State ex rel. Glidepath, LLC v. Columbus Reg'l Airport Auth.

• Decision Date: 05 January 2012
• Docket Number: No. 10AP-783,C.P.C. No. 10CVH-06-9624,10AP-783
• Citation: 2012 Ohio 20
• Parties: State of Ohio ex rel. Glidepath, LLC, Petitioner-Appellant, v. Columbus Regional Airport Authority, Respondent-Appellee.
• Court: Ohio Court of Appeals

2012 Ohio 20

State of Ohio ex rel. Glidepath, LLC, Petitioner-Appellant,

v.Columbus Regional Airport Authority, Respondent-Appellee.

No. 10AP-783

C.P.C. No. 10CVH-06-9624

COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT

Rendered on January 5, 2012

(REGULAR CALENDAR)

DECISION

Roetzel & Andress, LPA, Thomas L. Rosenberg and Michael R. Traven, for appellant.

Dinsmore & Shohl, LLP, Donald B. Leach, Jr. and Nicole M. Loucks, for appellee.

APPEAL from the Franklin County Court of Common Pleas

CONNOR, J.

{¶1} Petitioner-appellant, Glidepath, LLC ("Glidepath"), appeals from the judgment rendered by the Franklin County Court of Common Pleas in favor of respondent-appellee, the Columbus Regional Airport Authority ("Airport"). In this matter, we must determine whether a public authority wrongfully rejected a bidder with respect to a competitively bid contract. For the reasons that follow, we find that it did not and therefore affirm the judgment of the trial court.

{¶2} This matter concerns a project to relocate and replace the baggage handling system at the Port Columbus International Airport ("CMH"). In response to the events of September 11, 2001, airlines began screening each and every bag coming through airports. The baggage handling system in place at CMH consisted of large screening equipment that was located inside a narrow, linear lobby. This arrangement apparently caused inefficient disruptions in the flow of patrons through CMH. As a result, the Airport, as the operator of CMH, began discussing options for relocating the equipment. Designs developed over the years, but funding was apparently always a problem.

{¶3} Funding eventually became available through the American Recovery and Reinvestment Act ("stimulus funds"). In order to receive the stimulus funds, the Airport had to first demonstrate the need for the project to the Transportation Security Administration ("TSA") by performing a cost-benefit analysis of the savings associated with its design. It overcame this hurdle by demonstrating that the annual operating costs to TSA would be reduced from $3.7 million to an estimated $1.5 million.

{¶4} Under the new design, new equipment would be purchased, old equipment would be refurbished, and the integration and installation of the equipment would take the screening process entirely behind the scenes. The total cost was estimated at $55 million. Approximately $35 million of the $55 million was expected to be reimbursed by TSA with stimulus funds. In order to qualify for the stimulus funds, however, strict deadlines needed to be met, and paperwork needed to be timely submitted and properly supported.

{¶5} The Airport split the design into two distinct, but highly interdependent, projects. The first project called for the construction of two new buildings to be locatedbehind the main terminal at CMH. The second project called for the installation of the new, automated baggage handling system inside the newly constructed buildings ("BHS project"). The process and analysis performed by the Airport in investigating and awarding the BHS project is what forms the factual backdrop of this dispute.

{¶6} In April 2010, the Airport began advertising for bids with respect to the BHS project. On April 28, 2010, it conducted a pre-bid meeting, during which prospective bidders were permitted to tour the premises and ask questions. The Airport made available bidding documents, including: advertisement pages, specifications and drawings, bid forms, general conditions, specific conditions, and questionnaires for prospective contractors and subcontractors. These bidding documents indicated that the BHS project would be awarded to the lowest responsive and responsible bidder, in accordance with R.C. 9.312. Prospective bidders were given until May 5, 2010 to pose questions regarding the BHS project. Additionally, the bidding documents set a deadline of May 13, 2010 for the submission of any bids.

{¶7} The Airport received six bids before the deadline. Glidepath's bid was for $13,674,797 and was the lowest bid submitted. In fact, Glidepath's bid was $694,840 lower than the next lowest bid, which was submitted by Jervis B. Webb Company. In addition to having the lowest bid, Glidepath was also deemed to have been responsive in all material respects to the specifications of the bidding documents. Thus, the issue then became whether Glidepath was a "responsible" bidder in accordance with R.C. 9.312. An 11-member evaluation committee investigated this issue. Eventually, the committee determined that Glidepath was not a responsible bidder and recommended that the Airport reject Glidepath's bid on that basis. The Airport's Chief Executive Officer, ElaineRoberts, agreed with this recommendation. On June 4, 2010, the Airport notified Glidepath that it intended to reject Glidepath's bid and provided reasons in support.

{¶8} Glidepath requested a bid protest meeting in accordance with R.C. 9.312. The Airport obliged and conducted such a meeting on June 16, 2010 ("first protest meeting"). During the first protest meeting, Glidepath presented information refuting the reasons that the Airport found it to be non-responsible. After the meeting, the evaluation committee reconvened and conducted further investigations into Glidepath's responsibility. On June 29, 2010, the Airport again determined that Glidepath was not a responsible bidder. It again notified Glidepath that it intended to reject Glidepath's bid on that basis. As a result, that same date, Glidepath filed the instant lawsuit to enjoin the Airport from rejecting its bid and awarding the BHS project to another bidder. Glidepath's verified complaint sought a temporary restraining order, a preliminary and permanent injunction, a writ of mandamus, and damages for its bid preparation costs.

{¶9} The parties agreed to participate in another bid protest meeting, and the trial court consequently overruled Glidepath's motion for a temporary restraining order. The second protest meeting occurred on July 7, 2010 ("second protest meeting"). Glidepath again presented information regarding its responsibility. Following the second protest meeting, the evaluation committee met again, reviewed Glidepath's information again, and again reached the same conclusion they had on two prior occasions. Glidepath renewed its motion for a temporary restraining order.

{¶10} The trial court consolidated Glidepath's requests for a temporary restraining order, for preliminary and permanent injunctive relief, for a writ of mandamus, and for bid preparation costs. The consolidated matter came before the court for a final hearing on July 15, and July 16, 2010. The trial court denied Glidepath's claims in a decision andentry filed on July 22, 2010. Glidepath has timely appealed and raises the following assignments of error:

ASSIGNMENT OF ERROR #1 - The Trial Court Erred by Holding that the Airport Did Not Abuse its Discretion by Using Unannounced Standards to Reach the Decision that Glidepath Was a Non-Responsible Bidder Within the Meaning of R.C. 9.312.

ASSIGNMENT OF ERROR #2 - The Trial Court Erred in Holding that the Airport Did Not Abuse Its Discretion in Misapplying the Standards that it did Announce to Reach the Decision that Glidepath Was a Non-Responsible Bidder Within the Meaning of R.C. 9.312.

ASSIGNMENT OF ERROR #3 - The Trial Court Erred by Dismissing Glidepath's Claim for Bid Preparation Costs Without Consideration of the Meccon Decision.

ASSIGNMENT OF ERROR #4 - The Trial Court Erred in Finding that a Performance Bond Was Not Sufficient Evidence of Financial Responsibility Pursuant to R.C. 9.312.

{¶11} The first, second and third assignments of error are interrelated and will be addressed together. We will then address Glidepath's fourth assignment of error.

{¶12} In its first three assignments of error, Glidepath argues that it is entitled to recover the reasonable bid preparation costs associated with the BHS project.¹ In support, it cites Meccon, Inc. v. Univ. of Akron, 126 Ohio St.3d 231, 2010-Ohio-3297, in which the Supreme Court of Ohio held:

* * * [R]easonable bid-preparation costs may be recovered if the rejected bidder promptly sought but was denied a timely injunction to suspend the public-improvement project pending resolution of the dispute and a court later determines that the bidder was wrongfully rejected by the public authority but injunctive relief is no longer available * * *.

Id. at ¶1. As Meccon relates herein, the issue before this court is whether Glidepath was wrongfully rejected by the Airport with respect to the BHS project.

{¶13} A public authority has considerable discretion in evaluating bidders and awarding contracts under Ohio's competitive bidding laws. Cedar Bay Constr., Inc. v. Fremont (1990), 50 Ohio St.3d 19, 21. Courts are not vested with this discretion and must not substitute their judgment for that of a public authority in evaluating bidders and awarding contracts. Id., quoting Altschul v. Springfield (1933), 48 Ohio App. 356, 362; see also State ex rel. Associated Builders & Contrs. of Cent. Ohio v. Franklin Cty. Bd. of Commrs., 125 Ohio St.3d 112, 2010-Ohio-1199, ¶22. Further, appellate courts have no authority to make credibility determinations in such matters. Cleveland Constr., Inc. v. Ohio Dept. of Adm. Servs, Gen. Serv. Adm. (1997), 121 Ohio App.3d 372, 385. Instead, courts must presume "that the public authority performed its duties in a regular and lawful manner." Associated Builders at ¶24, citing Cedar Bay at 21; see also BFI Waste Sys. v. Garfield Hts. (1994), 94 Ohio App.3d 62. A public authority's decision to award a contract will be upheld as long as it has not abused its discretion. Cedar Bay at 21, quoting Altschul at 362.

{¶14} An abuse of discretion "connotes more than an error of law or of judgment; it implies an unreasonable, arbitrary or unconscionable attitude[.]" Dayton ex rel. Scandrick v. McGee (1981), 67 Ohio St.2d 356, 359. A public authority does...