If a state construction contract was advertised to be opened at one place (Springfield, SD), but the bidder instructions told contractors to mail bids to a different place (Pierre), and a contractor submitted his bid at Pierre instead of Springfield, can the State still accept his low bid?
Plain-English summary
The State of South Dakota advertised a construction contract for a project at Southern State College in Springfield. The advertisement said bids would be opened at 3:00 p.m. CST on April 30, 1968, at the Office of the President, Southern State College. But the Instructions for Bidders, given to interested contractors, told them to mail bids to the State Engineer's office at Suite 205, State Office Building No. 2, Pierre. A contractor referred to as "X" followed the Instructions and showed up in person at the Pierre office with his bid before 3:00 p.m. He did not mail a bid to Springfield.
When the State Engineer realized what had happened, he consulted the AG's office and improvised. The State Engineer was in Pierre; he had sent an agent to Springfield to publicly open the bids. The State Engineer opened X's bid in Pierre in the presence of disinterested third parties and telephoned the bid amount to the agent in Springfield. The agent then publicly repeated the bid amount, both to confirm the figures and to officially announce it as the first bid opened at the letting. All the other bids submitted at Springfield were then opened in the normal way.
After tabulation, X turned out to be the lowest bidder. The Board of Regents (which had to award the contract) asked the AG: given the procedural irregularity, can we still award the contract to X?
The AG said yes. The reasoning ran in three steps.
First, the purpose of competitive bidding statutes is to secure economy, protect the public from collusion or fraud, and promote honest competition so the government can buy at the lowest cost. SDC 65.0701-4, as amended in 1963 and 1965, embodied that policy and required the lowest responsible bid to be accepted unless all bids were rejected.
Second, the procedural problems in this case (X submitting at Pierre instead of Springfield; the State Engineer's telephone workaround for opening) were the product of confusion in the State's own paperwork, not anything X did wrong. The advertisement said Springfield; the Instructions said Pierre. A reasonable contractor following the Instructions would do exactly what X did. The State could not blame X for following its written instructions.
Third, the AG found no fraud, no favoritism, and no detriment to other bidders. The bid amount was opened in the presence of disinterested witnesses in Pierre, then publicly announced at the Springfield letting before any other bid was opened. Other bidders had no informational advantage they would not have had under a normal opening; everyone learned X's bid through the public announcement at the official place of letting.
The AG noted as an aside that there was a separate timing error in the advertisement: it specified "3:00 p.m. CST" when Daylight Savings Time was actually in effect on April 30, 1968, in both Pierre and Springfield. The AG declined to invalidate the letting on that ground either. And the AG hypothesized that even if X had been a high bidder rather than the low bidder, the procedural workaround would not have invalidated the overall letting; the practical question would only have mattered if X were not the low bidder anyway.
The bottom line: there was sufficient compliance with the public contract law. The Board of Regents could examine X's bid in the normal way, decide whether X was a "responsible bidder," and if so, award the contract.
Currency note
This opinion was issued in 1968. 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. South Dakota's public construction bidding statutes have been substantially restructured since 1968, with the modern framework in SDCL Title 5 (Public Property and Funds) and chapter 5-18A (public contracting). The federal-procurement-influenced rules on protest procedures, debarment, and bid responsibility have also evolved. Any modern bid dispute should be analyzed under current statutes and the Board of Regents' current procurement rules.
What the opinion meant at the time
For the Board of Regents in 1968, the opinion cleared the path to award the contract to X. The Board still had to make the "responsible bidder" finding (does X have the capacity, experience, and integrity to perform), but the procedural irregularity was not a basis for rejection.
For the State Engineer and other state procurement officers, the opinion gave a useful principle: when the State creates the confusion through inconsistent paperwork, the State cannot use that confusion as grounds to reject a bid that was made in good faith. The procedural fix had to be one that preserved the public-bidding policy goals (transparency, equal treatment, no favoritism), and a public announcement at the official letting was enough.
For losing bidders considering a protest, the opinion narrowed the available grounds. They could not win by pointing to the State's procedural mistakes if the lowest bidder followed reasonable interpretations of the State's documents and the State publicly announced the bid in a way that prevented information asymmetries. The protest grounds shrank to fraud, collusion, favoritism, or showing that the low bidder was not "responsible."
For contractors planning future bids, the opinion was a reminder of two practical lessons. One: read both the advertisement and the bidder instructions carefully, and when they conflict, follow the safer course (delivering to both places if possible, or contacting the awarding authority for clarification). Two: time-zone language in advertisements matters. The CST vs. Daylight Time error in this case could easily have caused a real problem if a bidder had been five hours away in another time zone.
Common questions
Q: What is a "responsible bidder"?
A: The opinion did not define the term, but in South Dakota public-contract law, a responsible bidder is one with the financial capacity, technical capability, experience, and integrity to perform the contract. Determining responsibility is a separate finding from determining the low bid amount.
Q: Could the State have rejected all bids and re-advertised?
A: Yes, under SDC 65.0701-4 the State could reject all bids. But absent grounds for rejection, the statute required the lowest responsible bid to be accepted. The AG saw no grounds for rejection here.
Q: Did the AG distinguish between "may consider" and "must accept"?
A: Sort of. The AG said the Board "may consider" X's bid, meaning the procedural posture was acceptable. The Board then had to make the responsibility determination. If X was responsible, the Board "must accept" the bid under SDC 65.0701-4.
Q: What if a competing bidder had heard X's bid amount before submitting their own bid?
A: The opinion did not address this scenario. In that case, an unfair informational advantage might have arisen. The actual facts had all bids already submitted at Springfield before X's bid was telephoned in, so the issue did not arise. The opinion's reasoning suggested that information leaks would be a basis for invalidation.
Q: What about the time-zone error?
A: The AG declined to invalidate the letting based on the "CST" vs. Daylight Time discrepancy. The implication was that minor advertisement errors that do not actually mislead bidders are not invalidating, but the opinion did not lay out a rule for how big an error would matter.
Q: Could X have refused the contract if awarded?
A: The opinion did not address withdrawal. SDC 65.0701-4 expressly allowed withdrawal "by letter or telegraphic communication" prior to bid opening. After opening, withdrawal would typically require showing extraordinary circumstances. Since X presumably wanted the contract, the withdrawal question did not arise.
Background and statutory framework
South Dakota's public contracting laws in 1968 were embodied in SDC chapter 65.07. The basic structure paralleled most other states: public agencies advertised contracts, contractors submitted sealed bids by a deadline, bids were publicly opened at a specified time and place, and the contract was awarded to the lowest responsible bidder unless all bids were rejected.
SDC 65.0701-4, the section most directly applicable, had been amended in 1963 (Chapter 465) and 1965 (Chapter 310). Those amendments had clarified the procedures for withdrawal and modification of bids before opening and had reinforced the "lowest responsible bidder" rule.
The Board of Regents was the awarding authority for state college construction projects because the colleges fell under the Board's jurisdiction. The State Engineer handled the technical and administrative side of the bidding, including drafting the advertisement, distributing the Instructions for Bidders, opening bids, and tabulating them for the Board's award decision.
The public-bidding policy rationale was familiar: open, competitive bidding produces lower prices than negotiated contracting; it constrains favoritism and corruption; it gives qualified contractors equal access to government work. The AG's opinion was an application of that policy: procedural details should serve the policy, not defeat it. When a procedural defect did not undermine any policy goal, the right answer was to proceed.
The opinion did not address the State Engineer's choice to send an agent to Springfield while staying in Pierre, which created the splitting-of-locations problem in the first place. Presumably the State Engineer had multiple lettings to handle, but the awkward configuration contributed to the confusion. A modern procurement office would presumably want a single coordinator at the official letting location.
Citations and references
Statutes:
- SDC 1960 Supp. 65.07, as amended (public contracts; competitive bidding chapter)
- SDC 1960 Supp. 65.0701-4, as amended by Ch. 465 (1963) and Ch. 310 (1965) Session Laws (lowest responsible bid; withdrawal procedures)
Source
Original opinion text
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 o'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 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.
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 1965. 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 was 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 and 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.