S.E. 2d
THE STATE OF SOUTH CAROLINA
In The Supreme Court
Ray Bell Construction
Company, Inc., Petitioner
v.
The School District of
Greenville County and
M.B. Kahn Construction
Company, Inc., Respondents
ON WRIT OF CERTIORARI TO THE COURT OF
APPEALS
Appeal From Greenville County
Marc H. Westbrook, Judge
Opinion No. 24790
Heard March 5, 1998 - Filed May 18, 1998
REVERSED AND REMANDED
David B. Summer, Jr., and Faye A. Flowers, of
Parker Poe Adams & Bernstein, L.L.P., of
Columbia, for petitioner.
Donald A. Harper and N. Ward Lambert, of The
Harper Law Firm, of Greenville, for respondent
Greenville County School District.
Theodore S. Stern, Jr., and Thomas E. Dudley, III,
p.13
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
of Covington, Patrick, Hagins, Stem & Lewis, P.A.,
of Greenville, for respondent M.B. Kahn
Construction Company, Inc.
WALLER., A.J.: We granted certiorari to review the Court of
Appeals' decision in Ray Bell Constr. Co. v. School Dist. of Greenville Cty.,
324 S.C. 320, 478 S.E.2d 67 (1996). We reverse and remand.
FACTS/PROCEDURAL POSTURE
In June 1994, Respondent Greenville County School District ("District")
issued an Invitation for Construction Bids on a new high school. Three
contractors submitted bids for the project: (1) Respondent M.B. Kahn
Construction Company, Inc. ("Kahn"); (2) Petitioner Ray Bell Construction
Company, Inc. ("Ray Bell"); and (3) Ellis-Don Construction, Inc. When bids
were opened, Kahn's was the lowest, some $240,000 lower than Ray Bell's.1
Ray Bell questioned the responsiveness2 of Kahn's bid because Kahn had
listed multiple subcontractors in the alternative for the same specialty work
on its bid form.
District required contractors to list subcontractors for fifteen separate
specialties. Ray Bell's complaint involves Kahn's listings in five areas:
ROOFING: "Piper or Pickens"
STRUCTURAL STEEL: "G.C. [general contractor, i.e. Kahn] and
or McAbee or Falcon"
MASONRY: "GC and/or Pettit and/or Brickmaster and/or Marion
and/or Byers and/or New Carolina and/or Cherokee and/or
Goucher"
TERRAZZO/HARD TILE: "Campbell Tile or Capital/Adams"
1Ellis-Don was the highest bidder and is not a party to this action.
2According to District's Procurement Code, contracts "shall be awarded
. . .to the lowest responsible and responsive bidder whose bid meets the
requirements and criteria set forth in the invitation for bids . . . ."
p.14
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
HVAC CONTROLS: "Barber Coleman or ACTS."
In response to Ray Bell's questions, District requested an explanation
from Kahn for its listings. Kahn made the following representations by
letter. For roofing, Kahn stated it listed two subcontractors because it
intended to award roofing by type: conventional built-up roofing to Piper and
metal roofing to Pickens. For Structural Steel and Masonry, Kahn stated it
intended to do the work itself, and would enlist the aid of additional
subcontractors should they be needed to complete the work on schedule. For
Terrazzo/Hard Tile, Kahn stated it intended to award terrazzo and ceramic
tile separately: terrazzo to Campbell "and the ceramic tile to be awarded
next in accordance with our proposal." For HVAC Controls, Kahn stated it
was necessary to list two subcontractors "due to the proprietary nature of
certain aspects of the controls systems depending on equipment selection."
After reviewing Kahn's written explanation, District issued a notice
stating it intended to award Kahn the contract. Ray Bell then filed a formal
protest with District's purchasing agent. The purchasing agent denied the
protest, stating that based on Kahn's written explanation, "'bid shopping' is
neither contemplated nor possible." The same day of this denial, District
awarded Kahn the contract. Ray Bell appealed the purchasing agent's
decision. The matter was subsequently set before a master-in-equity3 for an
administrative hearing.
At the hearing, held seventeen days after Kahn received the contract
award, Kahn gave further information regarding the subcontractor listings.
Regarding the roofing, Kahn represented it did not get breakout bids (broken
down into built-up and metal) from Piper or Pickens until after it received
the contract. Prior to that, it only had bids for the whole project. It used
3District's Procurement Code provides its "Procurement Review Board"
is charged with responsibility for providing administrative review of protests
arising from contract awards. Thus, when Ray Bell filed its request for
review of the purchasing agent's decision, the matter should have been heard
by this Board. However, at the time there was no active District
Procurement Review Board. Therefore, in an unusual agreement, all parties
stipulated the matter would be heard by a master-in-equity, who would have
all rights and powers of any administrative body authorized to hear the
protest. The presiding circuit court judge agreed to this stipulation and
reference, further providing any appeal of the master's decision would be to
circuit court. We make no representations regarding the propriety of a
judicial officer hearing this case in an administrative capacity.
p.15
BELL CONSTRUCTION COMPANY, INC. , v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
Piper's sub-bid in its bid calculation. After receiving the breakout bids post-
award, Kahn decided to award the entire job to Piper.
Regarding structural steel and masonry, Kahn maintained it still
intended to do the work itself, and would get District approval (i.e. comply
with S.C. Code Ann. 11-35-3020(2)(b)(ii), quoted below, regarding self-
bidding) before resorting to subcontractors. Regarding terrazzo/hard tile,
Kahn represented Campbell gave a pre-award bid, broken down into terrazzo
and hard tile. Capital gave a pre-award bid for the hard tile only. Adams
originally bid for both terrazzo and hard tile, but withdrew its bid at some
point (the record is unclear whether this occurred pre- or post-award).
Finally, regarding the HVAC controls, Kahn stated in actuality this
subcontractor is chosen by the mechanical subcontractor, (i.e. it would be a
"sub's sub"). Therefore, Kahn had no control over that award. It received
no quotes from either Barber Coleman or ACTS, and its listed mechanical
subcontractor did not provide these names. Kahn stated it had ultimately
awarded subcontracts to those subcontractors who submitted the lowest pre-
award bid. Kahn also denied it ever shopped bids.
After the hearing, the master denied Ray Bell's protest. The circuit
court affirmed. The Court of Appeals likewise affirmed. Ray Bell Constr.
Co., 324 S.C. 320, 478 S.E.2d 67 (Cureton, J., dissenting).
We granted certiorari.
ISSUES
I. Does state law prohibit the listing of alternate subcontractors in bid
forms?
II. If listing alternate subcontractors is improper, can doing so constitute
a minor informality such that District could waive it?
DISCUSSION
Standard of Review
Under District's Procurement Code, factual determinations required by
competitive sealed bidding "shall be final and conclusive unless they are
clearly erroneous arbitrary, capricious or contrary to law." No
p.16
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
determination by the Review Panel or Board concerning an issue of law shall
be final or conclusive."
I. Statutory Construction of S.C. Code Ann. 11-35-3O2O
Ray Bell argues S.C. Code Ann. 11-35-3020(2)(b) prohibits the listing
of multiple subcontractors in the alternative on bid forms. Under the
circumstances that exist in this case, we agree. In 1994, this section
provided, in pertinent part:
(b) Bid Acceptance. . . . The using agency's invitation for bids
shall set forth all requirements of the bid including, but not
limited to:
(i) The using agency ... shall identify by specialty in
the invitation for bids all subcontractors ... who are expected to
perform work or render service to the prime contractor to or
about the construction when those subcontractors' contracts are
each expected to exceed three percent of the prime contractor's
total base bid. In addition, the using agency ... may identify by
specialty in the invitation for bids any subcontractors who are
expected to perform work which is vital to the project. The
determination of which subcontractors are included in the list
provided in the invitation for bids is not protestable under
Section 11-35-4210 or any other provision of this code. Any
bidder in response to an invitation for bids shall set forth in
his bid the name of each subcontractor so identified in the
invitation for bids. If the bidder determines to use his own
employees to perform any portion of the work for which he would
otherwise be required to list a subcontractor and if the bidder is
qualified to perform such work under the terms of the invitation
for bids, the bidder shall list himself in the appropriate place in
his bid and not subcontract any of that work except with the
approval of the using agency for good cause shown.
(ii) Failure to complete the list provided in the invitation
for bids renders the bidder's bid unresponsive.
(iii) No prime contractor whose bid is accepted shall
substitute any person as subcontractor in place of the
subcontractor listed in the original bid, except for one or more of
p.17
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
the following reasons: [subcontractor (a) is financially
irresponsible, (b) did not properly bid to contractor, (c) was
inadvertently listed due to clerical error, (d) has not submitted
required bond, (e) is not licensed as required by law, (f) fails to
perform contract, (g) is doing unsatisfactory work'(h) has agreed
to substitution, (h) with using agency's consent upon good cause
shown]. The request for substitution must be made to the using
agency in writing.
(iv) Where substitution is allowed, the prime contractor,
before obtaining prices from any other subcontractor, must
attempt in good faith to negotiate a subcontract with at least one
subcontractor whose bid was received prior to the submission of
the prime contractor's bid.
(emphasis supplied).4
In disagreeing with Ray Bell's argument, the Court of Appeals stated:
". . . the express language of section 11-35-3020(2)(b) provides the failure to
complete the list in the invitation for bids renders the bidder's bid
unresponsive. The clear language of the statute, however, does not state that
listing of alternative subcontractors renders the bid unresponsive." Ray Bell
Constr. Co., 324 S.C. at, 478 S.E.2d at 70. In essence, the Court of Appeals
reasoned if the legislature did not expressly prohibit such listings, they were
permissible. In doing so, it relied on a strict rule of statutory construction:
If a statute's language is plain and unambiguous, and conveys a
clear and definite meaning, there is no occasion for employing
rules of statutory interpretation and the court- has no right to
look for or impose another meaning. Where the terms of the
statute are clear, the court must apply those terms according to
their literal meaning. This Court cannot construe a statute
without regard to its plain and ordinary meaning, and may not
resort to subtle or forced construction in an attempt to limit or
expand a statute's scope.
Paschal v. State Elec. Comm'n, 317 S.C. 434, 436-37, 454 S.E.2d 890, 892
(1995). The Court of Appeals found the language of section 11-35-3020(2)(b)
4District made these provisions applicable to the bids submitted for this
project by including them in its Instructions to Bidders and Invitation for
Bids.
p.18
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL, DISTRICT OF GREENVILLE COUNTY, ET AL.
unambiguous, and thus refused to resort to other rules of statutory
construction.
The question of whether a statute's language is unambiguous and
conveys a clear and definite meaning is not always an easy one. We find the
Court of Appeals erred in focusing only on section 11-35-3020(2)(b)(ii) in
construing the statute's meaning.5
All rules of statutory construction are subservient to the one that
the legislative intent must prevail if it can be reasonably
discovered in the language used, and that language must be
construed in the light of the intended purpose of the statute.
However plain the ordinary meaning of the words used in a
statute may be, the courts will reject that meaning when to
accept it would lead to a result so plainly absurd that it could
not possibly have been intended by the Legislature or would
defeat the plain legislative intention. lf possible, the court will
construe the statute so as to escape the absurdity and carry the
intention into effect.
Kiriakides v. United Artists Communications, Inc., 312 S.C. 271, 275, 440
S.E.2d 362, 366 (1994) (internal citations omitted) (emphasis supplied).
Allowing the listing of alternate subcontractors would conflict with the
overall purpose behind section 11-35-3020(2)(b). As Judge Cureton discussed
at length in his dissent, the underlying goals of the State Procurement Code
are, inter alia, to ensure standards for the "fair and equitable treatment of
all persons" dealing with public procurement, establish a "system of quality
and integrity with clearly defined rules for ethical behavior on the part of all
persons engaged in the public procurement process," and "foster effective
broad-based competition." S.C. Code Ann. 11-35-20 (Supp. 1997). These
goals are to be furthered while maximizing, "to the fullest extent
5We also disagree with the Court of Appeals' reasoning to the extent
it suggests the sole criteria of responsiveness is contained in this statute.
District's bidding requirements provide that a bid will be unresponsive if it
does not comply with applicable state law. Thus, if the listing of multiple
subcontractors in the alternative violates state law, the bid can be considered
unresponsive despite section 11-35-3020's failure to so specifically provide.
p.19
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
practicable[,] the purchasing values of [public] funds." Id.6 To these ends,
a primary objective of the bid listing provisions, particularly regarding
subcontractors, is to prevent bid shopping and peddling.7 Allowing the listing
of alternate subcontractors would only serve to foster these unethical
practices because it would give contractors the opportunity to choose from
among several prospective subcontractors, depending on who offered the
lowest bid post-award.
Additionally, the strict substitution requirements of section 11-35-
3020(2)(b) would be rendered virtually meaningless under the Court of
Appeals' interpretation. These provisions allow subcontractor substitutions
only with prior approval of the using agency and in certain limited
circumstances. However, if a contractor could list subcontractors in the
alternative on the bid form and then make its choice post-award, these
substitution requirements could be completely circumvented. "In construing
statutory language, the statute must be read as a whole, and sections which
are part of the same general statutory law must be construed together and
each one given effect, if it can be done by any reasonable construction."
Higgins v. State, 307 S.C. 446, 449, 415 S.E.2d 799, 801 (1992). See also
Jackson v. Charleston Cty. Sch. Dist., 316 S.C. 177, 181, 447 S.E.2d 859, 861
(1994) ("The true guide to statutory construction is not the phraseology of an
isolated section or provision, but the language of the statute as a whole
considered in the light of its manifest purpose.").
A Pennsylvania court reasoned, in interpreting similar subcontractor
6District's Procurement Code has incorporated these policies into its
provisions as well.
7" Bid shopping is the use by the general of one subcontractor's low bid
as a tool in negotiating lower bids from other subcontractors. Bid peddling,
conversely, is the practice whereby subcontractors attempt to undercut known
bid prices of other subcontractors in order to get a job. In most
circumstances, bid peddling is simply a response of competing subcontractors
to the bid shopping activity of a general, and insofar as a solution to this
problem is concerned, bid shopping and peddling may be treated as one."
Thomas P. Lambert, Comment, Bid Shopping and Peddling in the
Subcontract Construction Industry, 18 UCLA L. Rev. 389, 394 (1970). Bid
shopping allows a bidder "to be in a position to increase his profit, often to
the detriment of the project itself, by forcing subcontractors to provide
services at destructively low prices in order to obtain work." George &
Lynch, Tnc. v. Division of Parks and Rec., 465 A.2d 345, 349 n.4 (Del. 1983).
p.20
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
listing requirements contained in bid instructions: "Although it is true that
the bid instructions do not expressly forbid alternative listings, it is also true
that the apparent intent of the language 'to identify the equipment and
material which has been used by [the contractor] as a base bid . . .' together
with another requirement that no modifications would be allowed after bid
opening, makes the most reasonable interpretation seem to be that only one
listing would be permitted, and that was in fact how all the other bidders
understood the instruction." Conduit & Found. Corp. v. City of Philadelphia,
401 A.2d 376, 379 (Pa. Commw. Ct. 1979).8 We find section 11-35-3020
8In reaching its decision, the Court of Appeals relied on Thomas P.
Carney, Inc., v. City of Trenton, 562 A.2d 807 (N.J. Super. Ct. App. Div.
198S). In Carney, a bid was submitted listing multiple subcontractors for one
specialty. Carney argued this violated applicable law requiring bidders to
give "the name or names or all subcontractors to whom the bidder will
subcontract." The court disagreed, finding, "The 'one subcontractor to a trade'
rule contended by Carney is simply not found in the text of the statute. If
the drafters of the statute intended to prohibit general contractors from using
multiple subcontractors in each trade, we assume more precise wording would
have been used." Id. at 810. Carney held the statute neither prohibited a
bidder from contracting with more than one subcontractor in a trade, nor
required each subcontractor named actually receive a contract. "The purpose
of the word 'will' in the statute is to prevent substitutions of unlisted
subcontractors, not to guarantee that each listed subcontractor receive a
contract." Id.
Carney's holding was subsequently limited by Prismatic Dev. Corp. v.
Somerset Cty. Bd. of Chosen Freeholders, 564 A.2d. 1208 (N.J. Super. Ct.
App. Div. 1989), cert. denied, 570 A.2d 965 (N.J. 1989), and overruled on
other grounds by Meadowbrook Carting Co. v. Borough of Island Heights, 650
A.2d 748 (N.J. 1994). Prismatic also addressed whether contractors could
name alternative specialty subcontractors under the same statute analyzed
in Carney. Relying in part on legislative history, but also in part on
statutory language, Prismatic held it was impermissible "to name multiple
subcontractors for some (or all) of the branches of work and then select
between them after the opening of bids." Id. at 1212. In so holding, it
factually distinguished Carney: "In that case ... the contracting unit's bid
request contained a number of alternative proposals, all of which were to be
provided for in the bids. The prime contractor, in a single overall contract
bid, named more than one subcontractor for the same trade but was really
required to do so because the selection of the subcontractor det)ended upon
what the contracting unit ultimately decided to do." Id. at 1210 (emphasis
p.21
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
prohibits the listing of multiple subcontractors in the alternative on a bid.
However, our holding is not intended to proscribe listing multiple
subcontractors when more than one subcontractor is actually going to perform
the work (i.e. the 'ob will be shared), or when the award of subcontractors
will depend on some post-award action by the awarding Agency. See Ray Bell
Constr. Co., 324 S.C. at 331-32, 478 S.E.2d at 73 (Judge Cureton, dissenting);
Prismatic, 564 A.2d 1208.9 Under the circumstances of this case, we find
Kahn improperly listed subcontractors on its bid form because it provided the
opportunity to choose from among several subcontractors post-award.10
In finding Kahn's bid complied with applicable law, the master seemed
to focus on the fact that (1) it did not appear Kahn actually "shopped" its bid
among subcontractors, and (2) Kahn ultimately awarded subcontracts to those
supplied). Carney can be similarly distinguished here, a fact the Court of
Appeals ignored.
9Section 11-35-3020(2)(b)(i) was amended in 1997, after the Court of
Appeals issued its decision in this case. It now reads in pertinent part:
"Any bidder in response to an invitation for bids shall set forth in his bid the
name of only those subcontractors that will perform the work as identified
in the invitation for bids." (emphasis supplied to reflect amendment). We
do not suggest this amendment should be read as an indication of legislative
intent in enacting the statute we interpret today. See Whitner v. State, 328
S.C. 1, 492 S.E.2d 777 (1997) (Generally, the legislature's subsequent acts
cast no light on the intent of the legislature which enacted the statute being
construed).
10Neither of the limitations to our holding applies in this case. We do
take note of Kahn's initial, pre-award representations that the two roofing
subcontractors would share the work. Had that been the case, a good
argument exists this listing would not have violated section 11-35-3020.
However, this is not what ultimately occurred. Kahn used Piper's whole bid
in computing its bid offer. It admitted at the hearing it never asked for a
break-out bid from either Piper or Pickens until after it was awarded the
contract (and after it responded to District's inquiry). After receiving the
break-out bids, it decided to use Piper for the whole project, ostensibly
because Pickens bid too high. It is difficult to understand how a contractor
could have intended to award subcontracts separately by type when it never
had break-out bids. While Kahn may not have actually shopped its bid, it
appears by its own admissions to have engaged in some post-award
negotiations and decision-making.
p.22
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
subcontractors who gave the lowest pre-award bids. His reasoning was that
if the underlying policy of section 11-35-3020 is to prevent bid shopping, and
no bid shopping actually occurred, then Kahn effectively complied with the
statute.11 We disagree with this reasoning. Section 11-35-3020(2)(b) is a bid
listing statute. Although the legislature could have written a statute directly
prohibiting bid shopping, it chose instead to adopt preventive measures
regulating conduct which provides the opportunity to engage in unethical
practices.12 We find that to establish a violation of section 11-35-3020, proof
of actual bid shopping is not required. A contrary interpretation would not
only render subcontractor listing requirements largely superfluous, but would
create practical difficulties in light of the time and proof restrictions
11This was also the reasoning of District's purchasing agent. Of course,
District's willingness to adopt the "no harm, no foul" approach is colored by
its desire to get the lowest contract. Once it assures itself no actual bid
shopping occurred (even if it were only because of Ray Bell's protest), its
incentive to find the lowest bid unresponsive must have been greatly
diminished.
12 New Mexico rejected a similar argument upon a contractor's
contention it should be relieved of complying with certain bidding statutes
when there is no "real risk" of bid shopping or peddling because an agency
hearing is required.
If the legislature believed that the hearing before the using
agency would be adequate to determine whether or not there had
been bid shopping or peddling, then there would be little point to
listing subcontractors in the first instance. The using agency
would simply make an individualized determination in each case
regarding whether bid shopping or peddling had occurred. The
Act's listing requirement, however, together with the strict
limitation on substitution or subcontractors, establishes that the
legislature was not willing to rely on after-the-fact inquiries into
bid shopping or peddling. Rather, the legislature adopted
prophylactic measures which greatly reduce the opportunity for
bid shopping or peddling and thereby avoid the delay and
expense of fact-finding regarding the existence of those practices.
We should resist adopting an interpretation of [the statute] that
undermines the value of these prophylactic measures.
Dynacon, Inc. v. D & S Contracting, Inc., 899 P.2d 613, 618-19 (N.M. Ct.
App. 1995).
p.23
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
envisioned by the procurement scheme. Aggrieved parties must protest bids
within fifteen days after the notification of award is posted; and bid shopping
only occurs after an award is made. Considering that the decision of
responsiveness should be made before a contract is awarded, it would seem
impossible to make the issue depend on whether bid shopping or other
unethical behavior ultimately occurred. We find the legislature would not
have intended such an illogical application. The statute has uniform listing
requirements which, when followed, greatly diminish the opportunity to shop
bids. Eradicating opportunities to engage in unethical behavior is clearly
what the legislature has decided to police. Because Kahn's bid form gave it
such an opportunity, it ran afoul of section 11-35-3020(2)(b).
II. Waiver
District has the authority to waive minor informalities or irregularities
in a bid. Its Procurement Regulations define "minor informality or
irregularity" as "one which is merely a matter of form or is some immaterial
variation from the exact requirements of the invitation for bids, having no
effect or merely a trivial or negligible effect on price, quality, quantity, or
delivery of the supplies or performance of the services being procured, and
the correction or waiver of which would not affect the relative standing of, or
be otherwise prejudicial to bidders." The master found that even if Kahn's
bid listing did not comply with the statutory bidding requirements, District
had the discretionary authority to waive such noncompliance. It again based
its decision on its finding that ultimately no bid shopping actually occurred.
The circuit court affirmed the master's ruling.13 Ray Bell argues this was
error. We agree. For the following reasons, we find the violation in this case
was material and could not be waived. 14
While we have found no South Carolina authority directly on point,
courts from other jurisdictions have held noncompliance with bid listing
statutes material and non-waivable. See generally 64 Am. Jur. 2d Public
13The Court of Appeals, in light of its interpretation of section 11-35-
3020, did not address this issue.
14 The question of whether a variation is material is normally a question
of fact. 72 (Supp.) C.J.S. Public Contracts 13 (1975). However, our ruling
is not grounded on individual fact determinations. Rather it is a finding
that, as a matter of law, District has no authority to waive the statutory
bidding requirements in this case.
p.24
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
Works & Contracts 62 (1972) (mandatory statutory requirements cannot be
waived).
Essentially this distinction between conditions that may or may
not be waived stems from a recognition that there are certain
requirements often incorporated in bidding specifications [that] by
their nature may be relinquished without there being any
possible frustration of the policies underlying competitive bidding.
In sharp contrast, advertised conditions whose waiver is capable
of becoming a vehicle for corruption or favoritism, or capable of
encouraging improvidence or extravagance, or likely to affect the
amount of any bid or to influence any potential bidder to refrain
from bidding, or which are capable of affecting the ability of the
contracting unit to make bid comparisons, are the kind of
conditions [that] may not under any circumstances be waived.
Meadowbrook Carting Co. v. Borough of Island Heights, 650 A.2d 748, 751-52
(N.J. 1994). See also George & L3mch, Inc., 465 A.2d at 351 ("the contract
should never be awarded on the strength of a promise that the statutory
conditions restricting the very right to accept a bid will be satisfied
subsequent to its acceptance"); Haddock v. Board of Pub. Educ., 84 A.2d 157,
161-62 (Del. Ch. 1951) (multiple listing of alternative subcontractors could not
be a technical irregularity "in light of the special requirements of the statute"
making subcontractor listings a condition precedent to receiving award);
Neilsen & Co. v. Cassia, 536 P.2d 1113, 1116 (Idaho 1975); Williams Bros.
Constr., Inc. v. Public Bldg. Comm'n, 612 N.E.2d 890, 896 (111. App. Ct. 1993),
cert. denied, 622 N.E.2d 1229 (111. 1993) ("an agency has no power to waive
compliance with a requirement imposed by the legislature"); Prismatic, 364
A.2d at 1212 ("The failure to list the subcontractors in-the manner prescribed
by the statute is material and non-waivable").
Courts have adhered to this rule even when there is no actual harm
done, if the deviation had the "capacity" to affect the competitive bidding
process.
This court has required strict adherence to bidding requirements
even where no harm to the public authority was shown; where
the violation benefited the public; and where there was no
showing of bad faith or corruption. There are, however,
circumstances in which noncompliance with bidding requirements
has been characterized as technical rather than substantive, as
a minor deviation not requiring invalidation of a bid or a
p.25
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
contract. The question is whether invalidation is necessary in
order to fulfil the legislative purpose.
Phipps Prod. Corp. v. Massachusetts Bay Transl2. Auth., 443 N.E.2d 115, 118
(Mass. 1982) (internal citations omitted). In Conduit, the court discussed the
issue of whether listing alternative subcontractors is a waivable defect:
Although there is no evidence that [the low-bidding contractor]
engaged in bid shopping, a problem as to the statutory
requirement of open and equal competition occurs because the
benefits from bid-shopping can be anticipated when a bidder
intends to list several suppliers. Therefore, those benefits can be
factored into the amount quoted on the submitted bid, a benefit
all the other bidders reasonably believed would not be permitted
in this case. Thus, the aberration in [the protested] bid is one
allowing an opportunity for a Competitive advantage in preparing
the bid.
401 A.2d at 379 (here, prohibition against alternative listing was not in
statute but in bidding specifications). See also Meadowbrook, 650 A.2d at
755-56 (bidder's failure to include consent of surety in its proposal non-
waivable, even though cured four days later, because it had the "capacity to
affect the fairness of the bidding process," "even though it is evident that in
fact there was no corruption or any actual adverse effect upon the bidding
process").
We find allowing the subcontractor listing requirements to be waived
in this case would frustrate the purpose of the legislature in enacting the
statute. Therefore, Kahn's failure to properly list subcontractors as required
by section 11-35-3020 was a material violation of the bidding requirements
and was not waivable by District. Kahn's bid was therefore unresponsive.
For the foregoing reasons, we reverse the Cour-t of Appeals' decision in
this case and remand for further proceedings consistent with this opinion. 15
15Although Ray Bell originally sought a re-award of the contract, it is
now only seeking reimbursement costs and attorneys' fees. Kahn additionally
argues that because the master found Ray Bell's own bid unresponsive, it
does not have standing in this case. We disagree with Kahn's interpretation
of the master's order. A close reading shows any language referring to Ray
Bell's bid was purely hypothetical in nature. Under the factual
p.26
BELL CONSTRUCTION COMPANY, INC., v. SCHOOL DISTRICT OF GREENVILLE COUNTY, ET AL.
REVERSED AND REMANDED.
FINNEY, C.J., TOAL, MOORE, and BURNETT, JJ., concur.
circumstances of this case, we decline to find such language amounted to a
final, dispositive ruling.
p.27