Bid Protests: Know The Rules So You Don’t Lose Your Rights

Bid Protests:

Know The Rules So You Don’t Lose Your Rights

BY MEGAN M. WARREN, PARTNER MCRAE & METCALF, P.A.

In today’s uncertain times, contractors are facing ever-increasing competition for government contracts. For this reason, it is important for contractors to understand their rights as a bidder and how to protect those rights if they suspect there may be a basis to challenge an intended award of a project.

As we all know, state agencies are generally required to competitively solicit bids or proposals for public projects. A bidder also has the right to challenge the specifications of the solicitation prior to submittal of its bid or an agency’s decision to award a project. The focus of this article is on protests of an agency’s award of a project, although many of the concepts apply to solicitation protests as well.

In Florida, bid protests are governed by a variety of complex statutes, rules and case law. Perhaps the key characteristic of a bid protest is that it must proceed on an extremely expedited timeline, and important rights can be waived if a bidder does not timely assert its rights. As such, knowing your rights and when you are required to assert them will go a long way in pursuing (or defending against) a bid protest.

The following is an outline of the bid protest requirements for state contracts. Many cities and counties generally follow these same requirements, but not all. Some have abbreviated timelines and pro-

cedures, and some have none at all. For this reason, it is critical to move quickly to ensure that your rights are protected.

Basics of Competitive Bidding

The primary purpose of Florida’s competitive procurement laws is to provide a means by which an agency may acquire goods and services at the lowest possible cost and to protect the public against collusion, favoritism and fraud in the award of public contracts. To that end, competitive bidding is designed to secure fair competition on equal terms to all bidders.

Chapter 287 of the Florida Statutes generally requires that state agencies competitively solicit bids or proposals for projects greater than $35,000. The three most common types of competitive procurements identified in statute are: 1) Invitation to Bid (ITB); 2) Request for Proposals (RFP); and 3) Invitation to Negotiate (ITN). Regardless of the method used, the criteria for evaluation of bids, proposals or replies should be detailed in the bid documents.

Bid Protest Deadlines and Requirements – Don’t Waive Your Rights

Florida’s Administrative Procedure Act (Chapter 120 of the Florida Statutes) and corresponding regulations generally govern state agency bid protests including the requirements a bidder must comply with to preserve its right to protest.

Standing: A bidder that is “adversely affected” by an agency action, such as an award of a project to another bidder, has standing to file a protest. Usually, only the second-ranked low bidder has standing to challenge an agency’s award based on nonresponsiveness and other factors. In some cases, a third or lower-ranked bidder may have standing where all higher-ranked bidders are challenged or where the procurement process was fundamentally flawed and a re-bid is required. Non-bidders generally do not have standing absent special and extraordinary circumstances. 72-Hour Deadline: If a bidder or proposer wishes to challenge an agency’s award or intended award, it must file a Notice of Intent to Protest within 72 hours (excluding holidays and weekends) of the posting of the agency’s notice of decision or intended decision (or within 72 hours of the publication of the procurement documents if protesting the terms of the solicitation). This Notice is a brief statement informing the agency that the bidder intends to protest and that a Formal Protest will be forthcoming. Most importantly, a bidder’s failure to timely file the 72-hour Notice of Intent to Protest may waive the bidder’s right to protest. 10-Day Deadline: A bidder must file its Formal Protest within 10 days (including holidays and weekends) after the 72- hour Notice of Intent is filed. The Formal Protest must state with particularity the facts and law upon which the protest is based and is often an extensive legal document referencing legal authority and evidentiary exhibits. As with the Notice of Intent, a bidder’s failure to timely file its Formal Protest may waive its right to proceed with the protest.

Bid Protest Bond: When filing a protest, a bidder must generally furnish a bid protest bond payable to the agency. The timing and face value of the protest bond vary from agency to agency. For instance, in an FDOT protest, the protest bond is required at the time of filing the 72-hour Notice of Intent and the amount of the bond (for projects requiring prequalification) is 1 percent of the lowest bid submitted or $5,000, whichever is greater. Other state agencies do not require a bond until the filing of the Formal Protest and are based on a percentage of the estimated contract amount, not the lowest bid submitted. Given the variation in bid protest bond requirements, it is important to review the bid documents and applicable statutes to know the bond requirements for your protest. Again, if a bidder fails to timely submit a bid protest bond, it may lose its rights.

Common Grounds for a Bid Protest

The grounds for a bid protest tend to be fact specific and vary with the circumstances and requirements of each procurement. To determine whether a bid protest would be appropriate, a bidder should consider the mandated objectives of competitive bidding and whether the agency’s actions in awarding the project run afoul of these objectives. Below are some common grounds for a protest: • Non-responsive bid submitted by apparent low bidder (e.g. material

variances from solicitation requirements) • Sunshine Act violations by agency • Improper ex-parte communications with the agency • Arbitrary scoring and evaluation errors by evaluators • Bias, improper conduct or ethical violations by evaluators • Non-responsible bidder issues (e.g. lack of qualifications, lack of resources or financial ability, submitting false statements, abnormally low bid, or improperly named bidder) • Conditional proposal apparent low bidder • Improper post-bid submissions by apparent low bidder • Improper post-award changes by apparent low bidder

This list is not meant to be exhaustiv e but is to outline some common issues to look for in the event a protest is warranted.

It is important to remember that although courts give deference to governmental bodies in awarding projects, such deference is not unbridled. For example, the undersigned was recently involved in a bid protest where the ALJ overturned an evaluator’s scoring of a bidder for being arbitrary and capricious, and directed the agency to re-score the bidder’s proposal. See ArnAmy, Inc. v. Department of Management Services, DOAH 19-5502BID (February 5, 2020)(protester’s proposal score was “inconsistent and inequitable” where the evaluator gave credit to some bidders for providing information regarding their prior experience but not to the protester for providing the same information).

What the above-listed items have in common is that they relate to defects in the award or evaluation process, not the specifications themselves. If the grounds for your bid protest relate to the interpretation or application of a certain specification, it may be considered an untimely specifications challenge and you will have waived your right to protest. For this reason, it is important to carefully analyze the impact of any questionable bid specification as soon as the bid documents are released. If you believe that it may have any impact on the outcome of the award, it may be prudent to file a protest and seek clarification from the agency.

You Filed a Protest. What Happens Next?

Once a bidder timely files its Formal Protest, the bid process is stayed and, unless extreme circumstances exist, no final award of the project may be made until the protest is resolved. The bidder and the agency then have the opportunity to resolve the issues raised in the protest through an informal mediation process.

An agency must allow seven days to provide an opportunity for the parties to resolve the protest without a hearing. In addition to the agency and protester, the apparent low bidder may also participate in the settlement discussions and, if not resolved, the administrative hearing. In fact, both the protester and apparent low bidder should closely monitor the settlement process and request that the agency keep them informed of any meetings, discussions or correspondence from any other party.

If the parties do not resolve the protest during the settlement period, the agency typically refers the protest to the Division of Administrative Hearings (DOAH) for an expedited formal hearing before an Administrative Law Judge (ALJ). Pursuant to Chapter 120, a bidder has the right to an administrative hearing to resolve any disputed issues of fact. As with most everything else dealing with bid protests, the hearing and post-hearing submittals must be conducted in abbreviated timeframes (e.g. the final hearing must be conducted within 30 days of DOAH’s receipt of Formal Protest). However, unlike the 72-hour and 10-day requirements set forth above, these time periods can be waived by the parties. The administrative hearing is similar to a civil trial, and the parties are afforded similar rights, including the right to conduct discovery. The hearings are full evidentiary hearings where evidence and testimony can be presented to the ALJ. Following the hearing, each party submits a Proposed Recommended Order to the ALJ for consideration detailing the proposed findings of fact based on the evidence admitted at the hearing, conclusions of law and a recommendation. The ALJ considers the submissions by each party in preparing its Proposed Recommended Order to

the agency. The ALJ then issues an order that the agency can accept, in whole or in part. The bid protest is concluded at the agency level, and the procurement is no longer stayed absent appellate court intervention.

Conclusion

Florida’s competitive bidding laws are designed to ensure fair competition and to secure the best possible value at the lowest cost to the agency. Because of the expedited nature of the procurement process, and its inherent complexities, a bidder needs to be well informed of its rights and when to assert them. If a protest is contemplated, a bidder should move quickly to assert his or her rights to either file a protest or to defend against one.

About the Author

Megan M. Warren is a boardcertified construction law attor ney and partner at the law firm of McRae & Metcalf, P.A. She can be reached at (850) 386-8000 or mwarren@ mcraemetcalf.com.