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Construction group mulls further court action in dust-up

The Associated General Contractors of Wisconsin may not have succeeded in fighting city hall, but the organization’s lawsuit against Middleton made clear the group is willing to take a swing.

Bob Barker, executive vice president of the AGC, said that might be the biggest accomplishment resulting from the organization’s decision to sue Middleton after it awarded a construction contract to a company that was not the lowest bidder. He said the group has not yet decided whether it will continue the fight in court.

Even though the AGC failed to obtain an injunction on the project, it did manage to quell doubts about whether it was legally allowed to pursue a lawsuit on behalf of its members.

The lowest bidder in the Middleton case, Fond du Lac-based C.D. Smith Construction Inc., and five other companies that did not win the contract for the construction of a public works building are members of the AGC. Barker said the group’s ability to pursue the lawsuit, which Dane County Judge Peter Anderson accepted even as he rejected the request for an injunction, should put other local governments on notice.

“They should know,” Barker said, “that the AGC and other associations are going to watch what they are doing carefully.”

The AGC also succeeded in getting Anderson to say the bidding procedures used to award the contract to Madison-based Newcomb Construction Co. were “probably unlawful.” But that opinion was not part of a formal ruling and may have established only a weak precedent.

Still, the judge’s words gave others involved in the project cause for reflection. Matt Fleming, a lawyer for the city, said he did not agree that local officials acted unlawfully. Yet he conceded that, if the project were rebid, some things would be done differently.

Many of the arguments in the case centered on whether the city had provided enough detail in the specifications for the concrete structure it eventually contracted with Newcomb Construction to build. The bid documents contained hundreds of pages but only one paragraph concerning a concrete building.

Fleming and others have argued that the bulk of those specifications applied to both the concrete alternative and to the steel structure for which companies also were able to submit bids. Still, he said, the questions raised in court suggest city officials should have furnished more details, though, he added, “probably that falls short of what the AGC was arguing that we needed to have done.”

Fleming and others also expressed regret about an included requirement that, they said, never should have been in the specifications. Middleton’s project documents stipulated that only members of the Tilt-up Concrete Association trade group could be contracted to do concrete work on the proposed public works building.

That requirement meant only Newcomb Construction and one other contractor with a Wisconsin headquarters could perform such work. Tilt-up concrete is a construction method in which concrete panels are cast on site and then tilted into position.

Jeff Hazekamp, the architect who designed the public works building, said the intention never was to exclude other construction techniques, let alone allow only those belonging to a particular trade group to work on the project. He said he and others would have waived the required membership in the Tilt-Up Concrete Association had bidders proposed a different construction method, such as one entailing the use of precast slabs shipped to the site.

Hazekamp, president of Janesville-based architecture firm Angus-Young Associates Inc., said the language concerning the trade group was suggested by Newcomb Construction, which he consulted while writing the specifications for the concrete building. He said he should have noticed and eliminated the requirement when he reviewed the draft bid documents.

Questions about the propriety of Hazekamp consulting Newcomb Construction also came up in the AGC’s lawsuit. Hazekamp defended his actions, saying he was unfamiliar with tilt-up concrete and was following the industry practice of seeking advice from experts in a particular technique.

Newcomb Construction, according to its website, has built more than 100 buildings using the tilt-up method.

Hazekamp said one of the worst precedents that could have resulted from the AGC’s suit would have been a prohibition on seeking advice from companies that are likely to bid on a project.

“It’s the folks that are making it or installing it who are the experts,” he said.

Hazekamp said one reason the specifications contained so few details about tilt-up concrete was that he and others working on the project mostly were convinced no company could provide a concrete building at a price close to that of a steel structure. He was not alone in saying he was surprised to find Newcomb Construction’s bid of nearly $9.4 million was only about $59,000 higher than the low bid submitted by C.D. Smith.

City officials have said they did not expect to get such a good price for a building that, compared with a steel structure, will last longer, be more attractive and allow for a better interior arrangement.

Anderson, as part of his reasons for refusing AGC’s request for an injunction, cited testimony in which C.D. Smith and other company officials said they too had been of the opinion that a concrete building would be far more expensive than a steel one. Anderson said he took those statements as a sign that the companies would not have submitted a price for a concrete structure even had Middleton followed correct bidding procedures.

Because the outcome probably would have been the same regardless of how city officials acted, Anderson decided to let Newcomb Construction resume work on the project, which had been halted by a temporary restraining order handed down last month by another judge.

Barker, though, said he and others at the AGC think process is just as important as results. To the extent that they got a judge to opine that a city’s bidding procedures had probably violated the law, they at least accomplished something.

“That was good,” Barker said. “But the idea that the judge let them get away with it wasn’t.”


About Dan Shaw, dshaw@wislawjournal.com

Dan Shaw is the managing editor at the Wisconsin Law Journal. He can be reached at dshaw@wislawjournal.com or at 414-225-1807.

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