Court: Design-Build Bid Process Illegal

Mon August 15, 2005 - National Edition
Jeff Cronin

The South Carolina Department of Transportation (SCDOT) will proceed with the demolition of the old Cooper River bridges in Charleston, a project let through a design-build contract, despite a state Supreme Court ruling declaring that procurement process illegal.

An SCDOT spokesman said it is the only open contract of its type awarded prior to the June 14 passage of a state law specifically allowing for the design-build process.

However, as a result of the court’s ruling, the agency will re-advertise at least one design-build project — a bridge replacement — that was originally advertised before June 14 but had not yet been awarded.

In a 4-1 ruling, the court said SCDOT illegally awarded the contracts for the construction of the $632-million Arthur Ravenel Bridge in Charleston, Highway 170 in Beaufort County and the Carolina Bays Parkway in Horry County. All three projects have been completed.

The court said in its written opinion that SCDOT did not have legislative support to award a design/build contract at the time of the lettings and “the fact that these three contracts were awarded to the lowest bidder is irrelevant.”

The dissenting opinion of Justice Costa Pleicones argued the petitioner, government watchdog Edward Sloan, was not in a position to sue SCDOT in the first place.

“Large amounts of money are at stake in bidding competitions, so a losing bidder has a strong incentive to take action if the process appears in violation of the law. That no such bidder is now before the court does not mean that Sloan automatically has standing,” Pleicones wrote.

The resulting murmur among those imbedded in the construction industry has been sparse. “As far as we’re concerned, it’s a non-issue,” said David Herndon, executive director of the South Carolina Asphalt Pavement Association.

With the passage of design-build legislation, he does not foresee any impact on the road builders of South Carolina. Even without the legislation, Herndon said the state’s financial status won’t allow for a major design-build project any time soon.

South Carolina law now specifies a design-build contract as one with a single entity for “design, right of way acquisition and construction of a project,” with the possible addition of “maintenance, operation or financing.”

The law states the cost of the project must be factored in when the department awards a contract, but it also may consider qualifications of the contractor, time of completion, innovation and quality.

Brian Perlberg, director of government affairs and general council for the Design-Build Institute of America, called the court’s ruling “short-sighted,” and predicts this type of contract procurement will remain in South Carolina.

The ruling, however, should be seen as a red flag to other states still in the process of drafting legislation to allow for design-build bids in public projects. Perlberg said the legislation should be written as clearly as possible to avoid loopholes and a similar lawsuit.

SCDOT spokesman Stan Shealy said the decision cannot be appealed, as there were no federal questions in the suit. CEG