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NORTH ATTLEBORO - Proposals from two New York auction houses interested in selling the town's Russian painting were rejected by the school committee on Wednesday after a technicality disqualified the leading bidder.

The school committee unanimously voted to readvertise, with new bids due on Monday, April 2, rather than accept a proposal from Christie's auction house to handle the sale of the painting "Afghans.". Appraisals have indicated that the painting, which was donated to the town in 1951 by W. Charles Thompson, could sell for more than $1 million.

Sotheby's, which is currently storing and securing the seven-foot by 10-foot work by Russian artist Alexandre Iacovleff for the town, also submitted a proposal, but the state Inspector General's office ruled it could not be considered due to a flaw in its proposal.

State law requires that bidders on this type of item submit two separate packages - one containing the specific details of its proposal and another package containing the price. The school department was required to evaluate and rank all proposals received based upon the details package without knowing the financial information.

Both auction houses submitted the two packages as required, but Sotheby's placed a sentence about its price proposal in the details package. As a result, the Inspector General's office ruled Sotheby's proposal could not be considered, even though its proposal was ranked higher than Christie's, Superintendent Richard Smith said. "Looking at the two non-price packages, one of the bidders was clearly winning the process but they included pricing information in the non-price package. I am recommending that we reject all bids as it is clear that the disqualified proposal was more advantageous to the town," Smith said.

Sotheby's proposal was ranked higher because of the auction house's presence in Russia - it has an office in Moscow with three representatives - and because it has sold seven other Iacovleff paintings.

"We were concerned with the history and experience of the bidders, particularly with their success in marketing Russian art," Smith said. "Sotheby's has 72 percent of the market in sales of Russian paintings, amounting to about $260 million."

Christie's has sold about $120 million in Russian art and has only one representative in Russia.

The two auction houses submitted identical price packages indicating that the town would receive 103 percent of the sale price for the painting. That is possible because art auction houses receive a commission, known as a bidder's premium, from the buyer of each painting and both auction houses indicated they would provide a cut of that commission back to the town.

School committee Chairman David Manoogian said the bidder's premium for major artwork is typically about 20 percent of the sale price.

Now that both auction houses know the details in each other's proposals, the school committee is hopeful that the second round will bring better figures.

"Maybe this will get us an even better deal," said Manoogian.

Even with the need to readvertise, it still may be possible that the town will be able to sell the painting at an April auction, Smith said.

The school committee, which voted to sell the painting last month, plans to award a contract to an auction house on April 2. The proposal to sell the painting will then go before selectmen, who have the final say on whether the masterpiece can be sold.

AMY DeMELIA can be reached at 508-236-0334 or at ademelia@thesunchronicle.com.