{ "id": 8525139, "name": "PROFESSIONAL FOOD SERVICES MANAGEMENT, INC. v. NORTH CAROLINA DEPARTMENT OF ADMINISTRATION, and the NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS", "name_abbreviation": "Professional Food Services Management, Inc. v. North Carolina Department of Administration", "decision_date": "1993-03-02", "docket_number": "No. 9210SC70", "first_page": "265", "last_page": "270", "citations": [ { "type": "official", "cite": "109 N.C. App. 265" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "27 ALR2d 917", "category": "reporters:specialty", "reporter": "A.L.R. 2d", "opinion_index": -1 }, { "cite": "65 A.L.R. 853", "category": "reporters:specialty", "reporter": "A.L.R.", "year": 1930, "opinion_index": 0 }, { "cite": "231 S.E.2d 882", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "888" } ], "opinion_index": 0 }, { "cite": "292 N.C. 70", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567415 ], "year": 1977, "pin_cites": [ { "page": "80" } ], "opinion_index": 0, "case_paths": [ "/nc/292/0070-01" ] }, { "cite": "362 S.E.2d 294", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "296" } ], "opinion_index": 0 }, { "cite": "87 N.C. App. 637", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358977 ], "year": 1987, "pin_cites": [ { "page": "639" } ], "opinion_index": 0, "case_paths": [ "/nc-app/87/0637-01" ] }, { "cite": "400 S.E.2d 66", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "68" } ], "opinion_index": 0 }, { "cite": "101 N.C. App. 475", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527900 ], "year": 1991, "pin_cites": [ { "page": "478-79" } ], "opinion_index": 0, "case_paths": [ "/nc-app/101/0475-01" ] } ], "analysis": { "cardinality": 589, "char_count": 12578, "ocr_confidence": 0.78, "pagerank": { "raw": 1.7828076327102065e-07, "percentile": 0.7137273254154972 }, "sha256": "1bd0077501c5d5dc99cb20da4b59c71ff8d35726e948940a5a4b1f801db98c09", "simhash": "1:da49e19f5c310c4d", "word_count": 2022 }, "last_updated": "2023-07-14T20:43:31.464788+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges JOHNSON and MARTIN concur." ], "parties": [ "PROFESSIONAL FOOD SERVICES MANAGEMENT, INC. v. NORTH CAROLINA DEPARTMENT OF ADMINISTRATION, and the NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS" ], "opinions": [ { "text": "GREENE, Judge.\nPetitioner appeals from an order of the trial court affirming a final agency decision of the Secretary of Administration rejecting petitioner\u2019s bid.\nThis case involves the award of the food services contract at the North Carolina School of Science and Mathematics (the School) in Durham, North Carolina. In March, 1990, a request for proposals (RFP) was issued by the School and the Division of Purchase and Contract of the Department of Administration (the Department) seeking bids for the new food services contract at the School. In addition to proposals for cafeteria items, the RFP sought prices from contractors for items to be sold in the snack bar, which is operated by the food services provider on a cash basis with a fifteen percent commission on gross sales accruing to the School. In relevant part, the RFP sought prices for the following snack bar items: tossed salad and iced tea.\nIncluded in the bids submitted was one from petitioner Professional Food Services Management, Inc. (Professional), the incumbent food services provider at the School. Professional in its bid listed prices for tossed salad and iced tea in the manner in which it had been selling these items at the School\u2019s snack bar for several years: \u201ctossed salad \u2014$.10 per ounce\u201d; \u201ciced tea \u2014 $.50, all you can drink.\u201d Professional\u2019s bid for the basic twenty-one meal cafeteria plan and the alternates requested by the School was the lowest among the bidders ($3.62 per student), and the School\u2019s chief fiscal officer and business manager recommended to the Department that the new food services contract be awarded to Professional. However, the Department concluded that Professional\u2019s bid was not responsive to the RFP based on the price quotations given by Professional for tossed salad and iced tea. According to the Department, the RFP required that separate prices be furnished for small, medium, and large sizes of tea and that a lump sum price be given for a tossed salad. The Department refused to consider Professional\u2019s bid and directed that the contract be awarded to the lowest bidder among those considered, TWM Services, Inc. (TWM).\nAfter the award to TWM, Professional met with Department officials to protest the Department\u2019s decision; however, Professional\u2019s attempt to persuade the Department to change its mind regarding the award was unsuccessful. On 31 July 1990, Professional, pursuant to N.C.G.S. \u00a7 150B-23, filed a petition for a contested case in the Office of Administrative Hearings in Wake County. In response, the School and the Department filed a motion to dismiss the petition, which was denied. A notice of hearing issued and the contested case proceeded to trial on 17 October 1990 in the Office of Administrative Hearings. After receiving testimony from five witnesses and other documentary evidence, the presiding Administrative Law Judge (ALJ) ruled in favor of Professional, concluding that Professional\u2019s bid was responsive to the RFP. The ALJ issued a recommended decision that Professional be reinstated as the food services provider at the School.\nThe matter was thereafter referred to the Department for final agency action in accordance with N.C.G.S. \u00a7 150B-36. On 1 February 1991, a final agency decision was rendered by the Secretary of Administration which rejected the ALJ\u2019s recommended decision and affirmed the Department\u2019s award of the contract to TWM. The Secretary of Administration in his final agency decision found that the RFP \u201crequired specific price information to be provided for various sizes of ice tea sold at the snack bar,\u201d and that Professional had provided no information on medium and large servings. In addition, the Secretary found that Professional \u201cprovided insufficient and inadequate information in its bid for the price of a tossed salad.\u201d The Secretary concluded based on these findings that the bid submitted by Professional was nonresponsive, and upheld the award of the contract to TWM. On 11 March 1991, Professional sought review of the final agency decision pursuant to N.C.G.S. \u00a7 150B-43 in Wake County Superior Court by filing a petition for judicial review of the final agency decision. Professional argued that the final agency decision was not supported by substantial evidence, was affected by error of law, and was arbitrary and capricious. The court, after hearing, affirmed the final agency decision in an order signed 22 November 1991. Professional appeals.\nThe issue presented is whether the Secretary of Administration\u2019s decision that Professional\u2019s bid was nonresponsive to the RFP is supported by substantial evidence in view of the entire record as submitted.\nThe standard of review for an appellate court in reviewing an order of the superior court affirming or reversing a decision of an administrative agency is the same as that used by the superior court. Jarrett v. North Carolina Dep\u2019t of Cultural Resources, 101 N.C. App. 475, 478-79, 400 S.E.2d 66, 68 (1991). The appellate court may reverse or modify the final agency decision if the substantial rights of the petitioner have been prejudiced because the agency\u2019s findings, inferences, conclusions, or decisions are:\n(1) In violation of constitutional provisions;\n(2) In excess of the statutory authority or jurisdiction of the agency;\n(3) Made upon unlawful procedure;\n(4) Affected by other error of law;\n(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or\n(6) Arbitrary or capricious.\nN.C.G.S. \u00a7 150B-51(b) (1991). Our review is further limited to those grounds for reversal or modification argued by the petitioner before the superior court, and properly assigned as error on appeal to this Court. Watson v. North Carolina Real Estate Comm\u2019n, 87 N.C. App. 637, 639, 362 S.E.2d 294, 296 (1987). Professional argues that the final agency decision rejecting Professional\u2019s bid as being nonresponsive to the RFP is not supported by substantial evidence in view of the record as a whole. The substantial evidence required to justify a final agency decision is \u201csuch relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\u201d State ex rel. Comm\u2019r of Ins. v. North Carolina Fire Ins. Rating Bureau, 292 N.C. 70, 80, 231 S.E.2d 882, 888 (1977). Professional also argues that the decision is affected by error of law and is arbitrary and capricious. Because we agree with the first basis asserted by Professional for reversal of the final agency decision, we do not address Professional\u2019s remaining arguments.\nState contracts for the purchase of supplies \u201cshall be based on competitive bids and acceptance made of the lowest and best bid(s) most advantageous to the State as determined upon consideration of [certain criteria].\u201d N.C.G.S. \u00a7 143-52 (1990); see also 1 NCAC 5D .0300 to .0500 (July 1988) (delineating competitive bidding procedure for procurement by State of service contracts). It is the duty of the Secretary of Administration under the competitive bidding procedure to solicit bids from qualified sources of supply. N.C.G.S. \u00a7 143-52. In the context of public contract bidding, a \u201cresponsive\u201d bid is one which conforms substantially with the terms of the request for bids. 64 Am. Jur. 2d Public Works and Contracts \u00a7 58 (1972); see also N.C.G.S. \u00a7 143-52 (\u201csubstantial conformity with the specifications and other conditions set forth in [State\u2019s] request for bids\u201d is among the criteria considered in determining acceptance of bid). Whether a bid conforms substantially with the request for bids or whether, instead, it contains a material variance depends on \u201cwhether the bidder\u2019s proposal gives him an advantage or benefit which is not enjoyed by other bidders.\u201d Am. Jur. 2d at \u00a7 59. However, where a contract can be let only to the lowest responsible bidder after advertising for bids, \u201cthe specifications must be so framed as to secure fair competition upon equal terms to all bidders.\u201d Annotation, Bidder\u2019s Variation From Specifications On Bid For Public Work, 65 A.L.R. 853 (1930).\nIn the instant case, paragraph 2.7 of the RFP, dealing with snack bar pricing, states that\n[o]fferors shall provide a price list for snack bar items listed on page 31. Menu prices and operating hours of the snack bar will be established and changed by mutual agreement of the contractor and the school.\nThe snack bar items pricing list appears in the RFP in relevant part as follows:\nThe contractor agrees to provide the snack bar items listed below at the price indicated:\nTossed salad _\nTea Small _\nMedium _\nLarge _\nBased on the manner in which the RFP requested prices for tossed salad and iced tea, and, for that matter, many of the snack bar items (e.g., \u201csoup_\u201d \u201cmilk_,\u201d and \u201cfrench fries _\u201d), the Secretary of Administration\u2019s determination that Professional\u2019s bid was nonresponsive is not supported by substantial evidence. The RFP simply asked bidders to provide tossed salad and tea \u201cat the prices indicated,\u201d without specifying or providing any guidance as to the desired weight of these items. Thus, while two bidders might each have listed the price of a tossed salad as $1.50, one bidder might be planning to provide a ten-ounce salad for that price and the other a twenty-ounce salad. Viewed from such a perspective, it appears to us that Professional\u2019s tossed salad pricing was actually more responsive than that of TWM, which quoted the price for a tossed salad as $1.25 with no size or weight indicated. In fact, the Secretary of Administration at the hearing before the ALJ admitted, in the face of his conclusion that Professional\u2019s tossed salad price made its bid nonresponsive, that nothing in the RFP precluded a potential contractor from pricing salad by the ounce. A similar analysis applies to Professional\u2019s pricing of iced tea at $.50, all you can drink. TWM quoted iced tea at the following prices: \u201csmall \u2014 $.50, medium \u2014$.60, large \u2014$.70.\u201d However, it is impossible without speculation to determine what constitutes a \u201csmall,\u201d a \u201cmedium,\u201d or a \u201clarge.\u201d One bidder\u2019s \u201csmall\u201d tea might contain eight ounces while another bidder\u2019s may contain ten ounces. Professional offered to provide iced tea in the snack bar at one price, regardless of the amount consumed by the student.\nThus, in our view all of the evidence establishes that Professional\u2019s bid on the snack bar items at issue substantially conformed to the RFP, as it was written. Accordingly, the Secretary of Administration\u2019s final decision characterizing Professional\u2019s bid as nonresponsive must be reversed because it has prejudiced the substantial rights of Professional in that it is unsupported by substantial evidence. This case is remanded with the mandate that Professional\u2019s bid be deemed responsive to the RFP and that it therefore be considered to determine whether it meets the requirement of being the lowest and best bid most advantageous to the State.\nReversed and remanded.\nJudges JOHNSON and MARTIN concur.", "type": "majority", "author": "GREENE, Judge." } ], "attorneys": [ "Patton, Boggs & Blow, by Robert G. Mclver, for petitioner-appellant.", "Attorney General Lacy H. Thornburg, by Assistant Attorney General D. David Steinbock, for respondent-appellee." ], "corrections": "", "head_matter": "PROFESSIONAL FOOD SERVICES MANAGEMENT, INC. v. NORTH CAROLINA DEPARTMENT OF ADMINISTRATION, and the NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS\nNo. 9210SC70\n(Filed 2 March 1993)\nPublic Works and Contracts \u00a7 27 (NCI4th)\u2014 bidding on public contracts \u2014whether bid is nonresponsive\nThe Secretary of Administration\u2019s final decision characterizing a bid for food services at the North Carolina School of Science and Mathematics as nonresponsive was reversed where the Request for Proposals (RFP) required separate prices for small, medium, and large sizes of tea and a lump sum price for tossed salad, and petitioner\u2019s bid was for tossed salad at $.10 per ounce and iced tea at $.50, \u201call you can drink.\u201d The RFP did not specify or provide any guidance as to the desired weight or size of these items, so that two bidders might list the same price but provide different sizes. Petitioner\u2019s bid was actually more responsive than the winning bid, which quoted the prices for tossed salad and for small, medium and large tea with no size or weight indicated. N.C.G.S. \u00a7 143-52.\nAm Jur 2d, Public Works and Contracts \u00a7\u00a7 58, 59.\nDifferences in character or quality of materials, articles, or work as affecting acceptance of bid for public contracts. 27 ALR2d 917.\nAppeal by petitioner from order entered 22 November 1991 in Wake County Superior Court by Judge Knox V. Jenkins. Heard in the Court of Appeals 5 January 1993.\nPatton, Boggs & Blow, by Robert G. Mclver, for petitioner-appellant.\nAttorney General Lacy H. Thornburg, by Assistant Attorney General D. David Steinbock, for respondent-appellee." }, "file_name": "0265-01", "first_page_order": 293, "last_page_order": 298 }