State officials made mistakes when awarding a $7.6 million contract to renovate the West Virginia Lottery's headquarters building in Charleston, but the Lottery doesn't want to switch construction companies now because the project is already half-finished, a Lottery lawyer told state Supreme Court justices Wednesday.
"At this point, we're 50 percent complete," said Kelli Talbot, who's representing the Lottery and state Purchasing Division. "It seems impractical to me that we would switch contractors midstream."
A construction bid dispute has dogged the Lottery building renovation project for seven months.
Wiseman Construction - which briefly held the contract earlier this year -- wants the Supreme Court to overturn a Kanawha Circuit judge's order requiring the Lottery to rescind Wiseman's contract and award the project to Maynard C. Smith Construction Co., the low bidder.
The Lottery gave MCS Construction the go-ahead to start construction last summer while awaiting the Supreme Court's ruling on Wiseman's appeal. Wiseman has asked the Supreme Court for an expedited ruling.
During oral arguments Wednesday, Talbot said the state disagrees with the circuit court ruling but decided not to file its own appeal so the project wouldn't face additional delays.
"We had an $8 million renovation project - part of which is outdoor construction - and we were concerned about getting it done in a timely fashion with the funds we had without additional cost escalation," Talbot said. "The Lottery building space was sitting unoccupied, and we're losing rent money everyday we're not proceeding with this."
The renovation project - which will allow the state Insurance Commission to move into the 13-story Lottery building near the Interstate 77/64 split - was supposed to start in April, but the bid dispute has caused numerous delays.
In late March, the Lottery initially notified MCS Construction -- which bid $174,000 less than Wiseman -- that it had won the contract. But Wiseman executives alerted the Lottery that MCS Construction did not include references in its bid application.
The Lottery Commission subsequently awarded the contract to Wiseman, which had included references in its bid package.
In response, MCS Construction sued the Lottery and state Purchasing Division, alleging that the agencies failed to include a required form - used by contractors to list references - to the bid documents.
"There were some mistakes made in the bidding process," Talbot acknowledged Wednesday. "It's something we're looking at and don't want to repeat."
After a hearing, Kanawha Circuit Judge Jennifer Bailey ordered the Lottery to award the contract to MCS Construction.
In its appeal, Wiseman argues that Bailey got it wrong. Wiseman asserts that the Lottery's request for three references was a "mandatory specification," and state officials correctly tossed MCS's bid because the company failed to comply. The Lottery wanted references to determine contractors' experience with similar projects, the company said.
Lottery officials have said they never contacted Wiseman's references.
"One of the issues appears to be the bidding documents were extremely confusing," Chief Justice Margaret Workman said Wednesday.
Wiseman's lawyer, Jim Cagle, told the Supreme Court that a flood of contractors would likely sue the state, if justices don't overturn Bailey's ruling. State Lottery and purchasing officials made the right decision to disqualify MCS Construction's bid and award the contract to Wiseman, Cagle said.
"When the courts start substituting their judgment for those who are given the discretion to make those decisions, what you're going to generate is a whole lot of litigation where any party that feels slighted in the least about the bid process is going to sue," said Cagle.
The Lottery plans to spend $7.6 million to renovate its parking garage and three floors of office space. The 13-story office tower, formerly known as City Center West, houses the Lottery Commission, Alcohol Beverage Control Administration and other state agencies. U.S. Sen. Joe Manchin has an office there.
Supreme Court justices seemed to sympathize with both Wiseman and MCS Construction Wednesday.
"I think the state has messed this thing up so badly, and quite frankly, put both contractors in a horrible position," said Justice Allen Loughry.
Reach Eric Eyre at ericeyre@wvgazettemail.com, 304-348-4869 or follow @ericeyre on Twitter.