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State Law Affords Disappointed Bidder No Recourse

Saturday, July 04, 2009 06:06 pm

State Law Affords Disappointed Bidder No Recourse Bids--Procurement EBI Detroit, Inc. v. City of Detroit and Detroit Water & Sewerage Dept. Court of Appeals of Michigan 2009 Mich.App.LEXIS 945, No.277953(April 30, 2009)

Tough luck for government contractors in Michigan: An unsuccessful bidder cannot sue for compensation after losing out on the bid, even if the government played fast and loose with the bid selection criteria.

The City of Detroit and the Detroit Water and Sewerage Department(together, Detroit Water)solicited bids for two projects involving construction management and services for water system improvements on streets in Detroit.EBIDetroit, Inc.(EBI), submitted bids for both projects.Based on the original bid selection criteria listed in Detroit Water's requests for proposals, EBI had the lowest bid for one project and the second lowest bid for the other project.However, Detroit Water changed the bid selection criteria after EBI had submitted its bid, with the result that EBI's bids were fifth lowest for both projects. Detroit Water awarded the contract to other bidders.

EBI sued Detroit Water under several legal theories, but the trial court dismissed the suit because EBI lacked standing.EBI appealed to the Court of Appeals of Michigan, which affirmed the trial court.

Unlike federal law, Michigan law provides no special rights to unsuccessful bidders like EBI.They also have no standing to s [...]

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