No Liability for Architect’s Interference with Public Contract Award
January 29, 2020
The Michigan Supreme Court has overturned an appellate court decision holding an architect liable for unfairly recommending a contract award on a public construction project.
In Cedroni & Associates, Inc. v. Tomblinson, Harburn Associates, a school district hired an architectural firm to assist it in the bid selection process by evaluating the contractors’ bids and making recommendations to the school district. The school district and the architect were to be guided by a city charter provision requiring the acceptance of the lowest responsible bid.
The plaintiff submitted the lowest bid, but the school district followed the architect’s recommendation that the contract be awarded to the second‐lowest bidder. The Michigan Court of Appeals held that the architect could be liable for tortious interference with the bidder’s reasonable expectation that it would be awarded the contract.
The Michigan Supreme Court reversed, citing the longstanding rule that a disappointed bidder on a public contract has no standing to challenge the award of a contract to another bidder. In light of that, the Court observed that the low bidder has no valid business expectancy.
The Court also relied on a Michigan statute (M.C.L. 380.1267(6)), which states that “the board, intermediate school board, or board of directors may reject any or all bids…” The Court found that this statute provides that the ultimate decision to enter into a business relationship is a highly discretionary one. Therefore, a plaintiff cannot establish that its business expectancy reflected a reasonable likelihood or possibility and not merely wishful thinking.