STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

June 26, 1975

Mr. David Axtmann
Hyde County State's Attorney
Highmore, South Dakota 57345

OFFICIAL OPINION NO. 75-120

Board of County Commissioners lacks authority to approve additional payment to lower bidder on county vehicle when computational error in bid discovered by bidder subsequent to its acceptance.

Dear Mr. Axtmann:

You have requested an opinion based on the following factual situation:

Hyde County advertised for bids on a vehicle to be used by the Fire Department. Two bids were received, one in the amount of $10,480.00 and the other in the amount of $9,275.59. The low bid was accepted and the vehicle delivered to the county where it is now in use. Subsequently the low bidder advised the County Commissioners that he had in fact used an erroneous price list in preparing his bid and that his actual cost for the vehicle would be $9,870.45.

The question you have submitted is:

Should payment in the amount of $594.86 be approved by the County Commissioners for the computational mistake of the low bidder?

To rephrase your question, you are asking if the County Commissioners have legal authority to deviate from the terms of a contract subsequent to acceptance of a bid and performance by the bidder.

The statutory provisions regarding contracts on competitive bids for public corporations are found generally in SDCL 5-18.

The procedure for withdrawal and modification of bids is found in SDCL 5-18-8 and reads as follows:

5-18-8. Opening of bids-Withdrawal and modification of bids.- The sealed bids shall not be opened until the time and place specified in the advertisement therefor, but must be publicly opened and read at said time and place. Any bid may be withdrawn by letter or by telegraphic communications or in person before the time specified in the advertisement therefor. Bids may be modified by mail or by telegraphic notice received at the place designated in the invitation to bid not later than the time set for the opening of bids. Telegraphic modification shall not reveal the bid price but shall provide the addition or subtraction or the modification so that the final prices or terms will not be known to the public corporation until the sealed bid is opened. Any telegraphic modification may not be withdrawn after the time set for the opening of bids. Telegraphic modifications must be confirmed in writing by the successful bidder before award of the contract. No bid made shall be changed or altered by telephone.

In all cases, withdrawal, modification, and withdrawal of modification of bids must be communicated before the time specified for opening of bids. The import of this law is to establish a specific point in time at which the final offer of each bidder must be considered and acted upon pursuant to SDCL 5-18-9 (acceptance of bid). At such time the offer of the bidder is irrevocable.

In the factual situation as presented, the County Commissioners accepted the offer of the low bidder in the amount of $9,275.59, and without knowledge or reason to believe that the amount of the bid was erroneously calculated. Therefore, it is my conclusion that the Commissioners acted in good faith and in reliance on the fact that the bid was accurately calculated.

I am aware and have considered an earlier opinion from this office (AGR 1967-68, p. 489) in which telephonic communication of a bid was approved as complying with the spirit of the bid letting law despite the fact that the bid was to have been mailed or personally delivered. The following statement of justification appears therein:

There is no question that the purpose of such 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.

Although the facts seem to indicate that payment of the additional amount in this particular case would not likely perpetrate fraud, extravagance or improvidence there are instances in which similar actions might do just that. In addition, approval of the payment of the additional sum would in effect be permitting the low bidder to submit a revised bid without granting the other bidder herein and other possible bidders the right to do the same.

It is my opinion that the answer to your question is "NO." County Commissioners have no authority to approve payment of amounts in excess of an accepted bid price either under the competitive bidding statutes (SDCL 5-18) or the general powers of County Commissioners as provided in SDCL 7-8-20.

I am not overlooking or precluding the possibility that a court of law may find the low bidder has an equitable remedy. (See 52 ALR 2d 792.) However, this does not enlarge the scope of statutory authority of the Board .of County Commissioners to approve payments in excess of the amount of a bid submitted and accepted.

Respectfully submitted,

William Janklow
Attorney General

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