Irvine District Spent $800,000 More Than Necessary for School Construction, Court Finds. In a decision filed August 31, the Fourth District Court of Appeal wrote that "the Irvine Unified School District appears to have paid $800,000 more than necessary to remodel two elementary schools" because it unfairly rejected the lowest bidder on two construction projects.
The case involved the bidding process used by the school district in 2008 for its Northwood and Eastshore school modernization projects. The court said the case "illustrates the necessity" of following legal precedent (the D.H. Williams rule) under which "a public agency cannot reject the bid of the lowest bidder on a public works project on the theory that the bid is 'nonresponsive' to the agency's request for bids when, in substance, the real reason for the rejection is that the agency thinks the lowest bidder is 'not responsible' – at least not without giving the lowest bidder the chance for a hearing on whether the lowest bidder really is 'not responsible.'"
The opinion explains that when bidding for the contracts, "one competitor …, for some reason never adequately explained by the public entity, had access to the lower bidder's bid information within 24 hours of the opening of all bids." Thus, the competitor was able to challenge the lower bid almost immediately on the grounds that some licensing information was not disclosed. The competitor went on to receive one of the contracts.
When the lowest bidder asked the district for information about the competitor's bid, there was a delay of several weeks before it was provided. When the lowest bidder finally received the information, it discovered that the competitor had made the same omission on bidding forms that was the ostensible reason that its own bid was summarily rejected in the first place.
"It doesn't take Hamlet to figure out that something rotten happened in this case," the court wrote.
The court sent the case back to the trial court, where the lowest bidder is suing to have the school district reimburse its bid preparation costs, and also ruled that the school district must pay the company's legal costs for the appeal.
The Eastshore project will cost approximately $3.6 million, and the Northwood project will cost an estimated $3.3 million, the ruling states. (Source: Decision in Great West Contractors Inc. v. Irvine Unified School District, August 31.)
Cal-TaxReports, September 7, 2010
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