- The Washington Times - Thursday, May 24, 2007

A federal judge has declined to overturn a citywide paving contract that came under recent scrutiny amid accusations that a new D.C. rule gives one company an insurmountable edge in bidding for city road-construction jobs.

The multi-million dollar contract, awarded to D.C.-based Fort Myer Construction, was challenged in federal court when a rival company said it lost out on the job even though its bid was hundreds of thousands of dollars less expensive.

Capitol Paving Inc. sought to freeze the award of the contract until a judge can settle questions about the constitutionality of a new rule that applies to Fort Myer. The rule gives preference in awarding city contracts to businesses that have been in the District for 20 or more years.

U.S. District Court Judge Richard J. Leon said the public interest would be harmed if he delayed award of the alley-repair contract.

The judge, in an opinion issued Wednesday in federal court in the District, ruled the alley repairs “are necessary for the public health and safety and to avoid an inevitable increase in the cost of the project should there be a delay.”

Though declining to overturn the contract, the ruling doesn’t dismiss the lawsuit. And Capitol Paving can still challenge the constitutionality of the new bidding law in court, possibly collecting lost profits if it ultimately wins the case, Judge Leon wrote.

An attorney for Capitol Paving said the company is pressing ahead with the suit.

“The judge said the District needed to have the work done,” company attorney Douglas A. Datt said yesterday. “But he certainly didn’t say he didn’t believe the case didn’t have any merit.”

In court, the company argued the new rule has created a “monopoly” in bidding for D.C. road-paving contracts because Fort Myer is the only qualifying company.

Under the system, a so-called “longtime resident business” that submits a $1 million bid on a city contract could be chosen over a less-established competitor’s bid of $901,000.

That’s because under the new rule, city officials take the 10 percent discount and view the $1 million bid as $900,000 for the purposes of comparing offers. However, if the longtime business actually wins the contract, the District still would pay $1 million.

In court documents, Capitol Paving says in its bid on a recent citywide alley-construction contract, Fort Myer stands to get the job, despite its offer being about $600,000 more expensive.

Fort Myer officials said they dispute Capitol Paving’s lawsuit and filed court papers to intervene in the case, a motion that Judge Leon recently denied.

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