Bid Preparation Costs Recoverable

Kegler Brown Construction Alert

There are more bid disputes all the time due to the deteriorating construction economy as contractors fight for work. Some of these disputes are not resolved quickly and the appeals can go on for years, meaning that the unhappy bidder might ultimately prevail after the work was done by its competitor. The question then becomes: what damages are recoverable by the unhappy bidder if he is proven right?

The Ohio Supreme Court on July 21, 2010, ruled that a disgruntled bidder who seeks, but is denied, injunctive relief can recover his bid preparation costs if he ultimately prevails. Meccon, Inc. v. Univ. of Akron, Slip Opinion No. 2010-Ohio-3297. The Supreme Court also confirmed that lost profits would not be recoverable.

While bid preparation costs are little relief for an unhappy bidder who loses an important job, there will be some financial consequences for public authorities that will help preserve the integrity of the bidding process.