A Big Stone Gap U.S. District Court says a construction company hired to make repairs on a middle school and a high school damaged in separate weather incidents cannot collect on the balance of alleged contracts with the school board, as the purported contracts did not comply with requirement of the Virginia Public Procurement Act.
Ultra vires act
The school board argues that any purported contract between the contractor and the school board is ultra vires and void ab initio for failure to comply with the competitive bidding requirements and other strictures of the Virginia Public Procurement Act, Va. Code §§ 2.2-4300-4377. The school board contends the amended complaint fails to aver that the representatives who allegedly contracted on behalf of the school board were authorized to do so.
The contractor argues that the VPPA does not apply because it was hired to perform mitigation and restoration rather than new construction. That argument is unavailing, as the statute’s definition of “construction” expressly includes “repairing” a structure. The contractor also argues that its contract claim against the school board is based on the Authorization to Pay forms rather than a construction contract, but I find this to be a distinction without a difference. The Authorization to Pay forms address payment for construction services performed for the school board. The contractor cannot rely on these forms to get around the VPPA and its requirements.
The contractor does not allege that, in the alternative, the school board passed any resolution adopting alternative procurement policies and procedures. Nor is the contractor relieved of the VPPA requirements based solely on an alleged prior course of conduct that is inconsistent with the VPPA.
Through the VPPA, the General Assembly has limited a school board’s power to enter into certain kinds of contracts. To allow a party to enforce a contract that was executed without complying with the VPPA would undermine the strength of the VPPA and thwart its purposes. The contract claims against the school board are dismissed.
Further, the absence of an enforceable contract between the school board and the contractor is fatal to the contractor’s claim against defendant Risk Management Programs Inc. The contractor cannot recover funds under the insurance policy that it claims are due to it based on its invalid contract with the school board. The Authorization to Pay forms did not make the contractor an intended third-party beneficiary of the school board’s insurance policy, nor do the forms constitute contracts in their own right. Risk Management did not sign the Authorization to Pay forms, and those forms do not purport to require Risk Management to do anything.
The contractor seeks leave to amend to assert claims of unjust enrichment, conversion and interference with contract. The court agrees with defendants that amendment would be futile, as the proposed new claims are merely additional attempts to recover under the alleged contracts despite failure to comply with the VPPA.
H.S. Martin Construction Corp. v. Lee County School Board (Jones) No. 2:16cv10, Dec. 21, 2016; Ilya I. Berenshteyn, Russell L. Egli for plaintiff; Melissa Robinson for Risk Management Programs; Jennifer Royer for school board. VLW 016-3-616, 22 pp.