Walsh Construction Co. v. City of Toledo

53 F. Supp. 3d 1012, 2014 U.S. Dist. LEXIS 143514, 2014 WL 5037981
CourtDistrict Court, N.D. Ohio
DecidedOctober 8, 2014
DocketCase No. 3:14 CV 2096
StatusPublished

This text of 53 F. Supp. 3d 1012 (Walsh Construction Co. v. City of Toledo) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walsh Construction Co. v. City of Toledo, 53 F. Supp. 3d 1012, 2014 U.S. Dist. LEXIS 143514, 2014 WL 5037981 (N.D. Ohio 2014).

Opinion

[1014]*1014 MEMORANDUM OPINION AND ORDER DENYING CLAIM FOR PERMANENT INJUNCTIVE RELIEF

JACK ZOUHARY, District Judge.

Introduction

The City of Toledo (“City”) has long struggled with sewer overflows. 1 Portions of the City’s sewer system collect both stormwater and wastewater from homes and businesses. Because of heavy rains, these combined sewers periodically overflow, threatening human health and the region’s ecosystem.

In 2002, the City and the U.S. Environmental Protection Agency entered into a 20-year consent decree, addressing in part the sewer overflow discharges. See United States v. City of Toledo, 3:91-cv-7646-JGC (N.D.Ohio 2002). The City subsequently established the Toledo Waterways Initiative (“TWI”), an estimated $521 million investment in regional infrastructure to “prevent 80% of the average overflow volume from getting into [area] waterways.” See Toledo Waterways Initiative, Making our Rivers Cleaner, http://www. toledowaterwaysinitiative.com (last accessed Oct. 8, 2014).

This lawsuit concerns a significant phase of the TWI and the City’s efforts to meet a fast-approaching consent decree deadline. By January 1, 2015, the City must begin construction of the Ottawa River Storage Facility (“ORSF”), a retention basin for sewer overflows slated for construction on the site of a former brick factory and landfill. A private firm will complete construction, subject to the City’s direction.

Because of the project’s anticipated complexity, the City pre-qualified five of eight potential bidders in June 2014. In July 2014, the City issued the bid opportunity. By the close of bidding on August 26, four construction firms submitted sealed bids. Plaintiff Walsh Construction Co. II, LLC (“Walsh”) bid $68,743,000, beating out Intervening Defendant and Cross-claimant Kokosing Construction Co., Inc.’s (“Kokos-ing”) $68,977,000 bid—a $234,000 difference (CX 1). In percentage terms, Walsh’s bid was 0.33 percent lower than Kokosing’s.

Despite Walsh’s “low” bid, less than two weeks later the City declared Kokosing the bid winner. Walsh claims the City’s award was arbitrary and capricious and an abuse of discretion. As discussed in more detail below, City officials led Walsh to believe that its bid was satisfactory, but at the last minute City officials reversed course, rejected Walsh’s bid as non-responsive, and awarded the project to Ko-kosing.

Walsh brought this lawsuit seeking in-junctive relief “restraining [the City] from awarding the contract for the [ORSF] Project to Kokosing, and directing [the City] to award the contract to Walsh” (Doc. 1 at 8). Kokosing’s cross-claims seek a declaratory judgment that Walsh’s bid was “unresponsive and the City acted properly in rejecting it,” as well as a writ of mandamus compelling the City to award the contract to Kokosing (Doc. 21 at 5-6).

Given the tight deadlines for funding faced by the City, this Court gave expedited consideration to Walsh and Kokosing’s claims. By stipulation of Walsh and the City (entered prior to Kokosing’s intervention), this Court converted Walsh’s Motion for Preliminary Injunctive Relief into a request for final judgment, determining whether Walsh is entitled to a permanent injunction (Doc. 9). This Court held a bench trial on the merits over three days—September 30, October 1, and October 3—receiving exhibits and the testimony of four witnesses. This Memorandum Opinion now follows.

[1015]*1015BACKGROUND

The Parties and Principal Actors

Events leading up to the contract award involved a number of individuals, government agencies, and private firms. Walsh and Kokosing are both large construction firms, each sophisticated enough to bid on a project estimated by the Engineer to cost almost $80 million (PX 16). At Walsh, Matthew Glaz served as Lead Project Director, working with Program Manager Bo Boulier and other Walsh employees to prepare Walsh’s bid, and to communicate with the City and its consultants in the post-bid period.

Acting Director of Public Utilities Don Moline is the senior City official responsible for administering the ORSF bid. Julie Cousino, the City’s TWI Program Administrator, is the most knowledgeable City employee on ORSF matters. Paul Bock-stahler, who did not testify, is a City staff engineer.

Because the ORSF contract exceeds $100,000, the Department of Public Utilities (“DPU”) does not select the bid winner. Instead, Moline, Cousino, and other DPU employees “submit[ ] a recommendation award letter” to a multi-member Board of Awards (“Board”), along with “all pertinent documentation relevant to the pending contract .... The Board ... review[s] the matter and make[s] a recommendation to the Mayor indicating the best bid meeting specifications.” The Mayor then must award the contract “to the lowest and best bidder based on the recommendation of the Board” (Doc. 14-1 at 2 (City of Toledo, Administrative Policy and Procedure # 6)). The Board meets Friday mornings to review agency recommendations.

At least two private consulting firms assisted the City in letting the ORSF Project. Black & Veech (“B & V”) is lead consultant for the TWI, and “oversight engineer” for the ORSF Project. Bob Harbron is director of B & V’s TWI team, and Jim Broz is his deputy. B & V hired Arcadis to design the ORSF Project and write relevant technical specifications that would serve as a basis for bids. Tim Harmsen is program director for Arcadis’ ORSF team.

The Bid Documents

The Board’s bid award turned on whether Walsh and Kokosing complied with a technical specification that reads (PX 1 at 2) (emphases added) (“Section 02220 1.4(D)”):

Disposal of material classified as debris will be paid for at the price included in the Contract.
1. The Contingency Bid Price shall include all costs for disposal of 30,000 cu. yds. of material classified as debris which is not suitable to be re-used as fill materials, at an approved sanitary landfill as directed by the Engineer

Though styled a “contingency” bid item, all parties knew some amount of off-site disposal of material not suitable for re-use as fill would occur on the project - (Cousino Test. (Day 1) at 1:10; PX 24). The bid documents further define “debris” as (PX 1 at 5):

Excavated materials containing more than 5 percent deleteroius [sic] matter including: brick, cement block, mortar, clay tile, glass bottles, plastic, porcelain, metal, foam, and any other building materials with the exception of materials which meet the definition of Hazardous Environmental Conditions as defined in the General Conditions; and greater than 3 inches in any dimension.
Debris that is removed from the stockpiled fill materials and that cannot be reused in lesser quality fill materials shall • [1016]*1016be disposed of off Site at an approved sanitary landfill in accordance with Laws and Regulations at the Contingency Bid Unit Price for Debris Disposal.

No bid document further defines “approved sanitary landfill.”

Each bidder quoted the ORSF Project by relying on certain “technical data,” including a Geotechnical Report (Cousino Test. (Day 1) at 1:25).

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Cite This Page — Counsel Stack

Bluebook (online)
53 F. Supp. 3d 1012, 2014 U.S. Dist. LEXIS 143514, 2014 WL 5037981, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walsh-construction-co-v-city-of-toledo-ohnd-2014.