Winning library construction bid in San Jose may lead to lawsuit Friday, August 7, 2009 By David Goll, Silicon Valley/San Jose Business Journal SAN JOSE — The San Jose City Council’s approval of a bid by a prominent developer to build an 18,000-square-foot library may lead to a lawsuit, according to a local labor leader. Neil Struthers, CEO of the Building and Trades Council of Santa Clara and San Benito Counties, said labor leaders and representatives of some of the nearly two dozen contractors who lost out to low-bidder Barry Swenson Builder of San Jose are talking about the possibility of legal action to negate the 6-5 council vote. They contend Swenson plans to use a steel contractor with insufficient experience on the project, violating the city’s bid specifications. Mayor Chuck Reed disagrees, saying the steel contractor qualifies for the job. And for his part, company CEO Swenson said securing the contract will help him avoid staff layoffs. After his original bid that came in $15,000 below his closest competitor got a belated OK from city officials, he said he plans to start construction on the Educational Park Branch Library near Independence High School in East San Jose next week. “We certainly are happy to get the job,” he said. “With private projects not being financed, we desperately need the work.” Struthers said he and other contractors contend the city ignored its own bid specifications by originally approving Swenson, a high-profile developer known primarily for his privately funded design-build projects. They say his use of what they consider an inexperienced contractor handling structural steel aspects of the construction project sets an undesirable precedent for future city-funded projects. Bid specifications from the city required at least three years experience in the field. “They open themselves up to litigation by the contractor community with this decision,” Struthers said of the City Council. “It will hurt the city in the long run. We are checking with attorneys to see who might have standing (to file a lawsuit).” He said the job was originally bid in April, five months short of the third anniversary of the steel contractor — Elmer’s Portable Welding Inc. of Sacramento — receiving its state license to perform structural steel work. It secured the license in September 2006, Struthers said. Mayor Reed, who also voted to support Swenson’s bid — along with council members Judy Chirco, Rose Herrera, Sam Liccardo, Pete Constant and Pierluigi Oliverio — said there’s no basis to the objections from other contractors and the Building and Trades Council. He said Elmer’s may have received its state license less than three years ago, but it has had five years of experience in the field, keeping it in line with city requirements. “I’m happy the Council reconsidered it,” Reed said. “They took action that will save the city money. I’m anxious to see the project started and get our construction workers busy.” Swenson shares that sentiment. He said commercial construction activity in the area has declined by 71 percent over the past year while his own company’s project volume has been cut in half. “We have bid occasionally on public projects in the past, but we will be doing more of it in the future,” Swenson said. “The objections (of other contractors and labor leaders) are a smoke screen and have no merit. We will be using more local contractors than any of the other companies that bid on this project.” The Aug. 4 council vote reversed a decision made by the same governing body June 23 to rebid the project after controversy arose over the selected subcontractor. The library is scheduled to open in spring 2011. It would be the 18th library built in the city of 1 million as the result of a November 2000 bond measure approved by city voters authorizing $212 million on such projects over a 10-year period. Herrera, the councilwoman who requested that the issue be revisited by her colleagues, switched her vote this time around in favor of Swenson. Councilwoman Chirco, who had been absent from the June meeting, also voted in favor. Voting in opposition were Nora Campos, Nancy Pyle, Ash Kalra, Madison Nguyen and Kansen Chu. David Goll can be reached at 408.299.1853 or dgoll@bizjournals.com.