Appeals court rules against school district in construction bids

Anaheim-based contractor wants Irvine Unified's contracts with two other companies voided.

February 18, 2011|By Alexandra Baird,

Irvine Unified School District broke the law when it awarded $6.9 million in contracts to construction companies without giving the lowest-priced bidders full review, a state court of appeal ruled.

The California Public Contract Code requires that public projects of more than $15,000 be given to the lowest responsible bidder.

A panel of judges with the Fourth Appellate Court in Santa Ana found that when district officials rejected Great West Contractors Inc.'s bids and went with higher bidders for renovations to Northwood and Eastshore elementary schools in 2008, the district paid $800,000 more than it would have.

In issuing its opinion, the panel described the district's choices as "favoritism most foul," writing that, "It doesn't take Hamlet to figure out that something rotten happened in this case."


According to their opinion, the district's rejection of the lowest bids centered around Anaheim-based Great West's response on a bid document regarding whether the company had ever been license under a different name or license number.

Great West answered "no," but soon after the bids were submitted, the district received a letter from Construct 1 One Corp., a competing contractor based in Tustin.

The letter argued that Great West failed to disclose that it had indeed operated under different license numbers. After a staff review, the district's director of construction and facilities informed Great West that the district was rejecting its bid.

The district did not give Great West a chance to respond, and at a school board meeting, the company's bid was not listed, just the words "non-responsive."

IUSD awarded the Northwood contract to Construct 1 and the Eastshore contract to JRH Construction, also based in Tustin. The appellate court questioned this, as well as why Construct 1 was able to obtain and respond to Great West's bid so quickly — within 24 hours — but when Great West's legal counsel asked to review the bids, the district stalled.

Great West filed a lawsuit against the district in May 2008, asking the district to void its existing contracts and award them to Great West. The license-number issue, the company argued, was a misunderstanding: The other numbers were joint-venture licenses.

A trial court sided agreed with the district, but the appeals court sided with Great West.

On Dec. 1, the California Supreme Court denied the district's appeal to rehear the case.

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