Construction company loses bid, sues school district | TahoeDailyTribune.com
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Construction company loses bid, sues school district

An Auburn, Calif., construction company is suing the Lake Tahoe Unified School District over a dispute about construction bids.

Paragon Construction, a division of Farinha, Inc., filed a complaint against LTUSD July 20 in El Dorado County Superior Court. Paragon claims that the school district awarded construction contracts to “a non-responsible, non-responsive bidder “- the Thomas Haen Company, Inc., of South Lake Tahoe – for two LTUSD construction projects. The projects include construction of a new facility at the Mount Tallac Continuation High School and a new science wing at the South Tahoe Middle School.

“Upon looking at Mr. Haen’s bid, there were several things that my client questioned,” said John Garcia, attorney representing Paragon Construction.



Garcia said his client believes that LTUSD wrongfully awarded the contracts to Thomas Haen Company because Haen failed to disclose the identity of a portable classroom manufacturer and installer in his bid for the contract.

But Steve Morales, LTUSD facilities director, said Haen didn’t need to list the manufacturer as a subcontractor in his bid proposal because Haen isn’t going to be hiring a subcontractor for the installation of the portable classrooms.




“He’s relocating the portables himself,” he said.

LTUSD Superintendent Rich Alexander said that Haen was awarded contracts for both projects because he was the lowest bidder.

“We found that the bid was appropriate and responsive,” Alexander said. “We have a responsibility to award the contract to the lowest, responsive bidder and Haen’s bid met those requirements.”

According to bid proposal documents, Haen’s bid of $2.9 million for the South Tahoe Middle School science wing project was $286,387 less than Paragon’s bid of $3.2 million. Haen’s bid of $973,900 for the Mt. Tallac Continuation project beat out Paragon’s $1.1 million by $203,497. In total, Haen’s bids were $489,884 less than Paragon’s.

Garcia said Haen’s bids may have been lower but they weren’t responsive or responsible because of the failure to disclose the information about the subcontractor. He also said that he questions if the Haen Company has the ability to install portable classrooms on his own and whether or not that action would affect the buildings’ warranty.

Thomas Haen declined to comment.

Garcia said that not winning the contract award has caused considerable monetary and non-monetary damages to Paragon Construction.

“The damages are difficult (to discern) at this point,” said Garcia. “It relates to the amount of money lost in profits and damage to the reputation of the name of the business.”

Paragon filed a motion on July 20 to stop the school district from awarding the contract to the Thomas Haen Company while the lawsuit was pending.

El Dorado Superior Court Judge Suzanne Kingsbury denied the motion in a hearing held on the same day it was filed. Preparation for construction is underway.

Underground utility and grading work on the South Tahoe Middle School science wing project began July 12. Work on the Mt. Tallac Continuation High School Project will likely begin next week, pending state approval of plans. Funding for the projects come from state bond money and $17 million Bond Measure C, which was passed May 4 by voters in the Lake Tahoe Unified School District.

Garcia said representatives of Paragon have not decided whether they will pursue the lawsuit any further.

“There’s three options: continue with the lawsuit, file for a court order to stop the Board of Education from awarding the the contract to Haen or simply call it quits,” Garcia said.

He said he expects representatives from Paragon to make a decision next week.


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