Sports fans are familiar with the scenario. A team stands only seconds away from victory. It is so close many are already celebrating. Suddenly, fate intervenes and a ball bounces off a glove, a half court shot swishes through the net, or a receiver catches a heaved touchdown pass. That is what the losing team calls: snatching defeat from the jaws of victory.
Snatching defeat from the jaws of victory could also be used to describe the circumstances of a recently decided Pennsylvania Commonwealth Court decision in Allan A. Myers, LP v. Montgomery County. The case involved the award of a county road paving contract. Allan A. Myers was the apparent low bidder and winner of the contract. In fact, the County Commissioners passed a resolution announcing that Myers was the low bidder and awarded the contract to it.
However, before the paving contract could be formerly signed, the County entertained a bid protest from a disappointed bidder. As a result of the protest, the County Commissioners adopted another resolution. This one rescinded the prior resolution awarding the contract to Myers and awarding the contract now to the disgruntled bidder.
Not surprisingly, litigation ensued. The trial court dismissed Myers’ case stating that as a matter of law “the mere act of awarding a public contract normally creates no binding obligation on the awarding entity without the proper contracting authorities going further and entering into and executing the contract.”
Myers appealed and argued that, under basic public contract principles, an enforceable contract existed when the County awarded the contract to Myers in the resolution. The Commonwealth Court disagreed and affirmed the trial court’s dismissal of Myers’ action. The Commonwealth Court explained that “where a statute prescribes the formal mode of making public contracts it must be observed, otherwise they cannot be enforced against the government agency involved.”
Looking to the statute governing the award of the paving contract, the Commonwealth Court reasoned that the language indicated that the Legislature intended that all contract be executed in order to be enforceable.
The take away. Before you start celebrating a bid award, if the statute governing the award of your contract requires it to be executed to be enforceable, bird dog the government agency to get you that executed contract.
Wally Zimolong
Wally represents contractors (and subcontractors) and developers. His clients build and develop residential, commercial, and industrial properties nationwide. Wally enjoys working with the owners of the businesses he represents because they tend to be entrepreneurs and all around interesting people.
