Contractors ask judge to reject $114 million Sacramento area sewer contract

Attorneys for two contractors asked a Sacramento Superior Court judge Monday to throw out a $114 million Sacramento regional sewer contract, saying the award violated state bidding requirements.

The attorneys represent Steve P. Rados Inc. of Santa Ana and Peltz Co. of Alliance, Neb., which lost a contract for a wastewater storage project despite submitting a bid $14 million less than the company receiving the contract, Teichert Construction of Davis.

“This is a case that shocks the conscience,” said Peltz attorney Randy Finch. “Protect the integrity of public bidding.”

Attorneys representing the Sacramento Regional County Sanitation District and Teichert defended the award, saying the combined Rados-Peltz bid violated state law because Peltz did not have a state contractors license at the time the bid was submitted. The Contractors State License Board gave Peltz a license the day before the district awarded the contract to Teichert in February.

Judge Timothy Frawley, who said he will take Monday’s arguments into consideration before issuing a final ruling, has offered conflicting opinions on the case.

In March, when he temporarily blocked the contract, Frawley called the Sacramento Regional County Sanitation District’s contracting process “troubling” and “misleading.” He was referring to the district prequalifying Peltz as a certified subcontractor, then disqualifying the company because of the licensing issue.

Two weeks later, he lifted his earlier injunction and allowed the Teichert contract to proceed. He said he was convinced after a further review of the evidence that “prequalification and licensing were separate subcontractor requirements,” and the district was likely correct in having “a requirement that subcontractors be licensed on bid date.”

Rados attorney Michael Minchella argued Monday that the district’s own officials were unsure whether a subcontractor had to have a license as of the bid date. He pointed to the decision by the district’s top official to abandon his initial recommendation of Teichert and recommend at the last minute that the district board throw out all the bids.

Instead, the district board, made up of elected officials in Sacramento County and West Sacramento, voted 10-4 in favor of Teichert.

Deputy County Counsel Lisa Travis said Monday that the district official’s changed recommendation was not an admission of a mistake. She acknowledged that she had told the board that throwing out the bids would be the “most conservative legal approach,” but that was simply to avoid a lawsuit.

Teichert attorney William Warne said the Davis contractor followed state contracting requirements and deserved the contract. Throwing out the award would send the wrong message as the district prepares to award other contracts in a $2 billion project required to meet recent state discharge requirements, he said.