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If proposed law passes successful bid protestors may be able to recovery attorney’s fees

by | Apr 4, 2011 | Bidding, Mistaken Bids, Withdrawal Of Bids, Bid Bond Claims And Bid Disputes

Today contractors who have bid on a public works project and are protesting its award to another bidder may not recover their attorney’s fees even if they prevail in establishing a wrongful award.

This fact may soon change. Rep. Donald P. Wagner (R-Irvine) has proposed AB 457, which would entitle a bidder who successfully challenges the award of a contract determined to be invalid due to errors or omissions of the public entity to recover costs and attorneys fees incurred in pursuing the challenge. In other words, if a contractor protests an award in court and wins, it would be awarded its attorney’s fees in addition to any other damages.

In a press release issued on May 23, 2011, Mr. Wagner’s office stated,

This bill will force public agencies to take more seriously their obligations to comply with … read moreexisting bidding laws. Under current law, the lowest responsible bidder is to be awarded a government contract. However, a low bidder who erroneously is not awarded the contract and spends its own money in court vindicating the public’s right not to overpay for public works can only recover its costs for bidding on the project. This removes any incentive for a wronged business owner to challenge a public agency since the expense of that challenge comes directly from the business’s bottom line. Consequently, public agencies, knowing that there are no significant repercussions to flagrantly violating the existing competitive bidding laws, can do so with virtual impunity. But under AB 457, attorneys’ fees can be recovered by a deserving bidder. This will encourage public agencies to guard tax dollars through appropriate bid awards, promote government transparency, and encourage contractors to keep local politicians honest.

Interested parties may check here for the ongoing status of AB 457.