Second place bidders frequently look for ways to displace low bidders. The most common tool is a protest that the low bid is not responsive to the solicitation or the low bidder is not responsible. Two California contractors took the challenge to another level and the case went to the state’s highest court.
The two contractors were chronic second low bidders on highway improvement contracts, with a third company the consistent winner. The second place bidders sued the low bidder for damages on a theory of wrongful interference with the competitive bidding process. The plaintiffs alleged the low bidder priced labor at rates lower than required by the prevailing wage laws.
The California Supreme Court did not allow the suit to proceed. The court was unimpressed with the plaintiffs’ argument that recognition of such suits would be beneficial for the taxpaying public and laborers on public works contracts. In fact, said the court, allowing these private actions would be bad public policy.
What is your opinion? Wouldn’t private suits for damages enhance compliance with the competitive bidding laws? Or, as feared by the court, would these suits facilitate opportunistic claims and discourage good companies from participating in the public works sector?