Could Kenner accept the lowest pipe-supply bid after the bidder added a yearly price increase?

Plain-English summary

Kenner solicited a two-year contract for PVC pipe and fittings, with bid terms requiring prices to stay unchanged throughout the contract. The apparent low bidder added an annual price-escalation notation. The 2013 opinion concluded that the bid had to be rejected as nonresponsive because it did not agree to the fixed-price requirement.

The AG explained that public entities could not waive valid statutory or bid-document requirements for one bidder. The opinion also cited a provision making a materials or supplies contract executed in violation of the Public Bid Law null and void, with a possible civil penalty in a qualifying nullity action.

Currency note

This opinion was issued in 2013. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

Kenner procurement officials

The opinion treated the bidder's price-escalation condition as a direct conflict with the advertised requirement that prices stay fixed. That failure made the bid nonresponsive despite its apparent low price.

Supply bidders and council members

The AG said valid bid requirements had to be observed uniformly. The opinion did not decide which other bidder should receive the contract.

Common questions

Could Kenner accept the lowest bid with a yearly price increase?

No. The AG said the escalation notation violated the unchanged-price condition in the city's bid documents, requiring rejection.

Could the city waive that difference for the low bidder?

The opinion said a public entity could not waive a validly imposed bid requirement and still treat a noncomplying bid as responsive.

Did the AG identify a consequence for an unlawful supply contract?

It cited La.Rev.Stat. 38:2220's nullity rule and said a district court might award a civil penalty in a qualifying action brought by the district attorney or AG.

Background and statutory framework

The request concerned a two-year, as-needed materials contract. The opinion discussed La. R.S. 38:2212.1 on purchases of materials and supplies and cited Louisiana cases enforcing statutory and bid-document requirements. Its conclusion turned on the conflict between the city's fixed-price term and the bidder's annual escalation.

Citations

• La. R.S. 38:2212.1: public material and supply purchasing rules discussed in the opinion.
• La.Rev.Stat. 38:2220: contract nullity for Public Bid Law violations.

Source

• Landing page: https://www.ag.state.la.us/Opinions
• Original PDF: https://www.ag.state.la.us/Opinion/Download/13-0050

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

~tat.e of 1fiouisiana
DEPARTMENT OF JUSTICE
P.O. BOX 94005
BATON ROUGE
70804-9005
JAMES D. "BUDDY" CALDWELL
ATIORNEY GENERAL

MAY 0 1 2013
Opinion 13-0050

Hon. Michael S. Yenni
90-A-1 PUBLIC FUNDS & CONTRACTS

Mayor, City of Kenner
La. Rev. Stat. 38:2211, et. seq.
1801 Williams Boulevard
The Louisiana Public Bid Law provides that all statutory
City Hall, Building B, Suite 200
requirements, advertisement requirements, and bid form
Kenner, LA 70062
requirements must be observed. Here, because the
presumptive low bidder failed to comply with a bid requirement, the City of Kenner must reject the non­ responsive bid.

Dear Mayor Yenni:

Your opinion request has been assigned to me for research and reply. You have asked for our opinion on certain matters related to Louisiana's Public Bid Law.
According to your opinion request, the City of Kenner ("City") recently solicited bids for a two (2) year contract to supply P.V.C. pipe and fittings to the City on an as needed basis. The General Provisions for the bid stated that all terms, conditions, and prices were to remain unchanged during the length of the contract. However, the presumptive low bidder included a notation on its bid form indicating a 3.50/0 escalation clause per year.

Your request indicates that after consultation with the City Attorney's Office, the City deemed the bid non-responsive. However, your request indicates that the decision to deem the presumptive low bidder's bid non-responsive has received opposition from certain members of the City Council. You have asked for our opinion as to whether the presumptive low bidder's bid may be accepted in accordance with Louisiana law.

As a public entity, as defined in La. Rev. Stat. 38:2211, the City is subject to the provisions of the Louisiana Public Bid Law. La. Rev. Stat. 38:22111, et seq.
Under the bid law, contracts for the purchase of materials and supplies exceeding $30,000 must be advertised and let by contract to the lowest responsible and responsive bidder. La. R.S. 38:2212.1 (A)(1 )(a). Contracts for the purchase of materials and supplies costing $10,000 or more, but less than $30,000, must be made by obtaining ~p :fewer than three telephone or facsimile quotations. La. R.S. 38:2212.1 (A)(1 ){b\,' For purchases of less than $10,000, there is no prescribed procurement. method.

It is generally well-settled that the provisions and requirements of Louisiana's Public Bid Law, as well as those provisions and requirements stated in the bid documents, shall not be waived by any public entity. See La. Rev. Stat. 38:2212

Page 2

Opinion 13-0050
Han. Michael S. Yenni
Page -2­

(A)(1 )(b); Hamp's Construction, LLC. v. City of New Orleans, 2005-0489 (La. 2/22/06), 924 SO.2d 104; Beverly Construction Company, L.L. C. v. Parish of Jefferson, 2007-847 (La. App. 5 Cir. 2/6/08), 979 SO.2d 551.
Once a requirement is established, that requirement must be uniformly followed by all bidders. A failure to comply with any statutorily impos~d requirement would render a bid non-responsive and would warrant a mandatory rejection by the public entity. The same holds true for a failure to comply with any validly imposed requirement stated in the public entity's bid documents. Numerous Louisiana courts have recognized that the statutory requirements, advertisement requirements, and bid form requirem~n's: including those included by reference to other documents, must becompletelo/:and accurately observed, and a bidder's failure to comply with every detail cah invalidate the bid. See Hamp's, supra, Beverly, supra.

Turning attention now to the question presented, it is the opinion of this office that the bid in question should be rejected as being non-responsive. According to your request, the bid documents required that the bidders agree that all terms, conditions, and prices were to remain unchanged during the length of the contract. The presumptive low bidder's addition of a disclaimer indicating that its price was subject to a 3.50/0 escalation per year fails to comply with this requirement. Accordingly, its bid should be rejected as being non-responsive.

We call to your attention La.Rev.Stat. 38:2220 which provides that any contract for the purchase of materials or supplies executed in violation of the provisions of the Louisiana Public Bid Law shall be null and void. Furthermore, in connection with any action to declare a contract null and void brought by a district attorney or the Attorney General, the district court granting a judgment of nullity may award a civil penalty not in excess of fifty thousand dollars against each offending member of the governing authority,. oJ. the public entity who authorized the violation. La. Rev. Stat. 38:2220(C).. .)jJ/' i';: ;:?".

We trust this adequately responds to your request. However, if our office can be of further assistance, please do not hesitate to contact us.

BY:

JDC/MJV/chb