Losing a public bidding or proposal opportunity is not an enjoyable experience. You are probably disappointed or frustrated, and you might even think that the public agency violated a bidding requirement or relied on improper information in making the award. If that is the case, you might also be considering filing a bid protest. Before you do, here are three questions to ask yourself:
- What do you want? Discover what legal remedies, if any, are available in your jurisdiction.
- Where do you go? Learn where the bit protest forums are, and learn more about their procedures.
- When do you file? Explore the best timing for asserting a bid protest—not too early or too late.
No. 1: What do you want?
The remedy you seek will determine not only the kind of relief you obtain but also the procedures applicable to your protest.1 A few common remedies include:
- Money damages from the public owner. If you are not terribly interested in wresting the project away from the successful bidder, you might be able to seek damages from the public owner. Usually you can only recover the bid or proposal preparation costs and perhaps attorney’s fees. Winning an award of lost profits is much more difficult2. And this, like everything in this alert, is heavily dependent on the statutes, rules and case law in the governing jurisdiction.
- Injunction barring award to another party, or stopping performance of a contract already awarded. If you do want to try and take over the project, you should ask for a temporary restraining order and injunction stopping the award or performance on the project. This will stay the public owner’s actions, and, during the stay, you can seek a court order that you are entitled to the award for the project.
- Damages from the successful bidder. Sometimes the successful bidder wins a project based on misrepresentations to the public owner. In that situation, you might consider seeking damages against the other bidder. You may be able to recover more types of damages from the bidder than you would from the owner4. However, these cases can be very difficult to prove.
- Special statutory damages. A number of statutes may give you a claim against the public owner for special damages. Potential grounds for relief include federal and state civil rights, antitrust, deceptive business practices, and qui tam statutes.5
No. 2: Where do you go?
If you choose relief against the public owner, your claim will likely fall under the jurisdiction of a special administrative body or court with the authority to oversee the procuring agency’s actions. At the federal and state level, your protest typically must go through the procuring agency or an agency dispute board for an administrative law proceeding before you can file a lawsuit. However, this is not always true. In Indiana, for example, there is no such thing as legal standing for disappointed bidders. Only taxpayers have standing to challenge contract awards.
For local projects, you will need to check state statutes, regulations, local procurement codes and ordinances, as well as case law, to determine the proper forum and procedures for your bid protest.
Claims against another party, such as the successful bidder, can be filed in any court with jurisdiction over that party and the subject matter of the claim. Such claims are not subject to the same administrative requirements applicable to claims against the public owner, but they are heavily dependent on whether the courts in your jurisdiction allow for direct actions under the facts of your project.
No. 3: When do you file?
You need to pay close attention to the timing of your bid protest. Your claim may not be ripe if you bring it too soon, such as before the bidding opens6. But if you wait too long after the award, you risk prejudicing the rights of the owner and the successful contractor. A court may find that your claim is barred by a failure to act quickly enough if you unreasonably delay bringing your claim7. Your claim may also become moot if the public contract procurement is cancelled8. Accordingly, the timing of your claim can be just as important as deciding who to bring it against.
Check these requirements before you submit your bid or proposal. It is best to know them ahead of time so you are prepared in the unlikely event a concern arises.
For more information on preparing a potential bid protest visit Bruner & O'Connor Construction Law.