Can a Disappointed Bidder Maintain a Procedural Due Process Claim ?
In Independent Enterprises Inc. v. Pittsburgh Water and Sewer Authority, 103 F.3d 1165 (3d Cir. 1997), the Third Circuit provided a summary of both federal and Pennsylvania law regarding whether a disappointed bidder had any property rights to sustain a procedural due process claim.
In holding that a disappointed bidder cannot maintain such a claim, it stated:
According to the teachings of Board of Regents of State Colleges v. Roth, 408 U.S. 564, 92 S. Ct. 2701, 33 L. Ed. 2d 548 (1972), ...a disappointed bidder may not pursue its procedural due process claims against the governmental entity unless "an independent source such as state law" affords it a "legitimate claim of entitlement" to be awarded a municipal contract for which it was the lowest responsible bidder.
The disappointed bidder relies only on state competitive bidding law as the "independent source" providing its "legitimate claim of entitlement."
Although Pennsylvania's competitive bidding statutes require that public contracts be awarded to the lowest responsible bidder, ... Pennsylvania courts have long held that such laws are for the benefit of the public only and do not give a low bidder standing to challenge a municipality's failure to award a contract in accordance with the statute. See, e.g., R.S. Noonan, Inc. v. School Dist. of York, 400 Pa. 391, 162 A.2d 623, 624-25 (1960) (citing Commonwealth ex rel. Snyder v. Mitchell, 82 Pa. 343 (1876)); J.P. Mascaro & Sons, Inc. v. Township of Bristol, 95 Pa. Cmwlth. 376, 505 A.2d 1071, 1074 (1986); see also ARA Servs., Inc. v. School District of Phila., 590 F. Supp. 622, 629 (E.D.Pa.1984) ...
These Pennsylvania cases demonstrate that one who bids on a public contract has no legitimate expectation of receiving it until the contract is actually awarded. See Highway Express Lines v. Winter, 414 Pa. 340, 200 A.2d 300, 303 (1964) ("By their bid the unsuccessful bidders proposed to contract for certain work; that bid was not accepted.
It was a mere proposal that bound neither party, and as it was never consummated by a contract, the city acquired no right against the bidders nor they against the city.")
Since the disappointed bidder's bids were never accepted, it never acquired an enforceable right with respect to the contract being awarded.
It, therefore, has not been deprived of a property interest that warrants procedural due process protection. Independent Enterprises, 103 F.3d at 1177-78.