HEMPHILL CONSTRUCTION COMPANY, INC.
CITY OF CLARKSDALE, MISSISSIPPI
OF JUDGMENT: 11/28/2016
COAHOMA COUNTY CIRCUIT COURT HON. LINDA F. COLEMAN JUDGE
COURT ATTORNEYS: CHRISTOPHER SOLOP CURTIS D. BOSCHERT LYNN
PATTON THOMPSON KIMBERLY TAFT PURDIE
ATTORNEYS FOR APPELLANT: CHRISTOPHER SOLOP, LYNN PATTON
ATTORNEY FOR APPELLEE: CURTIS D. BOSCHERT
RANDOLPH, PRESIDING JUSTICE
The City of Clarksdale ("City") solicited sealed
bids for a public construction project. The City received
sealed bids from Landmark Construction Company, GCI
("Landmark"), and Hemphill Construction Company,
Inc. ("Hemphill"). When unsealed, both bids
exceeded the project's allocated funds by more than ten
percent. Rather than rebidding the contract, the City
conditionally awarded a contract to Landmark, dependent upon
the City's obtaining additional public funds to match
Landmark's bid. The City's actions were not provided
for in the public bidding laws. Accordingly, we reverse the
judgment of the Coahoma County Circuit Court and remand the
case to the trial court.
AND PROCEDURAL HISTORY
In February 2015, the City issued an Advertisement for Bids
for the 2014 Community Development Block Grant
("CDBG") Wastewater Improvements - Contract #1
(Equipment and Controls). The Advertisement called for the
City to receive written, sealed bids at the Clarksdale Public
Utilities Commission ("CPU") up to and until 1:30
p.m. on May 27, 2015, at which time any bids would be opened
publicly and would be considered by the City at the next
meeting of the Board of Mayor and Commissioners of the City.
The sealed bids were opened on May 27, 2015, and the
Certified Tabulation of Bids revealed Landmark's lump-sum
bid was $924, 527 and Hemphill's lump-sum bid was $953,
Twelve days later, the City held a meeting. The June 8, 2015,
minutes of the City reflect that Bill Coker, the City's
grant consultant on the project, presented the Certified
Tabulation of Bids, which showed that Landmark's bid,
combined with the lowest bid on Contract 2: Solid
Waste-Denali Water Solutions, LLC- exceeded the project
budget by more than ten percent, specifically, $216,
Coker advised the City that the Mississippi Development
Authority would consider increasing CDBG funds by $75, 000,
and that the Clarksdale Public Utilities Commission
("CPU") would increase its matching funds by an
additional $141, 182. Coker recommended that the City accept
the lowest bids for each Contract, contingent upon the
funding increase. The City then accepted Coker's
recommendation and decided to award Contract # 1
conditionally to Landmark, dependent upon the aforementioned
increased funding. The minutes of the City reflect that there
had been no consideration of the City's statutory
authority to accept either bid.
On June 19, Hemphill protested the award to Landmark. The
City responded to Hemphill on July 9, stating that the City
disputed Hemphill's claims, and advised that the contract
had been awarded to Landmark.
On July 13, Coker informed the City that the additional CDBG
and CPU funding had been acquired. The City then granted the
Mayor permission to execute the Mississippi Development
Authority Modification on Wastewater Treatment Plant
Contract, which modified the budget by increasing it to $216,
182. That same day, the City authorized the Mayor to execute
a Notice of Award to Landmark.
Hemphill filed a Bill of Exceptions in the Circuit Court of
Coahoma County pursuant to Mississippi Code Section 11-51-75
(Rev. 2012), appealing the City's July 13 decision to
award the contract to Landmark. Hemphill argued, inter
alia,  that the City had violated Mississippi
Code Section 31-7-13 by awarding the contract to Landmark,
because the bids submitted exceeded the allocated funds by
more than ten percent. Mississippi Code Section
31-7-13(d)(iv) provides that: if the lowest and best bid is
not more than ten percent (10%) above the amount of funds
allocated for a public construction or renovation
project, then the agency or governing authority shall be
permitted to negotiate with the lowest bidder in
order to enter into a contract for an amount not to
exceed the funds allocated. Miss. Code Ann. §
31-7-13(d)(iv) (Supp. 2017) (emphasis added). Hemphill argued
that the City had violated this statute by securing
additional funding after the bids were opened because the
bids were more than ten percent of the total budget, and,
therefore, the City could not negotiate or enter into a
contract with Landmark. Hemphill also argued that, even
though there is no precise caselaw addressing Section
31-7-13, there are Attorney General public-bidding opinions
advising municipalities that they are prohibited from
securing additional funds after bids have been opened to
negotiate or enter into a contract with a bidder whose bid
exceeds the project funds by more than ten percent.
See Op. Miss. Att'y Gen. 2012-00195 (April 20,
2012); Op. Miss. Att'y Gen. 98-0764 (Dec. 23, 1998).
Finally, Hemphill argued that the City's decision to
award the contract to Landmark was arbitrary and capricious.
After a hearing, the circuit court held that the City's
award of the project to Landmark did not violate state law,
[t]he purpose of [Mississippi Code Section] 31-7-13(d)(iv) is
to allow a governmental entity to negotiate with the lowest
bidder to bring the bid within the amount of funds allocated.
In this case Clarksdale did not negotiate with Landmark.
Clarksdale obtained additional funds from the MDA and the
CPUC to meet the lowest bid. The bid laws do not prohibit
this, accordingly, Clarksdale's actions were not
. . .
From a policy perspective, the State Legislature has left the
decision on when to rebid construction projects with the
local governing authorities. [Mississippi Code Section]
31-7-13 does not prohibit Clarksdale from obtaining or
allocating additional funds to meet the lowest bid and since
it does not, Clarksdale's award of the Contract to
Landmark was not improper.
It is from this Order that Hemphill appeals. Hemphill
requests that this Court reverse ...