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03/17/95 ERICSSON GE MOBILE COMMUNICATIONS v.

March 17, 1995

ERICSSON GE MOBILE COMMUNICATIONS, INC., ETC.
v.
MOTOROLA COMMUNICATIONS & ELECTRONICS, INC., ET AL. CERTIFIED QUESTIONS FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA



APPEALED FROM: Certified Question for The United States District Court for the Northern District of Alabama. William M. Acker, TRIAL JUDGE.

Released for Publication June 27, 1995.

Almon

The opinion of the court was delivered by: Almon

ALMON, JUSTICE.

The United States District Court for the Northern District of Alabama, the Honorable William M. Acker, Jr., presiding, has certified questions in a dispute under Alabama's competitive bid law in which a dissatisfied bidder, Ericsson GE Mobile Communications, Inc. ("EGE"), has challenged the City of Birmingham's contract with Motorola Communications & Electronics, Inc. ("Motorola"), for a new public safety radio communications system. This Court has agreed to answer questions concerning the appropriateness of requesting alternative bids, whether this contract qualifies as a "sole source" contract (and therefore is exempt from the bid law), and the relevance of the City's outside consultant's close cooperation with Motorola.

Because the certified question procedure does not place this Court in a position of making factual findings, we set forth the following primary facts, as provided by the district court and the materials submitted by the parties, merely to provide a context within which our answers may be understood. The City of Birmingham decided to replace its old public safety communications system, and on May 27, 1993, issued a request for bids for a "Digital 800 MHZ Trunked Simulcast Radio System." The request for bids included four alternatives: *fn1

"Alternative #1 - A system compatible with APCO [ *fn2 ] project 25 interim standards.

"Alternative #2 - A system compatible with APCO 16 standards.

"Alternative #3 - A system compatible with present APCO 16 standards with a capability to migrate to APCO 25 standards.

"Alternative #4 - A Mobile Data Terminal System.

"A vendor may bid on any or all of these Alternatives."

The APCO project 25 standards are entitled "interim" because the project 25 is an evolving system still in the development stages, with certain targets and expectations but with no final written specifications or guarantees of future performance in certain of its aspects. APCO, however, has approved the APCO 16 standards.

The two bids received were opened August 2, 1993. Motorola bid for the APCO 25 Interim Standard System under Alternative #1, and EGE bid for the APCO 16 Standard System under Alternative #2. The mayor and the city council were the City's decision-makers on the project. A special committee of four City employees recommended that the City accept EGE's bid as the lowest responsible bid. Floyd Dyar, the City's purchasing agent, was among those who recommended that the APCO 16 system offered by EGE be accepted. The mayor, however, decided that the City's needs would be better served by the APCO 25 Interim Standard System and recommended it to the City Council.

After obtaining advice from Alton Hambric, the City's outside consultant on the project, and upon instruction from the mayor, the City rejected both bids on October 27, 1993. The City thereafter entered into negotiations with Motorola and entered into a contract with Motorola in March 1994. The contract states on its face that it is for an APCO 25 Radio System.

EGE filed a complaint in the Federal district court, seeking to enjoin execution of the contract as violating the Alabama competitive bid law, Ala. Code 1975, § 41-16-50 et seq. The bid law provides:

"All expenditure of funds of whatever nature for ... the purchase of ... equipment ... involving seven thousand five hundred dollars ($7,500) or more, ... made by or on behalf of ... the governing bodies of the municipalities of the state ..., except as hereinafter provided, shall be made under contractual agreement entered into by free and open competitive bidding, on sealed bids, to the lowest responsible bidder."

§ 41-16-50(a). The statute applies to municipalities and to various other political subdivisions and agencies of the state, collectively referred to hereinafter as the "purchasing authority." "Any bona fide unsuccessful bidder on a particular contract shall be empowered to bring a civil action in the appropriate court to enjoin execution of any contract entered into in violation of the provisions of this article." § 41-16-61. "Contracts entered into in violation of this article shall be void...." § 41-16-51(d). EGE ...


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