Transcript Tuesday - Avoiding Bid Protests

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
7
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 (2nd) 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 3rd party review of protest – Rule #8 – be
willing to submit any major controversies to arbitration
or other 3rd 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.
3.
Challenged the evaluation process and criteria
Bid process be reopened and allow them to engage more in
decision making process
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