A Public Authority May Not Reject a Bidder Based Merely on Prior Prevailing Wage Disputes

The Ohio Supreme Court has addressed the question of whether a public authority may consider mere allegations of prior violations of Ohio’s prevailing wage law when choosing who qualifies as the best bidder on a publicly-funded construction project. In State Ex Rel. Associated Builders & Contractors of Central Ohio v. Franklin County Board Of Commissioners, the Ohio Supreme Court held that the Franklin County Commissioners failed to exercise “sound discretion” when they rejected the lowest bidding contractor because the contractor violated Ohio’s prevailing wage law more than three times in two years. The Commissioners set compliance with the prevailing wage law as one of the criteria for contractor selection. In reality, the Ohio Department of Commerce conducted multiple investigations on the contractor but never found that the contractor actually violated the prevailing wage law. The Ohio Supreme Court reasoned that an investigation into a wage dispute without finding an intentional violation of the prevailing wage law could not be considered a violation of the law for the purpose of evaluating a prospective contractor. Thus, the Court found that the Commissioners misapplied their own criteria and held that the Commissioners’ reliance on this misapplication of the evaluation criteria resulted in an improper rejection of the contractor’s bid. The Court went on to explain that while public authority has both the power to establish bid evaluation criteria and broad discretion to determine which contractor is “best,” it must use “sound discretion” when applying the established criteria to evaluate each bid. This means a public authority cannot misapply or ignore its own evaluation criteria to reject the lowest bidder. For the Ohio Supreme Court Opinion, see State ex rel. Associated Builders & Contrs. of Cent. Ohio v. Franklin Cty. Bd. Of Commrs., Slip Opinion 2010-Ohio-1199 (Decided March 25, 2010).

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