2. A County has the authority to make and enforce any bid
requirement or specification that conforms to sound business
practice. The statutes do not contemplate specific requirements
actually included by a county in a bid package. Tunny v City
of Hastings, 141 N.W. 168 (Minn. 1913); O.A.G. 707a-3, February
24, 1964. To illustrate: a municipality drafted specifications
for a piece of equipment that required bidders to include guaranteed
maximum repair costs for a specific period of time after purchase, and
a guaranteed minimum repurchase price. A bidder challenged the
validity of these requirements.
The court found:
- that by fixing a salvage value (repurchase price) the
purchase would assure the taxpayers the best bargain for the lowest
overall price; (see O.A.G. 707a-7, January 9, 1968.
- that it is legitimate to pinpoint repair costs of the
equipment, (see O.A.G. 707a-7, supra).
- that neither of these requirements impede free competition.
- NOTE: In order to meet the argument that Minn. Stat. §
373.01 requires counties to sell surplus property at auction, the
repurchase guarantee can be structured to provide that it is a
guarantee by the bidder that it will submit a bid in at least that
amount upon an offering of the equipment as surplus.
- The specifications might also reasonably include estimates
by the bidder of yearly maintenance costs and estimates of product
availability of use to the county - that is, estimates of down time
and estimates of the time for the Supplier to get a repair person on
site to make repairs.
3. Bidding Particular Brands
a. Specifications must be drafted to permit full and free
competition. Hendricks v City of Minneapolis, 290 N.W. 428
(Minn. 1940).
b. Subject to certain rules, a county may specify particular brand
name items if such is necessary and desirable. O.A.G. 707a-12, May 23,
1962.
c. The primary condition precedent to bidding brand name items
appears to be their availability to other suppliers who can submit
bids on their own behalf, building in whatever profit margin
they want. Hendricks, supra; Hodgeman v. City of San Diego,
53 Cal. App. 2d 610 (1942); Gamewell Co. v. City of Phoenix,
216 F. 2d 928 (9th Cir. 1954).
