Proposed Law Gives Attorney's Fees to Successful Bid Challenger

March 29, 2011, by Meyers Nave

A new bill (A.B. 457) was recently introduced in the California Legislature that would provide attorney's fees to a public works bidder who is not awarded a contract for a public project, but who successfully challenges the bidding process for the project in court.

A.B. 457 would enact Public Contract Code 5111, which as drafted would state "If a contract is entered into under Section 5110 pending final decision on a challenge to the intended or actual award of the contract, and if the contract is later determined to be invalid due to errors or omissions of the public entity, a bidder who successfully challenges the intended or actual award of that contract shall be entitled to recover costs and attorney's fees incurred in pursuing that challenge."

Not surprisingly, A.B. 457 is supported by various associations that represent contractors and the construction industry. And, since the proposed law is likely to result in an increase in bid protests and subsequent lawsuits against public entities, and resulting project delays, as well as the potential for attorney's fees liability, various public entity associations oppose it.

The bill was scheduled for a committee hearing on March 22, 2011, but that hearing was cancelled. You can follow the status of A.B. 457 here.

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