Decision to Find Contractor Not Responsible for OSU Project Upheld on Appeal

Kegler Brown Construction Newsletter

Recently the Franklin County Court of Appeals upheld a trial court's landmark ruling that the State had considerable discretion in awarding public contracts to contractors other than the low bidder.

O.R.C. §153.08 provides that the State will award public works projects to the "lowest, responsive and responsible" bidder. O.R.C. §9.312 sets forth the criteria that are to be considered when determining whether a bidder is "responsible" for that project, including the experience, management skills and financial resources of the bidder, but this provision has been infrequently applied by public authorities. In a landmark case last year construing these "responsibility" provisions, Judge Sheward of the Franklin County Common Pleas Court ruled that Cleveland Construction, Inc., while low bidder, was not "responsible" to perform the sizable general trades portion of the Max Fisher Business College project for The Ohio State University, and upheld the award to the second low bidder, Danis Building Construction Company.

The Trial Court rejected the low bidder's contentions that the public officials had abused their discretion in the investigation and evaluation process and further that there were technical defects in the "responsibility" process applied by the State.

The Trial Court went on to uphold the constitutionality of the process and affirmatively ruled that it was fair and reasonable.

The low bidder appealed the case to the Franklin County Court of Appeals, who on June 10, 1997, affirmed the Trial Court's decision in all respects. The three judge appellate panel ruled unanimously that:

  • The State did not apply "unannounced criteria" to the responsibility determination, particularly where, as here, the same criteria was applied to all bidders.
  • The State did not improperly "compare" the bidders simply because all of the information relative to responsibility was obtained from all the bidders at the same time due to the limited time available.
  • The duty to assess the responsibility determination may be delegated by the Deputy Director of the Department of Administrative Services.
  • The State has the discretion to refuse to award a contract to the low bidder if it is not in the best interest of the State.
  • The State need not promulgate rules for the responsibility process nor must the low bidder be given the right to due process —such as cross-examining witnesses at the bid protest meeting.
  • The responsibility process, as applied by the State here, was constitutional.

This decision upholding the "responsibility" evaluation process will likely encourage more frequent use of the statute by public owners in the future, with the result being that the low bidder may not always be the successful bidder.

Don Gregory, Ted McKinniss and Chris Weber successfully represented The Ohio State University in this case.