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©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients butmay be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500
Nuts & Bolts of Bid ProtestsPresented for Florida Bar CLE
Robert Hosay106 E. College Ave.
Tallahassee, Florida 32301850.222.6100
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Preview
What are we going to talk about?
– Perspective
– The procedural process
– Tips and Pitfalls within the process
– Examples of winning strategies in bid protests
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Perspective
Why Protest?
– Protect your marketplace. It’s about $$$!
– Fundamentally unfair or biased process.
– Evaluation flaws.
– Winning bidder misrepresented qualifications.
– Entry into new line of business; establishcredibility in the market.
– Expected in Florida?
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Perspective
Why Not to Protest?– Preserve relationship with customer.
– You are often arguing points adverse to the samepeople that you want to buy your product orservice.
– It’s not cheap, especially when there is not aguaranteed return for the capital outlay.
– Depending on facts, winning is difficult in light ofhigh burden of proof.
– 1% protest bond.
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The Procedural Process
The first step once the State posts a notice ofintent to award is to file a notice of intent toprotest within 72 business hours.
An intent to protest can be a simple writtenstatement indicating the firm intends to file aprotest.
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The Procedural Process
Upon receipt of the intent to protest, the agency has72 hours, excluding Sat. & Sun., and state holidays,to provide the estimated contract amount to thevendor, in order to establish the 1% protest bondamount. §287.042(2)(c) Fla. Stat.
The estimated contract amount shall be based uponthe contract price submitted by the protestor or, if nocontract price was submitted, the agency shallestimate the contract amount.
The estimated contract amount is not subject toprotest.
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The Procedural Process
The formal written protest that includes theallegations must be filed within 10 days of filing thenotice of intent.
– Be careful! Some agencies (Fla. Lottery and State GroupInsurance to name two) require the formal written protest andbond to be filed within 72 hours. Check the solicitationdocument and governing statute for the filing deadline within72 hour period.
Failure to file the formal written protest within thetime prescribed by §120.57(3) Fla. Stat., or failure topost the (1%) bond or other security required by lawshall constitute a waiver of proceedings underChapter 120, Florida Statutes.
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The Procedural Process
Upon receipt of the formal written protest thathas been timely filed, the agency shall stop thesolicitation or contract award process until thesubject of the protest is resolved by finalagency action, unless the agency head setsforth in writing particular facts andcircumstances which require the continuanceof the solicitation or contract award processwithout delay in order to avoid an immediateand serious danger to the public health, safety,or welfare. §120.57(3), Fla. Stat.
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The Procedural Process
The stay means that the agency cannot re-bid,re-post, or take any other action, with theexception of emergency action, until theprotest is resolved.
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The Procedural Process
Steps after the formal protest is received:– Agency offers a settlement meeting, held within 7 days in
accordance with 120.57(3), Fla. Stat. Agency determines iterred, and enters into written agreement with protester thatprotester will withdraw protest and agency will post a newnotice of intended decision.
– Agency offers a settlement meeting, and the protestorwithdraws. Note that these are public meetings. The intendedawardee may be invited.
– Agency offers a settlement meeting, and achieves acompromise. All parties sign a settlement agreement and theprotester withdraws the protest.
– If no settlement, the matter is referred to the Division ofAdministrative Hearings or the agency head, if no disputedissues of material fact are involved.
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The Procedural Process
If the subject of a protest is not resolved bymutual agreement within 7 days, excludingSaturdays, Sundays, and state holidays, afterreceipt of the formal written protest, and ifthere is a disputed issue of material fact, theagency shall refer the protest to the divisionfor proceedings.
A DOAH hearing shall commence within 30days of receipt of the protest at DOAH.
Provided a full evidentiary hearing.
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The Procedural Process
A recommended order will be issued within30 days after the hearing or after theadministrative law judge receives thetranscript, whichever is later.
However, as a practical matter the timelineslips in complex cases.
The recommended order is sent back to theagency for final agency action.
You have the opportunity to take exceptionsto the recommended order.
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The Procedural Process
You may appeal to the First District Court ofAppeals.
Watch out for your remedy!
– If the contract is executed and being performedyour remedy may be limited.
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3 Types of Protest
Specifications.
– Specifications are inaccurate, vague, contrary tocompetition, incomplete, biased or includeburdensome T&C’s.
Intent to Award.
– You lost the award.
Rejection of Bids.
– You spent $$$ and won but the agency decidesnot to award the contract.
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Specifications Protest
Hypothetical and Strategy.– RFP specifications are inaccurate in a way that
would allow different interpretations of how toprice your reply.
– File an intent to protest.
– You’ve got 10 days to let the agency know thattheir specifications are contrary to competition,arbitrary and capricious.
– File a formal protest and you’ve got 7 more daysto make your point!
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Specifications Protest
Pitfall:– If you don’t protest a specifications issue you may
waive the argument!
Strategy:– Most specifications protest do not go to an
administrative hearing…it’s easy to post newspecifications!
– If there is a Q&A period in the bid….then use it toeither address your concerns or set up yourprotest.
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Specifications Protest
The protest must show that the specificationsare so vague that a bidder cannot submit anaccurate bid or that the specifications are sounreasonable that it is impossible to complyand still be competitive. See Advocacy Ctr. forPersons with Disabilities v. DCF, 721 So. 2d753 (Fla. 1st DCA 1998).
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Award Protest
Standard of Proof – Whether the proposedagency action is clearly erroneous, contrary tocompetition, arbitrary or capricious.§120.57(3)(f), Fla. Stat.
Arbitrary action is "one not supported by factsor logic, or despotic." A capricious action isone "which is taken without thought or reasonor irrationally." Agrico Chem. Co. v. Dep’t ofEnvtl. Reg., 365 So. 2d 759 (Fla. 1st DCA1978).
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Award Protest
The protesting bidder must show that theagency’s action is contrary to:
– The solicitation specifications;
– The agency’s rules or policies; or
– The agency’s governing statutes.
See § 120.57(3)(f), Fla. Stat.
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Award Protest – If you win:
Legal counsel should already be involved.
Prepare to perform the contract.
Utilize the Chapter 119 public records request toprotect your award:
– Review procurement file.
– Review other proposals.
– Review evaluation documentation.
Let the agency know you will vehemently defendthe award decision.
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Award Protest – If you lose: Legal counsel should already be involved.
Utilize the Chapter 119 public records request to:
– Review procurement file.
– Review winning proposal.
– Review evaluation documentation.
Full technical and legal review of all documentation.
Prepare to quickly make the decision whether toprotest.
Develop protest fodder.
Prepare to have bid protest bond issued.
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Award Protest – Fodder
Responsiveness of winning bid.
Responsibility of the winning bidder.
Sunshine Law Violations.
Evaluation irregularities/discrepancies.
Scoring errors/discrepancies.
Improper Communications.
Bias or impropriety.
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Award Protest – Responsive?
If there are material deviations in a responsethen it’s not responsive.
A minor irregularity can be waived by theagency
– Can’t affect the price;
– Can’t give a bidder a competitive advantage; or
– Adversely impact agency interest.
See Intercontinental v. DOH, 606 So. 2d 380 (Fla. 3rd DCA 1992).
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Award Protest - Responsible?
A Responsible vendor has the ability toperform all contract requirements and theintegrity and reliability that will assure goodfaith performance. § 287.012(24), Fla. Stat.
Got Ethics?
Got Integrity?
Default on other contracts?
Suspended or debarred?
Financially capable?
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Award ProtestSunshine Law Violation
Agency action taken in violation of SunshineLaw is void! Silver Express Co. v. District Bd. ofLower Tribunal Trustees, 691 So. 2d 1099(Fla. 3rd DCA 1997).
Evaluation committees are open! See SilverExpress.
Oral presentations to an evaluationcommittee are open! Port Everglades Auth. v.International Longshoremen’s Ass’n, 652 So.2d 1169 (Fla. 4th DCA 1995).
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Award ProtestSunshine Law Violation
If there is an evaluation process it should bedone in an open meeting. Leach-Wells v. Cityof Bradenton, 734 So. 2d 1168 (Fla. 2nd DCA1999).
Negotiations as part of an ITN process are notopen, but recorded. §286.0113, Fla. Stat.
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Award ProtestEvaluation and Scoring
Are evaluators qualified?
Were the evaluators impartial?
Was the evaluation process consistent with thesolicitation criteria?
Did the scoring reflect inconsistencies betweenevaluators?
Tabulated correctly?
Pricing scale correctly applied and evaluated?
Is scoring consistent with the bid specifications?
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Award ProtestImproper Communications
Bidders or persons acting on their behalfcannot contact, between the release of thebid and the end of the protest period after theposting of intended award, any employee orofficer of the executive or legislative branchconcerning any aspect of the bid, except inwriting to the sole point of contact. Violationmay be grounds for rejecting the bid.§287.057(24), Fla. Stat.
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Award ProtestBias or Impropriety
Only the appearance of impropriety canjeopardize a contract award!
– Administrative Law Judge found appearance ofimpropriety where an evaluator had a relationshipwith a subcontractor’s principal. SeeTransportation Mngmt. Serv. of Broward v.Commission for the Trans. Disadvantaged, DOAH05-0920BID (May 2005).
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Rejection of Bids
Standard of Proof!– Must show that agency’s decision is illegal,
arbitrary, dishonest or fraudulent. §120.57(3)(f),Fla. Stat.
Significant Agency Discretion!
Often used to get out of procurement processmistakes made within the agency.
Rarely makes sense to carry to evidentiaryhearing.
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Rejection of Bids
The automatic stay does apply upon filing offormal protest.
New law allows replies to be exempt frompublic disclosure if agency concurrently statesintent to reissue the ITN. §119.071(1)(b), Fla.Stat.
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Case Law Updates
Academy Express, LLC v. Broward County– Shuttle bus service. scoring resulted in a tie, between Academy and
Limousines, with the tie broken in favor of Limousines. Academyprotested on the basis that Limousine had made materialmisrepresentations in its response.
P’ship for Cmty. Health v. DCF– Challenge to constitutionality of protest bond requirement under due
process clause and access to courts provision.
Dep’t of Hwy. Safety & Motor Veh. v. Nat’l SafetyComm’n, Inc.– National Safety Commission argued that language of contract
between itself and DHSMV granted it right to unilaterally renewcontract for additional five year term.
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Case Law Updates
Pro-Tech Monitoring, Inc. v. Dep’t of Corr. (1st DCA2011)– Vendor challenged agency final order dismissing protest as untimely
filed. Runner for vendor’s law firm delivered protest to furthest point oflawful public access before deadline.
Pro-Tech Monitoring, Inc. v. Dep’t of Corr. (DOAH)– Omission of required disaster recovery plan provided competitive
advantage because served as barrier to entry narrowing field ofrespondents and allowed vendor an out.
Infinity Software Development, Inc. v. Dep’t of Educ.– Winning vendor’s notations that proposal did not constitute a binding
offer.
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Case Law Updates
Laboratory Corp. of America v. DOH– Second place vendor challenged that winning bidders proposal of a
staffing plan rather than identification of each proposed individualemployee rendered winning bid to ITB materially non-responsive.
Traveler Elevator v. Fla. Sch. for the Deaf and theBlind– ALJ found the question of whether late-arrival constituted material
deviation did not matter in protest of rejection of all bids, school hadlegitimate question as to how such a decision would be resolved andelected to restart bid process instead.
Keystone Peer Review v. AHCA– question of disputed fact as to whether the procurement was exempt
from 287.057 procedures and it was thus improper for AHCA todismiss the protest.
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