Can the Controlling Board of a State Waive Competitive Bidding Requirements ?
In Control Data Corp. v. Controlling Bd. of Ohio (1983), the Controlling Board of Ohio waived competitive bidding requirements under its authority to do so pursuant to law.
The contract at issue was between the Ohio State Lottery Commission and General Instrument Corporation for the purchase of computer equipment and equipment maintenance services.
The plaintiffs included a competitor of the contract awardee and three members of the Controlling Board.
At issue was the failure by the Controlling Board to follow the requirements of R.C. 127.16, which provided, "Upon the request of either a state agency or the director of budget and management and after the controlling board determines that an emergency or a sufficient economic reason exists", the Controlling Board could act to waive, competitive bidding and approve the contract.
In Control Data, the plaintiffs alleged that no determination was made by the Controlling Board, by separate vote, that an emergency existed to waive competitive bidding.
The plaintiffs further contended that the Controlling Board violated its established procedures in approving the contract.
The appellate court noted that it was clear that the Controlling Board failed to fully abide by its own procedural guidelines but that strict compliance was not the rule.
The court reiterated that "the plaintiff must be able to demonstrate either that the procedural defects that occurred were so substantial that the basic integrity of the Controlling Board and its operations was threatened or that the defects were of such a nature that the plaintiff was prejudicially affected." Id. at 39, 16 Ohio B. Rep. 32, 474 N.E.2d 336.
Neither the trial court nor the appeals court could find such defects in procedure.