Must Combination Bids Always Be Low?
Kegler Brown Construction Newsletter July 1, 2010
A 2002 case out of Warren County, Ohio, involving a sewer project for the County Commissioners raised an interesting and novel issue concerning the 1995 amendments to the multi-prime contracting statute here in Ohio. At that time, amendments were made so that combination bids could be received and an award could go to the lowest combination bidder if the combination bid was lower than the collective multiple prime bids in the aggregate.
A County is permitted to award the contract to the “lowest and best” bidder and Warren County in this case determined that the “lowest and best” bidder would be the combination bid, which was only about $7,000 or .25 percent higher than the multiple prime bids in the aggregate. The County found such a price difference advantageous (in its opinion) because it could potentially avoid “finger pointing” between multiple prime contractors and additional paperwork.
One of the multiple prime contractors sued the County and sought a restraining order against the award to the combination bidder with the higher price arguing that the combination can only be considered if it were lower than the multiple prime bids in the aggregate. The Magistrate hearing the matter struggled with the perceived inconsistencies between Revised Code §153.52(B), which states that as between a combination bid and an aggregate of individual prime bids the “lowest and best” wins the contract and 153.52(A), which states that no contract for the entire job shall be awarded unless the combination bid is lower than the separate bids in the aggregate. The Magistrate then went on to dodge that important issue and state that the disappointed multiple prime contractor had not proven that the actions of the Commissioners were “unreasonable, arbitrary or unconscionable.”
A recent case out of Greene County involving the City of Fairborn has revisited this issue with a different end result. The Magistrate found that Revised Code §153.51(A) prohibits any consideration of a combination bid under a “lowest and best” standard if the combination bid was not lower than the multiple prime bids in the aggregate.
Groups in favor of multiple prime contracting argue that Revised Code §153.52(A) prohibits awarding to a higher combination bid because the public authority thinks it is “best” to avoid the perceived costs or lack of coordination potentially involved in multiple prime contracts. While owners, such as cities, enjoying a “lowest and best” standard, believe that Revised Code §153.52(B), to have meaning, must be construed to allow the benefits of a combination bid to be considered under its analysis as to which bid is “best.” The Courts have yet to resolve this novel issue with finality.