A challenge to the city's bidding process might delay the renovation to the Madison Central Library project until late March.
The city had planned to begin construction on February 13 and had awarded the construction bid to J.H. Findorff & Son, which bidded the project for just under $18.9 million. This was less than the $21.2 million the city had estimated the project at.
Findorff was one of five companies to bid on the project. However, three of the bids were deemed "non-responsive" by city staff for failing to meet the city's goal of having 20% sub-contractors be small or disadvantaged businesses. The city had estimated the project will need 20 to 30 subcontractors.
One of those three disqualified bidders was J.P. Cullen, which had the lowest bid and is now challenging the city's bidding process.
In a memo (PDF), city attorney Mike May explains: "The [small business enterprise] program offers an advantage for small businesses without regard to racial or gender preferences. The [disadvantage business enterprise] program does provide an advantage for businesses owned by women and minorities. When the City uses the DBE program under a federal mandate, the City is considered to be an agent of the federal government, and any challenge to the program must be a challenge to the federal program."
But when used only at the local level (when federal dollars aren't involved) DBE programs have been challenged in courts and "have been subject to strict scrutiny under the equal protection clause of the 14th Amendment to the U.S. Constitution," May wrote. "The Courts require a study justifying the DBE programs on a local level, and that the programs be narrowly tailored to remedy past discrimination."
The city hasn't taken these steps, May wrote. Furthermore, if Cullen challenges the bids in court, it could delay the library project indefinitely. As a result, May recommends all five bids be scrapped and the project rebid, using only the small business enterprise criteria, and not the disadvantaged business criteria.
Brian Cooper, the library project manager in the city's public works department, says rebidding the project would delay the start of construction. "The new goal would be to get started March 2012," he says, adding, "It might be pretty late in March."
From a financial point of view, this may or may not be bad news. Since five bids have already been made public, contractors will know what target they have to beat. However, if material costs start to climb, the contractors may be forced to bid higher, Cooper says.
"A lot of the prices are related to commodity prices, like concrete or steal," Cooper says. "And anything that's supplied or installed on a construction site uses petroleum. It's all beyond everybody's control."
Will minority businesses get cut out of the project under a new bidding? Norman Davis, contract compliance officer in the city's Department of Civil Rights, says not necessarily. "There are a number of small businesses that also are certified as minority-, disadvantaged- or women-owned business," Davis says. Those same businesses may be in the rebidding process."