Tip Top Construction Makes Case Against Government

Tip Top Construction President Joe Hollins said the V.I. government is misinterpreting federal procurement guidelines

April 09--ST. THOMAS -- The legal battle between contractor Tip Top Construction and the V.I. government went before the V.I. Supreme Court on Tuesday, although no ruling has been issued yet.

The lawsuit has been delaying the Main Street Enhancement Project, a federally funded project to rehabilitate Main Street in downtown Charlotte Amalie.

Procurement process

Procurement rules are at the heart of the legal dispute.

When the project was put out to bid last fall, two bidders responded. Island Roads bid $10.4 million and Tip Top Construction bid $8.6 million.

In November, the project was awarded to the higher bidder, Island Roads, and Tip Top filed a lawsuit in V.I. Superior Court.

Tip Top Construction President Joe Hollins has said the V.I. government is misinterpreting federal procurement guidelines.

The project already is designed, and the contract is solely for the purpose of construction, therefore the only thing that can be taken into account in selecting a bid is the dollar figure, according to Hollins.

In December, the V.I. Superior Court ruled in favor of the government, and Hollins appealed to the V.I. Supreme Court.

The appellate court ruled last month that it would expedite the process but that it would fully adjudicate the appeal. In the meantime, a restraining order is in place, preventing the government from breaking ground on the project.

Supreme Court hearing

Stefan Herpel represented Tip Top at Tuesday's hearing.

"There has to be public trust in the procurement system," he said.

Herpel told the justices that the federally funded project should comply with federal procurement standards and regulations. Specifically, the government is obligated to go with the lowest bidder as long as the bid is deemed responsive.

Chief Justice Rhys Hodge asked about a missing subcontractor signature that the government's bid evaluation committee pointed to as a reason the bid was incomplete.

"I think the court can set that aside. To me, the committee was straining to find a reason to reject Tip Top's bid," Herpel said.

Justice Ive Swan asked about the discrepancy between the bids and the in-house engineer's estimate, which was higher than Tip Top's bid.

"The regulations don't allow a bid to be rejected just because it's lower than the engineer's estimate," Herpel said.

Herpel said if the estimate does not match the bid it is considered mathematically imbalanced, but that is not reason alone to reject the lowest bidder unless the government produces a written explanation for a material imbalance.

A material imbalance would be proof that the bid did not take into account the required material or expenses necessary to complete the job.

When the government's attorney, Jennifer Augspurger, got up before the justices, she said simply: "The Superior Court got it right."

The justices pushed her about the lack of written response defending a material imbalance as a reason for rejecting the Tip Top bid.

Swan pointed out that the only written statement came out of the evaluation committee's recommendation report and was only a half page of copy.

"I don't see anything analytical about that report," Swan said.

"Where is the rest of it?" Hodge asked.

Augspurger said there may have been a larger report, but it was not introduced at the trial.

Herpel asked the court to remand the matter back to trial court to allow the case to proceed on the merits. He also asked the appellate court to give guidance to the lower court on the procurement rules and regulations so that a similar situation does not arise in the future.

"Boy, you sure like to go for the full enchilada, even if you know we can't give it to you," Swan said.

The justices did not make a ruling from the bench Tuesday, nor was an order or opinion filed by press time.

The project

The Main Street Enhancement Project is managed by the V.I. Public Works Department, which, in conjunction with the V.I. Water and Power Authority's downtown Hazard Mitigation Project, will widen and beautify Main Street from Post Office Square to the former Enid Baa Library by placing above-ground power lines underground.

The project will place palm trees in groups of four along the street, with areas for seating and light fixtures. Blue biche sidewalks will replace the concrete, and bollards will separate vehicular traffic from foot traffic.

The project is primarily funded by the Federal Highway Administration.

The work will be done at night so as not to impact daytime commerce on Main Street, according to Public Works officials.

The project's timeline was to run from May to November of this year.

While Public Works Commissioner Darryl Smalls is hopeful the project can stay on track, work cannot commence until a legal dispute between a contractor and the government is resolved.

- Contact reporter Aldeth Lewin at 714-9111 or email [email protected].

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