Warrenton, Oregon – A legal dispute is brewing between the City of Warrenton and Lyda Excavating, a local contractor, as the excavating company seeks relief in a lawsuit alleging improper contracting practices and infringement of free speech rights. This complaint was lodged on Monday in Clatsop County Circuit Court.
Lyda Excavating, owned by Michael Lyda, claims the city violated Oregon competitive bidding laws by allegedly rejecting its proposal for the Iredale Culvert Replacement Project without justification. The lawsuit asserts that the city deemed Lyda “not responsible” for the first time in nearly two decades, despite the company submitting the lowest bid of $707,965 out of three competitors.
City officials have refrained from commenting on the ongoing litigation. In May 2025, the city released a call for bids to complete “Iredale Project Phase 2,” aimed at replacing remaining segments of the storm drainage structures not covered in previous work. According to state law, contracts exceeding $5,000 must be awarded to the lowest responsible bidder.
While Lyda’s bid was the most competitive, the city awarded the contract to Big River Excavation with a bid of $841,240. In its notice of intent, the city stated that only two of the bids met its standards for responsible contractors.
The city’s reasoning for rejecting Lyda’s bid was related to email communication concerning another project, the Hammond Transmission Waterline Project. Though Lyda was qualified for that project, the city reportedly found issues regarding documentation of outreach efforts to Disadvantaged Business Enterprises (DBEs). Lyda had again presented the lowest bid for this project but lost the contract to North Cascade.
The complaint mentions that the city later informed Lyda it had found its bid to be nonresponsive, not due to concerns about professionalism, but rather because of perceived inadequacies in documentation related to DBE compliance. Lyda subsequently filed a protest, contending the city had applied undisclosed evaluation criteria by requiring a DBE checklist that was not previously mentioned in the bid solicitation.
In denying the protest, city officials indicated they had previously requested clarifications from Lyda, claiming the responses were insufficient. Tensions escalated when the city allegedly pressured Lyda to withdraw its bid from the Iredale Project, warning that a refusal could lead to complaints filed with state regulatory boards.
Lyda rejected this ultimatum, asserting that personal feelings of city staff against him or his company should not influence bidding processes. The city officially rejected Lyda’s bid on July 15, citing a lack of a satisfactory integrity record on Lyda’s part, a provision under Oregon law allowing such a decision based on prior convictions related to contract performance.
Moreover, the city reportedly based part of its decision on informal feedback from other municipalities, claiming that four had expressed issues with Lyda. The accusations of “spurious litigation” stem from Lyda’s earlier challenges to city projects, including an unsuccessful lawsuit against the City of Seaside in 2023.
Lyda now alleges that the city’s actions were anti-competitive and lacked a valid basis. The lawsuit seeks an injunction to prevent the city from proceeding with its contract with Big River Excavation, reimbursement of preparation costs up to $50,000, and recovery of attorney fees. Lyda also requests a formal acknowledgment from the city admitting wrongdoing and awarding the contract for the Iredale Project to his company.
This legal battle highlights ongoing tensions between city officials and local contractors, raising questions about transparency and fairness in municipal contracting practices.
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