people present in the bidding room, the
clock in that room, or the clock in the Helena, Montana, office.
We conclude that Petri's evidence on this point was inconclusive.
Petri also contends that it would be impossible for all the
events which transpired between the opening of the bids and the
phone call to Helena to have occurred between 1:30 and 1:34 p.m.,
when the call was completed. However, he does not specify a
particular finding relating to this argument, and none of the
court's findings address this point directly. The testimony of
several persons present in the bid opening room was that the events
described occurred between 1:30 and 1:34 p.m., and only Petri's
speculative opinion contradicts their testimony.
Petri argues that Vaniman should have exercised her discre-
tionary authority by accepting his bid on the Johnstone project
rather than by allowing him to withdraw his bid on the Paisley
4
project. He states that the people in the bid opening room knew he

intended to submit a bid on the Johnstone project, because he said
so when he submitted his bid on the Paisley project. He quotes

this Court:
[IIrregularities which do not give one bidder a substan-
tial advantage over other bidders, are types of irregu-
larities that can be waived by public officers in
awarding contracts.

Martel Const. v. Montana State Bd. of Examiners (1983), 205 Mont.

332, 343, 668 P.2d 222, 228. And, "state officials have discre-

tionary power to waive immaterial irregularities in any bid
offered." Sebena Paving v. Gallatin Airport Auth. (1990), 245

Mont. 389, 393, 801 P.2d 614, 616.
In Martel, the irregularity was failure of the successful

bidder to make written acknowledgment of receipt of addenda to the

solicitation for bids. The irregularities in Sebena involved

inclusion of a minority-owned enterprise as a subcontractor.

Neither party has cited Montana case law concerning late bids

as an irregularity in bidding for government contracts. MSU points

out that, under federal government procurement regulations, hand-

carried late bids are almost always rejected. J. McBride & T.

Touhey, et al., Government Contracts, Volume lB, § 10.110[5], p.

10-340 (1993). Although Montana state government contracts are not

subject to the federal regulations, the record here clearly

reflects that rejection of late bids is the industry-wide practice.

Vaniman and two of her supervisors testified that they had never

5
accepted a late bid, in hundreds of bid openings. The purpose of
this practice is to prevent a late bidder from observing the terms

of the other bids and changing his bid at the last moment.

We conclude that the District Court did not err in treating

lateness as a material irregularity in a government bid and in

concluding that MSU did not act arbitrarily and capriciously in

rejecting Petri's bid on the Johnstone project because it was late.

II

Did the court err in failing to find that MSU violated a duty
to award state contracts to the lowest responsible bidder?

Petri cites 5 18-l-102, MCA, which provides that public

contracts shall be awarded "to the lowest responsible bidder." He
argues that the decision not to accept his bid violated MSU's

statutory duty to accept the lowest bid on the Johnstone project.

Because Petri was not allowed to submit his bid on the

Johnstone project, there is no proof that his would have been the

lowest bid meeting the requirements for the project. We therefore

hold the court did not err in failing to find that MSU violated a

duty to award state contracts to the lowest responsible bidder.

Affirmed.

,<--&&
Chief Justice
We concur:

-

Justices
Justice Terry N. Trieweiler specially concurring.
I concur with the majority's conclusion that MSU could

properly reject Petri's bid because it was late. Because I
conclude that Petri's bid was legally rejected, it necessarily

follows that he was not the lowest bidder. However, I disagree
with the majority's conclusion that there is no proof that Petri's

bid would have been the lowest, had it been timely received.

For these reasons, I concur with the result of the majority
opinion without agreeing with all that is said therein.

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 October 4, 1993

CERTIFICATE OF SERVICE

I hereby certify that the following order was sent by United States mail, prepaid, to the following
named:

J. David Penwell
Attorney at Law
P.O. Box 1677
Bozeman, MT 59715

Leslie C. Taylor, Esq.
Montana State University
Rm. 211, Montana Hall
Bozeman, MT 59717

ED SMITH
CLERK OF THE SUPREME COURT
STAm OF MONTANA