South-Western Legal Studies in Business

Low Bidder for City Contract Has Promissory Estoppel Claim for Improper Rejection
Description Kansas high court held that when a responsible bidder properly responds to a call for bids on a public works project and is the low bidder, but the bid is rejected for reasons not disclosed in the bid request documents, the bidder has a claim in promissory estoppel to recover bid preparation costs.
Topic Contracts
Key Words Promissory Estoppel; Bidding; Government Contract; Bidding Costs
C A S E   S U M M A R Y
Facts Ritchie Paving submitted a bid for $760,505 in response to a request for bids for a street project in the city of Deerfield, Kansas. The request for bids noted that it would go to the lowest bidder. Ritchie was the lowest bidder by more than $31,000, but Deerfield did not accept the bid for reasons not specified in the request for bids. Ritchie sued in promissory estoppel to recover its expenses of $6,642 in preparing the bid. The district court dismissed the case for failure to state a claim upon which relief may be granted. Ritchie appealed.

Reversed. When a governing body solicits bids for public improvements it must do so consistent with the provisions of the statute governing competitive bids in such projects. Promissory estoppel is a proper remedy for an unsuccessful responsible low bidder to recover bid preparation costs. There is no allegation of fraud or other tort here. Rather the city refused to award the bid for reasons not disclosed in bid documents relied upon by the responsible bidder, who relied on the bid proposal documents provided.

Citation Ritchie Paving, Inc. v. City of Deerfield, 61 P.3d 669 (Sup. Ct., Kan., 2003)

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