Emma Corp. v. Inglewood Unified School District

Emma Corporation, a licensed building contractor, submitted the low bid on a school construction project proposed by the Inglewood Unified School District. (Pub. Contract Code, § 100 et seq.; all further section references are to the Public Contract Code.) As required, Emma included a bond issued by Fidelity and Deposit Company of Maryland for 10 percent of the bid, which would be forfeited if Emma won the contract but refused to perform.

Emma discovered it had failed to include its plumbing subcontractor’s costs in its bid, which thus was nearly $800,000 too low. Emma timely sent the District a letter withdrawing its bid. The District, but not Emma, realized the letter did not provide all the information required by, and thus did not satisfy, the bid withdrawal statutes. (§§ 5101-5103.) As part of a deliberate strategy, the District told Emma it would contact Emma if it needed more information. The District did not do so. When the bid withdrawal period lapsed, the District claimed Emma failed to comply with the bid withdrawal requirements and awarded Emma the contract at its original bid price.

Emma refused to perform. The District gave the contract to the next lowest…