Louisiana Public Bid Law requires the person signing the bid to provide written evidence of their authority to do so at the time of the bidding. The law deems signatories for a limited liability company (“LLC”) to have authority to bid for the LLC if they are members of the entity, and the most recent company filings with the Secretary of State list them as such.
In 2015, the Fourth Circuit court of Louisiana rendered a decision in the case of Dynamic Constructors, LLC v. Plaquemines Parish Government. The main issue on appeal was whether Jeffrey Hymel, a member of Dynamic LLC who was listed in the company filings should have also provided written evidence of his authority at the opening of the bid.
Before Plaquemines Parish Government (PPG) awarded the contract, a competing bidder challenged Dynamic’s eligibility to secure the bid since Hymel failed to provide written evidence of his authority to bind Dynamic. The Government accepted the bid protest and concluded that Dynamic’s bid was non-responsive. Dynamic filed for a preliminary injunction to prevent PPG from awarding the bid to another company and a writ of mandamus to secure the bid for themselves. The trial court granted the injunction holding that written evidence was not necessary since Hymel was a member of the LLC on file with the Secretary of State.
The appeals court disagreed and reversed the trial court’s judgment. It based the decision on the 2014 amendments to the Louisiana Public Bid Law, which reworded the statute, La R.S. 38:2212, requiring some form of written evidence or documentation at the opening of the bid. This evidence could simply have been a copy of the company’s current business record on file with the State, but it should have been provided to establish Hymel’s authority to bid on behalf of Dynamic. The court held that in this case the bidder for Dynamic should have provided written evidence of his authority to secure the project for the bid he made.
Even the smallest construction projects can be complex and risky. Public contracting, especially state contracting, requires careful planning and a keen understanding of the process involved. As demonstrated in the Dynamic case, even experienced companies can run into trouble when it might seem they are in compliance.
When you or your company is faced with a construction-related legal issue, you need the assistance of an experienced attorney. Smiley Law Group, has years of experience assisting and advising construction professionals involving public bids. Call us today for a free consultation.