LAW: THE CONTRACTOR'S SIDE: Disappointing outcome

June 10, 2011

In most states and in federal contracting, a disappointed bidder is typically deemed an interested party who is entitled to file and litigate bid protests.


In most states and in federal contracting, a disappointed bidder is typically deemed an interested party who is entitled to file and litigate bid protests.

Rarely, however, does a disappointed bidder have the right to protest on the grounds the successful bidder is not a responsible bidder. In other words, protests must be based upon defects in the procurement process, including the bid documents, or the responsiveness of the successful bid. If you bid a highway project in Connecticut, however, your protest rights are even more limited and no bidder may protest for any reason unless it has standing.

SDE Interchange Joint Venture v. State of Connecticut Commissioner of Transportation, 2010 Conn, Super. LEXIS 3308 (Dec. 21, 2010), involved a bid for reconstruction of the I-91 and I-95 interchange in New Haven in which the second lowest bidder (SLB) sought to challenge the award to the low bidder. The SLB claimed that the low bidder had received in excess of 130 willful and/or serious violations from the U.S. Occupational Safety and Health Administration within the last three years and thus was foreclosed by state statute from receiving the award. That safety statute provides, in pertinent part, the following:

“No contract shall be awarded by the state or any of its political subdivisions to any person or form or any firm, corporation, partnership or association in which such persons or firms have an interest . . . which has been cited for three or more willful or serious violations of any occupational safety and health . . . during the three-year period preceding the bid, provided such . . . citation has not been set aside following appeal to the appropriate agency or court having jurisdiction.”

In its lawsuit against the Commissioner of Transportation (COT), the SLB sought an injunction against the award of the project to the low bidder and an order of mandamus directing the COT to award the project to the SLB. The COT admitted that he was aware of the low bidder’s safety citations, yet he proceeded with the award because it had appealed all of the citations and the appeal process was ongoing. Nevertheless, in response to the lawsuit, the COT filed a motion to dismiss on the ground the SLB lacked standing to file the protest lawsuit.

In Connecticut, no procurement statute expressly provides a disappointed bidder with the right to file a protest. Rather, one must sue under the common law; essentially function as a private attorney general who is seeking to ensure fairness within the procurement proc­ess. In each instance, a disappointed bidder must prove it has standing or the case will be dismissed.

To decide the standing issue, the court noted that it is not enough that the party is injured by an act or omission of a public official, but “whether the official violated any duty to the plaintiff.” In this case, the court observed that the language of the safety statute was aimed at protecting workers from unsafe practices by their employers. It achieves this objective by discouraging unsafe contractors and encouraging safe contractors through the award of public funds only to the latter. The court thus concluded that as a mere business competitor of the low bidder, the SLB was not within the “zone of interests” protected by the statute and, consequently, it lacked standing to bring a lawsuit based upon the COT’s alleged failure to enforce the safety statute.

In Connecticut, a disappointed bidder generally will be regarded as lacking standing absent a viable claim of favoritism, fraud or corruption. Because the case involved a challenge to the low bidder’s responsibility and thus would have been difficult to bring in any state, it represents an example of the scrutiny a protesting contractor will face if it seeks to utilize novel arguments to circumvent statutes that prohibit these types of protests. It also serves as another reminder of the importance of knowing your rights as a bidder in the jurisdiction in which you submit bids.

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