Competitive Bids Not Required

A California appeals court has expanded the right of state and local agencies to perform work with in-house labor and avoid competitive bidding on contracts for public work over $15,000.

The First District Court of Appeal sided Friday with Marin County’s Ross Valley Sanitary District in its effort to engage its own work force to complete a sewer system improvement project on 139 miles of small diameter pipes.

The decision overturns a ruling favoring the Construction Industry Force Account Council Inc., which would have required competitive bidding on the pipe replacement project.

The ruling is likely to be a boon for other special districts and state agencies that have the resources to perform jobs with an existing work force.

State law requires that agencies and districts use competitive bidding on projects costing $15,000 or more. The Ross district had historically performed spot repairs on aging sewer lines using in-house construction crews.

In recent years a more modern technique known as “pipebursting” has become a preferred method of fixing sewer lines.  In 2010, the district began using it.  Pipebursting allows 350-foot long sections of pipe to be replaced by digging holes about 350 feet apart and using a hydraulic pump to pull a torpedo-like device through the old – usually clay – pipe, bursting it and leaving the new pipe in its wake, the court said.

In 2011, the district hired a new team of employees to do the pipebursting work and the Construction council sued saying they had to put the larger project out for bids. The trial judge agreed and the Ross District appealed.

The appeals court sided with Ross saying there was nothing in the law that mandated bidding on larger projects, only that competitive bidding should be used with a district does opt to farm out the work.

The state law applies “when a district contracts with a third party for public work, and not when a district relies on [its own workforce.]”

“We are left to conclude that [the state law] only operates to require competitive bidding when a sanitary district contracts out a district project costing over $15,000,” wrote Justice Martin Jenkins.

Case: Construction Industry Force Account Council v. Ross Valley Sanitary Dist., No. A139069


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