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35 Constr. Law. 17 (2015)
Private Rights of Action for Procurement Violations

handle is hein.journals/conlaw35 and id is 177 raw text is: RECOURSE FOR PROCUREMENT VIOLATIONS Privae Rights of Action for Procurement Violaions , Anna Oshiro and Peter TV tHahn Anna Oshiro Peter W. Hahn This article explores disappointed bidders' potential private claims for relief against public officials, private representatives of public agendes, and other bidders who, intentionally or otherwise, have thwarted or interfered with these bidders' attempts to co ntract for public work. When can a disappointed bidder bring a private action fbr damages against an agency, an agency representative, or a competing bidder?' When Does a Private Right of Action for Damages Exist Against Public Entities or Officials for Violations of Public Procurement Laws and Practices? Relief Under Applicable Procurement Codes and Enabling Stalutes Congress and the judiciary provide bidders with the most 'robust and elaborate system of decentralized oversight of any area of public administration.' Public procure- ment law gives disappointed offerors expansive protest rights, Including the right to challenge the government's conduct in protest forums.3 Relief under federal and state procurement codes is often statutorily prescribed, mini- mizing availability of private relief. Even when that is not the case, governmental bodies often are shielded from liability stemming from improper conduct in bid pro- curement and awards. Scholars and the private sector have implored courts to address the dual roles of governments when acting simultaneously as a sovereign entity and as a contract- ing party Some argue that allowing redress outside of administrative proceedings (thus affording bidders the right to recover lost profits) recognizes the evolution of contract law and the expanded recognition of expectation Annra Osiro is with Dan ion Key Leog Kapc'hak Has ert in lonolhu, III. Peter, TV Hahn is with Dinsmore & Shohl, ILiP in Co/umbus, 0-. damages in connection with that evolution.5 Arguably, an award of lost profits would further serve the underlying goals of increasing transparency and curbing inpropri- ety while also permitting increased awards of damages to injured bidders. Such argunents. howeve; fbr the most part remain largely theoretcal. The majority of federal and state courts do not recognize private claims for dam- ages arising out of public procurement, mainly because the enabling statutes allowing for such procurement so often stress the right of public agencies to throw out all bids. In such instances, courts repeatedly have found that bidders who would have been awarded the public con- tract at issue are without a claim for damages resulting from being denied such work. Courts have reasoned that. until the contract is awarded, all bids can be thrown out, and bidders therefore cannot have a reasonable property rigitu ian e'tant bid.- For example, a contractor whose low bid to construct a high school was rejected by a school board in violation of its own rule that public contracts be let to the low- est and best bidder had no tort claim for lost profits resulting from the board's alleged misconduct because the school board's duty was no greater than described in an advertisement for bids that unconditionally reserved the right to reject any and all bids. The plaintiff alleged that its low bid was rejected without cause, arbitrarily, and capriciously, through favoritism and bias. Sustaining the trial court's grant of a general demurrer to the con- plaint, and noting that the plaintiffs did not plead fraud or deceit by the school board, the court said that despite the school board's rule governing the acceptance of bids, the contractor's right to award of the contract could be no greater than as published in the advertisement on which his bid was based, reasoning that because the advertise- ment reserved the school board's unconditional right to reject any and all bids, no cause of action would arise because of any improper motive in rejecting the low bid. In general, disappointed bidders who have been denied jobs due to perceived procurement violations have been held to the relief afforded under applicable procure- Ment codes and accompanying case law, which typically excludes clains for lost profits and private claims against agencies or government officials. Claims Under 42 U S. C. § 1983 Outside of the exclusive statutory remedies set forth in federal and state procurement law, bid protesters have sought private redress, with Ilimited success, by bringing actions for damages against agency officials under 42 U.S. § 1983. Section 1983 is an expected choice ofclairn for disappointed bidders because Fall 2015 THE CONSTRUCTION LAWYER 17 Published in The Construction Lawyer, Volume 35, Number 4, Fall 2015. © 2015 by the American BarAssociation. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. uxxxx-

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