STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

June 4, 1968

Alfred B. Kemper
State Engineer
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 67-68 pg. 489

Bids and Bidders. Competitive bidding for state construction contract. Error in submitting bid, based upon confusion in notice of bids, and instruction to bidders, which was not based on fraud, or favoritism, is no ground for rejecting such bid.

You have requested my opinion based upon this factual situation:

"In pursuance to statute requiring competitive bidding in awarding public contracts, a construction contract was publicly advertised. The advertisement for letting stated:

"3:00 p.m., CST, April 30, 1968

At: Office of the President,

Southern State College."

Persons interested in bidding on such project were furnished an "Instruction for Bidders" which directed that the envelope for mailing bids should be addressed:

"To: State Engineer,

Suite 205, State Office Building No. 2,

Pierre, South Dakota 57501."

X, a contractor, in some manner received such instruction for bidders and on April 30, 1968 before the hour of 3:00 0'clock p.m. of said day appeared with his bid at the Office of the State Engineer, in Pierre. He mailed no bid to Springfield, South Dakota, the location of Southern State College.

After consultation with the Office of the Attorney General, the State Engineer, who was in Pierre - he having sent his agent to Springfield to publicly open such bids - got into telephonic communication with his agent, and had the bid of X delivered in person in Pierre, be the first "bid opened at such letting." The procedure followed was as follows: The State Engineer, in the presence of disinterested third parties, opened such bid, and communicated the amount to the agent in Springfield. The agent in Springfield repeated such bid amount to the State Engineer - not only to verify the figures, but as the announcement of the first bid opened at the letting.

After all bids submitted were tabulated, it was ascertained that the lowest bid submitted for such public construction was that of X.

With this factual situation, you have submitted this question:

"Was there sufficient compliance with the public contract law of the State of South Dakota. so that the Board of Regents, the public agency responsible to award the contract on such project, can, if they find that X is a 'responsible bidder,' award him the contract as the lowest 'responsible bidder,' in conformity with the statute?"

The statutes governing the letting of public contracts on competitive bidding are contained in SDC 1960 Supp. 65.07, as amended. Such are not peculiar to our state, but have been generally adopted in this country. There is no question that the purpose of stich statutes is to secure economy in the expenditure of public funds for public projects, to protect the public from collusion, favoritism, fraud, extravagance, and improvidence, and to promote actual, honest and effective competition among bidders so that all public contracts insofar as possible may be secured at the lowest cost to the taxpayers.

The specific statute in South Dakota which applies to the problem presented is SDC 1960 Supp. 65.0701-4, as partially amended by Ch. 465 of the Laws of 1963, and Ch. 310 of the Laws of i965. You will notice this statute authorizes not only withdrawal, but a modification of submitted bids, prior to their opening, either by letter or telegraphic communication. It provides in part:

"Unless all bids presented are rejected, the lowest responsible bid, in all cases, must be accepted. In case the low bidder is not responsible or the bid is not made in accordance with the requirements of this act or the low bid is withdrawn, the bid of the next lowest responsible bidder may be accepted."

Certainly X in his bidding was not attempting to defraud the general public. He may have shown poor judgment in accepting the place he was directed to mail his bid, as directed in the "instructions to bidders," rather than the place of "letting," as stated in the advertisement, but it is apparent that there was confusion in the advertisement for bids and instruction to the bidders. Likewise, the procedure adopted by the State Engineer, under such circumstances, in reading such bid over the telephone to his agent at the place of letting, together with such agent repeating such bid, showed no favoritism or fraud to other bidders. Such bid was the first bid submitted, and all other bids presented at the proper place were thereafter opened and publicly announced.

There actually was an error in the advertisement of the letting of such contract, inasmuch as the advertised notice set the opening of the bids it 3:00 p.m. CST, when in fact on April 30, 1968, Daylight Savings Time vas in effect, not only in Pierre, but in Springfield. I cannot find that this error renders the whole letting invalid.

It is my opinion that had X been a high bidder, that "opening" of his bid md announcing it as it was done in the circumstances would not render the whole bidding process irregular and invalid. X however, is the apparent low bidder. There is no showing of fraud to other bidders, or favoritism, partisanship, or the like to the detriment of the general public.

It is my opinion that there was sufficient compliance with the Public Contract Law so that the Board of Regents, the public agency that by law must award the contract, may consider such bid, determining whether or not X is the "lowest responsible bidder" to whom, by statute, the contract should be awarded. My answer to your specific question is YES.