Case Name: Dalton v. Kunde et al.
Court: Montgomery County Court of Common Pleas
Jurisdiction: Ohio
Decision Date: 1971-10-22
Citations: 31 Ohio Misc. 75
Docket Number: No. 138669
Parties: Dalton v. Kunde et al.
Judges: 
Reporter: Ohio Miscellaneous Reports
Volume: 31
Pages: 75–98

Head Matter:
Dalton v. Kunde et al.
(No. 138669
Decided October 22, 1971.)
Common Pleas Court of Montgomery County.
Mr. Frank Root and Mr. John Jenkins, for plaintiffs.
Mr. James Brake, city law director, and Mr. Thomas Randolph, for defendants.

Opinion:
Rice, J
This taxpayer's suit came on to be beard upon its merits, the prayer requesting that the court issue a permanent injunction enjoining the defendants, Dayton city manager, Dayton city commissioners and the Dayton city accountant-director of finance, from paying or causing to be paid any amounts whatsoever to the Finite Con struction Company or allowing any work to be done by the Finke Construction Company for the construction of the Della Avenue and Riverdale Code Enforcement Area Construction Projects.
Upon due consideration of all the evidence and the testimony had at the hearing of the captioned cause, it is the opinion of the court that the plaintiff has not sustained his burden of proof and the court, therefore, enters final judgment in favor of the defendants.
A. Findings of Fact:
1. On or about July 19 and July 26, 1971, an invitation to bid was published in the Dayton Journal Herald for the following four projects:
a. Improvement of Della Avenue (Della Avenue)
b. Improvement of Service Drive West of Salem Avenue (Salem Avenue Service Drive)
c. Improvement of alleys in the Eastern Code Enforcement Area No. 2 (Eastern Code Area)
d. Improvement of alleys in the Middle Riverdale Code Enforcement Area (Riverdale Code Area)
2. On August 3, 1971, a pre-bid conference was held with reference to the above four projects. At said hearing, Jack Unterberger, city director of service and buildings, and James Francis, assistant to the executive director for contract compliance of the Human Relations Commission, explained to prospective bidders, among which were the B & M Construction Company and the Finke Construction Company, the provisions of newly amended Sections 147, 147-2 and 147-3 (Ordinance 24059), of the Code of General Ordinances of the city of Dayton, the effect of said amendments on present and future bidding for city of Dayton contracts, and the necessity of appending to each bid an Affirmative Action Assurance Plan (AAAP). The AAAP would indicate the present number of minority employees presently on the work force and how many the contractor might be expected to add if the contract were awarded to his company. The contractors were told that no bids would be accepted unless the AAAP's were attached to the bids and that they would be reviewed and recommendations made by him to Jack Unterberger as to their acceptability. All the new forms required under the newly amended ordinance were shown and explained to the prospective bidders, including the forms to be used for completing the AAAP's,
3. Newly amended Sections 147, 147-2, and 147-3 of the Code of General Ordinances of the city of Dayton (effective July 28, 1971), were passed in order to effectuate the city of Dayton's stated policy of compliance with Federal guidelines to implement equal opportunities for all qualified applicants regardless of race, color, sex, ancestry, national origin or place of birth. The ordinance specifically states that it is passed to comply with Section 103 (a) of the Demonstration Cities and Metropolitan Action of 1966 and with the Department of Housing and Urban Development's regulations designed to effectuate the aforementioned statute, which regulations are in the form of a document entitled "Model Cities Resident Employment and Training Requirements (CDA Letter No. 11)." The newly amended ordinance is designed to provide better guidelines for the Human Relations Commission and to prospective bidders for city contracts.
Section 147 states, in pertinent part, that the director of service and buildings (director) shall certify the lowest and best bid to the city manager. In determining which is the lowest and best bid, the director shall give consideration to the AAAP submitted in accordance with Section 147-3 of the ordinance, with particular attention to the probable effectiveness of such AAAP in insuring minority group representation in all trades and all phases of the bidder's operation.
Section 147-3 states, in pertinent part, that all bids on contracts submitted by contractors shall include, on their own behalf and on behalf of their proposed subcontractors, signed statements that: a. Applicants are hired and employees treated during employment without regard to race, color, religion, ancestry, national origin, or place of birth; b. The AAAP which the bidder proposes to undertake to insure that there will be minorities represented in all trades and in all phases of their operation (the bidders are invited to use the Human Relations Commission 's Contract Compliance Office for assistance in drafting their proposal). The AAAP is ordered to comply with certain stated guidelines, to-wit:
a. Use of minority contractors as subcontractors;
b. Employ representative numbers of minorities in all job classifications, with an increase in the work force resulting from the project bid upon being accompanied by a comparable increase in the number of minority group employees ;
c. Establish timetables for achieving employment goals which are directly related to the total work force;
d. Action oriented recruitment using Comprehensive Manpower Center and other recruitment sources where minority applicants can be found';
e. Provide on-the-job training opportunities for recently hired minority employees;
f. Employ residents from the Model Neighborhood Area for projects being performed in the Model Neighborhood Area, whether or not related to Comprehensive Cities Demonstration Program;
g. Recruitment sources where minorities are not registered will not be used; and
h. Record the total present work force and total minority work force and list minorities by job classification.
4. On August 10, 1971, bids were opened and were as follows:
Location B S M Finke
1. Della Avenue $32,388.10 $32,626.90
2. Salem Avenue Service Dr. 7,454.00 No bid
3. Eastern Code Area 88.587.90 97,948.80
4. Riverdale Code Area 76.696.90 77,982.75
Both B & M and Finke Construction Company submitted AAAP's, with their bids, in accordance with the above mentioned city ordinance..
5. On August 10, 1971, James Francis, assistant to the executive director of the Human Relations Commission for Contract Compliance, recommended that Finke Con struction Company be awarded contracts for two locations, based upon their having the more acceptable AAAP, to-wit: Riverdale Code Area and Della Avenne, and that the B & M Constrnction Company be awarded contracts for the other two projects, to-wit: Salem Avenne Service Drive and the Eastern Code Area. This recommendation was based npon: 1. B & M's being the only bidder on the Salem Avenne Service Area; 2. B & M deserving an opportunity to implement their AAAP on the Eastern Code Area Project; 3. Finite's past record of compliance with non-discriminatory hiring practices and their present total minority work force (eighteen percent minority employees compared to zero percent for B & M). These factors gave them the better AAAP on the Della Avenne and Riverdale Code Project, according to Mr. Francis' evaluation. He indicated, in his testimony on the witness stand, that his office had records on B & M Construction since August of 1969 and that their compliance had been less than satisfactory as far as implementing non-discriminatory hiring practices. He introduced figures to substantiate this.
This recommendation was approved by Edward King, director of the Human Relations Committee, without further investigation at this time, and forwarded to Jack Unterberger, director of the city of Dayton's Department of Service and Buildings..
Jack Unterberger testified that he discussed the bids and the AAAP's with his assistant, William Mason, upon the receipt of the report from the Human Relations Commission. Unterberger determined that B & M Construction was the lowest and best bidder on the Salem Avenue Service Drive and the Eastern Code Area Project and that Finke Construction was the lowest and best bidder on the Della Avenue and Riverdale Code Area Project. Unter-berger based his recommendation on, primarily, the number of minority employees presently on the work force. He stressed, over and over again, the fact that at the time of the review on August 11 or 12, 1971, B & M Construction had zero percentage of minority employees, whereas Finke Construction had eighteen percent of their work force made up of minority employees. He also stressed that he had prior experience with B & M Construction Company and that it was his opinion, both from personal observation and from discussions with members of his staff, that the B & M Construction Company simply did not carry out their intentions with regard to implementing nondiscriminatory work practices. In other words, Unter-berger placed great reliance on the fact that Pinke Construction Company said they had minority employees at the time and would use them on the job, whereas B & M (whose promises had not been satisfactory in the past) had no minority employees and would have to go out to secure them if they got the contracts. Unterberger felt that, with these factors in mind, Pinke Construction Company's AAAP's were the best and would best effectuate the city commission's expressed intention of providing eqijal employment opportunities for all minorities. Unterberger, after making such determination, certified to the city manager his opinion and recommendation that the contracts be awarded Salem Avenue Service Drive and Eastern Area Code Projects to the B & M Construction Company and the Riverdale Code Area and Della Avenue Projects to the Pinke Construction Company.
William Mason, Assistant to Jack Unterberger, testified that he and Unterberger had discussed the projects, with the recommendation from the Human Relations Commission on hand, and that the considerations for awarding the contracts pursuant to the Human Relations Commission's recommendations were: 1. Current number of minority employees, stressing the fact that Pinke Construction Company had eighteen percent of their work force in the minority category, whereas B & M Construction had zero percent; 2. The minor difference in bids; and 3. The capability of the contractors (both were capable).
The city manager approved the recommendations of Jack Unterberger and forwarded them to the city commission for its approval. The recommendations of the city manager, on each of the four projects, indicated to the commission that the awards have been concurred in by the .Housing and Urban Development Department (HUD) and that the AAAP's have been approved and reviewed by the Human Relations Commission. On those projects where Finke's bid was higher than B & M's ($238 plus on Della Avenue and $1,285 plus on Riverdale Code Area), and yet where Finke was selected as the lowest and best bidder, the Commission was advised that Finke Construction Company was selected because of their superior AAAP Program,
6. Four recommendations were submitted to the city commission on August 18, 1971. Commissioner Liskany questioned the award to Finke Construction Company of the Riverdale Code Area Project, particularly in view of the fact that B & M had been the low bidder. James Kunde, the city manager, explained the policy of adding the AAAP —equal opportunity program — as an influence in determining the lowest and best bid. Several minutes of animated discussion followed, between all the different commissioners and the city manager and the director of the Human Relations Commission, as well as with Mr. Francis, who was present, in which the fact that Finke Construction Company had eighteen percent of minority work force as opposed to B & M Construction Company's zero percent of present work force was discussed. Also mentioned was the fact that B & M, while promising to hire a certain number of minority employees, did not, at that time, have any on board. Mayor McGee stressed, on several occasions, his view that the city must give consideration to those businesses that have been complying with the laws relating to minority hiring, as opposed to those that have not complied but say they will if they get the particular contract awarded to them.
Edward King, the director of the Human Relations Commission, gave his opinion that his preference would be for the company who implemented a non-discretionary policy in the past as opposed to one who is presently not implementing a policy of non-discrimination but who promises to do so if the contract is awarded. He was asked to investigate the matter further and to make a report at the next commission meeting. The matter was thus tabled until the meeting of August 25, 1971.
7. On August 19, 1971 (the day after the commission meeting above referred to) a meeting was held between Edward King from the Human Relations Commission, Jack Unterberger from the department of service and buildings and a representative of the city law department. These three gentlemen reviewed the initial recommendations and determined that same were still valid. They based this decision not only on the past performance of B & M and Finke Construction Company with regard to the hiring of minorities and the implementation of their AAAP's but also on the number, or percentage of minority employees now employed by the various companies.
8. On August 19, 1971, Edward King, director of the Human Relations Commission, forwarded a memorandum to the city manager on the subject of the B & M Construction Company. Said report indicated that B & M had failed to implement the AAAP program that they had agreed to implement as far back as August of 1969 (at a time when zero percentage of its thirty employees were of minority groups). On the other hand, Finke's AAAP and their past performance with regard to hiring of minorities, far outweighs B & M's promise to comply in the future should the contract be awarded to them. The initial recommendation was confirmed and again referred to the commission.
9. The city commission accepted the recommendation and awarded the contracts accordingly on August 25 and September 1,1971, to wit: The Salem Avenue Service Drive and the Eastern Code Area Projects were awarded to the B & M Construction Company and the Riverdale Code Area and Della Avenue Projects were awarded to the Finke Construction Company.
10. Bonnie McKeehan, an executive of B & M Construction Company, testified that she went to the office of James Francis, after the awards were announced and showed him certain letters she had written to unions asking for minority employees to hire. She alleges that he said that if he had known about these letters previous to his making his recommendations, that B & M would have gotten the contracts. When asked why she did not attach these letters to her AAAP, Miss McKeehan indicated to Francis that she did not know that she could do so. According to Miss Mc-Keehan, both Francis and Jack Unterberger, to whom she went after leaving Francis' office, indicated that it was too late to change the recommendations. James Francis denies this particular conversation. He did state, and Miss McKeehan agrees with this statement, that had he known of these letters, he wonld have been better able to evaluate B & M's proposal.
11. Miss McKeehan testified that, from time to time, since the submission of the AAAP to the city in 1969, minorities had been hired and placed on the payroll. However, because of a lack of work, they were laid off. At the time of the bids in question, B & M was, due to a shortage of work, down to a skeleton staff', which included no minorities.
12. It was stipulated by and between the parties that on August 17,1971, bids were opened on a construction project totally unrelated to any of the four projects under discussion herein. This was the Kiverdale Code Enforcement Storm Sewer Project. AAAP's were submitted, by the various contractors, with their bids. The low bidder was one Associated Excavating Company, whose AAAP showed no minority employees on the total work force or on the job. The programs submitted by C. D. Webb, Incorporated, the second lowest bidder, showed five minority persons on the total work force and five on the job. Associated's AAAP's showed one minority subcontractor, whereas Webb's indicated no minority subcontractors. The director of service and buildings determined that the bids submitted were equal as to the AAAP's, working days, capability of bidders, etc., and recommended the award to the Associated Excavating Company, the low dollar bidder as the lowest and best bid. This recommendation was accepted by the city commission and the contract awarded on September 1, 1971.
B. The Issues
1. Is Ordinance 24059 (newly amended Sections 147, 147-2 and 147-3 of the Code of General Ordinances of the city of Dayton) in violation of the city charter which provides for competitive bidding, or otherwise unconstitutional for the reason that it delegates uncontrolled discretion to the director of service and buildings, without proper standards and guidelines?
2. If not, is the award and proposed contract to the Finke Construction Company improper by reason of inadequate instructions to bidders concerning the criteria to be used by the director in determining the lowest and best bidder as to its AAAP (even though twenty-five pages of instructions on equal employment opportunities were set forth in the specifications), thus violating the competitive bidding requirement of the Dayton City Charter and the general law?
3. Did the Dayton city commissioners act contrary to law or abuse their discretion in awarding the contract to other than the lowest bidder? Sub-issues to be determined under this heading are:
a. Did the director of service and buildings abuse his discretion in selecting other than the lowest bidder for the Della Avenue and Riverdale Code Area Projects; and
b. Is the director of service and buildings the only official with any power to exercise discretion as to determining the lowest and best bidder, all other officials and the city commission being authorized only to approve or disapprove the determination of the director of service and buildings ?
G. Conclusions of Law
1. The ordinance is constitutional.
a. As a valid exercise of the police power of the municipality :
Article XVIII, Section 3 of the Ohio Constitution states that municipalities shall have the authority to exercise all powers of local self-government and to adopt and enforce within their limits such local police, sanitary, and other similar regulations as are not in conflict with the general law. "Police power is the government's power of self protection; it has its origin, purpose, and scope, in the general welfare — in the public safety, public health and public morals. The police power is asserted to protect the well being of society and to maintain security of the social order. It is invoked by the courts to sustain legislative enactments which are passed to provide for public health, morals, safety, or welfare and which do not contravene any constitutional provision. The objective of the police powers is the promotion of the public good." 10 Ohio Jurisprudence 2d, Constitutional Law, Section 325.
Article XVIII, Section 7 of the Ohio Constitution states that any city may frame or adopt or amend a charter for its government and may thereafter exercise all the powers referred to above. Dayton has such a city charter. The making of contracts for public improvements is controlled by the charter of the city and the legislative and administrative steps taken thereunder to authorize it. Akron v. Zeisloft, 22 Ohio N. P. (n. s.) 533.
Can there be anyone who can argue that this ordinance is not an exercise of the municipality's police power —that, since it is legislation designed to secure equal opportunity for employment to all qualified applicants for employment, regardless of race, color, religion, sex, ancestry, national origin or place of birth, that it is not directly related to the public welfare of not only the minority members of the community but also the community as a whole? Such legislation is designed to assure to each member of the community that the rights granted to the citizens under the Fourteenth Amendment to the United States Constitution will not be denied because of discriminatory hiring practices. Indeed, it can be argued that the city has an affirmative duty to insure that public funds are not expended in such a way that denies the equal protection of the law to its citizens.
"The day has long passed when the Fourteenth and Fifth Amendments could be considered as merely restraining 'active' government discrimination. Almost a full decade ago, the Supreme Court, in Burton v. Wilmington Parking Authority, 365 U. S. 715, clearly laid down the rule that 'no state may effectively abdicate its responsibilities by either ignoring: them or by merely failing to discharge them, whatever the motive may he. ' Therefore, states and the federal government mnst sustain the burden of affirmatively assuring equal protection, including nondiscrimination, in all of its dealings. Implicit in this is a requirement of good faith. The obligation is not satisfied by the administration of an intellectual placebo. Good faith means the implementation and administration of programs which are designed to be successful and effective; they must work. The conclusion reached, therefore, is that the Constitution requires that government shall affirmatively seek and find effective programs to combat segregation and discrimination, at least where government funds or influence is involved." Kirkkower, The Constitutionality of "Affirmative Action" to Integrate Construction Trades. "The Philadelphia Plan," 43 Temple Law Quarterly 329 (1970).
This principle has been recognized by the Supreme Court of Ohio in Weiner v. Cuyahoga Community College District (1969), 19 Ohio St. 2d 35, stating that the policies of the United States and the state of Ohio against discriminatory hiring practices may be positively enforced by a public body through the medium of public improvement contracts. The court indicated that the public policy is clearly formulated in the legislation proscribing racial discrimination in employment (Civil Rights Act, 1964 and various executive orders).
Public construction contracts requiring employment in their performance must contain provisions by which the contractor promises that he will not engage in any discriminatory hiring practices. State and federal executive orders implementing civil rights legislation enjoin upon public contractors affirmative duties with respect to seeking, hiring, training, promoting and paying employees, and in regard to their dealings with subcontractors, unions and employment agencies, all to the end that non-discrimination in the performance of the contract will be assured. Weiner v. Cuyahoga Community College District, supra.
There; is no conflict with other laws involved here. Indeed, the ordinance in question expressly states that its passage is designated to better effectuate the various Federal laws designed to promote equal employment opportunities. Indeed, such an ordinance can only help promote compliance with various civil rights and equal opportunity laws which have been passed in this state and in the nation over the past dozen years.
The court holds that the ordinance in question is constitutional, as a valid exercise of the municipality's police power and as being consistent with the city's affirmative obligation of assuring equal protection, including nondiscrimination to all of its citizens.
b. The ordinance does not violate the principle of competitive bidding:
Section 132 of the city charter of Dayton provides for "competitive bidding. " The charter does not state whether the term "competitive bidding" means that the contract should go to the "low bidder" or to the "lowest and best" bidder. The ordinance in question, however, in Section 147, provides that the contract shall be awarded to the lotvest and best bidder. This, quite obviously, requires that the administrative officer, and finally the city commission, to look at more than simply which bid is the lowest in dollar amount. Other factors, by law, are now required to be taken into consideration in determining the lowest and best bid. The AAAP to be submitted with the bids is to be weighed with all other factors that have been historically weighed (total bid price, financial stability of the company, the company's ability to perform the contract, etc.) in determining which is the lowest and best bid. Thus, a company's AAAP is just one additional factor to weigh in determining which bid is the lowest and best, since the director is now required to evaluate the competing acceptable programs in the light of their probable effectiveness of such program in insuring minority group representation in all trades and in all phases of the bidder's operation. (Sec. 147)
The Ohio Supreme Court has sanctioned the requirement of attaching an AAAP to the contractor's bid and of allowing administrative officers or administrative boards to weigh the AAAP in determining which of two or more contractors is the lowest and best bidder. In Weiner v. Cuyahoga Community College District, supra, the court stated:
"A bidder for a construction contract to he awarded by a public body of this state may be required to assure non-discrimination in employment in the entire performance of such contract, by appropriate promises contained in contract provisions or related instruments."
"It may be argued that requiring public contractors to take affirmative action to forestall discriminatory employment practices in the performance of their contracts will tend to raise the cost of such contracts. Increased costs impair another governmental interest, that of economy. It must be noted, however, that neither state nor Federal contracts are secured only to the lowest bidder, but to the lowest and best bidder and lowest responsible bidder. 99
"Capacity to assure a performance which complies with anti-discrimination laws is reasonably a part of the standard of a best or responsible bidder on a contract involving the expenditure of public funds."
"Failure of a bidder to give such assurances when specified is a lawful ground for the rejection of the low bid of such bidder."
The court feels that if the failure of the bidder to give proper assurances when specified is a lawful ground for the rejection of the low bid of such bidder, by analogy, the failure of a bidder to satisfy the director as to the probable effectiveness of his AAAP in insuring minority group representation of his plan vis a vis the plan of another contract or bidder, is a lawful ground for the rejection of the low bid of such bidder.
It is to be noted that the similarities between the case at bar and the Weiner case, supra, are manifest. In Weiner, the invitation for bids on the contract contained specifications which required the contractors to submit an AAAP with the bid intended to "have the result of assuring that there is minority group representation in all trades on the job and in all phases of the work." The court finds that the Weiner case is authority for the proposition that an administrative board or body can, assuming a non-abuse of discretion, both require an AAAP and use that plan as one of the factors to be weighed in determining whether or not to give the bid to the low bidder or to one other than the low bidder (lowest and best).
c. The ordinance does not delegate uncontrolled discretion to the director of service and buildings without proper standards and guidelines.
It is true that Section 147 and Section 147-3 give some discretion to the director in weighing the AAAP's and, after weighing and considering same, in making his recommendation as to the lowest and best bidder to the city manager. But it is hardly uncontrolled discretion.. Briefly, Section 147 requires the director, in determining what is the lowest and best bid, to consider the AAAP's submitted, with particular attention to the probable effectiveness of such program in insuring minority group representation in all trades and in all phases of the bidder's operation. Section 147-3 outlines, in detail, the content of such an AAAP. The Section includes eight guidelines to follow in the preparation of such an AAAP, thus giving the director, when he evaluates the AAAP, definite guidelines to follow and standards against which to measure the plans, to determine which is the best plan designed to achieve probable effectiveness of such a program in insuring minority group representation in all trades and in all phases of the bidder's operation, to wit:
1. The use of minority contractors as sub-contractors;
2. Employment of representative number of minorities in all job classifications, with any increase in the work force resulting from the project bid upon being accompanied by a comparable increase in the number of minority group employees;
3. Establishing of timetables for achieving employment goals which are directly related to total work force;
4. Action-orientated recruitment using Comprehensive Manpower Center and other recruitment sources where minority applicants can be found;
5. Provide on-the-job training opportunities for recently hired minority employees;
6. Employ residents from the Model Neighborhood Area for projects being performed in the Model Neighborhood Area, whether or not related to Comprehensive Cities Demonstration Program;
7. Recruitment sources where minorities are not registered will not be used; and
8. Record total present work force and total minority work force and listing of minorities by job classification.
The court just feels that sufficient guidelines are set forth in the ordinance to "control" the discretion of the director. Indeed, the court feels that there are as many if not more, guidelines to follow in evaluating the AAAP as are usually present in evaluating such other factors as the financial stability of the bidder and _ physical ability of the contractor to perform the job, all of which evaluations administrative officers in the position of the director of service and buildings have been making for years.
As indicated above, the Weiner case, supra, dealt with the requirement of filing AAAP's intended to have the result of "insuring minority group representation in all trades on the job and in all phases of the work." Although the issue is not directly raised in the Weiner case, the court implied that sufficient guidelines had been set forth in the specifications to impose "controlled discretion" on the party that reviewed the AAAP's.
2. The award to Finke Construction Company is not improper — the court feels that adequate instructions wore given to prospective bidders concerning the criteria to be used by the director in determining lowest and best bidder, based upon, in part, a consideration of the AAAP's to be submitted with the bids.
It is to be remembered that the ordinance in question is a new one, becoming effective only some two weeks prior to the opening of bids on the four projects in question. It is further to be recalled that the requirement of attaching an AAAP to a bid is a new procedure. In order to acquaint prospective bidders on these four projects with the new rules, procedures and guidelines, the city conducted a pro-bid conference on August 3, 1971, which all prospective bidders on these four projects were invited to attend. The evidence is clear that both B & M Construction Company and Finke Construction Company were in attendance at such conference. At that time, representatives of the city, including Mr. Francis, of the Human Relations Commission, explained and outlined, in detail, what would be required under the new ordinance. Mr. Francis testified, and there is no evidence contradicting this, that he explained the forms and the guidelines that would be followed. He indicated that he would be making a recommendation and discussing same with Jack Unter-berger, the director of service and buildings.
It is true, as the defendant has pointed out, that there were twenty-five pages of instructions on equal employment opportunities set forth in the specifications, which did not deal with the AAAP's. However, as stated previously, both the ordinance and the necessity of appending an AAAP to the bid was new. Too new, perhaps, to work into the printed specifications. It is for that reason that the city conducted its "Pre-bid Conference" — to acquaint prospective bidders with new and additional requirements for bidding city public contracts. All the prospective bidders at the conference were alerted to the fact that not only would the twenty-five pages of specifications continue to hold true, as requirements for submitting bids with the city, but also that there were new and additional requirements which now had to be met.
The court feels that all prospective bidders, including Finke Construction Company and B & M Construction Company, were alerted to the new requirements, the new ordinance and the guidelines and standards which would be expected by the city and which would be followed by the city in evaluating both their bid and their AAAP's. All contractors were advised that said plans would be evaluated, along with other factors material to their bid, in determining which bid was the lowest and best. All prospective bidders were advised as to the purpose of the new ordinance--to carry into effect the city's stated desire to assure equal opportunities for employment. All prospective bidders were advised that it was the purpose of the ordinance to make a reality the promise contained in various state and Federal Equal Opportunity Laws.
3. The city commission neither acted contrary to law nor abused its discretion in awarding the contracts in question to other than the lowest bidder.
The plaintiff would infer that the city commission acted as a "rubber stamp" in this matter, awarding the contracts in question without so much as a second thought, on the recommendations of the city manager and the director of service and buildings. This is hardly true.
In the case at bar, the evidence is clear that Avhen these matters were brought up to an informal city commission meeting on August 18, 1971, that several minutes of animated discussion ensued. All of the commissioners participated in the discussion. At issue was not only the question of whether or not the contract should go to other than the lowest bidder on a particular project, but also the whole policy of the city commission in implementing the city, state and Federal equal opportunity guidelines and laws. At this commission meeting, both the Human Relations Commission director and the contract compliance officer, who had made the original recommendation, James Francis, spoke at length as to the reasons for favoring the Finke Construction Company over the B & M Construction Company. Two factors were stressed, over and over, to the commission.. Firstly, was the fact that Finke Construction Company at present had, on their payroll, some eighteen percent minority employee representation, whereas the B & M Construction Company had zero percent; secondly, was the past history of the B & M Construction Company, itself. It is to be recalled that the B & M Construction Company was no stranger to city construction work. The Human Relations Commission Chairman, Edward King, indicated that he had knowledge of B & M for a period of over two years and that their compliance with prior AAAP's was far from satisfactory. He felt, with all things considered, that Finke had the better plan and that they, therefore, were the lowest and best bidders.
The commissioners continued questioning at length. Finally, after asking Edward King for a further report, they tabled the matter until the next week.
Upon the further report of Edward King (issued following the August 19 meeting with the law department and Jack Unterberger) at the next meeting of the commission, the recommendations were finally accepted by that body.
Thus, the court holds that the city commission acted well within its discretion (as indicated by the discussion not only of these bids in question but of the general policy to be followed in public construction contracts submitted under this ordinance).
The plaintiff points to an analysis of Section 147 which states that the city commission has only the authority to approve or disapprove of the making of a contract, which said authority does not include the authority to determine the lowest and best bidder as has the director of service and buildings. This is, the court feels, a spurious argument. It is true that the city commission itself does not actually select the lowest and best bidder. That is the province of director Unterberger. However, the city commission, by its authority to approve or disapprove the recommendation of the city manager (to whom Unterberger has made his recommendation) has, in essence, the authority to disapprove of his recommendation as to the lowest and best bidder and to direct him to re-examine the matter a second time and to direct that the bid be given to the low bidder. It will be recalled that the director is simply trying to implement city commission policy as well as existing Federal and state laws. If the city commission disapproves of Mr. Unterberger's decision, by law and under the city charter, that body has the power to tell Director Unter-berger that it disagrees with his determination and to direct him to award the contract to other than his choice as to the lowest and best bidder. Thus, by virtue of their authority to review his recommendation as to the lowest and best bidder, the city commission, too, has the implied authority to evaluate and review the bids with an idea towards accepting that of the lowest and best bidder.
The court feels that the director of service and build ing's, Jack Unterberger, did not abnse Ms discretion in selecting other than the lowest bidder for the Leila Avenue and Riverdale Code Area Projects. It will be recalled that Mr. Unterberger testified that he had reviewed the AAAP and that he had concluded that Finke Construction Company's plans were more acceptable in terms of probable effectiveness of the program in insuring minority group representation. He based this, he stated, on two factors— present minority employees now on the payroll and past performance of the companies. Finke, as it will be recalled, had eighteen percent of its employees in the minority category, whereas B & M had no minority employees. Jack Unterberger stated that he had been familiar with the B & M Construction Company over the years and it was his opinion that B & M had not implemented the AAAP it had filed with the city in 1969. He stated he based this not only on personal observation of the work force employed at B & M worksites but also upon reports and memos from various members of his staff. His past experience with B & M was such that it seemed reasonably probable that B & M would not be able to fulfill their assurances of minority employment. On the two projects where there was only a minimal difference in the dollar costs, the jobs went to the Finke Construction Company, consistent with Mr. Unter-berger 's duty under the ordinance, in that their AAAP's were more likely to be effective in carrying out the design of the ordinance. Where B & M's bid was substantially lower, some ten thousand dollars (on the Eastern Code Area Project), that company received the job. There is nothing capricious, unfair or arbitrary, in these actions. The director of service and buildings, operating from past experience and an evaluation of present minority work force, concluded that, in terms of the ordinance, the Finke Construction Company's AAAP's were more likely to insure minority group representation in all trades and all phases of the bidder's operation. Finke was, in a sense, rewarded for its present eighteen percent minority employee representation on the total work force; whereas, the B & M Construction Company was, in a sense, penalized for its failure to implement the AAAP submitted to the city, by them, in 1969.
The plaintiff contends that the director's decision to find Finke Construction Company the lowest and best bidder on the Della Avenue and Eiverdale Code Area Projects (where the difference in the dollar amount of the bids was negligible) and, at the same time, awarding B & M Construction Company the contract on the Eastern Code Area Project constituted arbitrary and capricious conduct. He bases this statement on the fact that all the AAAP's submitted by B & M and Finiré were similar and were acceptable. He states that if B & M's AAAP's weren't good enough for Della Avenue and Eiverdale Code Area Projects, then they certainly would not have been good enough for the Eastern Code Area. This is an interesting argument, but one which, in the court's opinion, lacks merit. In this particular project, the Eastern Code Area Project, the bid difference was $9,400, with B & M Construction Company submitting the lowest bid. In this regard, it is not an abuse of discretion for the director to recommend the bid go to one whose dollar figure was substantially lower than that of the next lowest bidder. In the case of the Eastern Code Area Project, awarded to the B & M Construction Company, it might fairly be said that here the factor of the total dollar amounts on the bids was paramount. It will be recalled that director Unterberger stated that bid price was one of the factors considered in awarding the contracts. Nor was there anything arbitrary about the decision to give B & M a "chance" to implement their AAAP in accordance with this project. This is particularly so when one considers that their bid price was some nine thousand dollars below the next lowest bidder. It is safe to say that in a situation where the bid price from one contractor is some ninety-four hundred dollars below that of the next lowest bidder, that the total price will assume paramount consideration, assuming that the AAAP is "acceptable" in terms of being filled out in accordance with the law.
It must be stressed that, pursuant to the terms of the ordinances, one of the factors to be considered m determining the effectiveness of the AAAP is the total present work force and total minority work force and the listing of minorities by job classifications (see Guideline No. 8 in Section 147-3). Thus, director Unterberger was well within his discretion in considering the present total minority work force when evaluating the AAAP's.
Once again, the parallel of the case at bar with the Weiner case, supra, becomes obvious. In Weiner, the low bidder submitted an AAAP of some hundred pages but conditioned their hiring of minorities with the words ' ' subject to availability and referral to the company of qualified journeymen and apprentices from the local union." The low bidder stated in its AAAP that it would make every reasonable effort to see to it that minority representation was had but that they could not guarantee that negro apprentices would be working on the project. This bid was rejected in favor of the second low bidder, whose assurance of equal employment opportunity and minority group representation on the job was expressed as follows: "You are hereby advised that we will have negro representation in all crafts employed on this project." Thus, Weiner is authority for the proposition that an administrative body or board does not abuse its discretion when it awards a public construction contract to other than the low bidder, such award being based, in part, upon an evaluation of the AAAP's required by law to be submitted with the contract. This is particularly so when the administrative body or board has decided to whom to award the contract, based upon their own questioning of the award and based upon the recommendation of an administrative officer who has determined that the AAAP of the one other than the lowest bidder is most likely to insure the goal of equal employment.
It must be stressed that the court is not hereby ruling on the "correctness" of the director's recommendation or of the city commission's decision. The court is simply stating that the recommendations and the actions of both were within the discretion conferred upon them by law. As stated in State, ex rel. Roger Au, v. Studebaker (Montgomery County Court of Appeals, 1963), 120 Ohio App. 68, citing 47 American Jurisprudence 786:
"The law providing that a public works contract shall be let to the 'lowest and best bidder' does not require that the contract be let to the lowest dollar bidder, and a court cannot interfere with the exercise of the discretion of public authorities in awarding such contract, except in cases of fraud or abuse of discretion."
" # the provisions of R. C. 6117.27, directing county commissioners to let sewer contracts to the 'lowest and best bidder' vests a discretion in the county commissioners in the exercise of which the contract may be awarded to one other than the lowest bidder."
"The award of a sewer contract by a Board of County Commissioners to one other than the lowest bidder will not be interfered with by the court, where no abuse of discretion is shown by the record."
# * there is but little dissent from the general rule that in determining who is such 'lowest responsible bidder'; 'lowest and best bidder,' etc., public boards and officials are vested with wide discretion, and their decision, when based upon an honest exercise of the discretion thus vested in them, will not be interfered with by the courts, even if erroneous."
The Au case cited, with approval, the ease of State, ex rel. Shaefer, v. Ohio Turnpike Commission, 159 Ohio St. 581, as follows:
"The exercise of an honest judgment, however erroneous it may seem to be, is not an abuse of discretion. Abuse of discretion, and especially gross and palpable abuse of discretion, which are the terms ordinarily employed to justify an interference with the exercise of discretionary power, implies not merely error of judgment, but perversity of will, passion, prejudice, partiality or moral delinquency."
In the case of Steiner v. Custer, 137 Ohio St. 448, the court further defined abuse of discretion as follows:
"It must be kept in mind that the term, 'abuse of dis- eretion' means more than an error of law or error of judgment. It means a 'discretion exercised to an end or a purpose not justified by, and clearly against reason and evidence..' "
The court, therefore, holds that the city commissioners, upon consideration of this matter when it came before them, listened to arguments opposed to giving the contracts to other than the lowest bidder, demanded further information from the appropriate administrative officials and, when said information was forth coming, exercised their discretion and made their decision. The court feels that there was no abuse of discretion in the case at bar.
Wherefore, the court enters final judgment in favor of the defendants. The complaint in the captioned cause will be ordered dismissed at the plaintiff's costs and the temporary restraining order granted in the within cause on September 21, 1971, will be declared to be dissolved and held for naught.
Judgment for defendant.