St. Tammany News

COVINGTON - The St. Tammany Parish School Board is gearing up for possible litigation after a construction contract failed to materialize.

MBD Construction Co. of Baton Rouge was the School Board's first choice to build an additional wing on Mandeville High School's campus. MBD submitted the lowest bid on July 6, 2005, saying it could build the addition for $1,495,000.

MBD never signed a contract, but the School Board accepted the bid and a surety bond were entered into.

Surety bonds secure the bid amount as submitted by the construction company. If the bid is withdrawn, a portion of the bid amount can be demanded from the company that submitted the bid.

The total penalty amount in this case is $75,000.

According to Allen Smith, vice president of MBD, the company's original bid had two fatal flaws, the estimator having left out price estimations for masonry and roofing materials.

"MBD has been in business for 16 years. We have bid over 1,000 other jobs, I'm certain, and in all that time, we have only withdrawn one other bid that I know of," Smith said during the Jan. 12 School Board meeting's public comment section. "We have a history of being a very professional bidder, and we made a mistake."

Smith said the School Board construction department was notified of the initial mistake right away, which amounted to $64,000. The School Board questioned whether this was a sufficient amount of money to withdraw the bid.

At that point, MDB took a closer look at its proposal to see if it could make changes in the bid to account for and absorb the $64,000. Smith said the estimator then found a second mistake in estimation, this one for $111,000, bringing the grand total for the two mistakes to $175,000.

"What I've come here today to tell you is, if you make a claim on the bid, you will in essence be trying to punish me for my mistake to the tune of about $75,000," Smith told the board. "I'm here to tell you that I bid this job for you in good faith, just like we bid many many many other jobs, and when we're not low, no one compensates us for all the expenses we go through in bidding."

Smith went on to reiterate that he and his company made an honest mistake in the bid process and shouldn't be punished for this mistake, pointing out that the $75,000 fine would greatly harm MBD.

John McClendon, attorney for MDB and brother of Andrew McClendon, MBD's owner, who was out of town and couldn't attend the meeting, provided the School Board with copies of documents pertaining to MBD's removal of its bid.

The documents included a spreadsheet showing the mistakes in estimation and copies of all correspondence between the board and MBD concerning the bid.

"I want to point out a few things. We feel like we withdrew this bid legally and properly, but even if for some reason a judge would say that's not true, we have problems here that transcend the bid. Under law, you have 45 days to award the contract to us. Mrs. (Cameron) Tipton wrote to us on Aug. 5 saying we voted and we're going to send you a contract. We know now that the contract was ready on Aug. 9. We got this contract on Nov. 18, 105 days after," McClendon said.

Even after removing time missed due to Hurricane Katrina, which McClendon said accounts for the entire month of September and the first 15 days of October, the contract was still 55 days overdue.

"Between Aug. 9 when this contract was ready and Aug. 29, we never received the contract," McClendon added.

After going on to point out that MBD only guaranteed its contracts with subcontractors for 30 days, McClendon said there was no possible way for MBD to honor its bid, even if it didn't have reason to withdraw.

McClendon assured the School Board several times during his address that if it chose to pursue the $75,000 it would face lengthy and very costly litigation.

When it came time to address recommendations from the committee as a whole meeting, which included the MBD contract withdrawal, board members questioned whether or not the issue was ready for the courts.

"Given the fact that I think a lawsuit is going to stem from this and we picked up some big picture information tonight, is it worth going into special session to discuss the ramifications of this?" asked board member Neal Hennegan.

Hennegan asked Harry Pastuszek, the School Board's attorney, if he was concerned at all that the contract was delivered after 105 days. Hennegan received his answered quickly and definitively. "No," Pastuszek said.

Board member John Lamarque asked Deputy Superintendent Trey Folse if MDB had done work for the School Board before. Folse said it had not.

"I'm curious whether or not we, in fact, have suffered," Lamarque said.

"I think we have in the delay in time and the time we've spent on this," Folse said. Procedures are in place for all companies to follow, and MBD didn't follow those procedures, Folse added.

School Board President Donald Villere said the next lowest bid, submitted by O.R. Dixon Construction, is for $1,765,700, which is $270,700 more than MBD's original bid.

Board member Ray Alfred raised a motion to table the issue until the next committee as a whole business affairs meeting on Feb. 2. The motion carried, and the board went on to accept O.R. Dixon's bid.

Board member Ronald Bettencourt expressed his satisfaction with construction finally moving forward at Mandeville High.

"This project is six or seven months behind now, and that's not doing the students at Mandeville High any good, so I think we need to move forward on this," Bettencourt said.