Alaska Court Rejects Claims for Recovery of Bid & Proposal Costs
In Washington, a disappointed bidder has a recognized right to sue to enjoin the execution of a public works contract in a situation where such execution would violate the principles of competitive procurement. By contrast, the bidder has no statutory right to collect damages such as bid & proposal (B&P) preparation expenses or lost profits.
In Alaska, a disappointed bidder does have a statutory right to seek B&P costs under AS 36.30.585. This new case from the Alaska Supreme Court makes it clear, however, that recovery of B&P costs under that statute requires strong proof of causation between the expenses incurred and the alleged violation of the procurement rules. It is not enough, for example, to establish the rules were breached by the agency. Instead, according to this decision, the claimant must also demonstrate the amount of B&P costs specifically incurred due to the specific violation. And because the claimant here failed to make that connection, the Court rejected the claim for B&P costs recovery even as it assumed the agency had in fact violated state procurement law.