Bid protests are the focus of my inaugural Friday Forum, as I’ve been inspired by this compelling tweet yesterday from Birmingham, Alabama construction attorney Burns Logan:
https://twitter.com/BurnsLogan/status/439086321207091200
The linked story by Lisbon, Ohio’s Morning Journal discusses the dismissal of a lawsuit asserted by an architectural firm against an Ohio school board alleging the wrongful award of a design contract to one of the firm’s competitors. The problem with the suit, as the judge apparently saw it, was its untimeliness. Construction on the project had already begun, and a substantial amount of money already had been paid to those involved.
By way of example, the design firm chosen for the project had substantially completed its work and been paid more than $1 million for its services. The construction manager had been paid more than $100,000 for its pre-construction services, had billed more than $3 million in site prep work and had entered into numerous subcontracts for the project.
That’s a lot of water under the bridge before seeking to protest, as I observed in response to Burns’ chirp:
Whether you’re an architect or a prime contractor, you don’t have time to waste if you believe that a public procurement has been improperly administered. Once the contract you’re seeking is awarded to a rival, and even if you’re bid protest has merit, you are unlikely to recoup any meaningful damages beyond your bid preparation costs. To protect your rights, you need to stop the public owner from awarding the contract, either voluntarily or through judicial process, now.
Why do I say “voluntarily?” Because I’ve had some success reaching out to an owner pre-suit to raise concerns about the bidding process. A couple years ago, I wrote a letter to a public agency on behalf of a client who believed there were irregularities in the procurement process. Our letter did the trick: the contracting body, apparently persuaded by our arguments, rejected all bids and re-bid the project. Icing on the cake: my client was the lowest responsible bidder upon re-bid. A great result was obtained, and without resorting to litigation. That’s about as good as it gets, particularly in view of how difficult bid protests are to win, as I’ve previously blogged about:
[L]ocal awarding authorities in North Carolina have a tremendous amount of discretion in the awarding of public contracts. While it is true that single-prime contracts with an estimated value greater than $300,000 ($500,000 for state agency and UNC-system projects) must be awarded to the “lowest responsible bidder” as a matter of statutory law, our courts, in the absence of fraud or palpable abuse of discretion, will not upset a local government’s awarding of a construction contract. See Mullen v. Town of Louisburg, 225 N.C. 53, 33 S.E.2d 484 (1945). That abuse of discretion standard can be tough to satisfy, and makes formal bid protests – i.e., lawsuits aimed at preventing an award of a construction contract to your competitor — substantially difficult to win in the Old North State.
What do you think? Are bid protest lawsuits worth the trouble? Have you found success challenging the outcome of a bid by alternative means? The Friday Forum microphone is yours, and I invite you to use it by commenting below or engaging on Twitter.
N.C. Construction Law, Policy & News 