AI Generated Opinion Summaries

This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.

Facts

The City of Santa Fe solicited bids for a mixed-use community development project, listing four weighted evaluation criteria but excluding locality as a factor. Planning and Design Solutions (PDS), a California corporation, submitted the top-ranked bid. However, the City Council introduced locality as a new criterion after bids were opened, awarded the contract to a fourth-ranked local bidder, and later rejected all bids to reissue the request with revised criteria (paras 2-4, 13-14, 17).

Procedural History

• District Court, July 20, 1992: Issued a preliminary injunction preventing the City from awarding the contract to any bidder other than PDS (para 4).
• District Court, (N/A): Denied the City’s motion for summary judgment in part, ruling that the City violated its own procurement rules and awarded PDS damages for bid preparation costs. It also held that no binding contract existed between PDS and the City (para 4).

Parties' Submissions

• Petitioner-Appellee/Cross-Appellant (PDS): Argued that the City violated the New Mexico Procurement Code and its own purchasing regulations by introducing a new evaluation criterion (locality) after bids were opened and awarding the contract to a lower-ranked bidder. PDS sought damages for bid preparation costs (paras 1, 17, 29).
• Respondent-Appellant/Cross-Appellee (City of Santa Fe): Contended that it had the discretion to reject all bids and reissue the request with revised criteria. It argued that no binding contract existed with PDS and that its actions were lawful (paras 4, 16, 19).

Legal Issues

• Did the City of Santa Fe violate the New Mexico Procurement Code and its own purchasing regulations by introducing a new evaluation criterion after bids were opened and awarding the contract to a lower-ranked bidder?
• Was the City’s rejection of all bids lawful under the circumstances?
• Is PDS entitled to damages for bid preparation costs?

Disposition

• The Supreme Court of New Mexico affirmed the district court’s ruling that the City violated the Procurement Code and its purchasing regulations.
• The Court upheld the award of $25,769.93 in bid preparation costs to PDS (paras 35-36).

Reasons

Per Frost J. (Ransom and Montgomery JJ. concurring):

• The Court found that the City violated the Procurement Code and its Purchasing Manual by introducing locality as a new evaluation criterion after bids were opened, which was explicitly prohibited by the rules (paras 13-14).
• The City’s actions in awarding the contract to the fourth-ranked bidder and subsequently rejecting all bids were deemed arbitrary and capricious, as they disregarded the established procurement rules and undermined the integrity of the competitive bidding process (paras 22-25).
• The Court held that while no formal contract existed between PDS and the City, an implied contract arose from the City’s obligation to fairly consider bids in accordance with the published criteria. The City breached this implied contract by failing to adhere to its own rules (paras 27-30).
• The Court determined that reliance damages, specifically the costs incurred by PDS in preparing its bid, were an appropriate remedy to compensate for the City’s breach and to deter future violations of procurement laws (paras 31-33).