08-22-1988 - Agenda Packet City Council - regular meeting

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Expenditures, Purchasing, and Contracts in Minnesota law, fi3 as a minimum standard for wages, and which establish hours and working con- ditions prevailing for the largest number of workers in the same class of labor as a minimum standard for a contractor's employees. 64 Contracts for Less Than $15,000 Councils must follow certain procedures with respect to contracts of less than $15,000. If the es- timatcd amount of the contract exceeds $10,000 but is less than $15,000, the city may use sealed bids or direct negotiation, by obtaining two or ore quotations and without advertising for bids or otherwise complying with the requirement of competitive bidding. ' The city must keep all quotations on file for at least one ycTr. if the estimated amount of the contract is less than $10,000, the zouncil may make the contract either upon quotation or in the open market . As far as practical, the contract should be based on at least tw;, quotations which the city should keep on file for at least one year. 66 For all practical purposes, the procedure of purchases under $15,000 is the same regardless if the contract is over or under $10,000. If the clv publicly solicits bids where the law does not require :z!mnc1i11vc bidding, the Court has held that the city m, st "pursue such method in a manner reasonably designed to accomplish its normal purpose of giving all contractors an equal opportunity to bid and of assuring the taxpayers the best bargain for the least money." 67 Competitive Specifications When a city calls for bids for the purchase of supplies or equipment which are competitive in na- ture, it cannot prepare specifications to exclude all but one type of supplies or equipment . 68 While the statute does not app!-, :n c(.nstructiou con- tracts, it is clear from the Minnesota court cases that the same general principle applies. The proposals and specifications must allow free and full competition. They may not give a prospective bidder an unfair advantage over any other. 69 However, a city can include a reasonable specifica- tion, even if its inclusion results in fewer bidders being able to bid than could do so without the specification. 70 Specifications must I.- sufficiently definite and precise to afford a basis for comparable bids. 71 If the city cannot determine in advance the number of units it will need, it can ask for bids on a unit basis 72 The city should, however, estimate the nun. r of units since the number may affect the unit price. Rejecting Bids The local improvement code Wives the city the right to reject any and all bids. 73 Because of the statute, this right exists even if the city doesn't in- clude such a statement in the advertisement for a local improvement . The same is true of any city with a similar charter provision applying to other contracts. In any otiier case, the ciiy may and should reserve the right to r::ject any or all bids, or to waive informalities or irregularities. 74 It is possible that if the local improvement code is not involved, and the city has not ,reserved the right to reject any and all bids, a court action could compel the city to take the low bidder. The council probably has authority to waive ir- rcgularitics in bids when they do nor result in a substantial departure from specifications or favor the bidder guilty of the irregularities. 75 A failure by a few minutes to comply with a bid deadline or a failure to seal a bid until after it has been sub- mitted arc irregularities which the council may waive. 76 Lowest Responsible Bidder Statutory city contracts and contracts of ..:I cities for improveme:its under the local improve- ment code mug L go to the lowest responsible bid- der. Most home rule charters contain similar re- quircmcnts which govern contracts not undo the control of the local improvement Lode, but some use varying terms, such as "lowest bidder," or "lowest and best bidder 'The bidder who submits the lowest hid in dollars is not necessarily the "lou-st responsible bidder" and the ouoted phrase gives the c,-until reasonable discretion in choosing among bidders. 'Responsibility,' in bid statutes, means not only financial responsibility but also integrity, skill, and the likelihood of the bidder's doing faithful and satisfactory work Pror-: • as, for exampic, is an element of responsibility. While it is not clear under Minnesota law whether a bidder has a right to a hearing before the council rejects the hid on grounds of irrespon- Page 360 Handbook for Minnesota Cities