Public Owners Cannot Arbitrarily Award Contracts

Successfully protesting the award of a public construction contract is a very difficult.  Under the public bidding laws, an unsuccessful bidder cannot obtain a monetary award against a public owner and its only recourse is to seek stop the public owner from awarding the contract to another bidder.  The courts, however, will not stop a public owner from rejecting an apparent low bid and awarding the contract to another bidder unless the public owner engaged in fraud, favoritism or corruption.

For years, the public bidding laws protected the public owner’s ability to make any decision it deemed to be in its best interest provided it acted in good faith.  As indicated in another post, that protection ended when the Connecticut Supreme Court held that it was possible for an unsuccessful bidder to obtain a monetary judgment against a public owner if the claim was based upon a cause of action that did not rely upon the public bidding laws. 

More recently, a Connecticut Superior Court determined that a public owner can be held liable for money damages if it completely circumvents the public bidding laws.  In CTTFB, Inc. v. City of Bridgeport, the court refused to overturn a jury verdict that awarded the plaintiff damages after determining that the City violated the Connecticut Unfair Trade Practices Act.  In that case, the City awarded a contract without requesting competitive bids.  It negotiated a contract with a single contractor despite the fact that another company specifically requested an opportunity to submit a bid.

The City argued that, even if its conduct was wrongful, the plaintiff was not entitled to a recovery because it had not presented sufficient evidence of an “ascertainable loss.”  The court held, however, that the amount of the plaintiff’s loss did not have to be determined precisely.  It also held that the amount of the plaintiff’s loss could be determined by considering the amount of the contract that the City had awarded.     

In light of this case and other recent decisions, there are many ways that the award of a public contract can be mishandled.  If you are a public owner, construction manager, or trade contractor involved with public contracts, please give me a call if you have any questions about your current situation.