Everett’s Sweetheart Printing Deal: The Supreme Court Said No

The decision of the supreme court in the case of the Everett Times Publishing Company vs. the city of Everett is one of extraordinary importance. Section 130 of the general statutes provides that in cities of the third class the council shall annually, at a stated time, contract for doing all city printing and advertising, which contract shall be let to the lowest bidder; advertising to be done in a newspaper printed and published in such city. The city of Everett, by ordinance, fixed the stated time as April 1; required that the newspaper must have been published at least one year before the date of contract, and that the contractor must give bond as the council might determine; and directed the city clerk to give notice, by publication, of the annual letting. Pursuant to this ordinance the clerk gave notice that bids for the city advertising would be received at a certain time. The notice stated no particulars of what would be required in the way of advertising, or how the bids should be framed. At the proper time two bids were presented, one by appellant, and one by James H. Bradley. Appellant’s bid was for solid nonpareil at 25 cents per inch for the first insertion and 15 cents for subsequent insertions. Bradley’s bid was for the same kind of type at $1 per inch for the first and 50 cents for each subsequent insertion. Other propositions of the two bidders were substantially the same, except that Bradley offered that if the contract were awarded to him he would publish the official proceedings of the council free of cost to the city, and the city delinquent tax list at the rate of 5 cents for each description. The supreme court in its decision says:

“The council awarded the contract to Bradley by resolution, declaring him to be the ‘lowest and best bidder therefor.’ There was no other finding concerning either of the bids. Appellant in its complaint shows these facts, and that a contract based upon his bid has been entered into between the city and Bradley, and also that it is a taxpayer in the city of Everett. The object of the action, as stated in the prayer, is to enjoin the performance of the contract, and to require the city to enter into a contract with itself as the lowest bidder for the advertising.

“The generally accepted rule is that the courts will not, by mandamus, compel a municipal corporation to enter into a contract with one who shows himself to have been the lowest bidder in a competition of this kind.

“The agents of municipal corporations must maintain themselves within the law in the matter of awarding contracts, and if through fraud or manifest error not within the discretion confided to them, they are proceeding to make a contract which will illegally cast upon taxpayers a substantially larger burden of expense than is necessary, the courts will interfere by injunction to the effect of restricting their action to proper bounds.

“Even under the strict language of the statute requiring the contract for advertising to be let to the lowest bidder, it must be conceded that there would be some discretion of a judicial character left to the council. A guide to the exercise of this discretion was enacted in ordinance No. 3, providing that the newspaper must have been published at least one year, and that a bond should be given by the contractor. So, also, if the proposed contract were to cover many different items, bid for at different rates, and the quantities were not previously ascertained, it would take an extremely strong case to call for equitable interposition; as, also, if the bids were for large amounts, and the differences between bids were small and inconsiderable. The responsibility of the bidder, his experience and his facilities for carrying out a contract may be looked into, and an honest determination that on the whole his bid will not be, in the long run, the lowest, will be entitled to control. But in every such case, in order to protect itself from interference, the contracting agent should judicially find the facts which in its judgment render the apparently lowest bid not the lowest in fact.

“We have this case upon the complaint alone, and under its allegations the conclusion cannot be escaped that there was on the part of the council a gross disregard of the interests committed to it in making its award. It found nothing but that the bid of Bradley was the lowest bid, but the complaint shows affirmatively that the appellant was in every respect qualified and competent, and was equally entitled to consideration with its competitor. Yet, with the bidders standing upon an equal footing, the contract was awarded to that one whose bid was almost four times that of his rival without any apparent excuse or reason but the arbitrary act of the council. It was shown that for the previous year this printing cost about $300, but with the same amount of work this year it will cost $2,000—a very substantial addition to the tax-roll of a city of this class.”

The judgment is reversed and the cause remanded with instructions to overrule the demurrer and proceed upon the cause of action sustained.