
    CONTRACTS FOR. PUBLIC WORK.
    [Circuit Court of Franklin County.]
    The State of Ohio, ex rel Edward L. Taylor, Jr., Prosecuting Attorney, Franklin County, Ohio, v. Nathan B. Abbot et al, Trustees, et al.
    Decided, February, 1904.
    
      Public Contracts — WorJc Must be Awarded XJnder the Plans and Specifications Advertised — With Equal Opportunity to All Bidders— Test as to What Specifications Mean — Is the Manner in Which They were Understood by Bidders — Laches—On Part of the State in Questioning Validity of Contract — Injunction.
    1. A contract for the construction of a public building is illegal and void, where the plans and specifications upon which it was awarded were not those which the board caused to be prepared and advertised, were not responsive to the invitation to bid, and did not give other bidders the same opportunity to bid that was enjoyed by the contractor to whom the work was awarded.
    2. The test to be applied in determining the meaning of plans and specifications in connection with public bidding is the meaning derived therefrom by bidders and contractors familiar with the language employed.
    3. Authority to invite alternate bids would not authorize the acceptance of any alternative hid, submitted on condition that if certain parts of the building are omitted, or other changes made, not provided for in the specifications upon which the building was invited, the bidder will construct the building for the sum stated in his hid.
    4. The state is without the facilities for the discovery of fraud or irregularities in matters of public work which are open to individuals with reference to their own affairs, and a court of equity, applying the rule of laches according to its own ideas of right and justice, will recognize this fact where a claim of laches is made against the state.
    Sullivan, J.; Summers, J., and Wilson, J., concur.
    Heard on appeal.
   This action is brought to perpetually enjoin the trustees above named, as trustees of the memorial association of Franklin county, Ohio, from carrying out or completing a contract entered into by them as such trustees on the 7th of November, 1903, with their co-defendant, W. Ii. Ellis & Company, a firm doing business as general conractors under that name; also to perpetually enjoin said firm, their agents, employes, sub-contractors, etc., from carrying out or completing said contract, or doing any act or thing toward the completion of the same, and that the auditor of the county be enjoined from issuing any vouchers to said Ellis ■& Co., upon said contract, and that the treasurer of the county be enjoined from paying out any money out of the funds in his hands to said Ellis & Co. under said contract.

It is claimed by the plaintiff through its representative, the prosecuting attorney of Franklin county, that the contract entered into as above stated and which it assails, is an illegal and void contract and in contravention of the laws of Ohio, because it- is a contract for the construction of a memorial building under an act of the Legislature passed March 12, 1902 (Vol. of Laws 95, pages 41, 42, 43, 44), entitled an act “To provide for the construction and maintenance of a county memorial building to commemorate the' services of the soldiers, sailors, marines and pioneers of the several counties of the state,” and said contract is not based upon any detailed plan, specifications, forms of bids, and estimates of cost theretofore adopted by said trustees. By Section 6 of said act the board of trustees are authorized to employ architects, and Section 8 gives the board power to prepare, or cause to be prepared, plans and specifications, and to make contracts for the construction of a memorial building for the purposes specified in the act within the amount authorized. In making the contract authorized by this section the board are to be governed by the provisions of the several paragraphs that follow and contained in Section 8. The first paragraph provides, “That said contract shall be based upon detailed plans, specifications, forms of bids, and estimates of costs, to be adopted by said board,” and the third paragraph provides, “that no contract shall be let except to the lowest and best bidder, who shall give a preliminary and a final bond conditioned that he will enter into the contract. And paragraph second of said section, that the contract shall be made in writing upon a concurrence of a majority of the board, signed by the president and secretary of the board and the contractor, after an advertisement in two newspapers published and of general circulation in the county for a period of thirty days.”

The plaintiff avers that said board employed Prank Packard as an architect to prepare detailed plans, specifications, estimates of costs, which was done by said architect, and upon the completion of the same the board caused to be advertised in two newspapers and of general circulation in said county for a period of thirty days that it would receive sealed proposals up until 12 o’clock noon, October 31, 1903, for performing the labor, furnishing the material to erect said building according to the plans, descriptions, bills and specifications, prepared by Packard, the architect, to be found on file at the office of the association, Room 1210, New Hayden Block in the city of Columbus, where the same would be open to public inspection between the hours of 8 a. m., and 5 p. m., on all working days during the said period of thirty days. The plans, specifications, etc., prepared by Packard, the architect, and upon which sealed proposals were invited by the above advertisement, contained the following, under the head of supplemental bids and designated as proposition No. 2: “Supplemental bids will also be entertained for constructing the entire building, including all exterior walls, inside partitions, floor construction, girders, columns of Ferro concrete construction or other re-enforced concrete construction. Bids for this class of work, however, must be accompanied by complete specifications and data relative to the methods of constructions, the composition of the concrete, and the method of re-enforcing the same. It is understood that in making a bid for this method of construction, that the inside finish, the general layout of the building, and in fact all work excepting partition walls, floor construction, girders, and columns, are to be the same as described in the within specifications.”

The defendant, Ellis & Co., submitted a bid under this proposition, together with specifications in which they offered to furnish all the material and construct the entire building, walks, driveways, etc., for the sum of $211,305, and in the first paragraph of the specification attached to their bid stated that the same contained certain changes which were necessary in the various branches of the work to enable the said firm to perform the work for the sum stated, whereupon Packard, the architect, prepared supplemental specifications, which in many particulars were based upon the provisions contained in those of Ellis & Co., in which there appears many material changes and omissions of matters contained in the original plans and specifications upon which sealed proposals were invited.

The claim of the contractor, Ellis & Co., is that the omissions and changes contained in the supplemental specifications were necessary to the change from standard to concrete construction, and made for the purpose of economy, the board being fully authorized to do so by law and under the detailed specifications prepared by them, and therefore the- bid was responsive to the invitation, and being a lawful and the lowest and best bid, contract is not illegal and void.

The claim made by the trustees in their answer is substantially the same as made by Ellis & Company.

The changes required by said Ellis & Company, to construct the building, walks, driveways, etc., for the price named consisted of several omissions of parts of the buildings set forth in the original specifications, whilst others consisted in changes in form of constructions, decoration and material — all were to be made, however, for the purpose of enabling Ellis & Company to construct the building, driveways, etc., for the price named in their bid.

The estimated cost alone of the omissions based upon- the statement of Ellis & Company amount to several thousand dollars, the largest item being the sixteen columns, $10,000; ventilating fan, $6,000; and the change from a Scotch marine to the tubular boiler, $2,500. There are other changes and omissions, the items of which are small, but in the aggregate amount to at least $2,000. The difference in change of material and in .inside finish from cabinet to first-class carpentry and joiner’s work, under the testimony produced by plaintiff, would be large, and as it is stated in the first paragraph of the specifications submitted by Ellis & Company with their bid, that the changes suggested were necessary to enable them to construct the building, driveways, etc., for the sum stated; and it must necessarily follow that all changes, except those necessary to construct the building of Ferro concrete, were made because the material proposed and change in finish in place of those set forth in the original specifications cost less money.

The specifications submitted by Ellis & Company as to these changes and omissions were adopted by the board, and the contract assailed by plaintiff entered into immediately upon their adoption.

Under the provisions of the original plans and specifications inviting bids for Ferro concrete construction, we think it clear that persons submitting bids under it were not authorized to include in the specifications required to accompany the bid any omissions or changes from the original plans and specifications, except such as were necessary to that method of construction. The invitation to bid under proposition No. 2 of supplemental bids explicitly states that such bids will be entertained for constructing the entire building including all exterior walls, inside partitions, floor construction, girders, columns, etc., of Ferro concrete construction. The columns are not to be omitted, but instead of being constructed out of the material provided in the original specifications concrete may be used.

The entire proposition should be construed together, so that the exception found in the second paragraph of the proposition relates simply to the material that was to be used in the construction of the inside partitions, floors, girders, columns, etc. The inside finish could not be changed, except perhaps where a change to Ferro concrete construction required it. But the inside finish, general lay-out of the building, was to be the same as provided in the original plans and specifications. Upon the claim of the defendant, that under the exception contained in . proposition No. 2 the omissions, changes in material and finish named in the specifications furnished by Ellis & Company could be made and in that respect adopted by the board, plaintiff called several witnesses who follow the business of contracting for the construction of buildings .of this character, and whose testimony showed they had had large experience, several of whom inspected the original plans and specifications with a view of submitting bids, and this testimony was uniform, that in the exception the omissions provided for in the supplemental specifications were not included and not necessary in the adoption of the Ferro concrete construction. They submitted no bid upon either method of construction, for the reason that having personal knowledge as to the amount of funds the trustees had on hand to expend for the purpose, they knew the building, by either method, could not be constructed for that amount upon the plans and specifications upon which they were invited to bid. It is not what the trustees or the architect may have understood proposition No. 2 including the exception to mean, but how it was understood by contractors familiar with the language employed. Pease v. Ryan, 7 C. C. R., p. 50.

In the proposition no reference is made to the exhaust fan or any change from a Scotch marine to the tubular boiler, though they constitute large items in the omissions, and the testimony shows that concrete construction would not require the omission of either.

It is true that it is shown that the tubular boiler will perhaps answer the purpose intended fully as well as the Scotch marine, but there is no provisions in the original specifications that a bid might be made for a tubular boiler.

There are other changes and omissions, but a sufficient number and cost of same have been mentioned to sustain the conclusion reached and hereinafter stated. Whether these omissions or changes were such as did change any essential part of the building, or if constructed as provided by the supplemental specifications, there would be. in all the essential parts, substantially the same kind of a building as provided for by the original specifications, we think not material. The question is were the specifications upon which bids were invited in such form and expressed in such words as those to whom the invitation was extended could understand, that each bidder submitting a bid under proposition No. 2 could in the specifications accompanying his bid require the changes and omissions set forth in the bid of Ellis & Co., or that any such changes and omissions were permissible.

In view of proposition No. 2, as stated, and the testimony produced by plaintiff already referred to, we are of the opinion they were not permissible, and therefore the specifications upon which the contract with Ellis & Company was made were not those upon which competitive bids were asked.

The authority of the trustees to invite alternative bids being conceded, does the statute, by which all the authority they have is conferred, authorize them to accept any alternative bid, submitted on conditions that if they will omit certain parts from the building, and changes in finish, etc., that were not contemplated or intended, nor provided for anywhere in the specifications upon which competitive bidding was invited, that the bidder will construct the building, etc., for the sum stated in his bid? If so, then the trustees are authorized to enter into a contract without any reference to the plans and specifications upon which sealed proposals have been made, and the bidder who could succeed in getting in the greatest number of omissions and changes would be the successful one if the changes and omissions made his bid the lowest.

If plans and specifications are to be adopted by the board after all bids are in, then paragraph 3 of Section 8 is of no force. Section 6 authorized the board to employ an architect, and as contracts for construction can only be based upon detailed plans and specifications, forms of bids and estimates of costs, it is apparent for what purpose his employment is authorized. And as the contract for construction can be based alone upon detailed plans and specifications, and as provided by paragraph 3 of Section 8 that no contract shall be let except to the lowest bidder who shall give bond, etc., it is clear we think that the Legislature intended to and did provide the same safeguards to be found in other statutes pertaining to like matters, with the view to secure the benefit and advantage of fair and just competition between bidders, and at the same time close every avenue to favoritism and fraud and to insure the accomplishment of the work at the lowest price by subjecting the contract for it to public competition.

There is no fraud or bad faith charged in this case, and the evidence clearly shows that the trustees as well as the contractor have proceeded in good faith and with no intentional wrongdoing, but it also shows that the contract entered into with Ellis & Co. is clearly in contravention of the statute under which they were acting, and therefore void.

The contractor and the trustees could reasonably be expected to be governed by the understanding the architect might have as to any provision of the specifications prepared by him, but this would not avail either, if such understanding was different from that of contractors invited to bid familiar with the language employed. -

It is claimed further by the contractor, and also by the trustees, that the delay upon the part of the prosecuting attorney in bringing the action was unexcusable; that as a result of such unexcusable delay the contractor had incurred large expenses in the necessary preparation for the prosecution of the work, by moving to the site of the building at a large expense the apparatus to be used, bringing material upon the ground, entering into contracts for material to a large extent, the execution of the bond required and procuring the required sureties thereon, so that if the prayer of plaintiff’s petition should be granted the contractor would sustain serious loss; that being in a court of equity, notwithstanding the fact that the contract was illegal and void, yet in view of the foregoing, the court, looking to the equities of the parties, should “remain passive and do nothing in the premises.”

A court of equity applies the rule of laches according to its own ideas of right and justice.

The state has necessarily to depend upon its representatives and agents in matters of a public nature, and when the interests of the public are materially injured, by illegal proceedings, whether by fraud or otherwise, it can not have the facilities of discovery where simply individuals are interested and affected, and courts of equity have recognized this fact in the doctrine of laches.

If during the period necessary to enable the state through its representatives to prepare its action, to avoid and prevent a wrong to the public and protect it against loss, a contractor who has obtained an illegal contract out of which the injury arises, proceeds as it is claimed was done here, and thereby the state is estopped from preventing the injury and loss, and the public must submit, then it may be said that in almost every case,, when the state and the public are interested the doctrine of laches would apply. The claim of laches here we think is not sustained.

The further claim is made that if the prayer of the petition is granted, that no benefit will result to the public, or if any should result, it would be very little and so trifling that a court of equity should not extend its aid. -If the prayer is granted the only additional expense made apparent by. the facts disclosed will be the advertisement for bids upon the detailed plans, specifications, etc., as modified. This will insure the competition required by the law. Upon the testimony produced it is shown that an opportunity will be afforded of determining whether the building, etc., upon such modified plans and specifications can not be built for very much less than the bid upon which the centract was awarded, saving to the memorial fund several thousand dollars.

There is testimony in the ease, worthy of belief, showing that under the supplemental specifications upon which this contract was awarded, this building, with the walks, driveways, etc., can be built for $190,000, and at a profit to the contractor. Here is a difference of $21,000 which can not be regarded as a trifling sum.

It is further claimed that if the prayer is granted that it might result in the ultimate defeat of the building; whilst this is a claim wholly immaterial, and one not proper for the court to consider under the issues made, yet we are unable to see why such a result should follow, when the relief it granted will save several thousand dollars to the fund provided for the purpose, and at the same time enable the trustees to proceed according to the statute.

The contract entered into between the trustees and Ellis & Company is illegal and void, because the plans and specifications upon which it was awarded were not those caused to be prepared by the board, and upon which bidders were invited to bid, and hence not responsive to the invitation, plans and specifications; other bidders not having the opportunity to bid for the contract awarded Ellis & Co., it therefore follows that plaintiff is entitled to the relief prayed for in its petition, and the same is granted.

E. L. Taylor, Jr., and Chas. J. Pretzman, for paintiff.

J. E. Safer, for W. H. Ellis & Co.

Pugh & Stoddart, for trustees.  