UCI Is Supported for Rejecting Bid That Was 1 Second Late

A UC hearing officer has upheld a controversial decision in which UC Irvine administrators rejected the lowest bid for construction of a multimillion-dollar cancer building because it was one second late.

Don McIntyre, attorney for Taylor Woodrow Construction in Irvine, said the decision will cost California taxpayers $149,000 per second--the amount they would have saved had the Taylor Woodrow bid been accepted.

“It’s kind of ironic,” he said. UCI Medical Center, McIntyre said, is faced with millions of dollars in deficits each year, “and on the other hand we get a result like this.”

After a daylong hearing on the contract process earlier this month, UC hearing officer James J. Putkey concluded Monday that Taylor Woodrow was responsible for meeting UCI’s bidding deadline June 8 at precisely 2 p.m.

“Taylor Woodrow’s bid was irregular because it was late,” he wrote.

Victor Is Pleased

Putkey also said the Taylor Woodrow bid did not comply with UCI bidding requirements because, although its representative may have entered the room where UCI officials were accepting bids by 2 p.m., “the bid was not deposited at the front desk” in that room on time, as bidding documents specified.

Further, had the late bid been accepted, Taylor Woodrow would have had an unfair advantage over other bidders because the firm “had more time to receive lower subcontractor bids and thus present a lower bid to the university,” Putkey wrote.

Bernards Brothers Inc., a San Fernando construction firm, won the contract over three others with a bid of $8.65 million. Taylor Woodrow and Moran Construction of Alhambra submitted lower bids, but those firms bids were not even opened because UCI officials said both were one second late.

Taylor Woodrow bid $8.5 million on the project, and Moran Construction bid $8.53 million.

Officials from Bernards’ applauded Putkey’s decision Tuesday. “It’s customary for bids to be rejected if they’re late, whether it’s one second, one minute or one hour,” said Ted Gropman, a construction law attorney representing Bernards.

‘A Long Story’

Meredith Cefali, the UCI contract administrator who handled the bidding, declined to comment on Putkey’s decision and on whether any UCI bidding procedures have changed because of the dispute. “It’s a long story,” she said. “I’m not going to go into it.”

Meanwhile, Charles Glidden, vice president of Moran, which had protested UCI’s bid process but did not appeal, conceded: “Our representative was wrong. He should have had the bid in” at precisely 2 p.m. Still, Glidden said: “One second--that’s pretty picky. And it’s going to cost the state or the taxpayer a considerable amount of money.”

Taylor Woodrow officials said Tuesday that they will probably appeal the hearing officer’s decision in court. Still, project executive Chris G. Elliott called the situation an unusual example of “bureaucratic stubbornness.”

According to some of the bidders and their attorneys, UCI administrator Cefali had on June 8 assembled a half-dozen bidders for the cancer building contract in a row of offices along a hall on the Irvine campus. Each contractor’s representative had a telephone so that he could talk to officials in his company’s office.

Arcane Process

According to those familiar with the process, the public contract bidding process is an arcane and frenetic one. In the space of a few hours, officials in a construction company’s headquarters get quotes from subcontractors, figure out their costs and profit margins, then telephone the total to a “bid runner,” who races with the formal bid to the office where it is to be submitted.

The pace is frantic because “bids are compiled at the last possible moment” so that competing contractors will have less opportunity to “shop” subcontractor’s bids--that is, ask one subcontractor to beat another’s price, said Taylor Woodrow attorney McIntrye.

This was the process used by the prospective contractors for UCI on June 8. But according to hearing officer Putkey, shortly before the 2 p.m. deadline, Cefali had received no bids and had asked another UCI official to go down the hall and give bidders a one-minute warning. According to Putkey’s report, the Taylor Woodrow bid runner heard the warning, immediately sealed his bid and delivered it to the bid room.

At this point, the Taylor Woodrow officials contend, the procedure became unfair. They contend their office was farthest down the hall from where the bids were to be submitted, so that when a UCI official told them they had one minute left, they were “misled” and that they actually had less time remaining.

Cefali was using as an official clock a telephone recording of the time that was broadcast to bidders on a speaker phone. After sounding the 2 p.m. recording of the time, Cefali hung up the telephone receiver. And, according to Putkey, “immediately after the receiver was hung up, Taylor Woodrow’s runner deposited the bid in the bid deposit box on the front desk” and Cefali rejected it.

‘In the Room’

McIntyre contends that the bid should have been accepted because “physically our people were there in the room. There was a sweep-hand clock on the wall. And they went to hand the bid to Ms. Cefali, and she said, ‘What’s this?’ They said, ‘This is our bid.’ And she said, ‘Well, you’re late. Well, you’re one second late.’ ”

McIntrye said he thinks UCI officials could easily end the dispute by admitting, “ ‘Let’s say this is a mistake; let’s get on with business rather than spend $149,000 that need not be spent.’ ”

Bernards officials say the contract was properly awarded, and Putkey agreed.