Wagner Construction, Inc. - Page 5




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          B.  Petitioner's Business Activity                                          
               From 1985 through the years at issue, petitioner's primary             
          business activity was sewer, water, and road construction                   
          (highway and heavy construction).  Because of the seasonal nature           
          of the construction work performed by the company, petitioner               
          also performed contract logging in the winter months.  The                  
          logging operation complimented petitioner's construction business           
          because petitioner could use its trucks and equipment during the            
          winter months.  This seasonal operation kept many of petitioner's           
          construction employees working throughout the winter months.                
          Petitioner also owned and operated property for storage of logs             
          and construction materials and owned and operated sand and gravel           
          pits.                                                                       
               Petitioner was required to submit competitive bids for                 
          highway and heavy construction contracts.  Petitioner submitted             
          detailed information in the bids that included fixed costs for              
          materials and subcontractors in addition to petitioner's                    
          projected costs for its labor, supplies, and bond costs.  After             
          the bids were submitted, the requesting agency selected the                 
          lowest bid and awarded the contract.                                        
               In order to submit a bid for construction projects,                    
          petitioner was required by law to show that it had obtained the             
          required performance and payment bonds issued by an approved                
          bonding company.  Performance and payment bonds protect the owner           






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Last modified: May 25, 2011