Top 10 Grounds for Construction Bid Protests in Florida
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For construction entities participating in the competitive bidding process, it is very important to be able to timely issue spot impermissible arbitrary contract awards or improper solicitations based on flawed specifications that merit immediate protest. The fundamental analysis can be boiled down to simple questions, such as:
- Were the bid specifications reasonably specific?
- Was the winner responsive and responsible?
- Was there fraud or misconduct in the bidding process?
- Has the winning bidder been given an unfair economic advantage that merits reconsideration?
- Does the action prevent the public entity from making an equal comparison of responses to the bidding solicitation?
- Has there been substantial compliance with the bidding procedures?
- Did the agency act arbitrary?
Beyond those questions, this Blog post seeks to identify the Top 10 most common grounds in which Florida procedural or substantive bid protests are based upon.
1. Non-responsiveness of the winning bid, proposal, or reply- A responsive bid is one in which the bidder describes the work in substantially the same manner in which the entity sought the bid. Responsive bids confirm in all material respects to the solicitations. While a public owner may waive minor irregularities with a bid, proposal or reply, it may not waive a material deviation. A minor irregularity is an irregularity which does not: (1) affect the price of the bid, (2) give the bidders and advantage or benefit not enjoyed by other bidders, or (3) adversely impact the interests of the procuring agency. Intercontinental Properties, Inc. v. Department of Health and Rehab. Servs., 606 So. 2d 380 (Fla. 3d DCA 1992); see also Tropabest Foods, Inc. v. State, Dept. of General Services, 493 So.2d 50 (Fla. 1st DCA 1986). When evaluating material deviations from bid specifications, courts are inclined to look at:
- Did the deviation destroy the competitive process?
- Whether the variation had a substantial effect on pricing?
- Did the deviation provide a competitive advantage to one bidder over the others?
- Was the evaluation process compromised due to unequal submissions?
Id.; see also Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190 (Fla. 2nd DCA 1978).
2. Inadequate licensure- The proposed prime contractor or subcontractor must be licensed as required by law and/or by the bid specifications. Registration or certification of bidders is required before any contract is awarded for construction work on buildings or other improvements to real property, except for certain transportation or utilities projects as specified by Fla. Stat. §489.103. Fla. Stat. §489.103 requires the state, counties and cities to require submission of evidence of licensure or certification by a bidder unless the work is exempt. Qualification must be submitted before the bid response is proffered or else the bid cannot be accepted. Failure of the bidder to possess a license is incurable after the bids have been accepted.
3. Not a responsible bidder- As a general proposition, public bids are awarded to the lowest responsible bidder whose bid is responsive. By statute, responsible bidders have the capability in all respects to fully perform the contract requirements and the integrity and reliability that will assure good faith performance. Fla. Stat. §287.012. Things that may render a bidder not responsible include: (1) financial inability to perform the contract, (2) poor ethics, integrity or candor, (3) lack of qualification, (4) past history of non-performance, (5) previous bidder misconduct, (6) past government contract terminations or debarment.
4. Bid mistakes- The scope of the bid mistake and the reason it was made are critical factors in determining whether a bid is retractable or not. Math mistakes and scriveners errors are retractable, while improper evaluation of the project and bad business judgment are not. When a one-sided bid mistake is noticed and timely acted upon, a bidder can rescind a flawed bid if the mistake was honest, created undue burdens, not the result of negligence and doesn’t cause damage to the bid recipient. The leading Florida Supreme Court case which dealt with the issue of unilateral mistake is Graham v. Clyde, 61 So. 2d 656 (Fla. 1952). In that case, the contractor had already executed the contract when the mistake was discovered; however, the court still did not allow the contractor to rescind the contract due to an error in computing the items of the bid. The court in that case said that even bids containing unilateral mistakes are binding and the bidder is expected to bear the consequences of the erroneous bid. Despite that ruling, agencies will give strong consideration to allowing withdrawal of the winning bid if there has been faulty addition, misreading of blueprints, mix-up of numbers, improper multiplication, and/or misunderstandings as to the location or extent of work demanded. However, public owners do not allow withdrawal of bids when the concept of mistake is based on mistakes in law, mistakes in personal judgments or wrongful assumptions of contract obligations. It is important to recognize that in no event may the bidder alter or correct the bid. The competitive bidding process requires that bids be evaluated as submitted. Errors in bids may be the basis for rejection or for withdrawal, but they may not be corrected, even when it would suit the agency to do so. Correction of a material error in a bid creates an unfair advantage and creates the potential for collusion and abuse of the competitive bidding process.
5. Scoring and evaluation errors- Generally, the agency is not permitted to invoke criteria in scoring bids or proposals that were not part of the solicitation documents. See City of Sweetwater v. Solo Construction Corp., 823 So. 2d 798 (Fla. 3d DCA 2002). Evaluators are generally not to look outside the four corners of the RFP and the proposals submitted when conducting their reviews of the submitted proposals. Aurora Pump v. Gould Pumps, Inc., 424 So. 2d 70 (Fla. 1st DCA 1982). If a contract was awarded based on an evaluation of information not requested or provided in the formal bidding process, then that contract is subject to dispute. As for scoring bid responses, broad discretion is afforded to the public agency. An award may, however, be challenged if there are clear mathematical errors made by scorers, evidence that the scoring system itself is non-sensical or arbitrary, overt statistical bias from one scorer compared to another, failure to clear conflicts of interest, improper ex-parte communications between evaluators in the scoring process, unqualified or inexperienced evaluators, or internal failure to follow agency or bid document procedures.
6. Bias, favoritism, or appearance of impropriety- The evaluating agency may not be biased or engage in unethical conduct as part of its bid evaluation. See Emerald Corr. Mgmt. v. Bay County Bd. of County Comm’r, 955 So. 2d 647 (Fla. 1st DCA 2007) (protesting party stated a cause of action in bid protest where it was alleged that the county engaged in improper favoritism when it accepted terms from one party which were not contemplated by the RFP). Even the appearance of a conflict of interest or impropriety is grounds for a successful bid protest. Transportation Mgmt. Servs. Or Broward, Inc. v. Commission for the Transportation Disadvantaged, DOAH Case No. 05-0920BID, 2005 WL 1210021 (Fla. Div. Admin. Hrgs. May 20, 2005 )(finding appearance of impropriety where evaluator had on-going business, personal and professional relationship with the principal of a proposed subcontractor); Compass Envtl., Inc. v. Department of Envtl. Protection, DOAH Case No. 05-0007BID, 2005 WL 678870 (Fla. Div. Admin. Hrgs. March 21, 2005) (Recommended Order found that there was an appearance of impropriety where an evaluator had a professional relationship with a proposed subcontractor. Holding found it was unnecessary to show hardened fact evidence of actual bias or favoritism).
7. Cone of Silence violations- All state procurements, and many local government procurements are subject to a cone of silence that prohibits prospective vendors from communicating with representatives of the procuring agency other than the one individual identified in the solicitation as the single point of contact. For instance, Section 287.057 provides that communication must be in writing to the procurement officer, or as provided in the solicitation documents, and that violation of this provision may be grounds for rejecting a response. Violations of any applicable cone of silence obligations can be grounds for disqualification of a bid, proposal, or reply.
8. Sunshine Law violations- Pursuant to Florida’s “Sunshine Law,” all meetings of any state agency at which official acts may be taken must be conducted as noticed, open, public meetings. Bids that are awarded in derogation of the Sunshine Laws are improper and are void. See Fla. Stat. § 286.011. Specifically, meetings of procurement evaluation committees are subject to the Sunshine Law. Silver Express Co. v. District Bd. of Lower Tribunal Trustees, 691 So. 2d 1099 (Fla. 3d DCA 1997). Public agencies must take incredible measures to ensure compliance with Sunshine requirements, including but not limited to allowing all general meetings of a procurement evaluation committee to be publically noticed, open and available to the public. The Sunshine Law might apply to a procurement evaluation committee even if a meeting is never held. Leach-Wells v. City of Bradenton, 734 So. 2d 1168 (Fla. 2d DCA 1999). Oral presentations to an evaluation committee must be open to the public and officials from the procuring agency cannot suggest that bidders not attend presentations by competing bidders. Port Everglades Authority v. International Longshoremen’s Ass’n Local 1922-I, 652 So. 2d 1169 (Fla. 4th DCA 1995). Contract awards based upon private evaluation or scoring are subject to challenge. Questions you must ask yourself are: Were all meetings of the procurement evaluation committee publicly noticed? Were all meetings of the procurement evaluation committee open to the public? Are there minutes of all meetings of the procurement evaluation committee? Were all communications between members of the procurement evaluation committee confined to the public meeting? If the answer to any of those questions is no, then you may have a basis for a Sunshine Law violation bid protest.
9. Untimely submissions- Bid solicitations will contain a date and time by which the response to the solicitation must be submitted as well as instructions for submitting the response. To avoid unfair competitive advantages, agencies are very strict about rejecting a bid submitted late. Therefore, if any winning contractor has not submitted its full bid by the deadline, then it is subject to dispute. Moreover, no submissions made after the bid or proposal opening that amend or supplement are to be considered by the procuring agency. Thus, a bidder cannot change a bid after the bid has been opened, except to cure “minor” irregularities. Harry Pepper & Assoc. v. Cape Coral, 352 So. 2d 778 (Fla. 1st DCA 1981).
10. Arbitrary rejection of all bids- Public entities possess wide discretion to reject bids and start anew. However, they are not entitled to reject all bids arbitrarily. Agencies subject to Fla. Stat. § 120.57(3) may reject all bids if the decision is not illegal, arbitrary, dishonest or fraudulent. If an agency lacks sound justification for rejection and overlooks subsequent events that demonstrate the error of its decision to reject, it may be acting arbitrarily in rejecting all bids. As you can imagine, this is a very difficult standard to meet for a bid protestor.
Should you find that one of these grounds exist and on a State of Florida project you are a person who is “adversely affected by the agency decision or intended decision” as set forth by Fla. Stat. § 120.57(3)(b) and case law interpreting requisite standing, you are on a very strict deadline to initiate action. It is prudent to engage counsel immediately, for the filing of a bid protest is a two-step process in which time is of the essence. First, a notice of intent to protest must be filed within 72 hours (not including weekends or holidays) after the posting of the solicitation for a protest to the specification, and within 72 hours (not including weekends or holidays) after the posting of the notice of decision or intended decision with respect to a protest of an intended award or a rejection of all bids. Id. Second, a formal written protest accompanied by a proper bond must be filed within 10 days (including weekends and holidays) after the date the notice of protest is filed. Id; see also Fla. Stat. § 287.042. The formal written protest must set forth the facts and law upon which the protest is based. Failure to follow both of these steps results in waiver of bid protest proceedings. If you believe your bid is subject to protest, act immediately and without delay in contacting a qualified construction attorney to represent you through your bid protest and the hearings that accompany it.
Source: Procurement Substance and Procedure, Glenn M. Miller