Successful Bid Challengers May Receive Money Damages

Kegler Brown Construction Newsletter

The Mechanical Contractors Association ("MCA") successfully argued in protracted litigation that the University of Cincinnati violated the competitive bidding statutes through building a conference center with a lease-purchase financing option (lease-leaseback) without putting the construction work out to bid. Generally speaking, in order to receive an injunction the bid challenger must show he has "no adequate remedy at law" such as the ability to recover money damages.

Although the Courts granted MCA injunctive relief, the project was largely completed before a final victory was received at tremendous cost. Therefore, the Tenth District Court of Appeals took the extraordinary step of remanding the case to the trial court to determine an appropriate amount of money damages to avoid "an understandable chilling effect" upon future bid challengers. Mechanical Contractors Assn. v. Univ. of Cincinnati, Case No.00AP-665 and 694, February 20, 2001.

This case means that public owners in bidding disputes who do not prevail may for the first time be at serious risk that they will have to pay money damages to the successful bid challenger. It remains to be seen what the measure of damages are in such a circumstance.