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Tuesday, August 07, 2007

Ind. Decisions - Still more on: Impact of Fort Wayne Disability Center ruling in other areas of state?

Updating this ILB entry from August 5th, Dick Kaukas of the Louisville Courier Journal reports today that:

The New Albany City Council authorized legal action last night to determine whether two no-bid contracts, one for $3.3 million a year to run the sewer system and the other for $507,000 annually for storm drainage operations, are valid.

Both contracts were awarded last month to the same company, Environmental Management Corp., or EMC, which has run the city sewers since 2001.

Ever since then, some council members have questioned the agreements because no bids were sought by either the sewer board or the storm water board, which awarded them.

The resolution passed last night authorized a suit to be filed in Floyd Circuit Court, asking a judge to give a "declaratory judgment" and determine the validity of the contracts. The vote was 5-3 with one abstention. * * *

Generally, those who favored filing the suits said there was no other way to determine whether the contracts stood up because the opinions of attorneys were so far apart on the subject.

Jerry Ulrich, the council's lawyer, said it seemed clear to him that bids were needed.

But Greg Fifer, lawyer for the sewer board, and Mike Summers, the storm board attorney, both said they believe that the contracts for "professional services" did not have to be bid and would hold up in court. * * *

Ulrich, the council attorney, said last week that his research indicated bids were required. A memo he wrote concluded that a contract for $75,000 or more had to be awarded to "the lowest responsible and responsive bidder."

But in a letter to Ulrich dated yesterday, Fifer said an Indiana court wrote in a 1980 case involving the Muncie schools that "public bidding laws are not applicable" to contracts for "professional services." [ILB - emphasis added]

According to Fifer's letter, the ruling said bids are not mandatory if the contract involves "aesthetic, business or technical judgment."

In those circumstances, the court said, "it is assumed that the legislature could not have intended the lowest price to be the ultimate determining factor" in awarding the contract.

ILB observation - The governing statutes may have changed since 1980.

Posted by Marcia Oddi on August 7, 2007 01:06 PM
Posted to Indiana Decisions