Hanna v. Bd. of Ed. of Wicomico Co.

Delaplaine, J., delivered the opinion of the Court. This suit was brought by Henry H. Hanna, Jr., and Milford W. Twilley, residents and taxpayers of Wicomico County, to enjoin the Board of Education of Wicomico County from constructing four buildings for a high school in the City of Salisbury in accordance with a contract awarded to William F. Sutter, of Nescopeck, Pennsylvania. The Circuit Court held the contract valid and dismissed the bill of complaint. The appeal is from that decree.

On a suit by a taxpayer, a court of equity will not review the exercise of discretion of an administrative agency, if it acts within the scope of its authority, unless its power is fraudulently or corruptly exercised; but the court will restrain an agency from entering into or performing a void or ultra vires contract or from acting fraudulently or so arbitrarily as to constitute a breach of trust. Wiley v. Board of School Com’rs of Allegany County, 51 Md. 401 ; Matthaei v. Housing Authority of Baltimore City, 177 Md. 506 , 9 A. 2d 835 ; Castle Farms Dairy Stores v. Lexington Market Authority, 193 Md. 472 , 67 A. 2d 490 ; Masson v. Reindollar, 193 Md. 683 , 69 A. 2d 482 ; Coddington v. Helbig, 195 Md. 330 , 73 A. 2d 454 . In this case there is no evidence of fraud or collusion. But complainants assert that the contract awarded by the Board of Education to Sutter is void because it was in violation of that section of the Maryland Public Education Law which requires competitive bidding on con ⁵² tracts.

This section, enacted by the Legislature of Maryland in 1933, provides as follows: “Where the cost of any school building, improvement, supplies or equipment of any sort exceeds the sum of one thousand dollars, the Board of Education in each county shall advertise for bids in one or more newspapers published in their respective counties, publication of such advertisement to appear at least one week prior to the date on which bids are to be filed, and the contract for any such school building, improvement, supplies or other equipment shall be awarded to the lowest responsible bidder, but the Board of Education in the respective counties shall have the right to reject any and all bids and to re-advertise for other bids, and any contract entered into or purchase made in violation of the provisions of this section shall be null and void; provided, however, that the provisions of this section shall not apply to contracts for the purchase of books and/or other materials of instruction, * * * and provided further that nothing in this section shall apply to emergency repairs during the period of the regular school year.” Laws 1933, ch. 151, Code 1939, art. 77, sec. 62. In 1949 the Legislature at its regular session authorized the County Commissioners of Wicomico County to issue bonds in the amount of $1,200,000 for the construction of a high school for white children near the eastern limits of Salisbury and a high school for colored children near its northern limits. Laws 1949, ch. 293. At tiie same session the Legislature authorized the creation of a State debt in the amount of $20,000,000, from which it was agreed that approximately $370,000 was available as a grant from the State toward the cost of construction of the two high schools.

Laws 1949, ch. 502. At the extra session in December, 1949, the Legislature authorized the creation of a State debt of $50,000,000 to supplement the financing of the construction of public school buildings and facilities in the State. Laws 1949, Extra Sess., ch. 1. In 1951 the Legislature authorized the Wicomico County Commissioners to issue bonds in the ⁵³ amount of $700,000 to aid in the construction of the two schools.

Laws 1951, ch. 224. Pursuant to these Acts, the Board of Education in 1951 advertised for sealed bids for the construction of five buildings for the high school for white children. The five buildings were intended for classrooms, science, cafeteria, library, and power plant. The Board opened the bids on July 10.

The lowest bid was $1,984,145, submitted by Sutter. The next lowest was $2,033,233, submitted by J. Roland Dashiell & Sons, of Salisbury. On July 13 the Board awarded the contract to Sutter, subject to approval of the County Commissioners within thirty days. The Board, its architects and Sutter executed the contract, which was the Standard Form of Agreement between Contractor and Owner for Construction of Buildings, issued by the American Institute of Architects.

The contract was approved by Dr. Thomas G. Pullen, Jr., State Superintendent of Schools. But the County Commissioners, believing that $1,984,145 was more than the County could afford to pay for construction of this school, informed the Board of Education that they would not appropriate that amount. Thereupon the Board of Education conferred with Sutter and the architects, and it was proposed at the conference to eliminate the library building by putting the libary in the cafeteria building. By so doing, Sutter consented to reduce his bid to the extent of $210,840.

By making other changes in the specifications, he consented to reduce his bid further to the extent of $94,817. On August 7 the Board, without any readvertisement for bids, awarded Sutter the contract to construct the four buildings for $1,678,488. The statute directing each County Board of Education to award contracts to the lowest responsible bidder is mandatory. It requires the Board to advertise for bids whenever the cost of any building, improvement, supplies or equipment, except books and materials of instruction, exceeds $1,000, and declares that any contract made in violation of this provision shall be null and ⁵⁴ void.

The object of this statute is to obtain unrestricted competitive bidding for contracts for the construction and repair of public school buildings, and thereby to safeguard public funds by preventing favoritism, collusion and extravagance. Packard v. Hayes, 94 Md. 233, 249 , 51 A. 32 . In order to attain that object, it is indispensable that all bidders be put on terms of equality and be permitted to bid on substantially the same proposition. Hence, the plans and specifications of a contract should be available to all persons.who desire to bid thereon to enable them to compete on a uniform basis and without favoritism.

Folkers v. Butzer, 294 Ill. App. 1 , 13 N. E. 2d 624 ; Best v. City of Omaha, 138 Neb. 325 , 293 N. W. 116 . Of course, the statutory requirement should not be construed so strictly as to divest a Board of Education of the right to make minor changes in specifications after a contract has been awarded. If the Board had no latitude whatever in authorizing changes in materials when necessary or desirable, the public interest might be jeopardized in the event of emergencies or unforeseen obstacles.

This was pointed out by the Supreme Court of Oregon in the case of Pyle v. Kernan, 148 Or. 666 , 36 P. 2d 580, 584 . There the State Highway Commission had called for bids on a contract to resurface a road and to furnish a certain amount of broken stone for the purpose. The specifications called for Tupper rock; but when the plaintiffs, who were the successful bidders, began the work, they found