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Leo Michuda & Son Co. v. Metro. Sanitary Dist.

OPINION FILED JUNE 15, 1981.

LEO MICHUDA & SON CO., PLAINTIFF-APPELLEE,

v.

THE METROPOLITAN SANITARY DISTRICT OF GREATER CHICAGO ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. JAMES C. MURRAY, Judge, presiding.

MR. JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

Defendant Brant Construction Company, Inc. (Brant), defendant Metropolitan Sanitary District of Greater Chicago (the District), and defendant Melvin K. Goldman, purchasing agent of the District, appeal from an order issued by the trial court permanently enjoining Brant and the District from executing any contract documents for a construction project entitled "Replace Roof on Digester 2 and Miscellaneous Work, Contract 78-208-2P" (the project) and from engaging in the performance of any work described therein and enjoining the District and Goldman from awarding any contract for the project to any contractor other than plaintiff Leo Michuda & Son Co. (Michuda). The District and Goldman also appeal from the trial court order granting the issuance of a writ of mandamus directing the District to award the contract for the project to plaintiff Michuda.

On or about August 13, 1980, the District advertised for bids for the project. The work to be performed consisted of raising and replacing Digester No. 2 roof, providing a liquid polymer storage and transfer system to alleviate the manual transfer of hazardous materials and other miscellaneous work. On September 3, 1980, the District issued Addendum No. 1 to the project. This addendum included an "Appendix D, Notice of Requirements for Affirmative Action Plan to Insure Small and Minority Business Participation" (Appendix D). Appendix D notified bidders that the "goal of the [District] is to provide to the maximum extent possible 10% of the total dollar value of each project to minority and small business enterprises, and to surpass the stated goal wherever feasible." Appendix D required that the bidders submit with the bidding documents a "Goal Disclosure Form" listing the minority subcontracts intended for award to minority and small businesses.

Four companies, including Michuda and Brant, submitted bids in response to the District's advertisement. On September 9, 1980, the submitted bids for the project were opened publicly, resulting in the following bids: Brant Construction Company, Inc., $536,700; Leo Michuda & Son Co., $594,000; Independent Mechanical Industries, Inc., $666,500; Illinois Construction Co., Inc., $799,000. The District's engineer's estimate of the cost of the work was $420,000.

In connection with their bids, each bidder submitted a Goal Disclosure Form. The Goal Disclosure Form submitted by Brant contained the following statement:

"No firm contractual commitments at this time, but we will use every available means to obtain the services of Minority Business Enterprises in performing this work."

The Goal Disclosure Form submitted by Michuda was completed in accordance with the requirements of Appendix D and included the name, address, description of work and agreed price of $60,000, which is over 10% of its total bid to be paid to its minority subcontractor. None of the bidders submitted a letter of intent with its bid.

On October 6, 1980, Brant submitted to the District a second Goal Disclosure Form, which included the names and addresses of two minority subcontractors and agreed prices totaling approximately 18% of Brant's bid.

On November 6, 1980, the District's board of trustees, by resolution, set forth its intent to award a contract for the project to Brant. On that same day, Michuda filed its emergency complaint for declaratory judgment, writ of mandamus and other relief, and an emergency motion for temporary restraining order and preliminary injunction.

On November 12, 1980, the trial court entered a preliminary injunction enjoining defendants from executing any contract documents and from engaging in the performance of any work on the project.

On December 2, 1980, the trial court entered a permanent injunction enjoining defendants Brant and the District from executing any contract documents for the construction of the project and from engaging in the performance of any work on the project, and enjoining the District and Goldman from awarding any contract for the construction of the project to any contractor other than Michuda. The trial court found that Brant failed to comply with the minority requirements of the bidding documents and that such failure was a material omission and therefore Brant's bid was non-responsive.

On December 4, 1980, the District's board of trustees rescinded the award of the contract to Brant. Thereafter, defendant Goldman rejected all of the bids for the project due to his determination that Michuda's bid was excessive because it was 42.5% above the District's estimate. At the hearing on the petition for mandamus, Goldman testified that his reason for rejecting all bids was the hope that upon a rebid of the project the bids would be lower.

On December 23, 1980, the trial court found that defendant Goldman had abused his discretion in rejecting all bids and entered a writ of mandamus directing the District to enter into a contract with Michuda for the project and obligating the appropriated funds in the District's budget to pay for the project.

Initially, plaintiff Michuda asserts that its case involves no actual controversy and is moot because the District rescinded the award of the contract to Brant, thereby acquiescing in the trial court's December 1, 1980, order and, ...


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