Charting the (Stormy) Public Works Water
California’s economic downturn means that public works projects are fewer in number and smaller in scale as local and state agencies grapple with reduced funding. As a result, public works bidding is more fiercely contested than ever. A recent decision provides a good example. (Schram Construction Inc. v. The Regents of the University of California (2010) 187 Cal.App.4th 1040.)
In Schram, the University sought bids for the design and construction of the mechanical, electrical and plumbing work for UCSF Medical Center at Mission Bay. The bidding was structured around multiple packages and trades. The University used the “best value” method, a modified approach awarding the bid to the bidder with the best ratio between bid price and best-value-questionnaire score. (See Public Contracts Code § 10506.5(g).) The idea is that this method incorporates and weighs factors other than the bid price, resulting in the best contractor being selected from among the lowest bidders.
After the first set of bids were received and reviewed, the University decided that the bidding should be redone. In addition to the original six bid packages, the University invited bids on three alternative packages. It also changed the weights given to various factors used to calculate the best value scores. Schram Construction Inc. (SCI) initially bid on just two independent bid packages. Later, SCI did not bid on any of the new, alternative packages, choosing instead to bid on three of the separate bid packages. Two of its separate bids, if combined, covered one of the alternative bid packages: the HVAC (heating, ventilating and air conditioning) and plumbing for the Energy Center and Outpatient Building. But the University awarded that work to another bidder on the grounds that SCI did not bid the alternative package. As a result, SCI was not even considered for that work.
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