PATA History Pages

New Court Ruling May Affect Municipal and Township Road Projects

Bid and Contract Management is Crucial

From the Columbus Dispatch

Suburb must pay company for lost profit on road bid
Friday, April 15, 2005


AKRON (AP) — An Akron suburb wrongly rejected a company’s bid to build a road and must pay the company its lost profit, a state appeals court ruled Wednesday in a precedent-setting case.

The city of Fairlawn has to repay the company $90,922 because it abused its discretion during the bid process, the three-judge panel of the 9 th Ohio District Court of Appeals determined.

The ruling could force taxpayers throughout the state to pay twice for public projects that aren’t properly bid.

But "protecting the integrity of the bidding process and ensuring wronged parties receive meaningful relief outweigh the risk of citizens paying twice for the same project," the judges wrote.

Cementech Inc. submitted a nearly $600,000 proposal to build the service road in 2001. It was the lowest bid but failed to include trees that the city added to the project.

The company later offered to include the trees, but the city’s law director rejected the proposal. Former Summit County Common Pleas Judge John Adams ruled the bid was properly rejected, but the appeals court disagreed.