## Facts

- A Pennsylvania school board solicited competitive bids to construct a new public school building under a statutory requirement to award the contract to the “lowest responsible bidder.”
- The school district’s architect prepared the plans and bidding specifications but did not make enough copies of the plans for distribution to all contractors who sought them.
- Because the plans were not sufficiently available, some reputable contractors allegedly could not submit bids.
- At an initial school board meeting, the board rejected all bids then on file as being too high.
- At the next meeting, the board received bids again and accepted the bid of Republic Construction Co., even though Republic was the fourth lowest bidder by price.
- The school board did not meaningfully investigate the experience, judgment, efficiency, or financial standing of the three lower bidders before passing them over.
- Taxpayer representatives sued the board members and Republic Construction Co. in equity, seeking an injunction to stop the award and performance of the contract.
- The trial court disapproved of aspects of the bidding procedure but refused to enjoin the contract; the taxpayers appealed to the Supreme Court of Pennsylvania.

## Issues

1. Whether a school board violates a “lowest responsible bidder” requirement by awarding a contract to the fourth lowest bidder when it did not adequately inquire into the responsibility of the lower bidders.
2. Whether defects in the bidding process (including limited access to plans and the board’s limited inquiry into bidders) require a court of equity to enjoin the award absent proof of fraud, collusion, bad faith, or an abuse of discretion.

## Decision

- The Supreme Court of Pennsylvania affirmed the decree denying an injunction and allowed the contract award to stand.
- The Court treated “lowest responsible bidder” as allowing consideration of bidder responsibility in addition to price, and recognized that the awarding authority has discretion in making that judgment.
- The Court stated that boards should use available means of information to form an intelligent judgment about bidders, including inquiry into financial standing, reputation, experience, resources, facilities, judgment, and efficiency.
- Even though the trial court found fault with the board’s procedure, the taxpayers did not establish fraud, collusion, bad faith, or a sufficiently arbitrary decision to justify equitable interference.

## Legal Principles

- “Lowest responsible bidder” is not identical to “lowest price”; responsibility may include experience, reputation, resources, facilities, judgment, efficiency, and financial ability.
- A public board is expected to inform itself before deciding responsibility; it should gather available information and make a reasoned decision rather than acting on mere preference.
- Courts generally will not substitute their judgment for the awarding authority’s decision on responsibility unless the record shows fraud, collusion, bad faith, or a clear abuse of discretion.
- Irregularities in the solicitation or handling of bids may be grounds for condemnation, but equitable relief typically requires a showing that the irregularities reflect illegality or wrongful conduct sufficient to invalidate the award.
- Taxpayer plaintiffs seeking to restrain a public contract must show more than mistakes in procedure; they must show conduct that is dishonest, arbitrary in the legal sense, or so unreasonable that it amounts to an abuse of discretion.

## Conclusion

Hibbs v. Arensberg upheld a school board’s award of a school construction contract to the fourth lowest bidder despite flaws in the bidding process, holding that “lowest responsible bidder” permits consideration of responsibility factors beyond price and that equity will not enjoin the award absent proof of fraud, collusion, bad faith, or an abuse of discretion, while also stating that boards should investigate bidders to make an informed responsibility determination.


Hibbs v. Arensberg, 119 A. 727 (1923)