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

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

2

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;

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

4

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)

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

5

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.

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

6

Common Protestable Issues

Sole source contracts;

Best-value determinations; or

Abuse of discretion and disparate treatment of bidders.

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

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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.”

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

8

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.”

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

9

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.”

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

10

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.

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

11

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 .

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

12

Protests

Avoidance is best practice

Protests are time consuming and costly

Damages relationships

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

13

HOW TO AVOID BID PROTESTS

Sometimes You Can’t!

Even when you are confident with your award

YOU MAY BE CHALLENGED

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

14

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 (?)

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

15

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.

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

16

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.”

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

17

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

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

18

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.

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

19

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)

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

20

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

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

21

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

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

22

Protests

Avoidance is best practice

Protests are time consuming & costly

Damage relationships

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

23

THANK YOU

QUESTIONS?

Annual Meeting

April 7 - 10, 2013

Orlando, Florida

24

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