East Baton Rouge construction contract stalled in bid dispute

The city-parish of East Baton Rouge says that software developer BidX should assume responsibility for an erroneous contract award that resulted from a glitch in the company’s electronic project bidding software. The error resulted in the award of a project for the installation of street lights on Brightside Lane to Jack B. Harper Contractor, Inc. for $719,000. After the announcement of the project award, Diamond Electrical Company notified the city-parish that it had actually submitted a lower bid at $649,000.

The streetlight project represents only a small fraction of East Baton Rouge’s construction budget, which amounts to almost $500 million in contracts awarded so far this year. City-parish officials say this is the first time they have experienced this type of error with the electronic bidding software. For a small business, though, the loss of a contract of this size can have a significant impact.

The city-parish is required by state law to offer electronic bidding. The current conflict over bids on the Brightside Lane project might have been recognized and resolved earlier if the winning bidder had been present at the time of the award, but the law does not require contractors to be present when final bids are announced.

Although attorneys for the city-parish maintain that the software developer should assume responsibility for any damages to which either company may be entitled, it remains to be seen whether the developer will voluntarily accept any claimed liabilities. The developer declined to acknowledge the software glitch for 56 days following the erroneous bid award.

Attorneys for both electrical companies presented their cases for entitlement to the project award before the Metro Council, but one council member expressed concern that legal action may be on the horizon. Whatever the outcome, this case marks an unusual twist in the broad field of construction law. Both companies will need skilled counsel to effectively assert their legal rights.

Source: Greater Baton Rouge Business Report, “Project bids tied up in software glitch,” Adam Pearson, Oct. 15, 2012