Queen City Mechanicals, Inc. v. Boone County, Kentucky, and Lonkard Construction Co.

Summary

The court addresses Queen City Mechanicals’ emergency motion for a temporary restraining order and preliminary injunction concerning Boone County’s award of a watermain expansion contract to Lonkard Construction. The court concludes that Boone County likely misapplied Kentucky’s reciprocal resident-bidder preference law but also determines that the county retained broad discretion in awarding the contract, undermining Queen City’s federal claims and claimed entitlement to the contract. The temporary restraining order request is denied as moot, while the preliminary-injunction motion is granted in part and denied in part.

Holdings

1. Boone County was bound by its ordinance and Invitation to Bid to apply Kentucky preference law, but it likely misapplied KRS 45A.494 by applying a five-percent preference against QCM without showing that Ohio applied a preference against Kentucky bidders.
2. QCM was unlikely to establish a constitutionally protected property interest in the contract and therefore was unlikely to succeed on its § 1983 and declaratory-judgment claims.
3. QCM likely had standing to seek judicial review because Boone County adopted objective procurement criteria and a protest mechanism with the essential features of the Kentucky Model Procurement Code's protest procedure.
4. Even though Boone County was required to apply Kentucky preference law, it retained discretion to reject QCM's bid and award the contract to another bidder; QCM was not entitled to an order compelling award of the contract or to lost profits based solely on being the lowest bidder.
5. QCM was unlikely to succeed on its standalone claim for breach of bid requirements because an invitation to bid creates no contractual obligations under Kentucky law and the requested award or lost-profit relief was unavailable.
6. Although detrimental reliance is not an independent cause of action under Kentucky law, QCM was likely to succeed on a promissory-estoppel theory to the extent it alleged that Boone County promised to apply Kentucky preference law and QCM incurred wasted bid-preparation resources in reliance on that promise.
7. QCM satisfied the preliminary-injunction factors sufficiently to obtain an injunction against applying the preference and requiring Boone County to reconsider QCM's bid, but not an injunction awarding QCM the contract.

Questions Presented

1. Whether QCM was likely to succeed in showing that Boone County misapplied Kentucky's reciprocal resident-bidder preference law.
2. Whether QCM had a constitutionally protected property interest in the public contract for purposes of its 42 U.S.C. § 1983 claim.
3. Whether QCM could obtain a declaratory judgment that it was entitled to the contract.
4. Whether Boone County's locally adopted protest procedure gave QCM standing to obtain judicial review of the County's procurement decision.
5. Whether Boone County's application of the five-percent preference was arbitrary, capricious, or contrary to law.
6. Whether QCM was likely to succeed on claims for breach of bid requirements and detrimental reliance or promissory estoppel.
7. Whether the balance of preliminary-injunction factors warranted enjoining Boone County from applying the preference and requiring reconsideration of QCM's bid.

Disposition

other