The Year 2010 In Review: Public Works Projects

by Sheppard Mullin Richter & Hampton LLP

This article is the fifth in a series summarizing construction law developments for 2010.

In This article:

A. Bidding

1. Great West Contractors Inc. v. Irvine School District, 187 Cal. App. 4th 1425 (4th Dist. Aug. 2010)

In Great West Contractors, the Fourth District held that a public agency's rejection of a bid for a public works project on the basis that a corporate bidder did not list its officers' licenses is a question of bidder responsibility, not bid responsiveness, and therefore a due process hearing was required....

2. Schram Construction Inc. v. Regents of University of California, 187 Cal. App. 4th 1040 (1st Dist. Sept. 2010)

The Regents of the University of California awarded a general contract to DPR Construction for the design and construction of a medical center. On the University's behalf, DPR solicited bids for the mechanical, plumbing and electrical work on the project....

3. Graffiti Protective Coatings, Inc., et al. v. City of Pico Rivera, 181 Cal.App. 4th 1207 (2d Dist. Feb. 2010)

Through competitive bidding, plaintiff had been awarded a public works contract to maintain a city's bus stops....

B. Methods of Proving Damages – Total Cost and Modified Total Cost Theories

1. Dillingham-Ray Wilson v. City of Los Angeles, 182 Cal. App. 4th 1396 (2d Dist. Mar. 2010)

In this case, the Court of Appeal reversed a decision of the trial court, which had precluded the contractor from proving damages by the method it proposed and had ruled that neither a total cost theory nor a modified total cost theory was permissible. The first sentence of the Court of Appeal's opinion stated: "The City of Los Angeles obtained millions of dollars worth of construction work that it does not want to pay for." It only went further downhill for the City after that....

C. Change Orders

1. P & D Consultants, Inc. v. City of Carlsbad, 190 Cal. App. 4th 1332 (4th Dist. Dec. 2010)

The Fourth District Court of Appeal held that a contract with a public agency cannot be modified orally or through conduct of the parties when the contract provides that no amendments, modification, or waivers of contract terms were allowed without a written agreement signed by both parties....

D. Public Agency's Failure to Disclose

1. Los Angeles Unified School District v. Great American Insurance Co., 49 Cal. 4th 739 (July 2010)

The Supreme Court held in this case that a contractor need not prove an affirmative fraudulent intent to conceal as part of a cause of action for non-disclosure of material facts or breach of the warranty of correctness of the plans....

E. MBE, WBE, and DVBE Preferences

1. Coral Construction, Inc. v. City and County of San Francisco, 50 Cal. 4th 315 (Aug. 2010)

In the latest decision arising out of the City and County of San Francisco's series of ordinances granting preferences in the award of public contracts, the California Supreme Court upheld the constitutionality of Article I, Section 31 of the California Constitution, which forbids a city awarding public contracts to discriminate or grant preferential treatment based on race or gender. The City, whose public contracting laws expressly violate Section 31, challenged its validity under the so-called political structure doctrine, a judicial interpretation of the federal equal protection clause. The Court concluded that Section 31 does not violate the political structure doctrine....

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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