HomeMy WebLinkAboutS03-City Attorney
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u~nnHnulnu - tu:,WUI:~T FOR COUNCIL ACTION
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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.
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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.
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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
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t'UH COUNCIL ACTION
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STAFF REPORT
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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
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Loulse';;!-flenne,
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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
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City AttoI"nJ'!Ys
Amicus Brf
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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
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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.
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