Wil-Fred’s, Inc. v. Metropolitan Sanitary District

Metropolitan Sanitary District of Greater Chicago (the District) (defendant) published an advertisement inviting bids on rehabilitation work at one of its water plants. The job required the removal of clay pipe and their replacement with plastic pipe and filter material. The specifications declared that all pipe could withstand standard construction equipment. Wil-Fred’s, Inc. (Wil-Fred) (plaintiff), after carefully preparing and reviewing its bid, submitted the lowest bid, accompanied by a $100,000 bid deposit. Its bid was $235,000 lower than the next lowest bidder. Wil-Fred’s bid was based on a subcontractor bid by Ciaglo Excavating Company (Ciaglo). Ciaglo had been in business for five years, its president had eight years experience in excavating, Wil-Fred had hired Ciaglo on 12 previous occasions, Ciaglo had always performed in a highly-skilled manner, and Ciaglo inspected the jobsite and carefully examined specifications. After discovering that it was the lowest bidder, Wil-Fred asked Ciaglo’s president to review its bid. Ciaglo reported that it had made a mistake and would need to withdraw its bid. Ciaglo determined that it would cost $150,000 more than anticipated to complete the project. Ciaglo’s mistake was due to its belief that it could drive standard construction equipment over the plastic pipe in order to spread filter material. Other contractors and the manufacturer of the pipe informed Ciaglo that it could not. Wil-Fred reviewed Ciaglo’s price estimate sheet and checked with other contractors to confirm Ciaglo’s mistake. Two days after submitting its bid and before the District had awarded the rehabilitation contract, Wil-Fred attempted to withdraw its bid and requested the return of its bid deposit. The District, after having heard the reason for Wil-Fred’s attempted withdrawal, refused to allow it. The District also refused to return the $100,000 bid deposit. Wil-Fred filed suit and sought a preliminary injunction. Wil-Fred provided evidence that forfeiting the bid deposit would decrease its bonding capacity by two to three million dollars. Wil-Fred also provided testimony by Ciaglo’s president regarding Ciaglo’s mistake. The District failed to cross-examine Ciaglo’s president and did not introduce any evidence contravening his statements. The trial court granted rescission of the contract and ordered the District to return the bid deposit. The District appealed to the Illinois Appellate Court.