Nuts & Bolts of Bid Protests

Nuts & Bolts of Bid Protests Presented for Florida Bar CLE

Robert Hosay 106 E. College Ave. Tallahassee, Florida 32301 850.222.6100 [email protected]

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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

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 1 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; establish credibility in the market. – Expected in Florida?

Perspective

 Why Not to Protest? – Preserve relationship with customer. – You are often arguing points adverse to the same people that you want to buy your product or service. – It’s not cheap, especially when there is not a guaranteed return for the capital outlay. – Depending on facts, winning is difficult in light of high burden of proof. – 1% protest bond.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 2 The Procedural Process

 The first step once the State posts a notice of intent to award is to file a notice of intent to protest within 72 business hours.

 An intent to protest can be a simple written statement indicating the firm intends to file a protest.

The Procedural Process

 Upon receipt of the intent to protest, the agency has 72 hours, excluding Sat. & Sun., and state holidays, to provide the estimated contract amount to the vendor, in order to establish the 1% protest bond amount. §287.042(2)(c) Fla. Stat.

 The estimated contract amount shall be based upon the contract price submitted by the protestor or, if no contract price was submitted, the agency shall estimate the contract amount.

 The estimated contract amount is not subject to protest.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 3 The Procedural Process

 The formal written protest that includes the allegations must be filed within 10 days of filing the notice of intent. – Be careful! Some agencies (Fla. Lottery and State Group Insurance to name two) require the formal written protest and bond to be filed within 72 hours. Check the solicitation document and governing statute for the filing deadline within 72 hour period.

 Failure to file the formal written protest within the time prescribed by §120.57(3) Fla. Stat., or failure to post the (1%) bond or other security required by law shall constitute a waiver of proceedings under

The Procedural Process

 Upon receipt of the formal written protest that has been timely filed, the agency shall stop the solicitation or contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the solicitation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare. §120.57(3), Fla. Stat.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 4 The Procedural Process

 The stay means that the agency cannot re-bid, re-post, or take any other action, with the exception of emergency action, until the protest is resolved.

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 it erred, and enters into written agreement with protester that protester will withdraw protest and agency will post a new notice of intended decision. – Agency offers a settlement meeting, and the protestor withdraws. Note that these are public meetings. The intended awardee may be invited. – Agency offers a settlement meeting, and achieves a compromise. All parties sign a settlement agreement and the protester withdraws the protest. – If no settlement, the matter is referred to the Division of Administrative Hearings or the agency head, if no disputed issues of material fact are involved. 10 ©2013 Foley & Lardner LLP

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 5 The Procedural Process

 If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and state holidays, after receipt of the formal written protest, and if there is a disputed issue of material fact, the agency shall refer the protest to the division for proceedings.

 A DOAH hearing shall commence within 30 days of receipt of the protest at DOAH.

 Provided a full evidentiary hearing.

The Procedural Process

 A recommended order will be issued within 30 days after the hearing or after the administrative law judge receives the transcript, whichever is later.

 However, as a practical matter the timeline slips in complex cases.

 The recommended order is sent back to the agency for final agency action.

 You have the opportunity to take exceptions to the recommended order.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 6 The Procedural Process

 You may appeal to the First District Court of Appeals.

 Watch out for your remedy! – If the contract is executed and being performed your remedy may be limited.

3 Types of Protest

 Specifications. – Specifications are inaccurate, vague, contrary to competition, incomplete, biased or include burdensome T&C’s.

 Intent to Award. – You lost the award.

 Rejection of Bids. – You spent $$$ and won but the agency decides not to award the contract.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 7 Specifications Protest

 Hypothetical and Strategy. – RFP specifications are inaccurate in a way that would allow different interpretations of how to price your reply. – File an intent to protest. – You’ve got 10 days to let the agency know that their specifications are contrary to competition, arbitrary and capricious. – File a formal protest and you’ve got 7 more days to make your point!

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 new specifications! – If there is a Q&A period in the bid….then use it to either address your concerns or set up your protest.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 8 Specifications Protest

 The protest must show that the specifications are so vague that a bidder cannot submit an accurate bid or that the specifications are so unreasonable that it is impossible to comply and still be competitive. See Advocacy Ctr. for Persons with Disabilities v. DCF, 721 So. 2d 753 (Fla. 1st DCA 1998).

Award Protest

 Standard of Proof – Whether the proposed agency action is clearly erroneous, contrary to competition, arbitrary or capricious. §120.57(3)(f), Fla. Stat.

 Arbitrary action is "one not supported by facts or logic, or despotic." A capricious action is one "which is taken without thought or reason or irrationally." Agrico Chem. Co. v. Dep’t of Envtl. Reg., 365 So. 2d 759 (Fla. 1st DCA 1978).

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 9 Award Protest

 The protesting bidder must show that the agency’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.

Award Protest – If you win:

 Legal counsel should already be involved.

 Prepare to perform the contract.

 Utilize the Chapter 119 public records request to protect your award: – Review procurement file. – Review other proposals. – Review evaluation documentation.

 Let the agency know you will vehemently defend the award decision.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 10 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 to protest.  Develop protest fodder.  Prepare to have bid protest bond issued.

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.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 11 Award Protest – Responsive?

 If there are material deviations in a response then it’s not responsive.

 A minor irregularity can be waived by the agency – 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).

Award Protest - Responsible?

 A Responsible vendor has the ability to perform all contract requirements and the integrity and reliability that will assure good faith performance. § 287.012(24), Fla. Stat.

 Got Ethics?

 Got Integrity?

 Default on other contracts?

 Suspended or debarred?

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 12 Award Protest Sunshine Law Violation

 Agency action taken in violation of Sunshine Law is void! Silver Express Co. v. District Bd. of Lower Tribunal Trustees, 691 So. 2d 1099 (Fla. 3rd DCA 1997).

 Evaluation committees are open! See Silver Express.

 Oral presentations to an evaluation committee are open! Port Everglades Auth. v. International Longshoremen’s Ass’n, 652 So. 2d 1169 (Fla. 4th DCA 1995).

Award Protest Sunshine Law Violation

 If there is an evaluation process it should be done in an open meeting. Leach-Wells v. City of Bradenton, 734 So. 2d 1168 (Fla. 2nd DCA 1999).

 Negotiations as part of an ITN process are not open, but recorded. §286.0113, Fla. Stat.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 13 Award Protest Evaluation and Scoring

 Are evaluators qualified?

 Were the evaluators impartial?

 Was the evaluation process consistent with the solicitation criteria?

 Did the scoring reflect inconsistencies between evaluators?

 Tabulated correctly?

 Pricing scale correctly applied and evaluated?

 Is scoring consistent with the bid specifications?

Award Protest Improper Communications

 Bidders or persons acting on their behalf cannot contact, between the release of the bid and the end of the protest period after the posting of intended award, any employee or officer of the executive or legislative branch concerning any aspect of the bid, except in writing to the sole point of contact. Violation may be grounds for rejecting the bid. §287.057(24), Fla. Stat.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 14 Award Protest Bias or Impropriety

 Only the appearance of impropriety can jeopardize a contract award! – Administrative Law Judge found appearance of impropriety where an evaluator had a relationship with a subcontractor’s principal. See Transportation Mngmt. Serv. of Broward v. Commission for the Trans. Disadvantaged, DOAH 05-0920BID (May 2005).

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 process mistakes made within the agency.

 Rarely makes sense to carry to evidentiary hearing.

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 15 Rejection of Bids

 The automatic stay does apply upon filing of formal protest.

 New law allows replies to be exempt from public disclosure if agency concurrently states intent to reissue the ITN. §119.071(1)(b), Fla. Stat.

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. Academy protested on the basis that Limousine had made material misrepresentations 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 Safety Comm’n, Inc. – National Safety Commission argued that language of contract between itself and DHSMV granted it right to unilaterally renew contract for additional five year term. 32 ©2013 Foley & Lardner LLP

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 16 Case Law Updates

 Pro-Tech Monitoring, Inc. v. Dep’t of Corr. (1st DCA 2011) – Vendor challenged agency final order dismissing protest as untimely filed. Runner for vendor’s law firm delivered protest to furthest point of lawful 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 of respondents 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.

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 individual employee rendered winning bid to ITB materially non-responsive.

 Traveler Elevator v. Fla. Sch. for the Deaf and the Blind – ALJ found the question of whether late-arrival constituted material deviation did not matter in protest of rejection of all bids, school had legitimate question as to how such a decision would be resolved and elected 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 to dismiss the protest. 34 ©2013 Foley & Lardner LLP

©2013 Foley & Lardner LLP • Attorney Advertising • Prior results do not guarantee a similar outcome • Models used are not clients but may be representative of clients • 321 N. Clark Street, Suite 2800, Chicago, IL 60654 • 312.832.4500 17 Thoughts or Questions?

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