Publications & Presentations
March 24, 2016
Public construction contracts are often awarded to the lowest bidder. In some situations, however, price is not the only factor considered, and the low bid is passed over. A disappointed low bidder may have recourse to challenge the bid process, or even the prevailing bid itself via a bid protest. Might an unsuccessful low bidder also claim that its constitutional rights have been violated? The 8th Circuit recently addressed this issue and determined that when a governing agency explicitly reserves the right to select a bid other than the lowest, the unsuccessful and disappointed low bidder is precluded from obtaining any relief on Due Process, Equal Protection, or Free Association grounds.

In Higgins Electric, Inc. v. O’Fallon Fire Protection, the 8th Circuit affirmed the dismissal of a low bidding contractor’s and its union’s suit seeking relief against a fire protection district that chose not to award a new firehouse construction project to the contractor. The district awarded the contract to another company whose employers, unlike those of the contractor’s union, were represented by a union affiliated with a national labor organization. The contractor and its union brought a federal action against the district alleging violation of constitutional rights. The claimants first advanced an equal protection claim under a “class-of-one” theory, alleging that the district had subjected the contractor to “irrational and intentional differential treatment when compared to similarly situated individuals” by giving “false reasons” for not awarding the project to the contractor. The claimants asserted a property right in the contract to support a due process claim, and also that the district had interfered with their First Amendment right to freedom of association by not awarding the contract because the union was not affiliated with the national labor organization.  

Each argument was rejected in turn by the 8th Circuit. First, the court determined that only the contractor, and not the union, had the right to contest the district’s decision. But even so, the contractor failed to state a claim. First, the “class-of-one” theory is not available when a public agency is permitted to exercise discretionary authority, and the fire district had expressly reserved the right to award the contract “in [its] best interest,” and “to select a Bidder other than the lowest.” Second, and consistent with Missouri law, the contractor had no property interest in the contract merely because it had submitted the lowest bid, and no viable due process claim based solely on the fact that a contract was awarded to another company when the district had reserved the right “to select a Bidder other than the lowest,” and “to reject any and all proposals.” The court rejected as simply implausible the claim of interference with the freedom of association.  

Thus, when a public agency expressly reserves the right to exercise discretionary authority in the awarding of a public construction contract, an unsuccessful low bidder’s right to relief on due process, equal protection, or free association grounds is severely limited in the 8th Circuit.