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Wednesday, September 06, 2006

Ind. Decisions - "Court sides with city on fire truck-bidding suit"

Niki Kelly of the Fort Wayne Journal Gazette writes today on yesterday's Court of Appeals ruling in the case of City of Fort Wayne v. Pierce Manufacturing. See ILB case summary here. Some quotes from today's story:

The city of Fort Wayne won a legal victory Tuesday when the Indiana Court of Appeals ruled a company that lost a bid for $4.8 million worth of fire trucks had no legal standing to sue.

The decision reverses the original trial court ruling denying the city’s motion to dismiss the case. * * *

Mark Keaton, who represented the city, argued that more than 100 years of case law shows disappointed bidders cannot sue unless fraud or collusion is involved. He added that any changes to state statute in the late 1990s narrowed – not expanded – the situation further.

But James Fenton – arguing for Pierce Manufacturing Inc. of Wisconsin – said his client fits under a section added to state purchasing laws specifying a remedy for an aggrieved person.

The case began in 2004, when the city used a relatively new “reverse auction” process to solicit bids from Pierce and American LaFrance Corp. of South Carolina.

Essentially, rather than taking sealed bids, the city asked for proposals from fire truck builders, then began negotiating down the prices simultaneously. In the end, LaFrance won the contract for the 14 trucks at a cost of $4.8 million.

City officials estimated at the time the process saved the city $475,000.

A few months later Pierce sued, alleging the city didn’t treat both bidders fairly. The case was moved out of Allen County, and Wells Circuit Judge David L. Hanselman Sr. decided in October that Pierce did have standing and the city failed to follow the statutory procedure.

He canceled the contract and ordered a new bidding process – the only remedy allowed by law. Pierce cannot seek cash damages.

The city has paid for and received at least seven of the 14 fire trucks, which went mostly to serve newly annexed areas. But the city is still waiting for seven that are badly needed to replace older vehicles that are wearing out.

The appellate decision did note that the city did not treat the two bidders the same, telling LaFrance that its initial bid was “not competitive with the target pricing” and allowing them to substitute an air ride system for an independent front suspension system.

But the court never got past the issue of standing, saying Pierce did not meet the definition of “person aggrieved” set out in state law.

Fenton said Tuesday he needed to fully examine the ruling before he and his client make any decisions about an appeal.

The case was one of “first impression” for the court, which had not decided the issue since the legislature changed the law.

The oral argument was July 7th. Here is the ILB entry quoting from Ms. Kelly's report on the oral argument.

And here is the statute at issue: IC 5-22.

Posted by Marcia Oddi on September 6, 2006 07:41 AM
Posted to Ind. App.Ct. Decisions