We begin this month with a look at another case dealing with a public entity’s broad discretion in evaluating bids on public construction projects. The issue before the Franklin County Common Pleas Court was whether a bidder’s failure to include past prevailing wage violations could lead to the bid being rejected. Our second case, from the Court of Appeals for Sandusky County, Ohio, looks at whether property owners should be provided relief where the quality of their well water was damaged. Property owners sought compensation for the contamination of their well water where a hospital constructed injection wells that were used for storm water drainage.
Court Affirms County’s Broad Discretion in Bid Disputes
With opening day more than a year away, the future home of Columbus’ baseball team earned its first victory in the Franklin County Court of Common Pleas. Judge Richard Frye denied a bidder’s attempt to stop the award of a plumbing contract for the new baseball stadium project in TP Mechanical Contractors v. Franklin Co. Board of Commissioners (Franklin Co. Case No. 08-CVH-01-304).
Last November, TP submitted a combined bid for the plumbing and HVAC packages on the new stadium project, called Huntington Park. TP had the lowest combined bid for both portions of work and figured they were a shoe-in to receive the combined contract from Franklin County at the December Board of Commissioners meeting. In fact, the December board meeting agenda included a resolution to award the combined plumbing and HVAC contract to TP. However, the commissioners elected to table the decision on the contract until the January board meeting while other issues surrounding TP’s bid were investigated.
Those other issues turned out to be TP’s past prevailing wage violations. The commissioners were made aware of these violations in a letter from a county administrative staffer just days before the January board meeting. This letter detailed five prevailing wage complaints that had been levied against TP within the past two years. Based on these violations, the commissioners rejected TP’s bid.
As a result of the commissioners’ decisions, TP filed for a temporary restraining order. A TRO is an order of brief duration that is issued by a court to prevent an act or situation from occurring until a hearing can be held at which time the court will decide each party’s rights. In this case, the situation that TP was looking to prevent was the award of the plumbing and HVAC contracts to a different company.
TP based their TRO motion on two arguments: (1) Franklin County used unannounced bid criteria in their decision not to award the contracts to TP; and (2) Franklin County abused its discretion by not awarding the contracts to TP. In support of their position, TP argued that the prevailing wage issues were not true “violations.” TP pointed to the fact that four of the five complaints referenced in the letter to the commissioners were filed by the same individual and that in those four instances, TP simply paid the “minimal” amounts that were in dispute. The fifth complaint resulted in a $0 determination against TP.
In rejecting TP’s argument, the court relied upon a central tenet of Ohio bidding law: broad discretion by the public owner. Ohio courts have long given public owners broad discretion in evaluating bids on public works projects. Counties, in particular, are allowed to evaluate bids based on a lowest and best standard. This means that counties are not forced to take the lowest number and can in fact compare bidders based on announced criteria. The reason for this flexibility is to allow county officials to sort out contractors who may not be able to complete the work properly.
Courts are generally wary of inserting themselves into this level of decision making and the Franklin County Court of Common Pleas is no different. What courts do look for is an abuse of discretion meaning some unreasonable, arbitrary, or unconscionable attitude by the public official. In this case however, Judge Frye found no abuse of discretion. The court found it inappropriate to weigh the seriousness of TP’s past violations, likening the situation to comparing misdemeanors to felonies in a criminal setting. This was instead, a duty best left for the commissioners and not the court.
TP’s initial belief that it would receive the contracts for the baseball stadium work proved incorrect. In the words of baseball great Yogi Berra, “it ain’t over ‘til its over.” When it comes to the award of public works contracts, absent an abuse of discretion, county commissioners are left to call balls and strikes.
Injection Wells Allegedly Damage Water Supply; Property Owners’ Claims Denied
Construction projects often involve technical issues that are not within the ordinary and general experience of lay persons. Expert testimony is usually required to either support or refute claims related to these technical issues. In Skiles v. Bellevue Development Corp., 2008-Ohio-78, the lack of expert testimony led to the denial of claims against multiple parties.
In Skiles, a hospital began construction of a new facility located near private residences. As part of the construction, Class V injection wells were constructed at the hospital site to provide for storm water drainage. Soon after the construction of the injection wells, property owners located near the site began complaining about the quality of their drinking water. The property owners alleged that the construction of the injection wells caused the quality of their drinking water to fall below minimum drinking water standards.
Due to the decrease in water quality, the property owners sued the city, city employees, the drilling contractor, developer, and others associated with the project. The trial court granted summary judgment for the city and other defendants.
On appeal, the property owners claimed that the trial court erred when it ruled that expert testimony was necessary to show that the drilling contractor was negligent or reckless in the drilling and construction of the injection wells. The appellate court determined that expert testimony was required when the subject under investigation involved a highly technical question of science or art, or a particular profession or mechanical skill.
The court then discussed the highly technical nature of well drilling and the experience requirements for the drilling company that were set forth in the contract specifications. According to the court, “the work involved drilling to the limestone, setting a steel casing in the limestone, sealing the annulus, and continuing through the limestone until the sinkhole could accommodate a contract specified, minimum flow rate.” In the opinion of the appellate court, these matters were clearly “not within the ordinary and general experience of lay persons.”
Ultimately, the court determined that the property owners were required to introduce expert evidence to prove that the well drilling company was negligent and the wells were responsible for the decline in drinking water quality. No expert testimony was presented, however, at the trial court level. As a result, the appellate court affirmed the trial court’s decision to deny the claims against the drilling contractor.
As a part of the project, an environmental assessment report was prepared to determine impacts to the environment. The report was submitted to the mayor who then certified the findings of the report on behalf of the city of Bellevue. The environmental assessment report concluded that the project would have no significant environmental impact and that a more detailed environmental impact statement was not necessary.
The property owners blamed city representatives for allowing the injection wells to be constructed. The court determined that the former mayor and the city engineer were acting within their duties as governmental officials and had immunity from personal liability. The court further emphasized that the former mayor and the city engineer were acting within the scope of their employment, without malice, acted in good faith, and did not conduct themselves in a reckless manner.
The property owners also claimed that the city of Bellevue deprived them of their groundwater rights and this resulted in a “taking.” The court determined that the only actions taken by the city of Bellevue were to secure and evaluate an environmental assessment and to determine that there was no environmental impact. The property owners may have disagreed with the city’s evaluation; however, these actions did not constitute a taking of private property.