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February 9, 1989

BILDOC, INC., Plaintiff,
CHICAGO HOUSING AUTHORITY, a Municipal Corporation, Defendant

The opinion of the court was delivered by: NORGLE


 Before the court is defendant's, Chicago Housing Authority ("CHA"), motion for Summary judgment on plaintiff's, Bildoc, Inc. ("Bildoc") complaint. For the following reasons, the motion is granted.

 Rule 56(c) of the Federal Rules of Civil Procedure provides that a summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). A dispute about a material fact is "genuine" if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 2510, 91 L. Ed. 2d 202 (1986). A plaintiff cannot rest on mere allegations of a claim without any significant probative evidence which supports his complaint. Id.; see First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 20 L. Ed. 2d 569, 88 S. Ct. 1575 (1968). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims and defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 2553, 91 L. Ed. 2d 265 (1986). Accordingly, the nonmoving party is required to go beyond the pleadings, affidavits, depositions, answers to interrogatories and admissions on file to designate specific facts showing a genuine issue for trial. Id.


 Bildoc filed this diversity action against the CHA alleging breach of contract. While the parties disagree on many collateral issues, there is no genuine issue as to any of the facts material to the question of whether the contract*under which Bildoc sues was lawfully terminated by the CHA.

 On November 2, 1984, the CHA issued an Invitation to Bid on four projects for the replacement of floor tile in the apartments comprising the Robert Taylor Homes housing development. When the CHA accepted a bid, the Invitation to Bid would, along with certain other documents ("Contract Documents"), form the contract. Accompanying the Invitation to Bid were certain Contract Documents, including, among others, the Special Conditions, Instructions to Bidders and General Conditions.

 The Contract Documents repeatedly informed all prospective bidders of the requirement of posting a payment and performance bond ("Performance Bond"), (Special Conditions para. 2), and more importantly that the Performance Bond be furnished to the CHA within ten days after the Contract Documents are provided for signature. (Instructions to Bidders para. 10(a)(b)). This was punctuated by the warning that

The failure of the successful bidder to execute such contract and to supply the required bonds withing ten days after the prescribed forms [the Contract Documents] are presented for signature, or within such extended period as the [CHA] may grant based upon reasons determined adequate by the [CHA], shall constitute a default, and the [CHA] may either award the contract to the next responsible bidder or readvertise the contract . . . .

 (Instructions to Bidders para. 10(d)).

 Bildoc was an Ohio Corporation experienced in contracting with public housing authorities. (Williams Dep. at 8-10). On November 6, 1984, Bildoc, through its president, Bill Williams, responded to the Invitation to Bid on an accompanying bid form with offers and proposals to do the work specified in each of the four projects. As required by the Special Conditions, Williams submitted a bid bond with each bid. (Special Conditions para. 1).

 On November 29, 1984, CHA representatives opened all offers and proposals submitted in response to the Invitation to Bid and determined that Bildoc was the lowest responsible bidder on three of the four projects. The total contract price for these three projects was $ 3,866,611.17. During the relevant period, Zirl Smith was the Executive Director of the CHA and its authorized contracting officer. However, as Smith only had unilateral authority to contract for the CHA in non-emergency contracts with a contract price of up to $ 10,000.00, acceptance of the bid offers first required a CHA board resolution before Smith could accept on behalf of the CHA. (Resolution No. 80-CHA-44).

 For unknown reasons, the CHA board did not pass a resolution accepting Bildoc's bids until more than six months had passed. During the intervening time, the CHA and Bildoc engaged in discussions regarding compliance with the Contract Documents. On June 17, 1985, Smith formally accepted the bids by executing the Award and Notice to Proceed on the bid form. Bildoc was informed of the CHA's conditional acceptance in a certified letter dated June 21, 1985 ("Conditional Acceptance Letter") from Michael N. Gorman, Acting Purchasing Agent, which enclosed the Award and Notice to Proceed and the Contract Documents. The Conditional Acceptance Letter, which was sent to and received by Bildoc at 2387 Commerce Park, Beachwood, Ohio, also provided that the CHA's acceptance was subject to Bildoc furnishing the CHA with executed Contract Documents and posting a Performance Bond within 10 days.

 Sometime after receiving notice of the CHA's conditional acceptance, Williams set about obtaining a Performance Bond. However, the bonding company normally used by Bildoc had recently filed for bankruptcy and Williams was unable to obtain an acceptable Performance Bond before the expiration of the ten day period set forth in the Contract Documents and the Conditional Acceptance Letter. Despite Bildoc's failure to timely post a Performance ...

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