CHAPEL HILL - A construction company's apparent paperwork error has cost it the opportunity to build Chapel Hill-Carrboro's next school - and cost taxpayers an extra $200,000, an attorney for the school system says.
Centurion Construction Co. is suing the Chapel Hill-Carrboro City Schools for rejecting its bid to build Elementary School No. 11 in the Northside neighborhood.
The Raleigh-based company says its $17.2 million base bid was the lowest bid on the project by more than $300,000.
The company is seeking lost profits of more than $500,000, according to the motion filed in Orange County Superior Court.
A lawsuit represents one side in a legal dispute.
The school district says Centurion's original bid form failed to comply with state law because it omitted the name of Centurion's electrical subcontractor.
The law requires contractors to list their HVAC, electrical and plumbing/fire protection subcontractors.
A judge denied Centurion's request for an injunction last month, but Todd Jones, the company's attorney, said it "absolutely" will continue its lawsuit seeking damages in excess of $10,000 and the lost profits.
An attorney for the school district called the lawsuit "frivolous."
The district will file a motion to have it dismissed next month, he said.
State law requires contracts be awarded to the lowest responsible bidder to avoid favoritism and to safeguard the public's money. The statute says the party bidding the project can consider quality, performance and the time contractors say they need to complete the work.
Centurion's Jan. 31 bid had at least 10 places where handwritten subcontractors' names and financial figures were crossed out. Next to the words Electrical Sub-Contractor appears the handwritten word Moonlight, but it is crossed out.
The numerous cross-outs and the omission of an electrical contractor was a problem, said Bill Mullin, the school system's executive director of facilities.
"I have not seen (a bid form) as bad as that," he said Tuesday.The last minute
Jones said companies often change information at the last minute as they replace subcontractors.
"If you looked at other bids submitted by other contractors they have strike-throughs and changes made on them," he said. "Sometimes a subcontractor will come up with a better price."
The law says the party bidding a project may seek clarification, which happened in this case, Jones said.
Centurion sent a revised bid form after the Jan. 31 bid opening. The total base bid remained the same, and this time the form listed Moonlight as its electrical subcontractor.
The school district met with Centurion Feb. 9. The next day Mullin sent the company an email saying the district had thoroughly reviewed the bid, found Moonlight Electrical's name had been stricken from the original bid form and that he would not be recommending Centurion for the job.
Efforts to reach Gary Wright, Centurion's executive vice president, last week were unsuccessful.No second chances
Rod Malone, an attorney with Tharrington Smith LLP representing the school system, said the law is clear.
"The second (bid form) was submitted days after the bids were opened, and we don't allow contractors to go in and fix their bids," he said. "You just can't do that."An expert at the UNC School of Government agreed.
"The statute allows you to withdraw a bid, but there's nothing in the statute that says you can fix a mistake," professor Frayda Bluestein. Companies that do withdraw a bid may not rebid on the same project, she said.
The issue is fairness, she said. In general terms, if a contractor were awarded a contract without listing its required subcontractors, it would open up the possibility of "bid shopping," she said. For example, a contractor could go back to a subcontractor and demand a lower fee or threaten to hire someone else if the subcontractor's name and price were missing from the bid form, she explained.
Even if a contractor revises a bid at the request of the party bidding the project, "I think the court would say, 'You're the bidder. You're responsible for knowing what the requirements are,' " Bluestein said.Both sides lose
In this case, Malone said, it's not just the contractor that loses but the taxpayer.
If Centurion had included the electrical contractor in its original bid the school district would have given the company the Elementary School No. 11 contract as the low bidder. Instead the school district hired Bordeaux Construction of Durham.
Bordeaux submitted a bid of $17,765,950 to build the school, which included three features the system wanted added to the project: a green roof, a preferred energy management system and solar tube lighting to let more day light in the building's ground floor, Mullin said.
Centurion's bid on the project plus the three alternates totaled $17,532,500.
The school system did not have time to rebid the project and keep the new school on schedule, Malone said. The apparent paperwork error and having to go to a new bidder cost the school system and taxpayers an extra $233,450. The school system anticipates beginning construction later this month.