Client Alerts
November 19, 2010

Disappointed bidders should file timely bid protests

Stites & Harbison, PLLC, Client Alert, November 19, 2010

by Stites & Harbison, PLLC

Disappointed bidders who are not awarded public contracts and wish to protest the procurement must file timely bid protests. In some jurisdictions, the disappointed bidder must also seek injunctive relief in order to preserve its protest. Most state and local jurisdictions have statutory or regulatory procedures for filing bid protests. These procedures often prescribe time periods within which protests must be filed. For example, Kentucky requires a protest to be filed promptly and in any event within two calendar weeks after the aggrieved party knows or should have known of facts giving rise to the protest. KRS 45A.285(2). However, two recent appellate court decisions demonstrate how disappointed bidders can lose their protests by not seeking injunctive relief before work begins.

In PRN. Assocs LLC v. State of Wisconsin Dept. of Administration, 766 N.W.2d 559 (Wis. 2009), the Wisconsin Supreme Court held that a bidder who failed to seek an injunction was barred from protesting the award of a contract. The unsuccessful bidder filed a protest and the state agency denied the protest. The bidder then sought judicial review of that decision. The court held that there was no basis for judicial review and the bid protest was moot because the bidder had not obtained an injunction blocking the contract award. The court found that even if the bid protest had merit there was no relief that it could award the bidder because the project had already been completed. The court also denied the unsuccessful bidder’s request for declaratory relief because the petition for declaratory relief was merely seeking prospective relief in the form of damages to which the disappointed bidder was not entitled.

In State ex rel Gaylor, Inc. v. Goodenouw, 928 N.E.2d 728 (Oh. 2010), the Ohio Supreme Court addressed the question of whether the disappointed bidder filed a timely bid protest. The court held that the bid protest was timely because the bidder sought a court-ordered stay of the contract a day before the contract was awarded to another bidder. The court warned, however, that an unsuccessful bidder’s action will be dismissed as moot if the bidder failed to obtain a stay of the construction pending resolution of its protest.

The lesson from these decisions is that the disappointed bidder should seek an injunction to prevent the public procurement from going forward. A disappointed bidder who fails to seek an injunction to stop the award of the contract risks losing its protest because the disputed contract has been awarded or completed.

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