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S.n. Nielsen Co. v. Public Building Com.

OPINION FILED JULY 11, 1980.

S.N. NIELSEN COMPANY, APPELLANT,

v.

THE PUBLIC BUILDING COMMISSION OF CHICAGO ET AL., APPELLEES.



Appeal from the Circuit Court of Cook County, the Hon. James C. Murray, Judge, presiding.

MR. JUSTICE KLUCZYNSKI DELIVERED THE OPINION OF THE COURT:

This action was filed by plaintiff, S.N. Nielsen Company, seeking a determination that it is entitled to the contract for the construction of the New Loop and City Wide College, to be located in downtown Chicago. The circuit court of Cook County agreed with plaintiff that the bidding formula used by the defendant Public Building Commission was unlawful, but it refused to grant the relief requested. We allowed plaintiff's motion for direct appeal. 73 Ill.2d R. 302(b).

Plaintiff, S.N. Nielsen Company, and defendant Del E. Webb Corporation are general contractors in the construction industry. Both submitted bids in response to the defendant Public Building Commission's April 11, 1980, advertisement for bids for the construction of the New Loop and City Wide College, 30 E. Lake St., Chicago. On May 15, 1980, the Commission opened the bids of Nielsen, Webb, and five other bidders. Nielsen's bid of $19,130,000 was lowest, and Webb's bid of $19,320,000 was third lowest. By resolution of May 20, 1980, however, the Commission awarded the contract to Webb on the basis of its application of the Commission's so-called "canvassing formula" under which a bidder receives credits for the percentage of hours worked by minority members not in excess of 50% of the total hours worked on the project. These credits are subtracted from the contractor's bid, and the result is denominated the "award criteria figure." The formula is included in bidding documents distributed to interested contractors, and the contractors calculate their own minority credits. The formula, as contained in the bidding documents, is set out below:

CANVASSING FORMULA

Line 1. Base Bid, in figures ______

Line 2. Percentage of the journeymen hours that the Contractor proposes to be worked by minority journeymen during construction of the project ______

Line 3. Multiply line 2 by line 1 by 0.04 ______

Line 4. Percentage of the total apprentice manhours that the Contractor proposes to be worked by minority apprentices during construction of the project ______

Line 5. Multiply line 4 by line 1 by 0.03 ______

Line 6. Percentage of the total laborer manhours that the Contractor proposes to be worked by minority laborers during construction of the project ______

Line 7. Multiply line 6 by line 1 by .01 ______

Line 8. Summation of lines 3, 5, and 7 ______

Line 9. Subtract line 8 from line 1 = ______

Award Criteria Figure ______

The formula was taken verbatim from a form used by the city of Chicago. We also are informed that the Commission began using the formula as early as 1974 but that no resolution was passed formally adopting the formula. Nielsen, however, does not attack the Commission's failure to pass such a resolution and has stipulated that the case is not thereby affected in any manner.

After application of the formula, the bidder with the lowest award criteria figure is awarded the contract. The award criteria figure, however, is used only to determine which contractor receives the contract; the contract is actually performed for the amount specified in the contractor's bid. Through application of the formula, it was determined that Webb had the lowest award criteria figure, $18,547,200, and that Nielsen had the second lowest such figure, $18,565,000. Webb was accordingly ...


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