Iconco v. Jensen Construction Co.

622 F.2d 1291 (8th Cir. 1980)

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Nature of the Case

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Facts

Iconco (P) was the second-lowest bidder on a small business set-aside construction government contract. Jensen (D) was the lowest bidder and was awarded the contract. P sued D claiming that D made a false bid in that D falsely certified it was a small business under federal law. P sued under fraud and unjust enrichment. During the trial, Colonel Johnson, Army Corp of Engineers testified on P’s behalf. Johnson gave his criteria for ranking bidders by amount and then doing a direct investigation known as a pre-award survey to determine if the low bidder was, in fact, responsible and competent to perform the contract. The overriding considerations were the fact that the contractor could provide a performance bond, the prior record of similar jobs done in the past, financial resources, organizational ability and adequacy of equipment. The actual job underbid was merely mule work and any contractor who had responsibly performed heavy work of any kind could have done the job. At trial, P propounded a hypothetical question to Johnson based on whether it would have gotten the job if it was known that D was not a small business and the answer was yes. P got the judgment on both counts, but the court set aside the $40,000 award for fraud on a finding that there was insufficient evidence to support the verdict. This appeal resulted.