Illinois courts continue to presume that ordinances enacted by public entities are valid, and therefore, the courts will uphold a public entity’s decision so long as it acts within the authority of its own ordinance. In Walsh v. Metro. Water Reclamation Dist. of Greater Chi., 389 Ill.App.3d 138 (1st Dist. 2009), the court decided that the contractor’s failure to submit its bid according to the district’s specifications warranted rejection, despite the fact that the contractor had submitted the lowest bid.
The district in this case, empowered by the legislature, had enacted an ordinance allowing it to adopt affirmative action regulations relative to the use of small and minority businesses in construction and procurement contracts. Thus, when it requested bids for a project related to its primary settling tanks that cost over $244 million, the district required compliance with its ordinance in the form of a signed “Utilization Plan.” That plan was to identify minority and small business subcontractors on the project, the type and amount of work they would perform, and the prices to be paid. Any bidder that failed to complete, sign, and return the plan as part of their bid would be rejected outright as a potential bidder, because the plan was designed to allow the district to determine whether the bid conformed to the purpose of the ordinance.
When the contractor failed to include a signed and completed plan as part of its bid, despite repeated oral and verbal warnings that the bid would be rejected if it did not include the plan, the district rejected the contractor’s bid and accepted that of the next lowest bidder. The contractor then filed a complaint seeking a preliminary injunction against the district and an order to compel the district to accept its bid. The trial court denied the contractor’s complaint. Although the appellate court agreed with the contractor that, as a bidder, it had the right to participate in a fair bidding process, it followed precedent when it ruled that bids must still conform to the requirements advertised in a bidding invitation.
Illinois courts have developed guidelines that enabled the judiciary to rule consistently and accordingly. For example, a bid that varies from advertised requirements must be rejected if that variance is material. A variance is material if it gives a bidder a substantial advantage or benefit not enjoyed by other bidders. Thus, when the general contractor in this case failed to follow a key requirement in its bid by neglecting to attest to the subcontractors it would use on the project, it enjoyed the benefit and advantage of retaining the ability to renegotiate prices with any subcontractors it wished, contrary to the purpose of the district’s ordinance. The court then determined that the contractor committed a material variance that required its rejection by the district.
The appellate court agreed with the district that accepting the contractor’s non-compliant bid simply because it was the lowest would give the contractor a substantial advantage over the other bidders. That other advantage would allow the contractor to raise an argument that its bid was non-conforming to begin with, resulting in no contractual obligation on its part. Hence, the contractor would be at liberty to walk away from the project if it chose to do so later.
In rejecting the contractor’s bid, the court determined that the district had followed its own ordinance without discretion, just as it had done eight times that year when bidders failed to comply with advertised requirements. The court then decided that absent fraud, unfair dealing, or any other arbitrary conduct on the district’s part, judicial interference would simply be unwarranted. Any result other than rejecting the non-responsive bid, the court finally ruled, would negatively affect the competitive bidding process.
