Hawaii procurement officers often complain of an inability to weed out unqualified or undependable contractors from the bidding process, and how the hard bid competitive bidding provisions of the procurement code do not allow sufficient discretion to pick the best contractors. There are, however, codified provisions for such "weeding," including findings of no responsibility, prequalification requirements, and the unqualified right to throw out all bids at any time if such is deemed to be in the agency's best interests. While these protections often require up front action on the part of state officials, they are a trade off against otherwise unfettered discretion in the contract award process. And, state actions in accordance with their statutes are almost routinely upheld by the courts. The 10th Circuit decision in Fisher Sand & Gravel Co. v. Giron provides a nice example of such efforts:

Fisher Sand & Gravel Co. ("Fisher") was the low bidder on a highway construction project. The New Mexico Department of Transportation ("NMDOT) recommended Fisher's contract award to the Federal Highway Association. At that point the second lowest bidder ("FNF") began making disparaging comments about Fisher to the NMDOT. They worked. The NMDOT elected to reject Fisher's bid and attempted to award the project to FNF. The Federal Highway Association would not allow it, because FNF was not the low bidder — Fisher was. In response, the NMDOT elected to throw out all bids and to rebid the job. It did so, and ended up awarding the contract to another bidder — neither FNF nor Fisher. Fisher sued both the NMDOT and the Project Administrators who had assured Fisher it was going to be awarded the job. Fisher claimed due process violations, presupposing a property right which was denied without due process.

These administrators sought dismissal under the theory of qualified immunity. The district court refused to grant dismissal, holding that Fisher had met the requirements for proceeding with its 1983 action, namely a property right, which the court found in an "implied contract" by and between NMDOT and Fisher when Fisher submitted the low bid on the job, and denial of that property right. On appeal to the 10th Circuit Court of Appeals, the contract administrators argued there could be no such property right because there is no such thing as "implied contracts" with the state. By statute, contracts with the state are unenforceable unless they are in writing. The appellate court agreed. The implied contract was unenforceable, and therefore it could not give rise to a protected property interest. The case was decided March 6, 2012, and is available at 2012 U.S. App. Lexis 4586.

Submitted by Anna H. Oshiro