The Pryor Times

Local News

March 13, 2013

City of Pryor wins lawsuit

Tempers ran hot in the case of McGrew Air Conditioning Inc. vs the City of Pryor. In a case that boiled down to reading the fine print and following directions, Judge Rebecca Gore favored the city.

When the time came to open bids for the new City Hall construction, McGrew's bid was among 90 or more. Coming in at roughly $11,000 less than the competition, McGrew, from Delaware, was the apparent low bidder. In accordance with the Oklahoma Fair Bidder Act, McGrew assumed the job would be awarded to their company.

The city set the bid aside, however, because of an exclusion handwritten onto the bid upon submission.

Robert Johnson, Vice President of McGrew, believed his company had been slighted. He was represented by attorney Bob Rush.

Rush provided an opening statement describing the facts as indisputable.

“I think the court will be surprised at the number of facts that are not disputable,” said Rush. “There is absolutely no dispute that he was the low bid. The city will argue that McGrew was the only company that was confused by the bid, this is not the case.”

The alleged confusion centered around whether or not the project included a building automation system. The plaintiff used the term as it applied to a heat and air system with a centralized control. Pryor, represented by city attorney Kim Ritchie, stated that a building automation system is a broad term that includes lights, windows, water flow and locks.

The city’s case was summarized in Ritchie’s opening statement.

“The city decided to build a new City Hall. The architect included a notation, but the city determined not to include a building automation system. When this was released for bid, no one called with questions. The bid package included instructions to call the architect or project manager in case of any confusion, and a written addendum would then have been issued. No one called,” said Ritchie.

McGrew handwrote an exclusion that their bid did not include an automation system on a page in the bid package.

Ritchie said the instructions stated that bidders were not to make exclusions and if they did, their bid was subject to be dismissed.

“They ignored these instructions and created ambiguity,” said Ritchie. “In the bid documents, it also defines a legitimate bid. Exclusions are not permitted. Under the Competitive Bidding Act, if exclusions are not submitted appropriately, a government has the ability to decline it and go for a higher bid.”

Ritchie said handwritten exclusions make the bid more of a proposal, which was not appropriate at that time.

Both the defendant and the plaintiff presented a plethora of evidence, including most of the bid package documents.

Rush called his first witness, Robert Johnson.

“If you thought it (the building automation system) was not part of the plans, why did you not take steps to point it out,” said Rush.

“There were no provisions other than just a stray reference,” said Johnson. “We would not have included the exclusion if the city's specification had not included it in part of their bid.”

Johnson explicitly stated he did not modify the scope of the work outlined in the project.

Ritchie began his cross examination by asking if Roberts was familiar with the Competitive Bidding Act. Roberts said he was. Ritchie confirmed that Roberts understood the law was set up for the protection of the tax payers, not the contractor.

Ritchie provided 18 exhibits to confirm Roberts understanding of the bid package.

The bid package stated, “The bidder has read and understands all bidding documents and the bid is made in accordance therewith,” and “The bidder has read and understands the bidding documents. The bidder shall carefully study and compare the bidding documents with other work being bid concurrently...and shall at once report to the architect any errors, inconsistencies or ambiguities discovered.”

Roberts agreed he had signed that he understood each of these documents as they were read.

“Why would you have signed off on something you didn’t understand?” said Ritchie.

When asked why he did not report any ambiguitiesto the project manager as directed, Roberts said, “because at that point it was already bid day.”

“Why would you wait until the last minute? Whose fault is it that you didn’t have time to submit questions?” said Ritchie.

“No one, it’s how we do our work. We have to wait so that suppliers have time to make addendum,” said Roberts.

“It's how you do your work? At the last minute?”

Halfway through Ritchie's 18 exhibits, Rush objected, saying he had made his point clear and that the questioning was going in circles.

“I think it’s important for the court to see how flagrantly he disregarded the instructions,” said Ritchie.

Ritchie questioned the plaintiff on whether or not he thought it would have been prudent for the city to enter into a legally binding contract with someone who violates the rules of the bidding process.

Another bidder was called as a witness, David Rovaine from AirComforts Inc. His bid included a formal letter, on company letterhead, which informed the city of a price change if they did, in fact, want the automated system.

“The letter was pretty much to cover my tail. It was probably an honest mistake on the city’s part, because a lot of these are canned specs, it happens,” said Rovaine.

“If you change the bid you take the risk of being excluded, it’s just how it works,” he said.

Halfway into the hearing the plaintiff heated up, but the city attorney kept his cool.

Scott Pendley, the project architect, and Chris Ball, senior project manager were both called as witnesses for the city.

Ball said it is nearly impossible to make plans perfect when there are thousands of decisions to be made that a lot of contractors try to take advantage of the city.

Three hours into the hearing, Mayor Jimmy Tramel was called to the stand.

“My job as mayor is to ensure that the public’s money gets spent correctly and within budgetary guidelines,” said Tramel. “Exclusions turn into change orders which cost the city extra money. That’s why McGrew's bid was set aside.”

Tramel stated he has known the Melton family his entire life, but that he did not agree that the decision to award them the bid looked suspicious. He said in a town the size of Pryor, it’s hard not to know everyone.

“I did not give them the bid, however. They earned it,” said Tramel.

It was explained that Melton’s Heat and Air was the lowest qualified bidder, meaning they were not the lowest in price but were a more responsible party.

“This is a bench trial, I don't see any reason to argue and go round and round. I think all the evidence has been presented. I think we could waive closing statements, if Ritchie agrees,” said Roberts.

“Well, I like hearing myself talk,” Ritchie joked. “But I'll waive.”

Judge Gore returned from recess to give her verdict.

“There is no way any person can have absolutely everything covered in a job this size,” she said. “I believe they understood that the city could potentially exclude their bid.

“I simply find that the bid package was clear enough that all parties understood. Mr. Roberts should have tried to seek clarification sooner. The city rejected the bid appropriately and according to the law. The plaintiff has failed to provide evidence that anything was improper,” said Gore. “I find the plaintiff has failed to meet it’s burden of proof and therefore deny their request to be awarded the bid post facto.”

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