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Bader v. Sharp

Court of Chancery of Delaware, New Castle County

December 23, 1954

Merwin O. BADER, Plaintiff,
v.
Hugh R. SHARP, Jr., J. Draper Brown, Jr., Benjamin F. Shaw, II, J. Gordon Smith, William P. Richardson, Frank R. Grier, and Dallas D. Culver, being and constituting the Commissioners of the State Highway Department of the State of Delaware; A. S. Wikstrom, Inc., a corporation of the State of New York; Clarence S. Collins, Jr., as State Treasurer of the State of Delaware, and William A. McWilliams, as Chief Engineer of the State Highway Department, Defendants.

Suit to enjoin entering into and performance of contract for erection of superstructure for a proposed bridge. The Court of Chancery, New Castle County, Marvel, Vice Chancellor, held that where there was no statutory requirement that bid contain certificate concerning material suppliers, and state highway department did not insist that there be certification and defendant derived no advantage or benefit from failure to make certification contained in proposal, failure to furnish certification was mere technical irregularity and state highway department could award contract on basis of defendant's bid which was the lowest.

Summary judgment for defendants.

Where there was no statutory requirement that bid contain certificate concerning material suppliers, and State Highway Department did not insist that there be certification and defendant derived no advantage or benefit from failure to make certification contained in proposal, failure to furnish certification was mere technical irregularity and State Highway Department could award contract on basis of defendant's bid, which was the lowest, for erection of superstructure for proposed bridge.

[35 Del.Ch. 58] John M. Bader, Wilmington, for plaintiff.

Richard F. Corroon, of Berl., Potter & Anderson, Wilmington, for defendant A. S. Wikstrom, Inc.

Clarence W. Taylor, Wilmington, for defendants Commissioners of State Highway Department of State of Delaware, State

Page 301

Treasurer and Chief Engineer of State Highway Department.

MARVEL, Vice Chancellor.

In July, 1954, the State Highway Department of the State of Delaware advertised by publication and mailing for bids on its Contract No. 1224-(4) for the erection of the superstructure for a proposed Walnut Street Bridge in Wilmington. Those wishing to bid competitively were directed to submit sealed bids and attention was drawn to the special provisions of the proposed contract, the standard specifications governing contract work for the Department and the proposed contract agreement itself. Bidders were directed to submit bids upon forms provided by the Department. Specifications were advertised as available at five dollars per set, and specific terms concerning performance of the contract were set forth in detail in a red bound proposal for bids, consisting of 153 pages, which was furnished to interested contractors. Sealed bids were opened[1] on September 1, and the lowest bid, in the amount of $1,242,171, was that of the defendant, A. S. Wikstrom, Inc. The next to lowest bid was that of J. A. Bader and Co., Inc., some $15,000 higher than the low bid.

Plaintiff, a citizen and taxpayer of Delaware, and president of J. A. Bader and Co., Inc., has brought suit on his own behalf and on behalf of persons similarly situated to enjoin the entering into and performance of Contract No. 1224-(4) by the apparently successful bidder and the disbursement of any funds by the State of Delaware pursuant to the proposed contract on the grounds that its execution and performance would constitute an ultra vires act on the part of the State Highway Department and result in an unlawful diversion of State funds, and that the low bid of A. S. Wikstrom, Inc. was not [35 Del.Ch. 59] responsive to the invitation for bids in that the corporate defendant failed to fill out and execute a certificate concerning material suppliers found on page 8 of the proposal for bids (exhibit B to the McWilliams affidavit). The complaint also charges that the award of the proposed contract to the corporate defendant would undermine the principle of competitive bidding by countenancing the acceptance of a bid made on more favorable terms than those properly met by others including the next to lowest bidder.

The corporate defendant admits that it did not fill out the form of certification contained in the proposal but claims that it did furnish the information called for in the certification on the day following the opening of the bids. Its answer also avers that the State Highway Department, while having the authority to insist on the completion of the certification form prior to submission of bids, also had the power to waive completion of such form.

The answer of the State Highway Department and of the individual defendants states that the controversial certification form did not constitute a part of the proposal for bids for the proposed contract, and that in any event the information required by the form of certification was later supplied by the successful bidder. This answer further avers that paragraph 14 of the standard specifications of the State Highway Department, which specifications were incorporated by reference into the proposal for bids, reserved to the Department the right to waive technicalities, to reject all or any bids, to advertise for new proposals, to proceed to do the work otherwise, or to abandon the work if in the judgment of the Chief Engineer of the Department the best interests of the State would be thereby promoted. It is also averred that after the bids were opened and after receiving information from and corporate defendant concerning its proposed material suppliers, the State Highway Department and its Chief Engineer determined that the interests of the State would be best served by waiving the requirement for certification of the names of material suppliers; that the failure of the corporate defendant to make out the certification was at the most not a material deviation from the proposal, and that

Page 302

A. S. Wikstrom, Inc. had in effect complied with the ...


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