Bidding + Contracts

The Conti case has long stood for the fact that a State entity could not ignore a contractor’s claim without risk of having a court find that the contractor’s contractual requirement to participate in the “Article 8” dispute resolution process was waived as a “useless act.” Contractors have long relied on this case for the proposition that the State is in no position to independently evaluate a contractor’s claim in that the same people who have a vested interest in denying the claim are also involved in the decision-making process. However, a recent Franklin County Court of Appeals decision in the matter of Cleveland Construction v. Kent State has decided that the “Article 8” process must be strictly enforced and has expressly overruled Conti.

Therefore, contractors with claims are cautioned to strictly follow the “Article 8” process in the contract, even if they believe it will be a vain or useless act. Fortunately for contractors, Ohio Revised Code §153.16 says if the state does not resolve the claim in 120 days, the contractor is free to go forward with its claim and file its lawsuit in Ohio’s Court of Claims seeking monetary damages. Another potential vehicle available to contractors is to secure the State’s agreement to mediate the dispute in lieu of participating in further “Article 8” administrative procedures. If that is the case, the contractor or its counsel certainly needs to memorialize that agreement in writing so there will be no argument about it later in the courts.

This case continues the trend of appellate courts in Ohio literally and strictly enforcing the provisions of the contract, regardless of the equities or practicalities involved.