Bay Cities Paving & Grading Inc v City of San Leandro

GavelBay Cities Paving & Grading Inc v City of San Leandro–Oliver DeSilva Inc dba Gallagher & Burk– Real Party in Interest2014 DJDAR 1909 (2014

This case involved a bidder ( Gallagher & Burk) who filed a Bid Bond with the first page missing and was the lowest contractor in this project with the city of San Leandro. The city found that the Bid Bond was signed by G&B and that the failure of G&B to submit the first page was a “minor irregularity”. G&B used the City’s standard Bid Bond Form. The City found that the signed Bid Bond page 34 referred to the prior text on page 33 and that the signature page independently identified the project.. The City reasonably concluded that a court would read page 34 (the second page) of the Bid Bond in the context of the form bid bond and enforce the bid bond under Civil Code section 1647.

The material provided in G&B’s original bid, which included the second page of its Bid Bond was sufficient to establish that G&B satisfied the bid security requirement by actually obtaining the required Bid Bond from an approved surety

The Court found that the bid was responsive. A bid defect cannot be found inconsequential if it gives the bidder an unfair competitive advantage. The Court distinguishes Valley Crest Landscape (1996) 41Cal, App.4th 1432, 1437. Appellant argued that the lack of the first page of the bid bond was a material defect and gave G&B an unfair advantage and that G&B’s bid was improperly supplemented after the bidding process with G&B not providing the first page of the bond and avoid liability under its bond.

Here the city found that the bid bond was legally enforceable–the City had the signature of the obligor and the bonding company at its bid opening which made the bond enforceable. The Court found that G&B could not have withdrawn its bid and avoid liability on its bond by invoking Public Contract Code 5103 in contrast to Valley Crest. ‘That statute applies only when”[a] mistake was made… in filling out the bid” and the mistake” made the bid materially different than” the bidder intended. Here that was not the case. Also citing the Ghilotti case the Court stated that the Appellant had failed to carry its burden of proving that the City abused its discretion by awarding the contract which was a BART station contract to G&B. The City’s determination that the omitted page of the G&B bid was an inconsequential deviation from the competitive bidding requirements was a factual conclusion supported by substantial evidence. Appellant’s abstract conclusion that the bidder had the option of withdrawing its bid without penalty.

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© 2013 Robert L. Bachman