This case summary is provided courtesy of Carl Neff, a distinguished lawyer in the Wilmington, Delaware, office of our firm.
In Asphalt Paving Systems, Inc. v. Department of Transportation, 2008 WL 852817 (Del. Ch., Mar. 20, 2008), read opinion here, the Delaware Chancery Court granted summary judgment in favor of the Delaware Department of Transportation (“DelDOT”). DelDOT solicited bids for the microsurfacing of certain roads in Sussex County, Delaware (the “Project”). Plaintiff Asphalt Paving Systems (“APS”) submitted the lowest bid of $524,444.44. DelDOT, after reviewing the bids, determined that APS’s bid was not on the bid bond form issued by DelDOT with the bid package, but instead was on a bid bond form issued by the American Institute of Architects. DelDOT interpreted its contract documents and the applicable provision of Delaware’s public works law, 29 Del. C. § 6962(d)(8)(a) to require rejection of APS’s bid given that it failed to use the precise, identical DelDOT form required (even though it was substantially similar in all material parts).
APS initially sought an order compelling DelDOT to award the contract to APS, along with interim injunctive relief against an award of the contract to the second lowest bidder, Dosch-King Company, Inc. (“D-K”), and an injunction against an award to D-K. Alternatively, APS sought an order requiring DelDot to rebid the Project. APS’s support for the latter argument was that DelDOT’s instructions relating to the delivery of a bid bond were misleading. Given that there were no material facts were in dispute, the Court was able to treat this matter as if submitted for summary judgment by all parties.
The Court held that under 29 Del. C. § 6962(d)(8)(a), DelDOT was required to reject APS’s bid, given that the bid bond form used by APS was not pre-approved by DelDOT. While there was a dispute over the fact that the Office of Management and Budget (“OMB”) never formally “issued” a bid bond form for DelDOT to use (as is required by the statute), the Court held that because the bid bond used by DelDOT was pre-approved by DelDOT (as is also required by the statute), and that it would be unreasonable to conclude that the legislative intent would be to interfere with DelDOT’s ongoing bidding procedures because of the absence of the OMB standard bid bond form, the Court agreed with DelDOT’s assertion that DelDOT approved bid bonds must be submitted with all potential bids. Further, the Court declined to require DelDOT to rebid the Project, given that APS’s Amended Complaint or its brief failed to argue that it was, in fact, misled by the instructions. For these reasons, the Court granted summary judgment in favor of DelDOT.