A recent decision by the Butler County, Ohio, Court of Appeals again demonstrates the challenges faced by contractors who have been found by a public authority not to be “responsible” bidders. In the case of Triton Services, Inc. v. Board of Educ. Talawanda City School District, Feb. 14, 2011, a prospective prime contractor submitted the lowest bid for the HVAC work for a proposed elementary school. Notwithstanding it submitting the lowest bid, the local authority determined that the contractor was not a “responsible” bidder and rejected its bid. The contractor then sued for an injunction to prevent the contract from being awarded to the next highest bidder and, after considerable litigation, lost in both the court of common pleas and the appellate court.
The public authority stated two concerns as the basis for its decision: (1) the contractor had previously sued the same public authority over disputed scope of work issues; and (2) the contractor failed to include a key component of the project in its bid, raising the prospect of another scope dispute. The contractor responded that (1) in the earlier suit, it had settled and received about 90% of what it had been requesting; and (2) it would do the “omitted” work for the current project under the original bid it had submitted.
The court rejected the contractor’s arguments. It ruled that the local authority had broad discretion to decide whether a contractor was “responsible” and that an appellate court reviewing the trial court’s determination should not second-guess that decision but should only set it aside for abuse of discretion, a high standard to meet.
For this reason, a frustrated bidder who is considering disputing a finding that it was not a responsible bidder should keep in mind several things.
- The place to win the battle is before the local authority. After that, the contractor has to prove abuse of discretion to win.
- Since the hearings before the local authority occur quickly after the decision is announced, it is vital to consider immediately doing a Public Records Act request for the local authorities’ written records regarding the matter.
- The contractor should consider putting competitors who have submitted derogatory information about the contractor on notice, prior to the public hearing, of potential defamation claims.
Both the tougher battle at the court level and the cost of a court battle must be seriously considered before seeking an injunction.Given the line of Ohio caselaw that recognizes the broad discretion afforded public authorities in determining if a bidder is “responsible,” it is imperative that contractors be proactive where their qualifications are questioned. A failure to provide an immediate, substantive response to such a determination will impact a contractor’s ability to reverse the decision and may also require the disclosure of such determination in future public bid submittals.