City of Houston v. Southern Electrical Services, Inc.
273 S.W.3d 739 | Texas Court of Appeals, 1st District (Houston) | 2008
What This Case Means for Subcontractors
Southern Electrical Services bid on a Houston airport project using prevailing wage rates provided by the City. After winning the contract, the City issued higher prevailing wage rates, forcing SES to pay workers more than it had budgeted. SES sued the City for breach of contract. The court ruled that SES could proceed with its lawsuit despite the City's claim of governmental immunity, because Texas law allows breach of contract claims against cities. This means subcontractors can hold cities accountable when bid documents contain incorrect wage information.
Key Takeaways
- •Document all wage rates and requirements from bid documents before submitting your bid—these become part of the contract and the city is responsible for accuracy
- •If a city issues amended wage rates after you've won the contract, you may have a valid breach of contract claim even though the city has governmental immunity protections
- •Keep detailed records showing how you calculated your bid based on the city's provided wage scales—this evidence supports a breach claim if rates change
Plaintiffs alleged facts sufficient to fall within government's waiver of immunity for adjudicating breach of contract.
Frequently Asked Question
Can I sue a city if it gives me wrong prevailing wage rates in the bid documents?
Yes. Texas courts have ruled that subcontractors can sue cities for breach of contract when the city provides incorrect wage rates in bid documents, even though cities normally have governmental immunity. You must show that you relied on the city's wage rates when preparing your bid and that the city later changed those rates, causing you financial harm.
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