Court Overrules Contractor Suspension for Past Performance

By Paul Emanuelli

In its July 1973 decision in White Construction Co. Inc. v. Division of Admin., the Florida Supreme Court overruled the State of Florida’s suspension of a bidder. The case dealt with a Request for Bids issued by the State for the construction of several road projects. State officials suspended a contractor and refused to accept that contractor’s bid due to concerns over alleged environmental damage caused by the contractor in the performance of prior contracts. The contractor, White Construction, challenged the ban. The court sided with the contractor after finding that State officials had stepped outside their statutory authority when they exercised contractor suspension powers that could only be exercised directly by the Secretary of Transportation:

…it appears from the record before us that respondent failed to properly follow the procedure set out in its rules and regulations for suspension for good cause. Chapter 14-8.01, 14.C, specifically requires that the Secretary of Transportation may suspend for good cause. From the record before us, we can determine that the Secretary of Transportation did not suspend White, but rather the letter of April 12, 1973, purporting to suspend White was written by J.W. Brown, Director of Road Operations, and was signed for Brown by P.J. White, State Construction Engineer. It does not appear from the letter that it constituted action by the Secretary of Transportation. The rules and regulations specifically require action by the Secretary himself to exercise such drastic authority and responsibility in such an important matter as the suspension of a bidder for cause.

As this case illustrates, when public bodies seek to suspend contractors due to past performance issues, they should ensure that they properly follow applicable statutory procedures and stay within their delegated statutory powers. Failing to do so can undermine the defensibility of any contractor suspension decisions.

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