ODOT’s Untimely Award of a Contract Lets the Contractor Walk Away From the Job

Kegler Brown Construction Alert

O.R.C. §5525.01 requires ODOT to timely award contracts within ten (10) days of the letting date. In a recent case a dispute had developed between the contractor and ODOT. When the contractor elected to withdraw from the project (based upon its dispute with ODOT) the 48-hour time for withdrawal of the bid had already passed. Yet ODOT had failed to award the contract within ten (10) days. When the contractor refused to go forward with the work, ODOT ordered forfeiture of the bid bond posted by the low bid contractor.

The question arose as to whether ODOT was permitted to recover under the bid bond when ODOT had failed to take timely action to issue the contract in the first place. The Franklin County Common Pleas Court on April 24, 2009 issued a decision granting the contractor’s motion for summary judgment, and finding that ODOT’s obligation to award a contract within ten (10) days was “mandatory.” The Court ruled that the failure to do so by ODOT barred its recovery under the contractor’s bid bond and that any contract between the contractor and ODOT was “void ab initio.”

This case means that ODOT will have to take timely action as required by statute if it wants to enforce contracts in the future. It is uncertain as to whether ODOT will elect to appeal this decision. R.B. Jergens v. ODOT, Case Nos. 08 CVH-7145 and 9537, Franklin County Common Pleas Court.