Underground Pipeline Construction Inc. intends to sue the city of Milwaukee for discrimination in failing to award a sewer contract to the company even though it was the low bidder for the job.
The city instead enforced its local preference law and awarded the contract to Milwaukee-based MJ Construction Inc. According to the law, the city grants a 5 percent bidding cushion, not to exceed $25,000, to companies based in the city.
Underground Pipeline is based in New Berlin. But the company also is a registered minority-owned firm, a distinction that led company owner Norb Dretzka to accuse the city of discriminating against him.
He said Friday he is finalizing the required paperwork and working with Craig Anderson, executive director of the American Indian Chamber of Commerce of Wisconsin, on what will be a federal lawsuit.
“I want to get paid what we had invested in the job,” Dretzka said. “I also want them to go back to bidding the way they used to do it.
“We’re losing more and more business. About 40 percent of our business was done in downtown Milwaukee, and the city’s just taken it away without reimbursement.”
The city instituted the local preference law in August.
If Underground Pipeline’s lawsuit is successful, it could cost the city more than $250,000. Dretzka said he wants to be reimbursed the $231,645 low bid the company submitted in September for work on city sanitary and sewer relay projects. The company also is seeking the $1,500 Dretzka said he spent putting the bid together and the $32,000 in profits he expected to make from the job.
Dretzka said the local preference law does not provide safeguards or exceptions for minority firms and makes it difficult for American Indian-owned businesses to work in the city.
Alderman Willie Wade, a supporter of the law, said the lawsuit is part of the growing pains that come with a new law.
“It’s a change from what some of these companies are used to,” he said. “Any time you put in something like this, it’s always going to be challenged. It’s a paradigm shift, but the last thing we want to do is something illegal.”
Wade said the city attorney’s office vetted the law, and he has complete confidence in Milwaukee’s ability to back up local preference.
The law was not designed to exclude minority firms, Wade said, but if the court finds in Underground Pipeline’s favor, the law could be changed.
“I don’t think we’ll do away with it,” he said. “I’m quite confident we could fix any loose ends and move forward.”
Richard Wanta, executive director of the Wisconsin Underground Contractors Association, called the lawsuit the latest argument against a law that’s hurting contractors and their subcontractors.
The law also is hurting minority contractors, Dretzka said.
“I’m not going to stand for that,” he said.