The Ohio Supreme Court has ruled that the City of Cincinnati’s refusal to award a drywall contract to a low bidder was not unlawful because the City rightfully concluded that the lowest bidder failed to satisfy a small business enterprise requirement set forth in the bid documents. In Cleveland Construction, Inc., the City sought bids for the expansion of the Cincinnati Convention Center. After competitive bidding, the City awarded a drywall contract to a contractor whose bid included work by small business enterprises as required by the bidding requirements. The City did not award the drywall contract to Cleveland Construction — despite being the low bidder — because it failed to meet this small business bidding requirement. After not being awarded the bid, Cleveland Construction filed a lawsuit against the City arguing that the City violated its due process rights. The Ohio Supreme Court concluded that although Cleveland Construction had standing to challenge the bid award, it could not prevail because it could not demonstrate that the City abused its discretion. The Court found that under the Cincinnati Municipal Code and bidding documents, the City could consider many factors beyond price to grant or deny the contract. For example, the Cincinnati Municipal Code permitted Cincinnati to award contracts to the “lowest and best bidder,” and even the lowest and best bid could be rejected if the bid was “not in the best interests of the city.” The Court concluded that the City properly exercised its discretion in awarding the drywall contract based on the small business enterprises requirement and therefore, Cleveland Construction could not prevail.
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