Official Newspaper of Eddy County since 1883
Klemetsrud's motion to halt NR-S boiler project soundly rejected
Good news came Thursday, Oct. 14 for the New Rockford-Sheyenne School District, as Southeast District Judge Troy LeFevre rejected Klemetsrud Plumbing and Heating’s request for an temporary injunction halting the boiler replacement project.
The lawsuit, filed Aug. 26, alleged that the school district did not comply with N.D.'s competitive bidding statutes in awarding the contract for the boiler replacement to Minot Plumbing and Heating, as Klemetsrud had submitted the lowest bid. Klemetsrud contended that once their bid was opened, they were deemed responsible bidders. Further, they argued that they were not given the opportunity to provide references, as the other contractors were, and were not given any reason why their bid was unsatisfactory.
The school district argued that the statute provided them the discretion to choose the lowest responsible bidder, and referenced a similar boiler replacement project at Open Season Lodge in Sheyenne, where Klemetsrud was not responsive to issues. They also noted that Klemetsrud had a poor reputation in the community, citing feedback they had received from community members regarding not only the Sheyenne project but others.
Both parties delivered oral arguments in the case, in a 90-minute hearing on Monday, Oct. 11. Jeff Klemetsrud, president of Klemetsrud Plumbing and Heating, Lucas Niess of Prairie Engineering, NR-S board member Alyson Myhre, and NR-S board president Mary Kay Price all testified in the case.
LeFevre deliberated for three days before ruling to deny Klemetsrud’s request on Thursday, Oct. 14. The written decision came just a few hours after press time for the Oct. 18 issue.
In considering the injunction, the judge said he weighed four factors: 1) substantial probability of succeeding on the merits; 2) irreparable injury; 3) harm to other interested parties; and 4) effect on the public interest.
Regarding the first factor, LeFevre wrote that contrary to Klemetsrud’s position, the plain language of the statute does not provide that a bidder is deemed responsible merely because its bid has been opened and read. The statute states, “a governing body or its designated agent (in this case Prairie Engineering) shall open publicly and read aloud each responsible bid received.” Both parties agreed that Klemetsrud’s bid complied with the requirements listed in the bid notice, therefore it was a responsible bid.
LeFevre also countered Klemetsrud’s argument that by opening the bid, the school district deemed his firm responsible. “This court does not conclude that N.D.C.C.48-01.2-07 may be construed as providing that once a bid is opened and read, the bidder has been deemed responsible by the governing body.”
“In other words, the bid itself may have been deemed ‘responsible’ by Prairie Engineering, but that does not mean the bidder was automatically considered ‘responsible’ by the school,” LeFevre continued.
LeFevre referenced several cases. One among them was Chaffee vs. Crowley (1922), in which the court affirmed a decision to award a contract to the third-lowest bidder, noting that even at that time, it was “well recognized that an earlier version of the law for awarding public construction contracts to the lowest responsible bidder granted the governing body discretionary authority.”
The record reflects the school did just that, according to LeFevre. “The school properly considered Klemetsrud’s ability, capacity, reputation, experience and efficiency. The record does not demonstrate the school abused its discretion in determining Minot Plumbing and Heating, rather than Klemetsrud, was the lowest responsible bidder,” LeFevre wrote.
Further, based on the testimony presented by the school district both in writing and on the stand during the Monday hearing, LeFevre noted, “As a result of Klemetsrud’s past performance in the community, it is known to the school district that Klemetrud’s skill and ability/willingness to perform repair work are suspect.” He concluded, then, that the first factor weighed against granting Klemetsrud’s requests.
In regards to the second factor, it was undisputed that Klemetsrud Heating and Plumbing would be irreparably injured if the school contracts with Minot Plumbing and Heating. However, LeFevre opined that the competitive bidding statutes are not intended to directly benefit contractors. Rather, the statues are erected for the benefit of the public, specifically “to prevent favoritism, fraud, and collusion, and secure the best work and supplies at the lowest price.”
LeFevre noted that the third and fourth factors, harm to other interested parties and effect on public interest, also weighed in favor of the school district. The school’s aging boilers are in poor condition, and with winter quickly approaching, “delaying the project [will] potentially harm the students, who will be subject to a building with an old boiler that is in need of replacement.”
As Louters explained in an interview Tuesday, “This case was kind of foundational, really.” She added that school district officials offered to present the case at the North Dakota School Board Association conference, in order to take what they’ve learned and educate other school districts on navigating competitive bidding statutes.
Now that the school can resume the project, Louters stated,” We want to shore up our interest in working with Minot Plumbing and Heating.”
In consultation with Prairie Engineering, the school district has engaged Minot Plumbing and Heating in reviewing the original contract presented to them in August. With a 14-week wait for boilers after the contract is signed, school officials are also evaluating potential timelines for replacement and seeking a recommendation from Prairie Engineering regarding that.
The Transcript will keep readers informed as the project moves forward.