The system was set up to keep Wildish from getting every LTD construction contract.  

Even though a family member is on the Board of Directors, the projects still have to be bid upon by qualified bidders.  The processes are set by State Statute, everyone has to be provided the same information, all the bids have to be evaluated in the same manner, etc. etc. 

ORS 279C.414  Competitive Quotes

"...the contracting agency shall award the contract to the prospective contractor whose quote will best serve the interests of the contracting agency, taking into account price as well as any other applicable factors such as, but not limited to, experience, specific expertise, availability, project understanding, contractor capacity and responsibility."

" If an award is not made to the prospective contractor offering the lowest price quote, the contracting agency shall make a written record of the basis for award."

I don't see the  'flaw'.