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HomeMy WebLinkAboutMinutes - City Council - 10/19/1985CITY COUNCIL OCTOBER 19, 1985 The South Burlington City Council held a Special Meeting on Saturday, October 19, 1985 at 9:00 AM, in the Mini-Conference Room, City Hall, Dorset Street. Members Present Paul Farrar, Chairman; Michael Flaherty, George Mona, Leona Lansing, Francis Murray. Members Absent None Others Present William Szymanski, City Manager; Angelo Pizzagalli, Attorney Richard McCain, Pizzagalli Construction. Review and Approve the Findings of Fact in decision of the hearing on awarding of the Airport Parkway Sewage Treatment Plant construction contract Chairman Farrar opened the meeting at 9:00 AM to review the final draft (copy attached with pencil corrections) of the Findings of Fact regarding the appeal to the awarding of the Airport Parkway Sewage Treatment Plant expansion contract. Several changes were recommended and agreed upon by the City Council. A copy incorporating these changes is attached. Angelo Pizzagalli stated that he is disappointed with the Council's action, that Charwill's bid should have been rejected, that he had been an active supporter in the community and that he owes it to his employees to pursue the decision through the entire appeal process. Chairman Farrar stated, he voted in the minority on the appeal, because he does not agree on the conclusions, especially the following statement on page 9 of the final copy: "We are not convinced by Pizzagalli that Charwill failed to exercise ordinary care in compiling its bid". Councilman Flaherty agreed. Councilman Murray made the motion to sign the final copy, incorporating the changes, when it is ready. Leona Lansing seconded the motion. Leona Lansing, George Mona and Francis Murray voted in the affirmative, Paul Farrar and Michael Flaherty against. Frank Murray made the motion to adjourn at 10:30 AM, George Mona seconded, all voted in favor. Clerk Published by ClerkBase ©2019 by Clerkbase. No Claim to Original Government Works. FINDINGS OF FACT and NOTICE OF DECISION The facts in this case are not in dispute. With the help of its consulting engineer, Webster-Martin of South Burlington, (hereafter project engineer), the City of South Burlington (herein- after City) invited lump sum bids for improvements and expansion to its Airport Parkway Wastewater Treatment Facility. Bids were to be submitted by 10:OO AM on July 25, 1985. The following three contractors timely submitted the following bids: Charwill Construction, Inc Meredith, New Hampshire (Hereinafter Charwill) Pizzagalli Construction Co. South Burlington, Vermont (Hereinafter Pizzagalli) S.G. Philli~s Constructors. Inc. - Burlinaton. Vermont After opening the bids the project engineer called Charwill and indicated that Charwill was the lowest bidder. On the afternoon of July 25, Charles William Lowth,Jr., President of Charwill, called the project engineer and told him that Charwill had made an error in its bid. Mr. Lowth offered to make Charwill's bid sheets available for review by the City. This telephone conver- sation was confirmed with a Western Union Mailgram, dated July 25 at 2:45 PM. On August 1, 1985, Mr. Lowth met with the City's manager, the project engineer and a representative of the State of Vermont's Agency of Environmental Conservation. He explained Charwill's bidding method and described how the error was made. He left Charwill's bid preparation work sheets with the project engineer for his further review. Webster-Martin reported to three of the City's five council member$ at its August 5, 1985 meeting. This report indicated as follows: (1) based on past performance, a1 1 three bidders were qual ified; (2) Charwill provided the City with timely notice of its allegation that i.t had made a bid mistake of 8300,000.00; (3) Based upon the facts as outlined by Charwill and supported by its bid . Preparation work sheets, Charwill make "an honest mistake" in its bid by failing to include $269,616.00 in i'ts bid, Charwill had not alleged bid mistake on other projects and; (4) the amended Charwill bid was still lower than Pizzagall i's next lowest bid by $272,051.00. 1 At this meeti'ng, the City's project engineer also advised the Council that Charwill had made a second mathematical error which, if corrected, would raise Charwill's lump sum bTd another lwebster-Martin letter to City Council dated August 5, 1935: Based on past performance, all bidders, Charwill ,Construction, Pizzagalli Construction, and S.G. Phil1 ips Constructors have the necessary experience, qual ifications, equipment and personnel to successfully complete the \;rorl: and on this basis we would have no hesitance in recommending award to any of the three bi'dders. At a meeting attended by personnel from Charwill Construction, the City of South Burl ington, Agency of Environmental Conservation and Webster-Martin held on Thursday, August 1, 1985, Bill Lowth explained their bidding methods, showed how the error was made and left their bidding package for further review. Based on the discussion which took place during the meeting and a review of the bid work sheets, there appears to have been an honest mistake in the amount of $269,616.00 in Charwill Construction's submitted bid. Charwill Construction's preferred solution was that the amount of the mis- take be added to the original bid price and that they be awarded the work. This would result in an amended bid price (contract amount) of $5,317,949.00. This price $272,051.00 less than the second bid submitted by Pizzagal 1 i Construction COmpany and $379,828.00 less than the third bid submitted by S.G. Phillips. As requested by Bill Szymanski, we have contacted Owners or Engineers referenced in Charwill's list of completed or current contracts and asked whether Charwill Construction has cliimed an error in their bid price on other projects. None of the people contracted experienced this situation with Charwill Construction $30,000.00. The project engineer further advised the Council that Charwill failed to remember to bring the paperwork to document this mistake to its meeting with the City's representatives and the State's Agency of Environmental Conservation on August 1, 1985. The project engineer further advised the Council that he would not permit Charwill to add this additional $30,000.00 to his lump sum bid since Charwill failed to support.this contention with evidence at the August 1 meeting. And finally the project engineer advised the Council that Charwill agreed that it had failed to support this allegation with evidence and thus it would not raise its lump sum bid by adding this $30,000.00 to its bid. The three City Council members in attendance at the August 5th meeting asked the City's manager to schedule a Council meeting with the City's Attorney at a time which, if possible, would be convenient for the five member Council. A Special Council meeting was held on Friday, August 9th between 5 and 7 PM. to discuss the matter further with the City's Attorney and its project engineer. After this discussion, the Council voted 3-2 to notify all three bidders of its intent to award the contract to Charwill at its amended price. Such notice was forwarded to all three contractors by letters dated August 15, 1985. Pizzagalli and Phillips were informed of their right to protest this proposed City action by August 26th. By letters dated August 15th and 26th, Pizzagalli protested the City's intent to award Charwill the contract at its amended bid price. On September 10, the City's attorney notified all three interested contractors that a hearing would be held on September 30, 1985 to give all parties the right to be heard on the issue including the examination and and cross-examination of witnesses. He asked the parties to submit written. legal memoranda in support of their positions. The hearingwas rescheduledforOctober 7 at the request of one of the Council members who could not attend the meeting on the 30th. Charwill outlined its factual position in a letter to the City's attorney dated September 19th and submitted a Memorandum of Law in further support of its position on September 25. In addition to its letters of August 15 and 26, Pizzagalli further outlined its position in letters (with attachments), dated Seotember 25 and October 3. Prior to and at the October 7th hearing Phillips indicated it supported Pizzagalli's position but would not participate at the hearing. The hearing on Pizzagalli's protest was heard by the Council on October 7 between 7:30 and 11:00 p.m. Piazagalli was represented at the hearing by Charles R. Tetzlaff of the law firm Latham, Eastman, Schweyer and Tetzlaff of Burlington, Vermont. Charwill was represented by Willard G. Martin and Catherine C. Stern of the law firm of Nighswander, Martin, Kidder & Yitchell, PA of Laconia, Hew Hampshire. Charwill called three witnesses. Pizzagal 1 i's attorney cross-examined them. Pizzagalli offered no testimony but offered two letters into evidence. Based upon the oral testimony submitted at the hearing and the exhibits and other documents which are part of the record (see Appendix A) the Council makes -the following findings of Pact: 1. Charwill is a New Hampshire construction company with experience in constructing wastewater treatment facilities. 2. Upon reviewing the trade publication, Charwill learned of the City's plans to upgrade and expand its Airport Parkway Wastewater Treatment Plant and the City's request for bid submissions on the project by July 25, 1985. 3. Charwill sent for the contract documents on July 13, 1985 and received them back from the City's consulting engineer on about July 18, 1985. 4. Shortly after the receipt of the contract documents, Charwill's estimator reviewed the contract specifications, identified the categories of work which had to be bid upon, determined a quantity of units for each category, determined the cost for each unit, and performed the required mathematics to secure the cost tor each identified category of work. 5. Charwill had a computer print-out report of each of these categories of work. 6. The last line of the last page of each of these computer reports contained the cost estimate for each work category. 7. Charwill sub-contracted portions of its estimate work. The sub-contractor and Charwill's estimator determined it would be appropriate to divide concrete work into two classifications. By doing so Charwill would be able to submit a somewhat lower cost for concrete work than if only one concrete work classification were utilized. 8. Charwill divided the concrete work into two sub-categories: "Heavy concrete" and "Building concrete", and took each off separately. 9. Charwill had two separate computer print-out reports for the concrete work. It had a computer print-out report for the "Heavy" concrete category and another computer report for the "Building" concrete category. 10. This was the first time Charwill broke concrete into two subcategories to estimate the cost of concrete for its bid on a project. In other words until this project Charwill had always analyzed a single cost for a single concrete category. 11. Charwill's estimator put the separate computer print-out reports for each work category in a pile. 12. Charwill's estimator identified a three page list of work categories and placed them on an "Add-Deduct Sheet". 13. The items listed on Charwill's "Add-Deduct Sheet" were items the cost for which Charwill's estimator believed could change up until the last minutes before submission of its lump sum bid. 14. On or about July 19, Charwill's estimator listed all categories of identified work from the contract documents on its "Bid Summary Sheet" 15. While Charwill developed two separate computer reports for two subcategories for its concrete work estimate, it listed only "concrete" as a category on its bid summary sheet. It did not list separate work categories for "heavy concrete" and for "building concrete' on its bid summary sheet. 16. The computer report for "heavy concrete" listed a total cost of $618,336.00. 17. The computer report for "building concrete" listed a total cost of $269,616.00. 18. At the bottom of the "building concrete" computer worksheet's report, Charwill's estimator manually listed and totaled these two concrete subtotals. The total coat for both concrete subcategories was $887,952.00. 19. On or about July 22, Charwill's estimator reviewed the computer summary reports for the individual work categories and copied the cost estimate from the final line of the last page of the reports onto the bid summary sheet in the appropriate column next to the described work category. 20. Charwill's estimator reviewed the subtotal cost at the bottom of the computer report for "heavy concrete" and wrote the $618,336.00 cost subtotal for "heavy concrete" on the bid summary sheet in the "total" column next to the concrete category. 21. Charwill's estimator failed to review the "building concrete" computer report and therefore failed to see the $887,952.00 total cost figure for both the heavy concrete and building concrete categories. 22. This transposition error by Charwill's estimator caused its lump sum bid to be $269,616.00 less than its intended bid price. 23. Charwill's president reviewed the cost figures on the bid summary sheet prior to its bid submission to the City, but failed to notice his estimator's failure to include $269,616.00 for "building concrete", because without checking the computer reports he had no way of finding the error. 24. After its estimator made his transposition error, but prior to the City opening its bid, no one from Charwill reviewed the computer reports and compared the totals on these reports with the work category subtotals on the bid summary sheet prepared by its estimator. 25. It was not Charwill's "normal practice" to check the final subtotal costs for each category of work against the computer reports for each work category. 26. There is no industry standard requiring such a check be made. 27. Construction bid preparation procedures vary from company to company. 28. Unti:l the moments pri:or to s,ubmi$sion of char will.'.^ bid, cost changes a were being made by Charwill for some of the items on i'ts ''Add-Deduct Sheet". 29. It is. customary for contractors to charge between 6 and 14% for over- head and profit for cons.truction projects involving wastewater treatment facilities. 30. Sometime duri'ng the 6Pd process, but pri'or to the 25th of July, Charwill decided it would charge approximately 8% for "overhead and profit" on the City's construction project. - 31. Just pri,vr to submitting its bid on July 25 while Charwill was making last minute mathematical additions to determine its final lump sum bid, it made a mathemati.ca1 error whi'ch. caused another $30,0.00,00 to be mistakenly deleted from its lump sum 6i.d. 32. On July 25, 19B5 at 10:OO a.m. the following three contractors timely filed the following three lump sum bids: Charwill $5,048,333.00 Pizzagal 1 i 5,590,000.00 Phillips 5,697,777.00 33. Prior to noon on July 25 and soon after opening a1 1 three bids, the City's consulting engineer called Charwill by telephone and informed the company it was the lowest bidder. A representative of Charwill was also present and informed his company of the bid amounts. 34. When Charwill learned the size of the difference between its bid and Pizzagalli's bid, it checked its bid work sheets for errors. 35. Upon checking for errors, Charwi 11 found its transposition error of $269,616.00 and its mathematical error of $30,000.00. 36. On the afternoon of July 25, 1985, Charwill notified the City consulting engineer by telephone and a 2:48 p.m. mailgram that it had made a mistake in its lump sum bid price which caused its lump sum bid proposal to be $300,000.00 less than what it actually intended. 37. Charwill indicated that the $300,00Q.00 mistake was the result of a mathe- matical error and the error in transposing totals from its bid work sheets. 38. On August 1, 1985, Charwill met with the City's manager, the Consulting engineer, the City's Attorney, and the State of Vermont'sAqency of Environmental Conservation and by explanation and submission of its bid work sheets, the consulting engineer indicated that Charwill had made an honest mistake in failing to include the $269,616.00 cost for building concrete in its lump sum bid to the City. It appeared to the aonsulting engineer that an honest mistake due to its failure to properly transfer estimates for the cost of building concrete from its building concrete computer report to its bid summary sheet had been made. 39. Had these errors not been made this additional $299,616.00 would have been included in Charwill's July 25th bid proposal. 40. Thus, based upon clear and convincing evidence had Charwill not made its two errors an additional amount of no more than 8% of $299,616.00 or $23,969.28 would have been added to its final lump sum bid. 41. Based upon clear convincing evidence these corrections to Charwill's July 25th lump sum bid would cause it to be raised to no more than $323,585.28 and thus to a total of $5,371,898.28. 42. After these errors are corrected, Charwill's July 25th bid would still be lower than the next lowest bid by $218,101.72. 43. Charwill forgot to bring documentation to the August 1 meeting to substantiate its $30,000.00 mathematical error. 44. As a result of this failure Charwill agreed that it waived its right to correct this mistake. 45. Charwill has no prior history on other projects claiming it had made an honest mistake in preparing its bid. 46. Charwill's transposition error was an honest clerical error which it timely called to the City's consulting engineer's attention. 47. The experience of other contractors involved in the competitive bid process has been that low bidders who have discovered honest mistakes in their bids prior to being awarded the bids have been allowed to recind their bid but have not been allowed to increase the amount of their bid by including the amount of their mistake. 48. The Associated General Contractors of America of Vermont are of the opinion it is a threat to the competitive bid system to allow low bidders to adjust their bids to include the amounts of honest bid errors and theGefore should not be allowed. CONCLUSIONS We find that it would be unconscionable to require Charwill to be bound by itsoriginalbid. The evidence indicates that the approx- imation of 8% for overhead and profit is evenly divided between over- head and profit (i-e., 4% for overhead and 4% for profit). The .- transposition mistake alone amounts to more than 4% of Charwill's original bid. It is in the City's best interest to accept Charwill's amended bis of $5,317,949.00 since it is $272,051.00 less than the next highest bid which was submitted by Pizzagalli. Acceptance of Pizzagalli bid would cost the taxpayers an additional $272,051.00. We do not feel that permitting reformation of Charwill's bid adversely affects the integrity of the bidding process, and find to the contrary. We are not convinced by Pizzagalli that Charwill failed to exercise ordinary care in compiling its bid. To date Vermont Courts have not decided the issues in this case. There are no Vermont statutes or south Burlington ordinances which require the Council to act in a specific manner. Thus, there is no Vermont law which directs the Council to choose any of the following options: (a) award the contract to Charwill at its original July 25, 1985 bid or (b) to award the contract to Charwill at its reformed bid or (c) to allow Charwill to rescind its July 25th bid and award the contract to Pizzagalli, who is the next lowest bidder or (dl to allow Charwill to rescind its July 25th bid and reopen the bidding process. To decide the matter fairly the Council may rely on judicial decisions from other jurisdicitions and attempt. to apply the rules from these decisions with common sense and fairness. Despite the lack of Vermont law it is generally recognized in other jurisdictions that if (1) a low bidding contractor (a) commits a unilat- eral bid preparation mistake, (b) discovers the unilateral bid preparation " mistake prior to the awarding authority offering the contract, (c) calls such mistake to the awarding authority's attention in a timely manner prior to the award of the bid; and (2) objective evidence demonstrates the mistake was clerical and not judgemental, the awarding authority should permit equitable relief to such a contractor, provided: (a) enforcement of the mistaken bid would be unconscionable; (b) the mistake related to the substance of the consideration; (c) the mistake occurred regardless of the exercise of due care: and (d) granting relief will not result in substantial prejudice to the City. See Right to Rescind Bid on Public Contract, 2 ALR 4th 991. The evidence is clear and convincing that Charwill (1) made an honest clerical mistake; (2) timely called it to the attention of the City: (31 enforcement of the contract at the July 25th bid price would be uncon- L scionable; (4) Charwill exercised reasonable care; (5) the amount of the error caused it to be a substantial part of the consideration; and '~rcon Const. Co. v State, etc., 314 N.W. 2d 303, 306 (S.D. 1982) "We appreciate that any mistake indicates some degree of negligence. Absent gross negligence, however, equitable relief will not be denied." Courts have contractors to demostrate they "acted with ordinary care" when they made their "clerical mistake." To state that one can commit an error without committing negligence is misleading. An "error" is defined as "an act or condition of ignorant or improvident deviation from a code of behavior;" "an act involving an unintential deviation from truth or accuracy;" "an act through ignorance, deficiency, or accident which departs from or fails to achieve what should be done." Webster's New Collegiate Dictionary, 385 (1979). Negligence, on -10- the other hand, is thedoing of some act which a reasonable prudent person would do - essentially, an improvident, unintentional deviation from a code of behavior. Thus, an error is tantamount to negligence. Regardless, the Courts, like South Dakota, have either required gross negligence or have continously find clerisan errors not to be negligent. See for example Dick Corp, v Associated Elec. Co-op., Inc., 475 F. Supp. 15, 20 (1979) where the Court concluded that a contractor who £ailed to properly transpose $1,100,000 from its bid work sheet to its bid summary sheet was both a mistake and an exercise of ordinary care. . (61 the City would not. be at a disadvantage if itawardedthe contract to Charwill at the amended price. The issue in this case does not appear to be whether Charwill should be permitted relief to rescind his July 25th bid. The issue is whether relief should include reformation. In other words, the facts in this case and the application of the above principles to the facts do not appear to be indispute provided that rescission is the only equitable relief permitted. by the Council. Pizzagalli argues that the facts in the case and public bidding contract *law permit the Council to allow Charwill to rescind its bid to enable the City to award Pizzagalli the contract; but according to Pizzagalli it would be "a threat to public confidence in the public bidding process" to allow Charwill to reform its bid to allow a savings to the public of over $200,000.00 We disagree. We belive the contrary to be true. Contrary to the position of the protesting contractors and the cited Associations of General Contractors there is no absolute rule against a public bidding authority awarding a bid to a low bid contractor who has been permitted to reform his bid provided all of the conditions as' outlined above forequitable relief are met. Reformation of a low bidders bid and the award of a public contract at the reformed bid to the low bidder has been judicially recognized as the fairest solution in cases similar to ours. In Dick Corp. v. Associated Elec. co- op., Znc. 475 F. Supp 15 (1979) (USDC,W.D. Tenn. - 1979), the ~ick Corporation submitted a low bid of $13,600,000.00. The next lowe'st bidder submitted a bid of $15,674,000.00. After submission of its low bid but before award of the contract, Dick Corporation found that it made a $1,000,000.00 mistake in e transposing figures from work sheets to its summary sheets. The actual cost for one of the work categories on its bid work sheets was $1,100,000,00, but Dick Corp, mistakenly placed $100,000,00 on the summary sheet resulting "in the sum of $1,000,000.00 not being included in the total bid price." The Court allowed the Dick Corporation to reform its bid to include the $1,000,000.00 error, but Dick Corporation was still the lowest bidder by $1,074,000.00. The Court outlined the following reasons in holding that fairness was best served by allowing the reformation and awarding the contract to the Dick Corporation at the amended bid: The equitable remedy of reformation is an available and appropriate remedy under the circumstances of this case. The equitable remedy of reformation is an available and appropriate remedy under the circumstances of this case. . . The evidence is clear and convincing both as to the existence of the mistake and as to the bid price act- ually intended. Since the bid price,both as uncorrected and corrected, is the lowest received, it is the determination of this Court that equity will best be served by having the bid price submitted by Dick corrected from $13,600,000 to $14,600,000, rather than be permitting the withdrawal or rescission of the award to Dick Corporation. In Pabrizio & Martin, Inc. v. Board of Educators, etc., 523 F.2d 378 (1975), hereafter~abrizio, would have been the lowest bidder on a school construction project even if the school board allowed Fabrizio to amend its bid by increasing it by $171,000. It failed to include $171,000.00 in its bid due to a mathematical error. Even with the $171,000.00 increase. Fabrizio was $222,000.00 lower than the next lowest bid of $2,549,000.00. During the course of the contract, the parties had many disagreements and Fabrizio eventually left the job site alleging-breach of contract. When Fabrizio sued the awarding authority the latter alleged it had no contract with Fabrizia because it violated the competitive bidding process by permitting Fabrizio to reform its bid. The Second Circuit disagreed and provided the following analysis: Obviously it was in the interest of the taxpaying public to retain Fabrizio. The same specifications submitted to all alike were used . . . We do not mean to suggest that the Board, even acting in good faith, could avoid the obligation to solicit an additional round of bids if the changes involved were significant enough to involve a substantial possibility that another bidder might undercut Fabrizio on the amended construction plans. The public is entitled under the statute to have the job done at the lowest cost. The possibility of achieving a bid 1owertkianFabrizio's on the plan as changed, however, does not appear to be substantial, consid- ering the monetary value of the changes in light of the con- tract price and the amount by which other contractors' bids would have exceeded Fabrizio's price on the original plans. The Council's duty in this case is "to have the job done at the lowest cost" Fabrizio & Martin, Inc. v. Board of Education, 523 F2D 378, 383 (2d Cir. 1975) provided it acts reasonably and rationally rather arbitrarily and capriciously. Butler v. Inhabitants of Tremont, 412 A.2D 385, 387 (Me. 1980). It would be arbitrary and capricious to award Charwill the dantract at its amended price if Charwill's amended bid price was not the lowest, or there was substantial likelihood it would not be the lowest on re-bid. Contrary to Pizzagalli's argument the evidence clearly and convincingly demonstrates that Charwill's intended bid would have been $5,371,898.28 and at very least substan- tially below ~izza~alli's $5,590,000.00 bid. Charwill testified it decided its profit plus overhead on the * job would be about 8% and that it made two errors in its bid process totaling $299,616.00. Eight percent of $299,616.00 is $23,969.28. Upon adding the latter two figures the evidence becomes clear and convincing that Charwill's intended bid was $5,371,898.28 or less but at least $218,101.72 less than the next lowest bid. Charwill claimes its $30,000.00 mathematical error is irrelevant io the Council's analysis 6ecause Charwill is not including it in its amended bid. We agree with Charwill that this mathematical error is irrelevant. We disagree with the reason Charwill argues it is irrelevant. It would be relevant if it caused Charwill's amended bid to be higher than Pizzagalli's regardless of whether it was included in its amended bid. Allowing contractors to delete those errors which would cause the amended bid to be higher than the next lowest bidder would be improper. It would be allowing the lowest bidder to tamper with his bid after the bidding had closed. The $30,000.00 error is irrelevant in this case because when it is tabulated with the other bid mistake it does not cause Charwill's bid to get closer than $218,101,72 to Pizzagalli's bid. Since Charwill remains lower than Pizzagalli by this amount with the a.. ~ncluslon of the $300,000.00 error it is appropriate for the City to award the contract to Charwill and because of circumstances at the August 1 meeting to require the deletion of the $30,000.00 from Charwill's amended bid. While Pizzagalli argues there is no clear and convincing evidence that Charwill's intended its bid to be $5,371,898.28 it provided no evidence or logic to substantiate its argument. There will be no harm to the bidding process by awarding Charwill the contract at its amended bid price. The only conceivable harm would be that such a practice would encourage contractors to unreason- ably include numerous hidden bid mistakes to allow it to raise or lower its bid after the bidding has been closed so to secure an award of the contract. However, we are confident that such a practice would not develop because any history of such bid tampering would be easy to document and dictate against the award of the contract at the amended bid price. A contractor who practiced in this manner would develop a well deserved reputation for deceit and be out of business in a fairly short time. In this case the consultinq engineer checked the contractor's reputation and found Charwill engaged in no such prior practice. Charwill's estimator indicated during testimony that he had never made a similar mistake and Pizzagalli offered no evidence to suggest that this was CRarwill's plan. In fact Pizzagalli agreed that the evidence demonstrated Charwill's mistakes were honest. We are aware of the importance of maintaining the competitive bidding system which is used in the letting of municipal construction contracts. Consequently we do not mean to imply by (allow recision) that a bidder that has submitted the lowest quotation on a municipal contract may cavalierly disregard the contract's irrevocability clause and seek recision. Allowing such action would be unfair to the other bidders and would result in destruction of the system's integrity. However, we are certain that the courts of this state are capable of preventing such a result by refusing to grant recision where, while the present circumstances, the facts do not justify relieving the lowest bidder from his bid. Wil-Fred's Inc. v Metropolitan San., Etc., 372 N.E.2d 946, 953 (111. App. 19781. Similarly, the Council believes it should reject the notion that it should never under any circumstances allow reformation of the lowest bid and award the contract to the reformed bidder because such action may be inappropriate in other circumstances. Like the Illinois court, the Council believes the better rule is to allow reformation and award the contract at the reformed bid if it is warranted by the circumstances of the case. Finally, Pizzagalli's relies on Vermont contract law which requires the finding of a mutual mistake before a party to a contract is permitted to rescind or reform the contract. The cases cited by Pizzagalli deal with already formed contracts or mistakes or judgement. We believe that if confronted with the facts in this case which deal with reformation of bids prior to entry into a contract, Vermont's courts will follow the majority of other jurisdictions @ which permit such appropriate relief. ORDER The protests of Pizzagalli and Phillips are denied and the contract shall be awarded to Charwill at its amended bid price of $5,317,949.00. .. ~ated at South aurlinqton, Vermont, this 19th day of October, 1985 City Council, South Burlington, Vermont APPENDIX A a EXHIBITS (1) Charwill's Summary Sheet - (2) Charwill's Add-Deduct Sheets (3) Charwill's Notes Pertaining to - buying discounts, and overhead and profit (4) September 17, 1985 letter from The Associated General Contractors of America to Pizzagalli Construction Company (5) August 27, 1985 letter from Association of General Contractors of Vermont to City of South Burlington * FINDINGS OF FACTS REFERENCES: A. Stephen R. Kain's letter to Attorney Richard Spokes dated October 11, 1985 B. Latham, Eastman, Schweyer & Tetzlaff's letter to Attorney Richard Spokes dated October 10, 1985 FINDINGS OF FACT and NOTICE OF DECISION The facts in this case are not in dispute. With the help of its consulting engineer, Webster-Plartin of South Burlington, (hereafter project engineer), the City of South Burlington (herein- after City) invited lump sum bids for improvements and expansion to its Airport Parkway Wastewater Treatment Facility. Bids were to be submitted by 10:OO AM on July 25, 1985. The following three contractors timely submitted the following bids: Charwill Construction, Inc Meredith, New Hampshire (Hereinafter Charwill) Pizzagalli Construction Co. South Burlington, Vermont (Hereinafter Pizzagalli) S.G. Phillins Constructors. Inc. - Burlington, Vermont (Hereinafter Phillips) After opening the bids the project engineer called Charwill and indicated that Charwill was the lowest bidder. On the afternoon of July 25, Charles William Lowth,Jr., President of Charwill, called the project engineer and told him that Charwill had made an error in its bid, Mr. Lowth offered to make Charwill's bid sheets available for review by the City. This telephone conver- sation was confirmed with a Western Union Mailgram, dated July 25 at 2:45 PM. On August 1, 1985, Mr. Lowth met with the City's manager, the project engineer and a representative of the State of Vermont's Agency of Environmental Conservation. He explained Charwill's bidding method and described how the error was made. He left Charwill's bid preparation work sheets with the project engineer for his further review. Webster-Martin reported to three of the City's five council members at its August 5, 1985 meeting. This report indicated as follows: (1) based on past performance, all three bidders were qualified; (2) Charwill provided the City with timely notice of its / allegation that it had made a bid mistake of $300,000.00; (3) Based upon the facts as outlined by Charwill and supported by its bid preparation work sheets, Charwill made "an honest mistake" in its bid by failing to include $269,616.00 in its bid, Charwill had not alleged bid mistake on other projects and; (4) the amended Charwill bid was still lower than Pizzagalli's next lowest bid by $272,051.00. 1 At this meeting, the City's project engineer also advised the Council that Charwill had made a second mathematical error which, if corrected, would raise Charwill's lump sum bid another 1Webster-Martin letter to City Council dated August 5, 1985: k ~,7 Charwill Construction, Pizzagalli Construction and S.G. Phillips Constructors have the necessary experience, qualifications, equipment and personnel to successfully complete the work and on this basis we would have no hesitance in recommending award to any of the three bidders. At a meeting attended by personnel from Charwill Construction, the City of South Burlington, Agency of Environmental Conservation and Webster-Martin held on Thursday, August 1, 1985, Bill Lowth explained their bidding methods, showed how the error was made and left their bidding package for further review. Based on the discussion which took place during the meeting and a review of the bid work sheets, there appears to have been an honest mistake in the amount of $269,616.00 in Charwill Construction's submitted bid. Charwill Construction's preferred solution was that the amount of the mistake be added to the original bid price and that they be awarded the work. This would result in an amended bid price (contract amount) of $5,317,949.00. This price $272,051.00 less than the second bid submitted by Pizzagalli Construction Company and $379,828.00 less than the third bid submitted by S. G. Phillips. As requested by Bill. Szymanski, we have contacted Owners or Engineers referenced in Charwill's list of completed or current contracts and asked whether Charwill Construction has claimed an error in their bid price on other projects. None of the people con- a tacted experienced this situation with Charwill Construction. $30,000.00. The project engineer further advised the Council that Charwill failed to remember to bring the paperwork to document this mistake to its meeting with the City's representatives and the State's Agency of Environmental Conservation on August 1, 1985. The project engineer further advised the Council that he would not permit Charwill to add this additional $30,000.00 to his lump sum bid since Charwill failed to support this contention with evidence at the August 1 meeting. And finally the project engineer advised the Council that Charwill agreed that it had failed to support this allegation with evidence and thus it would not raise its lump sum bid by adding this $30,000.00 to its bid. The three City Council members in attendance at the August 5th meeting asked the City's manager to schedule a Council meeting with the City's Attorney at a time which, if possible, would be convenient for the five member Council. A Special Council meeting was held on Friday, August 9th between 5 and 7 PM. to discuss the matter further with the City's Attorney and its project engineer. After this discussion, the Council voted 3-2 to notify all three bidders of its intent to award the contract to Charwill at its amended price. Such notice was forwarded to all three contractors by letters dated August 15, 1985. Pizzagalli and Phillips were informed of their right to protest this proposed City action by August 26th. By letters dated August 15th and 26th, Pizzagalli protested the City's intent to award Charwill the contract at its amended bid price. On September 10, the City's attorney notified all three interested contractors that a hearing would be held on September 30, 1985 to give all parties the right to be heard on the issue including the examination and and cross-examination of witnesses. He asked the parties to submit written legal memoranda in support of their positions. ye 3 The hearing was scheduled for October 7 at the request of one of the A Council members who could not attend the meeting on the 30th. Charwill outlined its factual position in a letter to the City's attorney dated September 19th and submitted a Memorandum of Law in further support of its position on September 25. . , In addition to its letters of August 15 and 26, Pizzagalli further outlined its position in letters (with attachments), dated September 25 and October 3. Prior to and at the October 7th hearing Phillips indicated it supported Pizzagalli's position but would not participate at the hearing. The hearing on Pizzagalli's protest was heard by the Council on October 7 between 7:30 and 115a0.0 PM. Pizzagalli was represented at --7 the hearing by Charles R. Tetglaff of the law firm Latham, Eastman, Schweyer and Tetzlaff of Burlington, Vermont. Charwill was repre- sented by Willard G. Martin and Catherine C. Stern of the law firm of Nighswander, Martin, Kidder & Mitchell, PA of Laconia, New Hampshire. Charwill called three witnesses. Pizzagalli's attorney cross-examined them. Pizzagalli offered no testimony but offered two letters into evidence. As a--est&+d- the above, the Conheil ka7t-g 1. Charwill is a New Hampshire construction company with exper- ience in constructing wastewater treatment facilities. 2. Upon reviewing the trade publication, Charwill learned of * the Cityts plans to upgrade and expand its Airport Parkway Wastewater Treatment Plant and the City's request for bid submissions on the project by July 25, 1985. 3. Charwill sent for the contract documents on July 13, 1985 and received them back from the City's consulting engineer on about July 18, 1985. 4. Shortly after the receipt of the contract documents, Charwill's estimator reviewed the contract specifications, identified the categories of work which had to be bid upon, determined a quantity of units for each category, determined the cost Eor each unit, and performed the required mathematics to secure the cost for each iden- tified category of work, 5. Charwill had a computer print-out report for each of these categories of work. 6. The last line of the last page of each of these computer reports contained the cost estimate for each work category. To: From: Date; Re: South Burlington City Council .& Richard A. Spokes October 17, 1985 -. DRAFT PROTEST FINDINGS I have reviewed the October 15, 1985 draft decision and findings of fact prepared by Frank. I believe the proposed findings thoroughly address the issues. There are a couple of suggestions and observations I would like to make, however, and these follow: - Willard C. Martin, Esq. was the lead attorney for Charwill. Catherine Stern also was present but I am not sure whether Mr. Kain was in attendance. - I would suanest the last sentence on this page read along the -- . . - ---- -\ Based upon the oral testimony submitted at the hearing and the exhibits and other documents which are part of the record (see '' A~nendix A) the Council makes the following j findings of fact. 2. Page8. - No. 9. I think it might be appropriate to include a finding of fact stating that Chawill subcontracted some of its estimate work, that the subcontractor and Charwill's estimator determined it would be appropriate to divide concrete into two classifications and that by doing so Chawill would be able to submit a somewhat lower figure for concrete than it would if only one concrete classification were utilized. - No. 26. 1 would suggest adding the following to this finding: ..., and we are'not convinced by Pizzigalli that Charwill failed to exercise ordinary care in compiling its bid. - No. 29. I would suggest adding'the word "approximately" prior to "8%". I could be wrong, but I don't believe Charwill indicated I .I South Burlington City Council I October 17, 1985 Page 2 at the hearing that there was anything sacred about the 8% figure. - I am not totally cLmfortable with findings 37 through 45. For example, numbers 37 and 42 seem to be redundent. Number 38 refers to "errors", but the preceding finding only refers to the transposition mistake. Although it's not a legal observation, I'm not certain the evidence indicated Charwill would have added 8% for overhead and profit to the total of the two items it left out of its final bid. Perhaps, however, your suggested approach ie responsive to Pizzigalli's position that Charwill did not submit clear and convincing evidence to prove what its intended bid would be. I also would caution that it would be inappropriate to include any findings which are not based upon the evidence you heard at the hearing or the material contained in the documents which form part of the record. - I would recommend adding two or three additional findings along the following lines: $? We find that it would be unconscionable to require Charwill to be bound by its original bid, The evidence indicates that the approximation of 8% for overhead and profit is evenly divided between overhead and profit (i.e., 4% for overhead and 4% for profit). The transposition mistake alone amounts to more than 4% of Charwill's original bid, and thus Charwill would be performing the contract at a loss. It is in the City's best interest to accept Charwill's amended bid of $5,117,919.00 since it is $272,051.00 less than the next highest bid which was submitted by Pizzigalli. Acceptance of the Pizzigalli bid would cost the taxpayers an additional $272,051.00. (3) We do not feel that permitting reformation of Charwill's bid adversely affects the integrity of the bidding process, and find to the contrary. 7. Page 21. - I would suggest that in lieu of the last sentence on this page you substitute the following: South Burlington City Council October 17, 1985 Page 3 The protests of Pizzigalli and Phillips are denied and the contract shall be awarded to Chawill at its amended bid price of $5,317,949.00. 7. Charwill sub-contracted portions of its estimate work. The sub-contractor and Charwill's estimator determined it would be appropriate to divide concrete work into two classifications. By doing so Charwill would be able to submit a somewhat lower cost for concrete work than if only one concrete work classification were utilized. 8. Charwill divided the concrete work i to two sub-ca egories: "Heazconcrete" and "Building concrete", anfk~ L.& #e>SFR&$/ 9.$ Charwill had two separate computer print-out reports for the concrete work. It had a computer print-out report for the "Heavy" concrete category and another computer report for the "Building" concrete category. 10. This was the first time Charwill broke concrete into two subcategories to estimate the cost of concrete for its bid on a project. In other words until this project Charwill had always analyzed a single cost for a single concrete category. 11. Charwill's estimator put the separate computer print-out reports for each work category in a pile. 12. Charwill's estimator identified a three page list of work categories and placed them on an "Add-Deduct Sheet". 13. The items listed on Charwill's "Add-Deduct Sheet" were items the cost for which Charwill's estimator believed could change up until the last minutes before submission of its lump sum bid. 14. On or about July 19, Charwill's estimator listed all categories of identified work from the contract documents on its "Bid Summary Sheet". 15. While Charwill developed two separate computer reports for two subcategories for its concrete work estimate, it listed only "concrete" as a category on its bid summary sheet. It did not list separate work categories for "heavy concrete" and for "building concrete' on its bid summary sheet. 16. The computer report for "heavy concrete" listed a total cost of $618,336.00. 17. The computer report for "building concrete" listed a total cost of $269,616.00. 18. At the bottom of the "building concrete" computer worksheet's report, Charwill's estimator manually listed and totaled these two -concrete subtotals. The total coat for both concrete subcategories was $887,952.00. 19. On or about July 22, Charwill's estimator reviewed the computer summary reports for the individual work categories and copied the cost estimate from the final line of the last page of the reports onto the bid summary sheet in the appropriate column next to the described work category. 20. Charwill's estimator reviewed the subtotal cost at the bottom of the computer report for "heavy concrete" and wrote the $618,336.00 cost subtotal for "heavy concrete" on the bid summary sheet in the "total" column next to the concrete category. 21. Charwill's estimator failed to review the "building concrete" computer report and therefore failed to see the $887,952.00 total Cost figure for both the heavy concrete and building concrete categories. 22. This transposition error by Charwill's estimator caused its lump sum bid to be $269,616.00 less than its intended bid price. 23. Charwill's president reviewed the cost figures on the bid summary sheet prior to its bid submission to the City, but failed to notice his estimator's failure to include $269,616.00 for "building concrete", because without checking the computer reports he had no way of finding the error. d.4 --> 24. After its estimator made his transposition error, put prior to the City opening its bid, no one from Charwill reviewed the computer reports and compared the totals on these reports with the work category subtotals on the bid summary sheet prepared by its estimator. 25. It was not Charwill's "normal practice" to check the final subtotal costs for each category of work against the computer reports for each work category. 26. There is no industry standard requiring such a check be made. 27. Construction bid preparation procedures vary from company to company, we are not convinced by ~izzagalli that Charwill failed to care.in compiling its bid. 28. Until the moments prior to submission of Charwill's bid, cost changes were being made by Charwill for some of the items on its "Add-Deduct Sheet". 29. It is customary for contractors to charge between 6 and 14% for overhead and profit for construction projects involving wastewater treatment facilities. 30. Sometime during the bid process, but prior to the 25th of July, Charwill decided it would charge approximately 8% for "overhead and profit" on the City's construction project. 31. Just prior to submitting its bid on July 25 while Charwill was making last minute mathematical additions to determine its final lump sum bid, it made a mathematical error which caused another $30,000.00 to be mistakenly deleted from its lump sum bid. 32. On July 25, 1985 at 10:OO AM, the following three contractors timely filed the following three lump sum bids: Charwill $5,048,333.00 Pizzagalli 5,590,000.00 Phillips 5,697,777.00 33. Prior to noon on July 25 and soon after opening all three bids, the City's consulting engineer called Charwill by telephone and informed the company it was the lowest bidder. -7 ; A representa- tive of Charwill was also present and informed his company of the bid amounts. -j/;es/~c 34. When Charwill learned of the difference between its bid and 1 Pizzagalli's bid, it checked its bid work sheets for errors. 35. Upon checking for errors, Charwill found its transposition error of $269,616.00 and its mathematical error of $30,000.00. 36. On the afternoon of July 25,1985, Charwill notified the City consulting engineer by telephone and a 2:48 PM mailgram that it had made a mistake in its lump sum bid price which caused its lump sum bid proposal to be $300,000.00 less than what it actually intended. 37. Charwill indicdted that the $300,000.00 mistake was the result of %2;e mathematical error and the error in transposing totals from its bid work sheets 38. On August 1, 1985 Charwill met with the City's manager, pty Consulting engineer an Att rney and the State of Vermont's Agency /r of Environmental Conservation and by explanation and submission of ' s bid work shee s, the consulting engineer* tkUrrJ7 &A$ that e~made an honest mistake in failing to include the $269,616.00 cost for building concrete in its lump sum bid to the City. It appeared to the consulting engineer that an honest mistake due to its failure to properly transfer estimates for the cost of building concrete from its building concrete computer report to its bid summary sheet had been made. 39. Had these errors not been made this additional $299,616.00 would have been included in Charwill's July 25th bid proposal. 40. Thus, based upon clear and convincing evidence had Charwill not made its two errors an additional amount of no more than 8% of $299,616.00 or $23,969.28 would have been added to its final lump sum bid. 41. Based upon clear convincing evidence these corrections to Charwill's July 25th lump sum bid would cause it to be raised to no more than $323,585.28 and thus to a total of $5,371,898.28. 42. After these errors are corrected, Charwill's July 25th bid Would still be lower than the next lowest bid by $218,101.72. 43. Charwill forgot to bring documentation to the August 1 meeting to substantiate its $30,000.00 mathematical error. 44. As a result of this failure Charwill agreed that it waived its right to correct this mistake. 45. Charwill has no prior history on other projects claiming it had made an honest mistake in preparing its bid. 46. Charwill's transposition error was an honest clerical error which it timely called to the City's consulting engineer's attention. 47. The experience of other contractors involved in the competitive bid process has been that low bidders who have discovered honest mistakes in their bids prior to being awarded the bids have been allowed to recind their bid but have not been allowed to increase the amount of their bid b'y including the amount of their mistake. 48. The Associated General Contractors of America of Vermont are of the opinion it is a threat to the competitive bid system to allow low bidders to adjust their bids to include the amounts of honest bid errors and therefore should not be allowed. CONCLUSIONS We find that it would be unconscionable to require Charwill to be bound by itsoriginalbid. The evidence indicates that the approx- imation of 8% for overhead and profit is evenly divided between over- head and profit (i-e., 4% for overhead and 4% for profit). The transposition mistake alone amounts to more than 4% of Charwill's ~. .. -.- we-- original bidp- - wu..LL--L ~55 -eas. It is in the City's best interest to accept Charwill's amended bis of $5,317,949.00 since it is $272,051.00 less than the next highest bid which was submitted by Pizzagalli. Acceptance of Pizzagalli bid would cost the taxpayers an additional $272,051.00. We do not feel that permitting reformation of Charwill's bid adversely affects the integrity of the bidding process, and find to the contrary. &'' To date Vermont Courts have not decided the issues in this case. There are no Vermont statutes or South Burlington ordinances which require the Council to act in a specific manner. Thus, there is no Vermont law which directs the Council to choose any of the following options: (a) award the contract to Charwill at its original July 25, 1985 bid or (b) to award the contract to Charwill at its reformed bid or (c) to allow Charwill to rescind its July 25th bid and award the contract to Pizzagalli, who is the next lowest bidder or (d) to allow Charwill to rescind its July 25th bid and reopen the bidding process. To decide the matter fairly the Council may rely on judicial decisions from other jurisdicitions and attempt. to apply the rules from these decisions with common sense and fairness. Despite the lack of Vermont law it is generally recognized in other jurisdictions that if (1) a low bidding contractor (a) commits a unilat- eral bid preparation mistake, (b) discovers the unilateral bid preparation mistake prior to the awarding authority offering the contract, (c) calls such mistake to the awarding authority's attention in a timely manner prior to the award of the bid; and (2) objective evidence demonstrates the mistake was clerical and not judgemental, the awardingauthorityshould permit equitable relief to such a contractor, provided: (a) enforcement of the mistaken bid would be unconscionable; (b) the mistake related to the substance of the consideration; (c) the mistake occurred regardless of the exercise of due care; and (d) granting relief will not result in substantial prejudice to the City. See Right to Rescind Bid on Public Contract, 2 ALR 4th 991. The evidence is clear and convincing t-hat Charwill (1) made an honest clerical mistake; (2) timely called it to the attention of the City: (3) enforcement of the contract at the July 25th bid price would be uncon- scionable; (4) Charwill exercised reasonable care;2 (5) the amount of the error caused it to be a substantial part of the consideration; and 2~rcon Const. Co. v State, etc., 314 N.W. 2d 303, 306 (S.D. 1982) "We appreciate that any mistake indicates some degree of negligence. Absent gross negligence, however, equitable relief will not be denied." Courts have contractors to demostrate they "acted with ordinary care" when they made their "clerical mistake." To state that one can commit an error without committing negligence is misleading. An "error" is defined as "an act or condition of ignorant or improvident deviation from a code of behavior;" " an act involving an unintential deviation from truth or accuracy;" "an act through ignorance, deficiency, or accident which departs from or fails to achieve what should @be done." Webster's New Collegiate Dictionary, 385 (1979) . Negligence, on the other hand, is thedoing of some act. which a reasonable prudent person would do - essentially, an improvident, unintentional deviation from a code of behavior. Thus, an error is tantamount to negligence. Regardless, the Courts, like South Dakota, have either required gross negligence or have continously find clerican errors not. to be negligent. .see for example Dick Corp, v Associated Elec. co-op., Inc., 475 C. Supp. 15, 20 11979) where the Court concluded that a contractor who failed to properly transpose $1,100,000 from its bid work sheet to its bid summary sheet was both a mistake and an exercise of ordinary care. (6) the City would not be at a disadvantage if itawardedthe contract to Charwill at the amended price. The issue in this case does not appear to be whether Charwill should be permitted relief to rescind his July 25th bid. The issue is whether relief should include reformation. In other words, the facts in this case and the application of the above principles to the facts do not appear to be indispute provided that rescission is the only equitable relief permitted. by the Council. Pizzagalli argues that the facts in the case and public bidding contract law permit the Council to allow Charwill to rescind its bid to enable the *City to award Pizzagalli the contract; but according to Pizragalli it would be "a threat to public confidence in the public bidding process" to allow Charwill to reform its bid to allow a savings to the public of over $200,000.00 We disagree. We belive the contrary to be true. Contrary to the position of the protesting contractors and the cited Associations of General Contractors there is no absolute rule against a public bidding authority awarding a bid to a low bid contractor who has been permitted to reform his bid provided all of the conditions as, outlined above forequitable relief are met. Reformation of a low bidders bid and the award of a public contract at the reformed bid to the low bidder has been judicially recognized as the fairest solution in cases similar to ours. I In Dick Corp. v. Associated Elec. Co- op., Inc. 475 F. Supp 15 (1979) (USDC,W.D. Tenn. - 1979), the Dick Corporation submitted a low bid of $13,600,000.00. The next lowest bidder submitted a bid of $15,674,000.00. After submission of its low bid but before award of the contract, Dick Corporation found that it made a $1,000,000.00 mistake in transposing figures from work sheets to its summary sheets. The actual cost for one of the work categories on its bid work sheets was $1,100,000,00, but Dick Corp, mistakenly placed $100,000,00 on the summary sheet resulting "in the sum of $1,000,000.00 not being included in the total bid price." The Court allowed the Dick Corporation to reform its bid to include the $1,000,000.00 error, but Dick Corporation was still the lowest bidder by $1,074,000.00. The Court outlined the following reasons in holding that fairness was best served by allowing the reformation and awarding the contract to the Dick Corporation at the amended bid: The equitable remedy of reformation is an available and appropriate remedy under the circumstances of this case. The equitable remedy of reformation is an available and appropriate remedy under the circumstances of this case. . . The evidence is clear and convincing both as to t.he existence of the mistake and as to the bid price act- ually intended. Since the bid price,both as uncorrected and corrected, is the lowest received, it is the determination of this Court that equity will best be served by having the bid price submitted by Dick corrected from $13,600,000 to $14,600,000, rather than be permitting the withdrawal or rescission of the award to Dick Corporation. In Fabrizio & Martin, Inc. v. Board of Educators, etc., 523 F.2d 378 (1975), hereafterFabrizio, would have been the lowest bidder on a school construction project even if the school board allowed Fabrizio to amend its bid by increasing it by $171,000. It failed to include $171,000.00 in its bid due to a mathematical error. Even with the $171,000.00 increase, Fabrizio was $222,000.00 lower than the next lowest bid of $2,549,000.00. During the course of the contract, the parties had many disagreements and Fabrizio eventually left the job site alleging,breach of contract. When Fabrizio sued the awarding authority the latter alleged it had no contract with Fabrizio because it violated the competitive bidding process by permitting Fabrizio to reform its bid. The Second Circuit disagreed and provided the following analysis: Obviously it was in the interest of the taxpaying public to retain Fabrizio. The same specifications submitted to all alike were used . . . We do not mean to suggest that the Board, even acting in good faith, could avoid the obligation to solicit an additional round of bids if the changes involved were significant enough to involve a substantial possibility that another bidder might undercut Fabrizio on the amended construction plans. The public is entitled under the statute to have the job done at the lowest cost. The possibility of achieving a bid 1owertfianFabrizio's on the plan as changed, however, does not appear to be substantial, consid- ering the monetary value of the changes in light of the con- tract price and the amount by which other contractors' bids would have exceeded Fabrizio's price on the original plans. The Council's duty in this case is "to have the job done at the lowest cost" Fabrizio & Martin, Inc. v. Board of Education, 523 F2D 378, 383 (2d Cir. 1975) provided it acts reasonably and rationally rather arbitrarily and capriciously. Butler v. Inhabitants of Tremont, 412 A.2D 385, 387 (Me. 1980). It would be arbitrary and capricious to award Charwill the iantract at its amended price if Charwill's amended bid price was not the lowest, or there was substantial likelihood it would not be the lowest on re-bid. Contrary to Pizzagalli's argument the evidence clearly and convincingly demonstrates that Charwill's intended bid would have been $5,371,898.28 and at very least substan- tially below Pizzagalli'S $5,590,000.00 bid. Charwill testified it decided its profit plus overhead on the job would be about 88 and that it made two errors in its bid process totaling $299,616.00. Eight percent of $299,616.00 is $23,969.28. Upon adding the latter two figures the evidence becomes clear and convincing that Charwill's intended bid was $5,371,898.28 or less but at least $218,101.72 less than the next lowest bid. Charwill claimes its $30,000.00 mathematical error is irrelevant iO the Council's analysis because Charwill is not including it in its amended bid. We agree with Charwill that this mathematical error is irrelevant. We disagree with the reason Charwill argues it is irrelevant. It would be relevant if it caused Charwill's amended bid to be higher than Pizzagalli's regardless of whether it was included in its amended bid. Allowing contractors to delete those errors which would cause the amended bid to be higher than the next lowest bidder would be improper. It would be allowing the lowest bidder to tamper with his bid after the bidding had closed. The $30,000.00 error is irrelevant in this case because when it is tabulated with the other bid mistake it does not cause Charwill's bid to get closer than $218,101,72 to Pizzagalli's bid. Since Charwill remains lower than Pizzagalli by this amount with the inclusion of the $300,000.00 error it is appropriate for the City to award the contract to Charwill and because of circumstances at the August 1 meeting to require the deletion of the $30,000.00 from Charwill's amended bid. While Pizzagalli argues there is no clear and convincing evidence that Charwill's intended its bid to be $5,371,898.28 it provided no evidence or logic to substantiate its argument. There will be no harm to the bidding process by awarding Charwill the contract at its amended bid price. The only conceivable harm would be that such a practice would encourage contractors to unreason- ably include numerous hidden bid mistakes to allow it to raise Or lower its bid after the bidding has been closed so to secure an award of the contract. However, we are confident that such a practice would not develop because any history of such bid tampering would be easy to document and dictate against the award of the contract at the amended I bid price. A contractor who practiced in this manner would develop l a well deserved reputation for deceit and be out of business in a fairly short time. In this case the consulting engineer checked the I contractor's reputation and found Charwill engaged in no such prior I practice. Charwill's estima'tor indicated during testimony that he I had never maee a similar mistake and Pizzagalli offered no evidence I to suggest that this was charwill's plan. In fact Pizzagalli agreed I that the evidence demonstrated Charwill's mistakes were honest. We are aware of the importance of maintaining the competitive bidding system which is used in the letting of municipal construction contracts. Consequently we do not mean to imply by (allow recision) that a bidder that has submitted the lowest quotation on a municipal contract may cavalierly disregard the contract's irrevocability clause and seek recision. Allowing such action would be unfair to the other bidders and would result in destruction of the system's integrity. However, we are certain that the courts of this state are capable of preventing such a result by refusing to grant recision where, while the present circumstances, the facts do not justify relieving the lowest bidder from his bid. Wil-Fred's Inc. metropolitan San., Etc., 372 N.E.2d 946, 953 (Ill. App. 19781. Similarly, the Council believes it should reject the notion that it should never under any circumstances allow reformation of the lowest bid and award the contract to the reformed bidder because such action may be inappropriate in other circumstances. Like the Illinois court, the Council believes the better rule is to allow reformation and award the contract at the reformed bid if it is warranted by the circumstances of the case. Finally, Pizzagalli's relies on Vermont contract law which requires the finding of a mutual mistake before a party to a contract is permitted to rescind or reform the contract. The cases cited by Pizzagalli deal with already formed contracts or mistakes or judgement. We believe that if confronted with the facts in this case which deal with reformation of bids prior to entry into a contract, Vermont's courts will follow the majority of other jurisdictions which permit such appropriate relief. ORDER The protests of Pizzagalli and Phillips are denied and the contract shall be awarded to Charwill at its amended bid price of $5,317,949.00. Dated at South Burlington, Vermont, this day of October, 1985 City Council, South Burlington, Vermont APPENDIX A I (I) Charwill's Summary Sheet I (2) Charwill's Add-Deduct Sheets J I (3) Charwill's Notes Pertaining to - buying discounts, and overhead and profit I J I (4) September 17, 1985 letter from The Associated General Contractors of America to Pizzagalli Construction Company I I (5) August 27, 1985 letter from Association of General Contractors J. I of Vermont to City of South Burlington 1 FINDINGS OF FACTS REFERENCES: I A. Stephen R. Kain's letter to Attorney ~ichard Spokes dated J October 11, 1985 B. Latham, Eastman, Schweyer & Tetzlaff's letter to Attorney Richard V Spokes dated October 10, 1985