## Facts

- The Metropolitan Airports Commission (MAC), a Minnesota public corporation, administered airport-related work for the Hiawatha Light Rail Transit Project, including a tunnel and station under the Minneapolis–St. Paul International Airport.
- Because the work was large and time-sensitive, MAC used a prequalification process to assess bidders’ experience and capabilities before receiving bids.
- Three construction firms (Frontier, Traylor, and Shea) submitted prequalification materials identifying the bidding entity as a “Frontier/Traylor/Shea” joint venture partnership, described as “joint-and-several,” and indicating corporate status as not applicable.
- MAC evaluated and prequalified that joint venture partnership on the understanding that its participants would be jointly and severally liable.
- When bids were submitted, the lowest bid came from Frontier Traylor Shea, LLC, a Delaware limited liability company formed by the same three firms.
- MAC rejected the LLC’s bid and awarded the contract to the next lowest bidder, reasoning that the LLC was a materially different entity than the prequalified joint venture and did not provide the same joint-and-several liability profile MAC had evaluated.
- The LLC sued and sought a permanent injunction compelling MAC to award it the contract, arguing the LLC was equivalent to the prequalified joint venture for purposes of bidding compliance.

## Issues

1. Whether MAC could lawfully reject the lowest bid where the bidder was an LLC rather than the prequalified joint venture partnership and the change affected the members’ liability exposure.
2. Whether MAC’s determination that the bid was nonconforming was arbitrary, capricious, or contrary to law.
3. Whether the low bidder established entitlement to a permanent injunction compelling award of the public contract.

## Decision

- The court denied the motion for a permanent injunction.
- The court held MAC reasonably treated the switch from a prequalified joint venture partnership to an LLC as a material difference, particularly because the LLC structure did not establish joint-and-several liability of the members.
- The court concluded MAC’s rejection of the bid as nonresponsive was within its discretion and was not arbitrary or capricious.
- Because the rejection was lawful, the low bidder had no enforceable right to the contract and could not show success on the merits necessary for permanent injunctive relief.

## Legal Principles

- A public contracting authority may require the bidding entity to conform in material respects to the entity it prequalified, especially where differences affect responsibility and risk allocation.
- A bid may be rejected as nonresponsive when it materially deviates from bidding requirements, including deviations tied to the bidder’s legal form and the financial liability backing performance.
- Joint-and-several liability associated with a joint venture partnership can be materially different from the limited liability typically associated with an LLC, and that difference may justify rejection in public procurement.
- Permanent injunctive relief requires actual success on the merits and a showing that equitable relief is warranted; being the lowest bidder does not itself create a vested right to a public contract when the bid is nonconforming.

## Conclusion

The court upheld MAC’s decision to reject the lowest bid because the bidder’s LLC form and liability structure materially differed from the prequalified joint venture partnership, and it denied a permanent injunction because the low bidder lacked a substantive entitlement to the award.


Frontier Traylor Shea, LLC v. Metro. Airports Comm’n, 132 F. Supp. 2d 1193 (D. Minn. 2000)