The City of New Orleans advertised for bids for street and utility renovation for certain streets. On February 26, 2002, the City informed Wallace C. Drennan, Inc. it was the lowest responsible bidder for two of the projects. The City and Drennan signed a contract for one of the projects on April 12, 2002. On April 19, 2002, the Sewerage and Water Board notified the City that it did not approve the projects and withheld its matching funds. On July 1, 2002, Drennan filed a petition for mandamus against the City. On August 1, 2002, the City issued a notice to proceed on the project for which the contract was signed. A contract for the second project was signed on August 13, 2002, and a notice to proceed was issued on September 30, 2002. Drennan sued the City for damages as a result of its delay in awarding the contracts and issuing notices to proceed. The trial court granted partial summary judgment in favor of Drennan on the issue of liability alone. The City appealed.
Drennan claimed it suffered damages as a result of the City’s failure to perform its obligations under L.R.S. 38:2215A which provides that upon receipt of bids for an undertaking of any public works contract, a political subdivision shall act within 45 calendar days of such receipt to award said contract to the lowest responsible bidder or reject all bids. Upon execution of the contract, L.R.S. 38:2215C provides the public entity, within 30 days thereafter, shall issue to the contractor a notice to proceed with the work. The statute specifically states its provisions shall not be subject to waiver. L.R.S. 38:2215D.
The City contended the deadlines did not apply as a result of the statutory exemption for contracts which are financed in whole or in part by federal or other funds which are not readily available at the time bids are received. L.R.S. 38:2215B. The exemption requires, however, that in the event the time limit stipulated is not applicable because of one of the exceptions outlined therein, that fact shall be mentioned in the specifications for the project and in the official advertisement for bids. The City’s advertisement for bids stated any contracts awarded for sewer related work were “expected” to be funded in part by a grant from the United States Environmental Protection Agency with matching funds from the Sewerage and Water Board.
The court of appeal concluded the content of the City’s advertisement did not satisfy the requirements of the statute and the deadlines included therein applied. There was nothing in the advertisement which compelled the bidders to understand that the City’s expectation of the sources of the funding means that the funding would not be readily available when the bids are received. As a matter of fact, matching funds of the EPA were always available, and, when the Sewerage and Water Board balked at contributing to the funding of the projects, the City expended its own funds. More importantly, the advertisement failed to mention the fact the time limitations, or statutory deadlines, would not apply. The City argued Drennan waived any complaint concerning its notice. The court of appeal disagreed. The statute specifically provided its provisions would not be subject to waiver.
The City was liable to Drennan for damages occasioned by the delay in executing the contracts and issuing the notices to proceed. The matter was remanded to the district court for a trial limited to the assessment and award of damages. Wallace C. Drennan, Inc. v. City of New Orleans, 2010-1301 (La.App. 4th Cir. 4/27/11), 65 So.3d 705.