Opinion
No. A03-50.
Filed: December 30, 2003.
Appeal from the District Court, Hennepin County, File No. Ap 02-6327.
Gordon P. Raisanen, Raisanen Associates Law Firm, Ltd., (for appellant).
George C. Hoff, Scott B. Landsman, Hoff, Barry Kuderer, P.A., (for respondent).
Susan L. Naughton, League of Minnesota Cities, (for amicus curiae League of Minnesota Cities).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant submitted a bid to build a public facility and was not selected. It sued to enjoin respondent from proceeding, and the district court entered summary judgment in favor of respondent. Appealing from the judgment, appellant contends that (1) the district court erred in limiting its review to the record before the city council and (2) genuine issues of material fact exist as to (a) whether the bid evaluation criteria for experience constructing a facility similar in size and functions were limited to experience constructing a public facility and (b) whether respondent applied the bid evaluation criteria reasonably. We affirm.
FACTS
Respondent City of Minnetonka (the city) initiated a building project that required removal of its vehicle storage and administration building and construction of a new building that would house all public works and maintenance operations. Because the city needed to provide uninterrupted public works and maintenance service during the construction, the project required timely completion in accordance with a schedule set by the city in the contract. The city hired Oertel Architects to prepare plans and specifications for the project. The plans and specifications included the following specific evaluation criteria to determine qualified bidders:
Experience constructing a facility 5 points similar in size and functions within the last five years, to the satisfaction of the owner
• For each additional facility 1 point each qualifying under the above category
Experience of the assigned job 5 points superintendent in supervising construction of a facility similar in size and functions within the last five years, to the satisfaction of the owner
• For each additional facility 1 point each supervised that qualifies under the above category
History of initiating change orders Deduct 2 points for (not at owner's request) that total each confirmed project more than 5% of the original bid within the last five years
History of complaints regarding the Deduct 2 points for quality of the work of projects each confirmed project within the last five years
Prospective bidders were given a copy of the evaluation criteria. A pre-bid conference was held on March 4, 2002, during which prospective bidders were given an opportunity to raise concerns or questions about the evaluation criteria.
Prior to the commencement of bidding, an addendum was sent to prospective bidders that gave notice of an added threshold requirement to the evaluation criteria. The addendum stated, "[a] bidder will not be considered as a contractor for this project unless the bidder receives a rating of at least 10 points, as determined by the architect and the City, using the . . . system for assigning points." The original evaluation criteria were otherwise unchanged. The addendum concluded by stating, "[t]he City will award a contract to the bidder whose bid price, quality and experience best conform to the overall interests of the City."
On March 12, appellant Westra Construction, Inc., (Westra) submitted its bid for the project. Westra's submission acknowledged that the addendum had been reviewed and incorporated into its bid. Westra's bid was the lowest, followed by a bid from CM Construction. Oertel evaluated Westra and CM according to the predetermined criteria. According to the evaluation criteria, Westra received a rating of zero points and CM received a rating of 12 points.
On March 21, the city advised Westra that Oertel recommended awarding the contract to CM. On March 25, the city council awarded the contract to CM. The contract was fully executed with CM on April 1. Westra objected to the city's use of the evaluation criteria and the award of the contract to CM in a letter dated April 5, 2002. Construction began on April 15.
Construction was completed on January 30, 2003.
On April 15, Westra served a complaint on the city, seeking temporary and permanent injunctive relief and declaratory relief. The district court denied Westra's motion for a temporary restraining order and granted summary judgment dismissing Westra's complaint. This appeal followed.
DECISION I.
Arguing that the district court should have considered evidence outside the record before the city council, Westra first contends that the district court erred in limiting the scope of its review. Westra's position is unavailing. When considering a challenge to a city's contract award, if the basis for the city's decision is discernible from the record, the district court's review is properly confined to the record before the city council. Swanson v. City of Bloomington, 421 N.W.2d 307, 310 (Minn. 1988). Under such circumstances, a trial de novo would infringe on the decision-making authority of the city and weigh against judicial economy. Id. In reviewing the proceedings of the city, the district court must determine whether the city acted capriciously, arbitrarily, or oppressively. R.E. Short Co. v. City of Minneapolis, 269 N.W.2d 331, 337-38 (Minn. 1978). Here, the basis for the city's contract award was apparent from the record. Thus, the scope of judicial review was properly limited to the record before the city council. The district court did not err when it reviewed the record before the city council to determine whether there was evidentiary support and a rational basis for the council's decision.
II.
On appeal from summary judgment, we determine whether any genuine issues of material fact exist and whether the district court erred as a matter of law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). We view the evidence in the light most favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Summary judgment is appropriate when a party fails to make a showing sufficient to establish the existence of an element essential to the party's case. Bersch v. Rgnonti Assocs., Inc., 584 N.W.2d 783, 786 (Minn. App. 1998), review denied (Minn. Dec. 15, 1998).
Westra asserts that the district court erred in granting summary judgment because material facts remain in dispute. Material facts are those that will affect the outcome of the case. Zappa v. Fahey, 310 Minn. 555, 556, 245 N.W.2d 258, 259-60 (1976). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party," a genuine issue of material fact does not exist. DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986)). A genuine issue of material fact must be established by substantial evidence. Id. at 69-70. As such, the party opposing summary judgment "must do more than rest on mere averments." Id. at 71.
A. Whether the Criteria were Changed or Ambiguous
Westra argues that the term "facility" in the evaluation criteria was either changed to mean "public facility" after the bidding opened or the term was ambiguous so as to lead Westra to believe that private facilities would also be considered. Citing Griswold v. Ramsey County, 242 Minn. 529, 536, 65 N.W.2d 647, 652 (1954), Westra maintains that any change in criteria invalidates the purpose of public bidding, which is to limit the discretion of contract-making officials in order to prevent fraud, collusion, and favoritism in contract awards. But the city has broad discretion in defining the terms of its evaluation criteria. Queen City Constr., Inc. v. City of Rochester, 604 N.W.2d 368, 374 (Minn. App. 1999), review denied (Minn. Mar. 14, 2000). Westra's claim that the city changed the meaning of the term "facility" invites us to divorce the term "facility" from the context in which it is used. We decline to do so. When read in context, the plain meaning of the phrase "facility similar in size and functions" means a facility similar to the proposed public works facility to be constructed. This construction does not exclude private facilities per se. A private facility conceivably could meet this standard of being similar in size and functions to the proposed public works facility. Westra, however, failed to establish that it would have qualified as the lowest responsible bidder under a standard that includes private projects. Had Westra been awarded points for the private projects it identified as similar in size and functions to the proposed project, Westra still would not have scored enough points to meet the threshold criterion. Thus, when the term is construed in context, whether "facility similar in size and functions" is limited to a public facility is not a material fact because resolution of the issue does not affect the outcome of this case.
B. Whether the Evaluation Criteria were Applied Reasonably
Minnetonka is a home rule charter city. As such, the city is required to seek competitive bids under the Uniform Municipal Contracting Law, Minn. Stat. § 471.345, subd. 3 (2002), but retains discretion in determining how contracts are awarded. See Queen City Constr., 604 N.W.2d at 373. The city adopted a lowest-responsible-bidder standard to award the contract at issue here. The evaluation criteria were used to determine the lowest responsible bidder. Once a public authority elects a method to use in a competitive-bidding process, that method must be followed unless it has been seasonably abandoned. Byrd v. Indep. Sch. Dist. No. 194, 495 N.W.2d 226, 231 (Minn. App. 1993), review denied (Minn. Apr. 20, 1993).
In determining the "lowest responsible bidder," a city may consider factors other than price. Otter Tail Power Co. v. Vill. of Elbow Lake, 234 Minn. 419, 425, 49 N.W.2d 197, 201 (1951) (stating that "[v]alue is not always determined by price alone"). Minnesota's competitive bidding laws recognize "the necessity for according public officials some latitude in purchasing items on which bids are required." Leskinen v. Pucelj, 262 Minn. 461, 469, 115 N.W.2d 346, 352 (1962). Awarding a contract is a discretionary administrative act vested by law in the governing authorities of the city. Queen City Constr., 604 N.W.2d at 374. Accordingly, "courts cannot direct the authorities as to how they shall exercise that discretionary power, nor direct to whom they must let a contract. They may only enjoin them from doing so illegally, which must include an arbitrary, capricious, or unreasonable exercise of power." Id. (quoting Nielsen v. City of St. Paul, 252 Minn. 12, 18, 88 N.W.2d 853, 858 (1958)). Here, after setting criteria for determining the lowest responsible bidder, the city, through its architect, evaluated the bids according to the predetermined criteria.
The city may create a system of evaluation criteria for awarding contracts through a bidding process. See Otter Tail Power Co., 234 Minn. at 424-25, 49 N.W.2d at 201. In doing so, the bidding procedure and its evaluative criteria must not impede "free and open bidding by all interested parties." Coller v. City of St. Paul, 223 Minn. 376, 385, 26 N.W.2d 835, 840 (1947). The process must "give all bidders an equal opportunity without granting an advantage to one or placing others at a disadvantage." Queen City Constr., 604 N.W.2d at 374 (quoting Foley Bros., Inc. v. Marshall, 266 Minn. 259, 264, 123 N.W.2d 387, 391 (1963)). And the procedure used in awarding public contracts must be pursued in a reasonable manner. Griswold, 242 Minn. at 535, 65 N.W.2d at 652.
Westra contends that the city unreasonably applied the evaluation criteria by showing favoritism to CM and unfairly discrediting Westra. Although Westra asserts that the city's architect applied the evaluation criteria based on fraud, favoritism, improvidence, and extravagance, Westra does not allege any specific facts supporting its claim that the architect engaged in an illegal application of the evaluation criteria. When the architect scored the bidders using the evaluation criteria, the architect relied on projects and references submitted by the bidders. The record demonstrates that the architect's application of the evaluation criteria to the information supplied by the contractors neither gave CM an unfair advantage nor placed Westra at an unfair disadvantage. For both Westra and CM, the architect considered projects that did not fit squarely within the criteria but were worthy of consideration. Westra fails to assert facts demonstrating the city's arbitrary, capricious, or unreasonable exercise of discretion. And the record is devoid of any evidence that the bidding process was implemented in a manner that granted an arbitrary or unreasonable advantage to any bidder.
Under the predetermined criteria, Westra's score of zero fell well below the minimum requirement of 10 points. Westra did not qualify as the lowest responsible bidder. Thus, the city had a rational basis for awarding the contract to CM instead of Westra. Accordingly, the district court properly concluded that, when the facts are viewed in the light most favorable to Westra, there are no genuine issues of material fact as to the city's application of the evaluation criteria that preclude summary judgment.
Because this case presents neither genuine issues of material fact nor a valid claim of legal error, we affirm the district court's grant of summary judgment in favor of the city.