AZ Supreme Court - Contracts - Bidding - RFP- Invitation to Bid - Prohibition against Gifts This case involves a dispute over the failure to award a contract to a vendor following an RFP. The City did a terrific job defending this action. The case centers on a recreational program in which vendors sought to use the city's four pools to offer competitive swimming. A contractor for over 50 years responded to an RFP issued by the city as did one other bidder. The other bidder offered a substantially more lucrative deal to the city, but based on other factors the city used to evaluate the bid initially failed to win the contract. This second bidder later discovered that an error was made in the evaluation and actually had a higher score. Nevertheless, the City decided not to award the contract to that bidder. Instead, the city cancelled the RFP and all bids and extended the contract of the other bidder. This decision led to a suit in which the Arizona Constitutional prohibition against public entities giving public funds or property away raised its potential bar to the city's actions. The court concluded that there are two prongs involved in analyzing the Gift Clause. One, is the 'gift' for a public purpose; and two, is the gift disadvantageous to the taxpayers? The question here involved the latter question and the court took heed of an amicus brief filed by the AG asserting that the clause is really just a check on the proportionality of the deal that's chosen. In this case, the court concluded that the city had many reasons other than the pure economic to forego the higher bid. However, the court also looked at whether the city violated its procurement code in failing to award the bid at all and rejecting all the bids when it did. Of importance to others, the court distinguishes between invitations to bid and RFP's insofar as the duty to accept a qualified bid that is the best of all bids. While the case involves Arizona law, my days in office remind me of the importance of understanding the procurement code under which you operate and making sure that you check all the right boxes. The case was remanded to make those determinations. Tip of the hat to Steve Kemp for forwarding this important case along. Neptune Swimming Foundation vs. Scottsdale, CV230076PR.pdf (azcourts.gov)<https://www.azcourts.gov/Portals/0/OpinionFiles/Supreme/2024/CV230076PR.pdf> Learning lesson from days gone by: I always found construction contract bidding terribly annoying. The engineers would put together a request for bids (invitation, usually) and we'd often get a bunch. What the engineers didn't include was the county's contract that would be applied and a request that the bidder note terms that were unacceptable or needed amendment. Sometimes they'd use the AIA documents. The result was usually a negotiation after bids were in as to the cost of complying with the contract. Make sure the invitation to bid or RFP include the form contract you intend to use and have the bidders answer with how the terms of that contract are to be applied to the engineering. After accepting bids, all that should be necessary then, is signing the agreement. Charles W. Thompson, Jr. Of Counsel P: (202) 466-5424 x7110 M: (240) 876-6790 D: (202) 742-1016 [facebook icon]<https://www.facebook.com/InternationalMunicipalLawyersAssociation/>[twitter icon]<https://twitter.com/imlalegal>[linkedin icon]<https://www.linkedin.com/company/international-municipal-lawyers-association-inc./> [logo]<https://imla.org/> 51 Monroe St. Suite 404 Rockville, MD, 20850 www.imla.org<http://www.imla.org/> Plan Ahead! Plan Ahead! See IMLA's upcoming events<https://imla.org/events/>, calls and programming. Check out our On-Demand webinar library<https://netforum.avectra.com/eweb/shopping/shopping.aspx?site=imla&webcode=shopping&cart=0&shopsearchCat=Merchandise&productCat=Webinar> with 100+ webinars at your fingertips!