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HomeMy WebLinkAboutS03-City Attorney ,..,.. . ......- ...-.... u~nnHnulnu - tu:,WUI:~T FOR COUNCIL ACTION ;., .~- From: James F. Penman, ""Ci ty Attorney Subject: Request by City of San Francisco to join in a Friend of the Court brief on the issue of establishing irresponsible bidders. - De~: City Attorney Date: November 16, 1994 Synopsis of Previous Council action: None. Recommended motion: Direct City Attorney to join pending appeal as an Amicus Curiae. ~.) ./ Signature Contact person: Dennis A. Barlow Phone: C;;?C;;C;; Supporting data attached: Ward: FUNDING REQUIREMENTS: Amount: Source: IAcct. No.) IAcct. Descriction} Finance: Council Notes: 75.0262 Agenda Item No S -,3 . . -- -..- ..... - .. .~._....... --- .....,,; .-...... w....., . t'UH COUNCIL ACTION ~.,. ~ . '.... STAFF REPORT -- The City of San Francisco is requesting that other cities join in an Amicus CUriae (friend of the Court) brief on the issue of when a city can determine that a bidder is irresponsible. The letter from Geoffrey Spellberg, San Francisco Deputy City Attorney is attached. Should the Mayor and Council wish to join in this action, the City Attorney should be directed to contact those preparing the brief. 75-0264 .. ~ (;~~"~\i .., ... ,'" o 0 1";1 . u)....~ ""O""'-i Loulse';;!-flenne, City ~: ney ,"-.. ,-' Geoffrey Spellberg Deputy City Attorney (415) 554-3954 November 9, 1994 California City Attorneys RE: Leaque of California Cities--Amicus Brief Request Dear California City Attorney: I am wri~ing ~o advise you of an important issue presently before the Callfornla Court of Appeal that potentially affects every California municipality. The issue involves the entitlement of municipalities to disqualify a contractor from bidding on public works contracts as a result of dishonest conduct by the contractor. Presently, it appears that municipalities lack such entitlement. That means that dishonest contractors who submit low bids on pUblic works projects must be awarded those contracts even though such contractors will inevitably submit inflated cost overrun claims when the jOb is completed. The issue is before the appellate court on the following facts. San Francisco hired a publics work contractor to perform a construction job that ultimately finished late and over budget. The contractor submitted a large contract claim for extra costs and brought a lawsuit based upon that claim. The claim was grossly inflated. As a result, the San Francisco Public utilities Commission held a two day public hearing to determine whether the false claim was knowingly submitted. After taking evidence from all parties, the Commission concluded that the contractor had intentionally submitted over $400,000 in false billings in an attempt to defraud San Francisco. Based upon that finding, the Commission declared the contractor "irresponsible" for a period of five years. That holding disqualified the contractor from ?idding on a~y San Francisco public works projects for the flve year perlod. (415) 554-3800 Fox Plaza, 1390 Market Street, Suite 1010 San Francisco 94102-5404 . . City AttoI"nJ'!Ys Amicus Brf "...~ -2- "-.'.."'" ,j 11/9/94 The contractor brought an action in San Francisco Superior Court challenging the Commission's decision. The court issued an injunction staying the decision and holding that the Commission lacked authority to disqualify the contractor. The San Francisco City Attorney's Office has appealed the court's order. Federal public contrrl(.tilltJ law contains extensive authority governi rig the issue of CClnl ,.lel ur disqualification. In contrast, then, is no s lrnllar stA"e 1;"../ allthority. The Public Contract Code requires award of CUtllldcts to the lowest responsible bidder--without any mechanism for evaluating responsiblity. By the appeal, we have asked the appellate court to recognize the right of California municipalities to disqualify contractors from bidding on public works projects where the contractors have acted "irresponsibly." The League of California Cities has recognized the importance of this issue. It has authorized the preparation and filing of an amicus brief in support of San Francisco's position. Hans Van Ligten (714 641-5100) of Rutan & Tucker is presently preparing the amicus brief. Joan Gallo, the San Jose City Attorney (408 277-4454), is the League Advocacy Committee member who has been assigned to supervise the brief. The League and San Francisco are looking for all public entities that are concerned about the issue to join in the amicus brief. Since I believe that a municipality's ability to control its award of public works contracts is critical to assuring quality work at fair prices, the appellate issue here has broad municipal affect. As such, I urge and request that you join as an amicus on the brief. Please contact Mr. Ligten or Ms. Gallo if you wish to join on the brief. Thank you f0~ Y0ur attention to this matter. Please call me with any questions. Very truly yours, LOUISE H. RENNE City Attorney +~ g;~u:y Cit;E~~~ey cc Joan Gallo, Esq. Hans Van Ligten, Esq. JoAnne Speers, Esq. (League of California Cities) 3' I S Ie. . . I \