Tuesday - Avoiding Bid Protests

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AVOIDING BID PROTESTS and HANDLING THE ONES THAT HAPPEN

Nancy Brooks Director of Purchasing Iowa State University Annual Meeting April 7 - 10, 2013 Orlando, Florida 1

Overview

What Is A Bid Protest?

A formal complaint against some aspect of a procurement process which asserts either: – A violation of policy, procedure or law; or – A decision that lacks any rational basis

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Overview

What is a decision lacking a rational basis?

– –

A decision or action that lacks logical support at all A decision based on materially mistaken or erroneous facts

– –

A decision contrary to the solicitation A decision based on improper motives Annual Meeting April 7 - 10, 2013 Orlando, Florida 3

Common Protestable Issues

• Failure to advertise the solicitation as required; • Specifications give one bidder an unfair advantage over its competitors; • A bidder had improper communications or relationship with contracting officer which gave the appearance of impropriety; • Winning bidder failed to satisfy minimum qualifications or was not responsible or responsive;

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Common Protestable Issues

• Evaluation criteria were applied that were different from those stated in solicitation; • More weight was afforded to one evaluation area than was disclosed in solicitation; • Irregularities in receipt or opening of bids (acceptance of late bid or opening at different times)

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Common Protestable Issues

• Source selection not rational or consistent with the evaluation criteria; • Past performance evaluations may appear unfair or not supported by facts; • Improper discussions or debriefings; or • Conflict of interest created by awardee’s involvement in certain activities.

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Common Protestable Issues

• Sole source contracts; • Best-value determinations; or • Abuse of discretion and disparate treatment of bidders.

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Bid Protest Trends

• Federal procurement protest increased – 1,652 in 2008 to 2,475 in 2012 • Why?

– Difficult economy – – Shrinking pots of public money Law firms specializing in bid protests

“Leading name in bid protests – team of attorneys have been nationally recognized for their work in pre-award and post-award protests.”

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Protests

• Court Cases –

Blue Cross & Blue Shield of Rhode Island v. Najarian,

(Rhode Island Supreme Court, 2005) •

Trial Court sustained a protest against the award & issued an injunction

Supreme Court reversed

While the contract award was not handled perfectly (at least partly due to understaffing), a “fair and open bid process was conducted in good faith and we must afford a presumption of correctness to the State’s decision. Any mistakes made during the process simply do not rise to the level of palpable abuse of discretion.”

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Protests

• Court Cases –

Glidepath, LLC v. Columbus Regional Airport Authority, (Ohio Court of Appeals, 2012)

• Evaluation committee determined Glidepath was not responsible. Airport’s finance director on committee and analyzed financial statements & D&B reports. Company had late payments to subs and limited project mgmt. experience.

• “Airport performed its duties in a lawful manner. Made qualitative determinations regarding Glidepath’s resources, capacity, and overall ability to perform…..determination was supported by logic and reason.”

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Protests

• Court Case: –

Professional Building Maintenance Corp. v. School Board of County of Spotsylvania (Virginia Supreme Court, 2012)

• •

County held 2 post-award meetings with vendor (1st) emphasized weakness in Environmentally Preferable Purchasing Program and (2 nd ) gave reasons regarding responsibility, transitioning plan, and method of conducting background checks.

Found that award decision was arbitrary and capricious.

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Protests

• Court Case: – A&A Industrial Piping, Inc. v. County of Passaic (New Jersey Supreme Court, 2012) • Protested award to low bidder on grounds that apparent awardee was not prequalified by county. County realized it inadvertently omitted prequalification in solicitation so cancelled it.

• Court sustained the county’s decision that it did not abuse its discretion in determining it needed to rebid. Court reasoned that this put potential bidders on an equal footing .

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Protests

• • •

Avoidance is best practice Protests are time consuming and costly Damages relationships

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HOW TO AVOID BID PROTESTS

Sometimes You Can’t!

Even when you are confident with your award YOU MAY BE CHALLENGED

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EXAMPLES OF PROTESTS

• Emergency Generator & Transfer Switches awarded to low compliant bidders (in-state) – – Protest: From low non-compliant bidder (out-of-state) Based on: Price No local preference clause in bid Failure to notify all bidders with bid tab within 7 days per state statute (?)

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Examples of Protests

• Disposable Gloves for Dining Services awarded to low bidder (local WBE) – – Protest: From bidder with higher price (out-of-state) Based on: Awardee’s bid was materially non-responsive by failing to answer all questions listed in Section D or including mandatory electronic copy in their proposal.

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Examples of Protests

• Vending Machine Energy Control Units awarded to low compliant bidder – – Protest: From bidder with higher price Based on: “Violation of NAEP Code of Ethics Rules #7 – Use only by consent original ideas & designs devised by one vendor for competitive purchasing purposes” “Request a 3 rd party review of protest – Rule #8 – be willing to submit any major controversies to arbitration or other 3 rd party review insofar as established policies of institution permit.”

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Examples of Protests

• Version Control Software awarded to low compliant bidder with best solution – – Protest: From other bidder Based on: 1.

2.

Challenged the evaluation process and criteria Bid process be reopened and allow them to engage more in decision making process 3.

Keep request confidential

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Examples of Protests

• Tent Rental and Event Set-Up Contract awarded to second low bidder based upon reference checks indicating poor communications and damage to grounds – – Protest: From low bidder (local company) Based on: Low bid and lack of evidence that company could not perform.

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Protest Avoidance Strategies

• Published policy and procedure for vendor disputes • Develop RFP to remove the appearance of an arbitrary or proprietary process • Post RFPs on Internet • Communicate your decision with all respondents prior to final award (debriefing)

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Protest Avoidance Strategies

• Keep communication lines open • Always respond to questions/protests in diplomatic manner.

• Keep conversations factual and objection • Be consistent with evaluation criteria stated in RFP

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Protest Avoidance Strategies

• Understand your position and institution’s will to support your decision • Be consistent and follow your policies & procedures • MAKE SURE YOU CAN DEFEND YOUR EVALUATION & AWARD DECISION

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Protests

• • •

Avoidance is best practice Protests are time consuming & costly Damage relationships

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THANK YOU QUESTIONS?

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