A recent court decision has upheld the Department of Transportation's (Caltrans) handling of a competitive bidding process, despite objections from a competing contractor. The case was filed by St. Francis Electric, LLC in the Court of Appeal of the State of California, Third Appellate District on July 26, 2024, against Caltrans and Alfaro Communication Construction, Inc.
The controversy began in September 2021 when Caltrans advertised a project for installing fiber optic cable systems and other improvements on State Routes 51 and 99. Alfaro submitted the lowest bid but later withdrew it due to a mathematical error. Caltrans allowed this withdrawal and subsequently rejected all bids to modify the project before readvertising it in February 2022. When Alfaro again submitted the lowest bid for the revised project, St. Francis Electric protested, arguing that under Public Contract Code section 5105, Alfaro should have been barred from rebidding after withdrawing its initial bid.
St. Francis contended that despite minor modifications, the project's identity remained essentially unchanged, thus invoking section 5105’s prohibition on further bidding by Alfaro. However, Caltrans maintained that significant changes had been made to the project—such as increasing working days, allowing for potential lane closures, revising borehole spacing requirements, and raising the Disadvantaged Business Enterprise (DBE) goal—which rendered section 5105 inapplicable.
The trial court sided with Caltrans, finding these changes substantive enough to differentiate the revised project from its original iteration. The appellate court affirmed this decision upon review. In their ruling, they noted that while many aspects of both projects were identical—including general descriptions and contract numbers—the alterations cited by Caltrans were sufficient to consider them different projects under section 5105.
St. Francis sought various forms of relief including invalidation of Alfaro’s awarded contract and compensation for bid preparation costs. They argued that Caltrans’ post facto determination about project differences was improper and unfairly forced bidders into an unnecessary protest procedure.
Despite these arguments, the appellate court found no merit in St. Francis's claims. They emphasized that substantial evidence supported Caltrans’s decisions regarding material changes between the initial and revised projects—particularly increased working days and DBE goals—and thus did not find Caltrans's actions arbitrary or capricious.
Case ID C098129.