Overview of Federal Bid Protests

Background

Under federal law, a bid protest is a written objection by an “interested party” to the conduct of a federal agency in acquiring supplies or services for its own direct use or benefits.  Congress authorizes bid protests in three separate forums, as discussed below.

Standing

To file a bid protest, the protestor must demonstrate standing as an interested party.  A protestor challenging the terms of a solicitation must be an actual or prospective offeror “whose direct economic interest would be affected by the award of the contract or by failure to award the contract.” See 31 U.S.C. §3551(2)(A).   A protestor challenging an agency’s decision generally must also demonstrate that it would be next in line for an award but for the agency error or that it would regain the opportunity to compete if its protest was sustained. [Note: Given their lack of “direct economic interests,” subcontracts on federal contracts generally lack standing to bring a GAO protest unless the contracting agency has requested that GAO hear such protests.]

Forum Selection

A contractor challenging a federal procurement may generally choose to file a bid protest before:

  • the agency administering the procurement,
  • the Government Accountability Office (GAO), or
  • the United States Court of Federal Claims (COFC).

Agency Administering the Procurement

Pre-award protests must be filed with the federal procuring Agency prior to the Agency’s receipt of the initial proposals, which would typically be before the “deadline” for bidders to submit their proposals.  Post-award protests must be filed within 10 days after discovery of the claim, meaning when the basis of the protest is known, or should have been known, by the contractor.

Pre-award Debriefing of Offerors: Offerors excluded from the competitive range or otherwise excluded from the competition before award may request a debriefing before award within 3 days after receipt of the notice of exclusion from the competition.  Debriefings may be done orally, in writing, or by any other method acceptable to the contracting officer. FAR 15.505.

Post-Award Debriefing of Offerors: An offeror, upon its written request received by the agency within 3 days after the date on which that offeror has received notification of contract award, shall be debriefed and furnished the basis for the selection decision and contract award.  Debriefings may be done orally, in writing or by any other method acceptable to the contracting officer.  The debriefing should occur within 5 days after receipt of the written request. FAR 15.506.

The process for filing a protest with the procuring Agency varies among the agencies, but obtaining a decision on the claim is fairly quick and inexpensive compared to the other forums.

The basic framework for Agency protests is outlined in FAR 33.103, which simply requires that the Agency provide for a procedurally simple, informal and expeditious resolution to the protest.  In fact, parties are encouraged to use their best efforts to resolve concerns raised by an interested party at the contracting officer level “through open and frank discussions” prior to the submission of an agency protest.  FAR 33.103(b).   If filed, the protest must be concise and logically presented to facilitate review by the Agency.  Along with basic identifying information about the protester and the solicitation or contract number, protests must contain a detailed statement of the legal and factual grounds for the protest, copies of relevant documents, request for an Agency ruling and the type of relief requested, and information which establishes standing and timeliness to file the protest.

Upon receipt of a protest before award, a contract may not be awarded, pending agency resolution of the protest, unless contract award is justified, in writing, for urgent and compelling reasons or is determined, in writing, to be in the best interest of the Government. FAR 33.103(f)(1).

Upon receipt of a protest within 10 days after contract award (or within 5 days after a debriefing date offered to the protester under a timely debriefing request) the contracting officer shall immediately suspend performance, pending resolution of the protest within the agency, unless continued performance is justified, in writing, for urgent and compelling reasons or is determined, in writing, to be in the best interest of the Government. FAR 33.103(f)(3).

Agencies are required to make best efforts to resolve a protest within 35 days of filing, and the process is the most informal of all bid protest procedures.  An important benefit to an Agency filing is that it triggers an automatic stay of the award or performance of the contract.  However, please note that a stay can be overridden upon a written determination of compelling need by the Agency.

The downside to filing a protest directly with the Agency is that the complaint is generally heard by the same person (the Procuring Contract Officer or some other Agency head) who initially developed the flawed specification, instruction or made the award selection.  Notwithstanding this apparent lack of independent review, be advised that a few agencies require a protester to file its protest first with the procuring Agency before the protest can be heard in another forum (e.g., U.S. Postal Service).

Government Accountability Office (“GAO”)

Filing a protest with the GAO appears to have many of the benefits of filing with the procuring Agency, but offers a review of the matter by an independent government official who is not associated with the procuring Agency.   The GAO reviewer is likely to have more experience and insight into the specific issues of the protest than an Agency officer.

GAO review is not as quick or inexpensive as an Agency review.  Also, there are formal procedures that must be followed for filing a protest with the GAO, as outlined in 4 C.F.R. part 21.  Protests must be in writing and addressed as follows:

Attention: Procurement Law Control Group

General Counsel

Government Accountability Office

441 G Street, NW.

Washington, DC 20548.

A protest filed with GAO shall:

(1) Include the name, street address, electronic mail address, and telephone and facsimile numbers of the protester,

(2) Be signed by the protester or its representative,

(3) Identify the agency and the solicitation and/or contract number,

(4) Set forth a detailed statement of the legal and factual grounds of protest including copies of relevant documents,

(5) Set forth all information establishing that the protester is an interested party for the purpose of filing a protest,

(6) Set forth all information establishing the timeliness of the protest,

(7) Specifically request a ruling by the Comptroller General of the United States, and

(8) State the form of relief requested.

No formal briefs or motions are required. A complete copy of the protest must be provided to the procuring Agency within one day of filing the protest with the GAO.

Timing of Filing Protests

The timing requirements are similar to the Agency requirements.  Pre-award protests relating to the solicitation or instructions must be filed before the date of proposal submissions for all bidders.  All other protests must be filed within 10 calendar days after the basis of the protest is known, or should have been known (whichever is earlier), with the exception of protests under which a debriefing is requested and held.  In such cases, the initial protest shall be filed not later than 5 days after the date on which the debriefing is held.   Protests filed after these deadlines are untimely and the GAO generally dismisses them.

GAO Notice to Agency

Once a protest is filed with the GAO, the GAO is required by statute to notify the federal agency whose contracting activities are being protested within one working day of receiving the protest. See 31 U.S.C. §3553(b)(1).  This GAO notice to the Agency: 1) marks the beginning of an automatic stay of the award or performance of the contract that lasts for the duration of the protest (agencies may, however, override these stays upon determining that “urgent and compelling circumstances” will not permit waiting for the GAO’s decision or where “performance of the contract is in the best interests of the U.S.”), and 2) marks the beginning of the 30-calendar day period within witch the agency must generally respond to the GAO protest. See 31 U.S.C. §3553(b)(2)(A).

Agency’s Response and Protester’s Reply

Within 30 days of being notified of a GAO bid protest, the Agency must file a report including a statement of relevant facts, memorandum of law, and relevant documents.  The Agency can avoid filing this report only when it requests and is granted dismissal of the protest before the report is due.  After the agency’s report is due, the protester has 10 calendar days to submit written comments on the agency’s report to the GAO.  If protester fails to submit such documents, GAO is required to dismiss the protest.

GAO’s Decision

GAO allows protestors to avoid costs of traveling to DC, where GAO is located, by providing for the resolution of protests based upon documents filed by the protestor and the agency, as opposed to in-person hearings.  Hearings are relatively rare in GAO protests.

GAO generally is required to issue its final decision within 100 calendar days of the protest’s filing.  This timeframe can be shortened to 65 days if GAO determines, either upon request or its own initiative, that the protest be treated under the “express option.”

When deciding a protest, GAO does not substitute its judgment for the agency’s, or conduct de novo review; rather, it considers only whether the agency complied with procurement statutes or regulations, and had a reasonable bases and adequate documentation for its decision making. See, e.g., 31 U.S.C. §3552(a).

GAO may recommend to dismiss, deny, or sustain a protest.  GAO recommendation is provided to the procuring agency, which has 60 days to adopt the GAO recommendations.  The agency is not legally required to implement the recommendations in the GAO’s decision.  However, agencies typically fully adopt GAO recommendations, as failure to do so results in a report to Congress by the GAO.

If the GAO determines that a solicitation or contract award does not comply with a statute or regulation, it may issue a recommendation that the Agency pay the protester its costs, including reasonable attorney fees, consultant fees and expert witness fees, as well as bid and proposal preparation costs.

A GAO protest can provide a second chance for relief to a protester.  If a protester first files with the procuring Agency and was denied relief, the protester can then file a protest with the GAO within 10 days after the protester learns of any adverse ruling by the Agency. 4 C.F.R. section 21.2.   In addition, protestors disappointed with GAO’s decision can seek reconsideration from GAO or file a bid protest with the United States Court of Federal Claims.

For detailed information on GAO Bid Protests, see GAO Bid Protests: An Overview of Time Frames and Procedures, Congressional Research Service (Jan. 19, 2016). See also https://www.acquisition.gov/far/html/Subpart%2033_1.html.

United States Court of Federal Claims (“COFC”)

A protester also has the option to file its bid protest in the United States Court of Federal Claims (“COFC”).  Procedures for protests at the COFC are governed by the Rules of the United States Court of Federal Claims, which can be found at: http://www.uscfc.uscourts.gov/rules-and-forms.  The specific procedures governing bid protests may be found at Appendix C, Procedure in Procurement Protest Cases Pursuant to 28 U.S.C. 1491(b).  Additionally, the Federal Rules of Evidence apply to COFC proceedings.

The COFC is located in the District of Columbia, although the COFC has national jurisdiction and may hold court at other places as it may prescribe by rule of Court. See 28 U.S.C.A. §173.  For those unable to travel to Washington, DC, parties may file a motion to participate in proceedings by telephone or videoconferencing.   The COFC is comprised of sixteen active judges, nominated by the President, and several senior judges.  In COFC cases, the Department of Justice (DOJ) represents the Government.  Individuals may represent themselves pro se, but COFC requires that any corporation or partnership be represented by counsel admitted to the COFC’s bar to practice before the court.

In accordance with the Rules of United States Court of Federal Claims governing bid protests, plaintiff’s counsel must provide at least 24-hour advance notice of filing a bid protest to: (1) the Department of Justice, Commercial Litigation Branch, Civil Division; (2) the Clerk, United States Court of Federal Claims; (3) the procuring agency’s contracting office; and (4) the successful bidder/offeror.  See Rules of the United States Court of Federal Claims, Appendix C, Procedure in Procurement Protest Cases Pursuant to 28 U.S.C. 1491(b), at II.2(a).  This pre-filing notification requirement must include, but not be limited to, the following: the name of the procuring agency and number of the solicitation; the name and number of the contracting officer, the principal agency attorney, if any, who represented the agency in any prior protest of the same procurement; whether the plaintiff intends to seek injunctive relief; and whether the action was preceded by a protest before the GAO.

One of the biggest advantages to filing with the COFC is that it has full powers of authority to bind the procuring Agency to decisions.  Another advantage is that a protester can use the COFC as a “last resort” after receiving negative rulings from an Agency and/or GAO protest.  The converse is not true, as a protester who first files with the Court of Federal Claims and receives an adverse ruling cannot then file with the procuring Agency or GAO.

COFC judicial review of agency actions in bid protest cases is limited to the administrative record.  The COFC reviews agency decisions under the Administrative Procedure Act (“APA”) standard.  See Choice of Forum for Federal Government Contract Bid Protests, 18 Fed. Circuit B.J. 243 (2009), at 21-22.  The court determines whether the agency action was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law based solely upon the administrative record. 28 U.S.C. § 1491(b)(1), (4); 5 U.S.C. § 702, 706(2)(A); see also Impresa Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1332 (Fed.Cir.2001); CW Gov’t Travel, Inc. v. United States, 110 Fed. Cl. 462, 479 (2013).

Timeliness standards for filing protests at the COFC are more relaxed as well.  Unlike the Agency and GAO strict time requirements, post-award protests can be filed with the Court of Federal Claims any time after the award provided that any delay in bringing the protest is not unreasonable, inexcusable or otherwise prejudices the Government or other parties.  Software Testing Solutions, Inc. v. United States, 58 Fed. Cl. 533, 535 (2003).   In addition, in accordance with 28 U.S.C. §1491(b)(1), the COFC “shall have jurisdiction to entertain such an action without regard to whether suit is instituted before or after the contract is awarded.”  That said, the doctrine of laches may be invoked as an affirmative defense in the context of a bid protest before the COFC. See Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308, 1314–14 (Fed.Cir.2007); see also Software Testing Solutions, Inc. v. U.S., 58 Fed.Cl. 533, 536 (2003).  See Nat’l Telecommuting Inst., Inc. v. United States, 123 Fed. Cl. 595, 602 (2015).  COFC cases have held that a “plaintiff cannot sit on his rights in bringing a bid protest while the Government moves forward with a contract.” See, e.g., Benchmade Knife Co. v. United States, 79 Fed.Cl. 731, 737 (2007) (citing Blue & Gold Fleet, 492 F.3d at 1314).  In a recent COFC case, the Court, in determining that plaintiff’s six-month delay in bringing its bid protest was untimely, stated:

“[T]his Court has found a “strong argument in favor of applying laches” when a plaintiff chose to wait two months to file suit because he was weighing the cost of litigation. Software Testing Solutions, Inc. v. United States, 58 Fed.Cl. 533, 536 (2003). In this case, NTI waited more than three times as long to bring this bid protest.” Nat’l Telecommuting Inst., Inc. v. United States, 123 Fed. Cl. 595, 602 (2015).

While the post-award timeliness standard is clearly less restrictive than that of the GAO and Agency requirement, the pre-award time requirement is comparable to the other forums: before the close of bidding.

The downside to the COFC forum is that protests can be more costly and time consuming than Agency or GAO protests.   However, in many cases, this forum offers the most due process protections to the protester because the Court adheres to the Federal Rules of Civil Procedure, can issue injunctive and equitable relief, and allows the parties to engage in discovery and file motions for summary judgment.

Another significant disadvantage to filing a protest in the Court of Federal Claims is the lack of an automatic stay of the award or performance on a contract award.  Even though a protester files a protest, the Agency can continue moving forward with the procurement and contracting process absent an injunction by the Court to stop until the protest is resolved.  For this reason, a protester should immediately request the Court to issue a stay on the Agency’s procurement process when the initial protest is filed.

Brief Overview of Some Comparisons Between the Different Forums

(See http://www.acc.com/legalresources/publications/topten/ttegcskabp.cfm)

Agency-level protests typically offer the least expensive and quickest resolution for a disappointed offeror, followed by GAO protests, and then COFC protests.

For agency-level protests, the Federal Acquisition Regulation (FAR) requires agencies to use best efforts to resolve a protest within 35 days after the protest is filed, although some agencies have implemented their own rules requiring shorter timeframes for resolution.  The GAO has 100 days after the initial filing of a protest to issue its decision.  By contrast, there are no time constraints on COFC’s authority to resolve bid protests.

Because none of these forums hold appellate jurisdiction over the others, a protestor who is unsatisfied with the result of a protest may re-file the protest in a different forum.  For example, a protestor disappointed with the outcome of a GAO protest may be able to file a COFC protest.  However, a protestor that files first at the COFC cannot later file a GAO protest based on the same issue. Thus, disappointed bidders may want to start with an agency-level or GAO protest before going to the COFC.

Although agency-level protests may be relatively quick and inexpensive, they also have significant disadvantages compared to GAO and COFC protests.  For example, agency-level protestors have no right to discovery.  By contrast, GAO and COFC protests require limited discovery, which means agencies must produce an agency report or administrative record containing all documents relevant to the protest. Further, in some cases, a COFC protest may allow for additional discovery (e.g., depositions).

Another important distinction between agencies, GAO, and the COFC, is the difference in remedies available to a disappointed bidder.  While agencies and GAO have limited authority and only can issue recommendations, the COFC has the power to enforce its judgments. Although this distinction has the potential to significantly impact forum selection, as a practical matter agencies generally follow GAO’s recommendations.

One significant advantage offered by GAO protests is the availability of an automatic stay of contract award or performance under the Competition in Contracting Act (“CICA”) (commonly referred to as a CICA stay).  To obtain a CICA stay, the protestor only needs to file its protest within 10 days of the contract award or within five days of its debriefing.  In contrast, CICA stays are not available in COFC protests.  COFC may stay contract award or performance through granting injunctive relief, although grants of injunctive relief require the protestor to satisfy a relatively high standard and post security.

AHCA Recommends New Medicaid Payment System to Legislature

UPDATE: The Agency for Health Care Administration (AHCA) held their final public meeting on November 20, 2015, to wrap-up their discussion and submit recommendations to the Legislature for the development of an Outpatient Prospective Payment System (OPPS) to replace the current “cost-based per visit” rate methodology for Florida’s Medicaid program. AHCA’s recommendation will be to adopt a modified Enhanced Ambulatory Patient Grouping system (EAPG), which involves bundling procedures and medical visits that share similar characteristics and pays one base rate to the provider to cover all of the bundled services. The new system is expected to be implemented on July 1, 2016.

Tom Wallace, Bureau Chief of AHCA’s Medicaid Program Finance, along with members of Navigant Healthcare, the private consulting company contracted to develop the new payment system were looking at two primary model options for the OPPS: 1) the EAPG, which requires proprietary software (most likely from Navigant) that will need to be purchased by providers; and 2) the Ambulatory Payment Classification (APC) model, which is linked to Medicare’s OPPS system. By the last meeting in October, it was clear that AHCA and Navigant preferred the EAPG system to the APC model. The recommendation presented at the final meeting confirmed the agency’s preference for the EAPG model.

Significantly, the consulting company provided a simulation of how the EAPG system would pay claims to hospitals based on data collected by AHCA in accordance with the current payment system. Navigant provided charts of the top 20 hospitals and ambulatory surgical centers (ASCs) that would see the biggest payment increases and decreases. (See pages 23-26 of attached workshop presentation.) According to the simulation compiled by Navigant using previous years data, the greatest increases in payments will be seen by Ocala Regional Medical Center, Bethesda Hospital East, St. Vincent’s Medical Center and Bayfront Health – St. Petersburg. The greatest decreases will be seen by Jackson Memorial Hospital, Florida Hospital, Homestead Hospital and Sacred Heart Hospital. (Full simulation results are attached here and here as Exel spreadsheets.) Approximately 18 hospitals were excluded from the simulation (including University Behavioral Hospital, Windmoor Healthcare, Emerald Coast Behavioral, UF Health Shands, UF Health Jacksonville, and others) because approximately 33-percent or more of their prior claims data were missing procedure codes. (See page 18 of attached workshop presentation for complete list.) It was suggested at the meeting that the committee reach out to the hospitals to get their procedure codes so that they can be included in the simulation.

Additional recommendations that will be provided to the Legislature include the following:

  1. No outlier payments from Medicare OPPS (payments above or beyond scope of EAPG system);
  2. No service line adjusters and only one provider-specific adjuster for hospitals with high Medicaid outpatient utilization (Nemours Children’s Hospital, Nicklaus Children’s Hospital and All Children’s Hospital);
  3. No “charge cap” with the EAPG payment methodology to allow payment of the lessor of submitted charges or Medicaid-allowed amount;
  4. Allow a 5-percent adjustment to the EAPG base rate to account for anticipated documentation and coding improvement (consistent with the value used in the first year of APR-DRG implementation); and
  5. Applicable claims paid between July 1, 2016, and the date of implementation will be adjusted to apply EAPG pricing (retroactive to July 1, 2016).

AHCA will submit its recommendations to the Florida Legislature by November 30, 2015. Legislation regarding a new payment system is expected to be passed during the 2016 Session, with the new program to be effective on or about July 1, 2016.

For more information about AHCA’s development of the OPPS, please contact an attorney at Smith & Associates.

A Year in Review: AHCA’s Managed Medical Assistance Program

AHCA presented a Post-Award Forum for Florida’s 115 Managed Medical Assistance (MMA) Waiver during the Medical Care Advisory Committee meeting on October 13, 2015. The forum provided a platform for AHCA to showcase data of the MMA program’s success and hear comments from the public regarding specific areas where the program fell short.

Medicaid is a federal/state entitlement program which is jointly financed by state and federal funds. Federal law requires the coverage of certain eligibility groups and services (mandatory), and states have the option of covering additional eligibility groups and services (optional). Florida implemented the MMA program as a way to incentivize higher quality care without causing inflation. In February 2015, AHCA signed contracts with MMA insurance providers to deliver a system of care to residents in each of the 11 AHCA districts in Florida.

In analyzing Florida’s average annual cost for Medicaid care, AHCA representative Beth Kidder presented a graph showing that the cost per person dropped from $6,564 per person in year 2010-11 to an anticipated $5,878 in 2015-16. AHCA also showcased an increased rate of participation by physicians and dental care providers. From November 2013 to June 2015, AHCA noted an increase of 7.43-percent increase in MDs and DOs providing services to Medicaid recipients. During the same time period, AHCA stated that total participating dentists increased by 23.09-percent.

Most of the public comments regarding the MMA program focused on the failure to ensure payment by providers to Emergency Transport Services (EMS) in Florida. Several groups representing EMS providers throughout Florida complained about improperly denied reimbursement for medical transports and the categorical denial of transports of more than 30 miles. The EMS providers pointed out that Medicare reimbursed such transports, and so should the MMA program providers. One EMS provider suggested a rule or statutory revision to require hospitals and nursing homes to obtain pre-authorization for a transfer request so that EMS is ensured reimbursement.

The Agency will be releasing a series of quarterly reports on the Statewide Medicaid Managed Care program. Reports for the first two quarters are available on the Agency’s website. The Agency also began publishing a consumer-focused health plan report card which includes annual ratings on how Florida’s health plans are faring with regards to providing preventative health care services to women and children (i.e., well-child visits, prenatal care for pregnant women). Plan effectiveness is measured through the Healthcare Effectiveness Data and Information Set (HEDIS), which is a standardized set of performance measures by the National Committee for Quality Assurance and used by more than 90-percent of the health plans in the U.S.

For more information about the MMA program in Florida or any other issue, please contact an attorney at Smith & Associates.

Outpatient Prospective Payment Systems

The Agency for Health Care Administration (AHCA) hosted a public meeting on September 17, 2015, to discuss the development of an Outpatient Prospective Payment System (OPPS) to replace the current “cost-based per visit” rate methodology. The stated goal of this payment method conversion is to help control healthcare spending increases while continuing to maintain access to services for Florida’s Medicaid populations.

To assist with this development, AHCA contracted with private consulting company Navigant Healthcare which has offered options between two popular OPPS models that have been adopted by other states. Once a preliminary decision is made on a model, Navigant and AHCA will send its recommendations to the Legislature before the next session.

Currently, Navigant and AHCA are leaning towards adopting an Enhanced Ambulatory Patient Grouping System (EAPG), which involves bundling procedures and medical visits that share similar characteristics and pays one base rate to the provider to cover all of the bundled services. The rates, which have yet to be formulated, will be based on a review of average historical data measured from diagnosis codes and claims paid to outpatient providers from fiscal year 2013-14.

The other OPPS model being considered is the Ambulatory Payment Classification (APC) model. According to Navigant, the APC model provides less bundling for procedures and ancillary services (and, subsequently, more “a la carte” payments) than the EAPG model. The APC model excludes many services – including laboratory, pathology, physical therapy and DMEs – which must be paid under other fee schedules. EAPGs require proprietary grouper software (from Navigant?) and will be less familiar to providers compared to the APC model, which is linked to Medicare’s payment system.

Two more public meetings will be scheduled before AHCA submits recommendations for an OPPS to the Florida Legislature on November 30, 2015. Legislation regarding a new payment system is expected to be passed during the 2016 Session, and then implemented on July 1, 2016.

For more information about AHCA’s development of the OPPS, please contact an attorney at Smith & Associates.

AHCA Preliminary Decisions on Skilled Nursing Facilities

View PDF Version here.

AHCA has issued its State Agency Action Reports announcing the preliminary results on CON Applications submitted for Skilled Nursing Facilities. Below is a summary of the winners and losers listed by Sub-district. For a summary of the process for challenging AHCA’s preliminary decisions, please see our prior Newsletter Article attached.

Sub-district 1-1

Approved Application:

NF Bay, LLC/NF Bay, LLC Establish a new 90-bed community nursing home

Denied Application:

PruittHealth – Escambia County, LLC/PruittHealth – Escambia County, LLC Establish a new 90-bed community nursing home

Sub-district 3-1

Approved Application:

SF Brevard, LLC/SF Brevard, LLC Establish a new 113- bed community nursing home

Withdrawn Application:

Terrace Enterprises, LLC/Terrace Enterprises, LLC Establish a new community nursing home of up to 120 beds

Sub-district 3-2

Approved Applications:

Oak Hammock at the University of Florida, Inc./Oak Hammock at the University of Florida Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds
Palm Garden of Gainesville, LLC/Palm Garden of Gainesville, LLC Add 30 community nursing home beds

Withdrawn Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 47-bed community nursing home

Sub-district 3-3

Approved Application:

Crestwood Nursing Center, Inc./Crestwood Nursing Center Add 29 community nursing home beds

Sub-district 4-1

No Approved Applications

Denied Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 14-bed community nursing home

Sub-district 7-2

Approved Applications:

Presbyterian Retirement Communities, Inc./Westminster Towers Add 30 community nursing home beds through the conversion of 30 sheltered nursing home beds
Presbyterian Retirement Communities, Inc./Westminster Winter Park Add 17 community nursing home beds through the conversion of 17 sheltered nursing home beds

Denied Applications:

MF Orange, LLC/MF Orange, LLC Establish a new 90-bed community nursing home
Orange SNF, LLC/Orange SNF, LLC Establish a new 118-bed community nursing home

Sub-district 7-4

Approved Application:

Lifespace Communities, Inc./Village on the Green Add 30 community nursing home beds through the conversion of 30 sheltered nursing home beds

Withdrawn Application:

Innovative Medical Management Solutions, LLC/Innovative Medical Management Solutions, LLC Establish a new 33-bed community nursing home

Sub-district 8-2

Denied Application:

Pelican Bay Retirement Services/Premier Place at the Glenview Add 14 community nursing home beds through the conversion of 14 sheltered nursing home beds

Sub-district 9-1

Approved Application:

Palm Garden of Vero Beach, LLC/Palm Garden of Vero Beach, LLC Add nine community nursing home beds

Sub-district 11-1

Approved Application:

Florida Medical Systems, LLC/Florida Medical Systems, LLC Add 45 community nursing home beds

Denied Application:

Palm Garden of Aventura, LLC/Palm Garden of Aventura, LLC Add 45 community nursing home beds

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

View PDF Version here.

New ALF Rules May Be Coming Soon

View PDF Version here.

The Department of Elder Affairs is holding a public workshop to consider new regulations that may have a significant impact on Florida assisted living facilities (“ALFs”). Significant changes being discussed at the workshop include changes to record keeping requirements, staff competency and training requirements, medication practices, and patient safety and quality of care processes. The first workshop on the proposed rules is scheduled for July 13, 2015 from 9:30 a.m. to 11:30 a.m., at the Department of Elder Affairs, 4040 Esplanade Way, Tallahassee, FL 32399. There is currently no draft proposed rule.

The Rulemaking Process

Rulemaking is required and governed by the Florida Administrative Procedure Act, which provides: “rulemaking is not a matter of agency discretion.” A grant of rulemaking authority is necessary, but not sufficient to allow an agency to adopt a rule. Rulemaking also requires a specific law to be implemented. An agency may only adopt rules that implement or interpret the specific powers and duties granted by the enabling statute. An invalid exercise of delegated legislative authority is an action that goes beyond the powers, functions, and duties delegated by the Legislature.

Agencies’ rulemaking authority is also invalid if it fails to adhere to strict procedural requirements. For example, not less than 28 days prior to the intended adoption, amendment, or repeal of any rule (other than an emergency rule) an agency must give notice of its intended action, including an explanation of the purpose and effect of the proposed action, the full text of the proposed rule or amendment, and a summary of the proposed rule or amendment. The notice must include an estimate of the regulatory cost of implementation.

Where there is a likely impact on small businesses, the agency must consider each of the following methods for reducing the impact: (1) establishing less stringent compliance or reporting requirements in the rule; (2) establishing less stringent schedules or deadlines in the rule for compliance or reporting requirements; (3) consolidating or simplifying the rule’s compliance or reporting requirements; (4) establishing performance standards or best management practices to replace design or operational standards in the rule; and (5) exempting small businesses, small counties, or small cities from any or all requirements of the rule.

Within 21 days of the publication of the notice, any affected person may request a public hearing. When an agency receives such a request it must hold at least one public hearing. In many instances the agency will hold multiple public hearings and may allow written comments to be submitted at or after the public hearing. Substantially affected persons also have the right to challenge a proposed rule under Florida Statute §120.56 as an invalid exercise of delegated legislative authority and have the right to a formal hearing before the Division of Administrative Hearings (“DOAH”). The timing of filing a challenge to a proposed rule varies based upon several criteria, the most common being dependent upon whether a hearing was requested or whether there are amendments to the proposed rule that require it to be republished. In most instances, challenges to proposed rules should either be filed within the same 21 day period or within 10 days after the public hearing is held.

To initiate a formal challenge, a substantially affected person must file a petition at DOAH. Within 10 days after receiving the petition, the matter must be assigned to an administrative law judge who shall conduct a hearing within 30 days and render a final decision within 30 days from the end of the hearing, unless these time frames are extended by agreement of the parties or for good cause, which is routine.

These hearings are de novo, meaning the agency has no presumption of correctness in its proposed rule. The standard of proof is a preponderance of the evidence. Hearings are conducted in the same manner as other 120.569 and 120.57, hearings, with one important exception, the administrative law judge’s order shall be a final agency action instead of a recommendation to be considered by the agency in a final order. The petitioner and the agency whose rule is challenged shall be adverse parties and other substantially affected persons may join the proceedings as intervenors in support of or against the proposed rule. There are opportunities to challenge a proposed rule after it becomes final, but the burden of proof becomes more difficult to challenge an existing rule than a proposed rule.

Be a Part of the Process

Rulemaking is the opportunity for facilities that will be affected by the regulatory changes to protect their interests and have input into the rules that will be implemented. Providers know better than the agencies that regulate them the true impacts of the proposed regulation. FALA and other associations are an important part of the process, but they may not know and understand the unique issues your facility faces with regard to proposed regulatory changes. The best regulations are fully vetted through multiple workshops, where stakeholders from diverse backgrounds and facility sizes participate.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law for over 20 years.

View PDF Version here.

President Proposes Changes to FLSA Regulations

In an article yesterday, the President announced that he would be proposing changes to FLSA overtime and minimum wage exemptions. These changes, if approved will have a significant impact on many business who rely on executive or administrative exemptions to the FLSA. These exemptions permit an employer to pay a straight salary to certain employees even when those employees work more than 40 hours per week. Without these exemptions, the employer would be required to pay the employee one and one half times his regular rate of pay for each hour over 40. These proposed changes mean that fewer employees will be eligible for these exemptions.

The Law, the Rules, and the Proposed Changes

Section 213(a)(1) of the Fair Labor Standards Act (“FLSA”) provides that employees “employed in a bona fide executive, administrative, or professional capacity” are not subject to the minimum wage and overtime provisions of the FLSA. The rules defining these employees provide, among other things, that the employee must be “[c]ompensated on a salary basis at
a rate of not less than $455 per week.” 29 CFR Sections 541.100(a)(1) & 541.200(a)(1). Based upon this, employees who meet the other requirements of an executive or administrative employee, who are paid at least $23,660 a year, do not need to be paid a minimum wage nor do they need to be paid one and one half times their regular rate when they work more than 40 hours in a week.

The President plans to have this amount increased to $50,400 per year (almost $970.00 per week) in 2016. While this change will most likely affect executive, administrative, and professional employees, from a practical standpoint, this will largely affect companies using the executive and administrative exemptions.

Executive Employees
In addition to the salary requirements, to meet the executive exemption, the employee must:

  • Have a primary job duty of “management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;”
  • “[C]ustomarily and regularly [direct] the work of two or more other employees;”
  • Have “the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight.”

29 CFR Section 541.100(a).

Management activities include: “interviewing, selecting, and training of employees; setting and adjusting their rates of pay and hours of work; directing the work of employees; maintaining production or sales records for use in supervision or control; appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status; handling employee complaints and grievances; disciplining employees; planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold; controlling the flow and distribution of materials or merchandise and supplies; providing for the safety and security of the employees or the property; planning and controlling the budget; and monitoring or implementing legal compliance measures.” 29 CFR Section 541.102.

Administrative Employees

In addition to the salary requirements, to meet the administrative exemption, the employee’s primary job duty must be the “performance of office or non-manual work directly related to the management or general business operations” and must include “the exercise of discretion and independent judgment with respect to matters of significance.” 29 CFR Section 541.200(a). As examples of administrative employees, the CFR lists administrative assistants to business owners and executives, project leads, human resource managers, employees in the financial service industry, and insurance claims adjusters.

Conclusion

The President expects these rules to be in place by the end of the year. This means that employers relying on the administrative and executive exemptions to the FLSA need to closely follow these rule changes and be prepared to reevaluate their exemptions upon their passing. This is a significant, over 100%, increase in the salary threshold to meet these exceptions. As these are rule changes, not legislative changes, the approval of congress is not needed. However, there is a procedure which must be followed for any change to the CFR (outlined here).

If you have questions or concerns regarding these exemptions, the proposed rule changes, or any other employment law mater, please contact the experienced professionals at Smith & Associates for a free consultation.

Local Bid Protests – You Can Fight City Hall: Protesting Your County, Municipality, or District, Procurement Decisions

Introduction

This article provides a brief overview of local government bid protest procedures. Unlike the state bid protest process, which is primarily governed by Florida state statutes and rules1, and is discussed at length in our previous article, “Bid Protests: Know Your Rights – the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”), the bid protest procedures for local government entities (counties; municipalities — cities, towns, villages; special districts) vary with each particular local authority.

In Florida, there are 67 counties, 282 cities, 109 towns, 19 villages, and over 1600 Special Districts2, and there is no uniform process or procedure for challenging the procurement decisions of each local entity. While the same substantive arguments typically raised in state agency bid protests (e.g., non-responsive bids, non-responsible bidder issues, bias/favoritism, arbitrary scoring, ex-parte communications)3, can often be raised when challenging local government entity decisions, the procedural process and timing for local government entity bid protests is not controlled by state statutes.4 Instead, the process varies for each county, municipality, and special district, depending on their individual authorizing charters, ordinances, procurement codes, and policies.

Some local government entities expressly adopt or follow, in whole or in part, the state procurement process and state procedures for challenging bid awards5, but more often the local government entities create their own procurement process and procedures, which are governed by their individual charters, ordinances, rules, as well as by their specific bid proposals (e.g., ITB, RFP specifications). In addition, judicial precedents and Florida’s strong public policy in favor of fair competition (discussed briefly below, and in more detail in our State Bid Protest article) provide avenues for challengers to contest unfair and arbitrary bid award decisions.

No Uniformity: Examples of Various Local Government Entity’s Bid Protest Procedures

As discussed at length in our prior State Bid Protest article, there is a uniform and rather straightforward bid protest process for challenging state agencies: the timeframe for bringing a notice of protest challenging a state agency’s bid solicitation specifications is 72 hours from date of posting of award, and the protester then has an additional 10 days after the notice of protest to file its formal written protest. The timeframes for challenging intended state agency awards are consistent with the timeframes for challenging solicitation specifications: 72 hours from the posting of the contract award to file a notice of intent to protest, and 10 days thereafter to file the formal written protest of intended award.

After receipt of a bid protest, the process thereafter is also relatively straightforward and uniform with regard to state agency bid protests: upon receipt of the formal written protest, the agency shall attempt to resolve the protest by mutual agreement within 7 days. If there is no mutual resolution of the protest within the 7 days after receipt of written protest, and there are disputed issues of material fact, the agency shall refer the protest to the Division of Administrative Hearings for assignment of an Administrative Law Judge to conduct a hearing within 30 days, and shall issue a Recommended Order (RO) within 30 days after the hearing (or within 30 days from receipt of the hearing transcript, whichever is later). Each party shall have 10 days to file written exceptions to the RO, and a Final Order (FO) shall be entered by the agency within 30 days after entry of the RO. See 120.57(3), Florida Statutes.

In contrast, the bid protest process for challenging local government entities is far from uniform and simple, as it varies within each specific local entity. In other words, each county, city, township, district has its own bid protest process.

Below are just a few examples from various county, village, city, and district governing procurement documents in order to demonstrate the complexity and lack of uniformity in local bid protest procedures, and the need for experienced legal counsel to represent vendor interests in any challenge to a local government entity’s competitive bidding process.6

County Example: Miami-Dade County

The primary governing procurement document for Miami-Dade County is Implementing Order 3-21, entitled Bid Protest Procedures. See http://www.miamidade.gov/aopdfdoc/aopdf/pdffiles/IO3-21.pdf.

Protests of Solicitation Specifications: Pursuant to Implementing Order 3-21, written protests of solicitation specifications must be brought at least two days prior to the hour of bid opening or will be deemed waived. (“Any question, issue, objection or disagreement concerning, generated by, or arising from the published requirements, terms, conditions or processes contained in the solicitation document shall be deemed waived by the protestor and shall be rejected as a basis for a bid protest, unless it was brought by that bidder or proposer to the attention, in writing, of the procurement agent, buyer, contracting officer or other contact person of the County department that issued the solicitation document, at least two work days (not less than 48 hours) prior to the hour of bid opening or proposal submission.”). Compare to Florida Statutes governing state agency protests, which provides that a “notice of protest” of state agency solicitation specifications shall be made within 72 hours of the posting of the solicitation, and the “formal written protest” shall be filed 10 days after the “notice of protest.”

Protest of Intended Contract Award: With respect to formal (concerning contract award amounts over $250,000) and informal (concerning contract award amounts between $25,000 and $250,000) bid protests of intended contract awards, bidders/proposers may protest an award recommendation by filing a written intent to protest within three work days of the filing of the award recommendation. The bidder/proposer must then file its formal written protest (including all pertinent documents and supporting evidence) within three work days after the filing of the intent to protest. (Compare section 120.57(3)(b), Florida Statutes, regarding protest deadlines for challenging state agency awards, which provides that the notice of protest must be filed 72 hours from the posting of the notice of intent, and the formal written protest must be filed within 10 days after the date the notice of protest is filed).7 Thus, Miami-Dade County’s timeframes for filing a written protest significantly differ from those outlined in Florida Statutes regarding challenging state agency decisions, and failure to adhere to the more stringent timeframes in the local administrative order may result in waiver of the right to protest.

The protest shall be filed with the Clerk of the Board of the County Commission, and, depending on the intended contract award amount, may thereafter be referred to a hearing examiner appointed by the Clerk of the Board within 5 days after the filing of the written protest, and, if so referred, a hearing will be conducted within 10 days thereafter. The hearing examiner will issue a Recommended Order (RO) within 5 days of the hearing.

Hearing Process Dependent on Contract Award Amount: Depending on the contract amount in question, the hearing process proceeds differently. Intended contract award bid protests concerning expenditures over $250,000 and that exceed the county manager’s delegated authority, proceed as follows: the hearing examiner’s findings and recommendation shall be presented to the Commission by the County Manager together with the recommendation of the County Manager. If the hearing examiner’s recommendation concurs with the County Manager’s recommendation, the Commission shall not allow presentations by participants at the time the matter is presented to the Commission, and a 2/3 vote of the Commission shall be required to take action other than that which was recommended. If the hearing examiner does not concur in the County Manager’s recommendation, the participants in the competitive process and their representatives may make presentations to the Commission and the Commission shall decide the matter by majority vote.

In contrast, protests where the amount in question is over $250,000 but does not exceed the County Manager’s delegated authority, proceed as follows: if the hearing examiner concurs in the award recommendation of the Department of Procurement or other issuing department, the department shall be bound thereby and shall implement such recommendation within 5 days. If the hearing examiner does not concur in the award recommendation, the Director of the Department of Procurement Management or of the issuing department shall either accept the hearing examiner’s recommendation and implement such recommendation with 5 days, or shall submit a written recommendation to the County Manager with 5 days stating the reasons why the County Manager should approve the department’s recommendation, despite the hearing officer’s recommendation, and the County Manager shall, within 5 days, choose either the department’s or the hearing examiner’s recommendation and instruct the department to implement such recommendation.

For intended contract awards under $250,000 but over $25,000, the procedure is as follows: the issuing Department Director shall review the protest, and after consultation with the County Attorney, shall issue a report and recommendation within 20 days of the filing of the protest stating the Department’s recommendation. The Department Director’s findings shall be forwarded to the County Manager for final determination and disposition of the protest. There will be an opportunity to settle the protest within 5 days of the filing of the protest.

In addition to Implementing Order 3-21, Miami-Dade County’s procurement process is governed by its Charter and County Code, specifically section 2-8.4 of the Code of Miami-Dade County, entitled “Protest Procedures.” (See http://miamidade.fl.eregulations.us/code/cid10620/2-8.4/) Moreover, all county vendor contracts in Miami-Dade County are subject to the General Terms and Conditions found at: http://www.miamidade.gov/procurement/library/boilerplate/general-terms-and-conditions.pdf.

Municipality Example: The Village of Wellington’s (“Wellington”)

The Village of Wellington’s procurement process is governed primarily by its Purchasing Manual, as well as by the requirements outlined in the specific ITB/RFP at issue. The Purchasing Manual establishes specific directions, guidelines and requirements for purchasing, and states that all purchases “shall be in accordance with this Manual…” (See Purchasing Manual at http://wellingtonfl.gov/images/stories/departments/Purchasing/docs/Code_and_policy/Final%20Purchasing%20Manual%202014.pdf.)

With regard to ranking bids, Wellington’s Purchasing Manual specifies the criteria to be used to decide a tie if two or more bids are tied. One factor that may be considered is the date and time that the bid was received by Wellington. In other words, if there’s a tie, and if other specified criteria do not resolve the tie, Wellington will consider which bid was received first in awarding the contract. These types of details and nuances specific to each locale are very important for vendors to be aware of prior to submitting their bids, as they may very well impact the outcome of the award.

Protests of Solicitation Specifications: With regard to protesting solicitation specifications, Wellington’s purchasing manual provides that prospective bidders must file its written protest to the solicitation within three days after the advertising/posting of the competitive solicitation. (“A prospective bidder, proposer or offeror may submit a protest in writing to the Purchasing Manager challenging the terms, conditions, or specifications of a competitive solicitation, including any provision governing the methods for ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract…. The protest must be filed in three (3) days . . . after the public posting… Failure to file a protest as to the terms, conditions, or specifications of a competitive solicitation shall be deemed a waiver of the right to protest on those grounds.”). Compare Florida Statutes, which provides that only a “notice of protest” to a solicitation specification must be filed within three days, and that the formal written protest may be filed ten days thereafter.

Protest of Intended Contract Award: Similarly, Wellington’s procedure for challenging an intended award of a bid contract also requires that the formal written protest be made within three days of the notice of intended award. Again compare Florida Statutes, which provides that only a “notice of protest” must be filed within three days, and that the formal written protest may be filed ten days thereafter.

Thus, Wellington’s truncated timeframes vary significantly from those required pursuant to Florida Statutes governing challenges to state agency solicitation and intended awards. It is crucial that bid proposers are aware of the local government entity’s timeframes, which often vary greatly from those specified in Florida Statutes, in order to ensure that no rights are waived.8

Bid Protest Process: The process for Wellington’s bid protests is as follows: the written protest must be submitted to the Purchasing Manager of the Purchasing Division within three days of the notice of intended award. Within 7 days of receipt of the written protest, the Purchasing Manager shall attempt to settle or resolve the dispute, with or without a hearing and within his/her sole discretion, and shall render a written decision. Any person aggrieved by the decision of the Purchasing Manager may appeal to the Village Manager within 7 days from the date of the Purchasing Manager’s decision. The Manager shall attempt to resolve the matter, with or without a hearing and within his/her sole discretion, and shall render a decision within 7 days following receipt of the appeal.

Discretionary Hearing: In the event that either the Purchasing Manager or Manager decides to conduct a hearing, such hearings shall be informal and Florida Rules of Evidence shall not apply. All evidence of a type commonly relied upon by reasonably prudent persons may be considered, and other bidders or proposers who have standing to intervene may be permitted to participate in the hearing.

Appeal to Council: The Manager’s decision shall be final and conclusive unless the protestor files a written appeal directly with Wellington’s Council within 3 days of the Manager’s decision. The Council shall consider the appeal within 30 days, and shall hold a quasi-judicial evidentiary hearing on the appeal. Failure to follow these protest procedures shall nullify any protest.

Special District Example: The Canaveral Harbor Port District (Canaveral Port District).

The Canaveral Harbor Port District (Canaveral Port District), created by the Florida Legislature and encompassing approximately one-half of Brevard County, Florida, is primarily governed by its Charter (Chapter No. 2014-241, Laws of Florida Special Acts of 1953, as amended). (See http://www.portcanaveral.com/PortCanaveral/media/Publications/2014Charter.pdf). The procurement process for the Canaveral Port District is addressed in Article XVII of its Charter, entitled, “Contracts; Competition.” While the Charter briefly discusses the bid proposal process and specifies that competitive bidding shall be enforced when contracts exceed $100,000, it is silent with regard to any procedure or process for challenging bid awards. Thus, those wishing to challenge are left with little guidance regarding the procedure for doing so. Florida Statutes, case law, public policy, the specific ITB or RFP criteria and instructions, and resort to Circuit Court will thus be instrumental in any protest.

Other Non-State Agency Protest Example9 – University of North Florida (“UNF”)

In Florida, there are 12 state universities, and 28 community and state colleges10, and each has its own procurement process. For example, University of North Florida’s procurement process is governed by its Purchasing Regulations, specifically 13.0020R, entitled “Notice and Protest Procedures Related to a University Contract Procurement Process” (See https://www.unf.edu/president/policies_regulations/13-Procurement_Services/13_0020R.aspx), as well as the Board of Governors’ Regulations 18.002 and 18.003.

Protests of Solicitation Specifications: Similar to the bid protest process for state agencies, UNF’s regulations provide that the Notice of Intent to protest a solicitation specification must be filed within 72 hours of the posting of the specification. Failure to timely file within the 72 hours shall constitute waiver of the right to protest proceedings related to the specification. A Formal Protest must be filed within 10 days after filing the Notice of Protest.

Protest of Intended Contract Award: Also similar to the bid protest process for state agencies, UNF regulations provide that a Notice of Protest of an intended contract award must be filed within 72 hours of the posting of the University’s notice of decision or intended decision, and that the Formal Protest must be filed within 10 days after filing the Notice of Protest.

Pursuant to UNF Regulations, the UNF President/President’s Designee may, in response to a Protest of a specification or intended award, terminate the contract procurement process, terminate the solicitation process, and/or reject all bids. If any such action is taken, the Protest shall be automatically dismissed, and the University may, if desired, reinitiate the contract procurement process.

Bid Protest Process: According to UNF Regulations, within 7 days of the filing of the Formal Protest, the University may hold informal discussions with the protester to attempt to resolve the protest by mutual agreement. If no resolution is reached, the protest shall proceed to a summary proceeding presided upon by a University official if there are no disputed issues of material fact, or to a quasi-judicial hearing if there are disputed issues of material fact.

Quasi-Judicial Hearing: If the Formal Protest contains issues of material fact, the President/President’s Designee shall either refer the Formal Protest to an appointed quasi-judicial officer for a quasi-judicial hearing or may forward a request for hearing to DOAH for assignment of an Administrative Law Judge (“ALJ”) to conduct the quasi-judicial hearing (in the same fashion as state agency bid protests). The hearing shall be conducted within forty (40) days after the date the Formal Protest was filed. The quasi-judicial hearing shall be a de novo proceeding to determine whether the University’s decision or intended decision is contrary to the statutes, regulations, or policies governing the University, or contrary to the Specifications. The standard of proof for the proceedings shall be whether the proposed University action was clearly erroneous, contrary to competition, arbitrary, or capricious.

All parties have an opportunity to present evidence; to respond to all issues involved; to conduct cross-examination and submit rebuttal evidence; and to submit proposed findings of fact and proposed orders. The hearing shall be conducted in conformity with the Florida Rules of Civil Procedure and the Florida Rules of Evidence. The Quasi-Judicial Officer will issue a written Recommended Order, and the University President shall thereafter issue a Preliminary Order, to which the parties may file objections, after which the President will review any timely filed objections and render a Final Order.

Judicial review of the University’s final decision shall be in accordance with Florida Rules of Appellate Procedure Rule 9.190(b)(3), applicable to review of quasi-judicial decisions of an administrative body not subject to the Administrative Procedure Act. A request for review may be made by filing a petition for certiorari review with the appropriate circuit court within thirty (30) days after the University’s final decision. Failure to seek timely review shall constitute a waiver of the right to appeal the University’s final decision.

It is clear from just the few examples highlighted above that there are no uniform timeframes or procedures for challenging local government entity procurement solicitation specifications and intended decisions, and that the procedures for challenging a local government entity’s procurement process are often extremely complex, and entirely dependent upon the local government entity’s governing procurement documents.

In addition to the different timeframes for bringing protests, each local entity’s governing purchasing documents may vary in terms of the contract amount that is subject to competitive bidding11, and the specific steps for protesting – the who, what, where, and how of protesting solicitations and intended awards (e.g., who does it need to be submitted to, who reviews the challenge, who do you appeal your challenge to; what information is required to be included, what information are you entitled to include; where should it be submitted, where do you appeal; and how do you ensure you exhaust your administrative remedies).

Typical Process in Local Government Bid Protests Despite Lack of Uniform Procedures

Overview

Despite the many procedural differences in each locale, the typical protest process pursuant to most local government procurement codes involves submitting a written protest to the local government’s administrative procurement staff (e.g., the Purchasing Department, the Purchasing Division, Procurement Office), and then appealing up the chain of command if unsuccessful below. Typically, there will be informal attempts to negotiate a settlement once a protest has been filed. Ultimately, most counties, municipalities, and districts will allow for an informal hearing (quasi-judicial hearing) before their Board or Commission. (See below re: quasi-judicial hearing).

Vendors will need to make several strategic decisions along with way. First, they will need to decide if they should challenge the solicitation specification. If they don’t timely object to the solicitation specifications, then they will waive the right to raise such issues later after the intended contract award has been made. However, if they do timely object, they run the risk of possibly offending or ultimately being disfavored by the local entity that they are protesting, and thus putting themselves in a vulnerable position vis-à-vis ultimately being awarded the contract.

Additionally, vendors will need to decide if and when to file suit in circuit court. Depending on the facts and the local government procurement procedures, it may be prudent to file in circuit court prior to any final decision by the Commission. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978). Conversely, depending on the facts and the likelihood of being successfully awarded the contract, it may be more beneficial to wait until after the Commission renders its final decision, and then if adverse, to seek a circuit court injunction or petition for writ of certiorari. (Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997) (holding that unsuccessful bidder’s circuit court action to enjoin College’s contract award to another contractor should have been granted due to the irreparable injury caused by College’s violation of sunshine laws).

What to do – Step by Step

The first step in determining whether to protest is to be sure to familiarize yourself with the local authority’s governing purchasing documents, ordinances, charters, etc., as well state statutes and relevant case law, in case the documents are silent on various procedures.

Next, once you are notified of a solicitation/intended award that you think is improper, it is crucial to act quickly and submit your protest so as not to miss any deadlines and waive any rights. It is imperative to follow the specific protest procedures outlined by the local entity’s governing documents.

Challenge to Bid Solicitation Specifications: Most local government procurement documents specify the timeframes and procedures for challenging bid solicitation specifications, and provide that the failure to timely file a protest to the specifications of a bid solicitation shall preclude the protester from raising those issues in a bid protest after the contract has been awarded. (For example, Miami-Dade County provides that a protest to solicitation specifications must be made 2 days prior to bid opening or are waived, at IO 3-21; The Village of Wellington provides that a protest to solicitation specifications must be filed within 3 days of the posting of the competitive solicitation, and that failure to do so shall be deemed a waiver of the right to protest on those grounds.).

Thus, if a bidder wishes to challenge the terms, conditions, or specifications contained in the solicitation (including any provision governing the methods for ranking bids, awarding contracts, reserving rights for further negotiation, or modifying or amending any contract) the protest to the solicitation must be timely filed in accordance with the local governing procurement documents, typically within a few days of the posting of the solicitation.

While it is illegal in competitive bidding for a local government entity to tailor bid criteria or specifications in favor of a preferred vendor, it is a fairly frequent problem in public procurement.12 If a vendor believes that any part of the solicitation is suspect, it must timely file the required protest pursuant to the local governing procurement documents or the issue is forever waived.

One of the most common problems in public procurement – whether local or state procurement – is that a vendor fails to timely challenge the bid specifications or criteria although the vendor believes that a particular criteria or specification is unfair, unnecessary, or one that the vendor simply cannot meet. A vendor might forego challenging a specification in an effort to remain on good terms with the local authority out of fear that an action may potentially bias the contracting entity against the vendor.

Failure to timely file a protest to the solicitation specification within the timeframe outlined in the local entity’s governing procurement documents will result in waiver of the right to challenge such specifications. In other words, if they wait until after the notice of intended award, and then file a protest attempting to raise bid specification irregularities, those allegations will be excluded from consideration.

This results in several procedural and tactical questions for the vendor to consider and weigh in consultation with its attorney. Often vendors are concerned that if they protest the solicitation specifications, regardless of the outcome of that protest, that the local entity may harbor resentment or ill will toward them, and fear that the local entity may become biased against them, and that ultimately they will fair less well in any final decision regarding awarding them the contract. These considerations should be discussed and weighed with experienced bid protest counsel.

Challenge to Intended Contract Awards: If the local entity improperly awards the contract to another bidder, vendors shall timely file a protest to the intended contract award in accordance with the local government entity’s procurement code/ordinances. Depending on the local procurement process, the vendor may be required to first file a Notice of Protest and then to follow up with a formal Written Protest. In other locales, the vendor may be required to file the formal Written Protest without any initial Notice of Protest. Intervening holidays and weekends are typically excluded in computing the Notice of Protest due dates and typically included in computing the formal Written Protest due dates, but again, this will depend entirely on the governing local procurement documents.

As discussed above, challenges will typically be filed with procurement administrative staff (Purchasing Department, Procurement Office, etc.), and will be appealed up the chain of command, ultimately concluding in a quasi-judicial hearing before the Commission. Additionally, there will typically be opportunities to informally resolve the protest through settlement negotiations.

Bid Protest Bond: Local government procurement documents typically require, similar to the state agency bid protests, that the protestor file a bond payable to the local government. The amount of the bid protest bond will depend on the local government’s procurement documents. (For example, Miami-Dade County has an escalating bond fee schedule that increases the fee amount based on the contract award amount, ranging from a $500 filing fee for contract award under $250,000 to a $5,000 filing fee for contracts awards over $5 million). Failure to timely file the bond in accordance with the local government procurement process shall typically constitute waiver of the protestor’s right to protest and/or the denial and dismissal of the protest.

Quasi-Judicial Hearing: Unresolved bid protests are typically set for quasi-judicial hearing before the Board or Commission. Depending on the local entity’s procurement process, these hearings may range from informal presentations by the parties and/or their representatives to full-fledged quasi-judicial hearings involving witness testimony, cross-examination, presentation of evidence, and written submissions. Typically the rules of evidence do not apply. Participating parties shall be afforded notice and the opportunity to be heard. Additionally, in a quasi-judicial proceeding certain standards of fairness and due process are afforded to the parties.

Seeking Relief in Circuit Court: Unsuccessful bidders may seek a temporary injunction in circuit court prohibiting the local authority from awarding the contract to the successful bidder. In order to prevail on an injunction in circuit court, the complaining party generally must establish: (1) a likelihood of irreparable harm; (2) the unavailability of an adequate remedy at law; (3) a substantial likelihood of success on the merits; and (4) public interest considerations. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978) (affirming temporary injunction and stating that “trial court was correct in taking action to preserve the status quo and secure the rights of the parties to equitable relief”); Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (affirming denial of temporary injunction and holding that protestor did not have a substantial likelihood of success on the merits); Charlotte County v. Grant Medical Transp., Inc., 68 So. 3d 920 (Fla. 2nd DCA 2011); Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997). See also Naegele Outdoor Adver. Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla.1995); Smith Barney Shearson, Inc. v. Berman, 678 So. 2d 376, 377 (Fla. 3d DCA 1996).

While there is strong judicial deference afforded to a local authority’s discretion to competitively award contracts, such discretion must not be arbitrary or capricious, illegal, or fraudulent. Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference). However, a local authority’s honest exercise of discretion in awarding a contract will not be overturned even if it appears erroneous or if reasonable persons could disagree. See Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (disappointed bidder’s protest did not show arbitrary or capricious action; thus, bidder failed to demonstrate a substantial likelihood of success in its challenge to the commission decision, and temporary injunction barring further proceeding on the contact was not warranted).

Circuit Court Remedies: It is important to obtain an injunction in circuit court to stop the contract award before the contract is executed and relied upon. While section 120.57(3)(c), Florida Statutes, expressly provides that any intended contract awards shall be stayed pending resolution of a timely filed bid protest13, there is no similar uniform requirement for a stay of intended contract awards for local government bid protests. Accordingly, it is very possible that the contract will be awarded and relied upon prior to your “winning” your appeal.

So what happens if the contract has already been executed and then you “win” your appeal? Some courts have held that you are only entitled to the cost of preparing the bid, while other courts have held that the government entity shall provide a comparable contract at a later point in time. To date, no Florida courts have held that an unsuccessful bidder is entitled to lost profits. See Miami Dade Cnty. Sch. Bd. v. J. Ruiz Sch. Bus Serv., Inc., 874 So. 2d 59, 62-65 (Fla. 3d DCA 2004) (reversing award of lost profits and remanding with directions that appellees be awarded equitable relief in the form of future comparable contracts, if possible, or, in the alternative, that their damages be limited to their bid preparation and/or bid protest costs.). See also City of Cape Coral v. Water Servs. of Am., Inc., 567 So. 2d 510, 512 (Fla. 2d DCA 1990) (holding that (1) unsuccessful bidder was entitled to recover bid preparation costs and prejudgment interest thereon when city failed to adhere to its representation that bid would not be rejected on ground that bidder was not licensed general contractor; (2) unsuccessful bidder had no cause of action against public entity for lost profits; and (3) bidder was not entitled to award of attorney fees.); City of Tallahassee v. Blankenship & Lee, 736 So. 2d 29 (Fla. 1st DCA 1999) (disappointed bidder on natural gas line construction project that sued city for disqualification of bid was not entitled to award of attorney fees, despite award of bid preparation costs; there was no contractual or statutory authority for recovery of attorney fees from city and litigation was against city and not third party).14

Florida’s Public Policy and Case Law in Support of Fair Competition

In addition to the specific protest procedures for each local government entity, government contracting in Florida is guided by strong public policy considerations aimed at the protection of the public against collusive contracts, fraud, bias, and favoritism. While public bodies have discretion in contracting for goods and services, they cannot act illegally, arbitrarily, capriciously, or fraudulently. See, e.g., Wester v. Belote, 103 Fla. 976, 138 So. 721 (Fla. 1931) (laws of this kind requiring contracts to be let to the lowest bidder are based upon public economy, are of great importance to the taxpayers, and ought not to be frittered away by exceptions; they serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers’ expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated) (emphasis added); Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference); City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798 (Fla. 3d DCA 2002) (applying arbitrary and capricious standard to RFPs as well as bids). Florida’s public policy, case law, and statutes dictate that competitive procurement, regardless of the local government entity’s bid protest process, is designed to secure fair competition on equal terms to all bidders, to secure the best values at the lowest possible expense, to provide an opportunity for an exact comparison of bids, and to assure that the most responsive bid is accepted. Additionally, government entities must afford fundamental due process rights to its citizens and must allow for a clear point of entry to challenge its decisions. See, e.g., Capeletti Brothers, Inc. v. Dep’t of Transp., 362 So. 2d 346, 348 (Fla. 1st DCA 1978) (holding that agency must afford due process right of clear point of entry to challenge agency decision).

Finally, regardless of the type of local government (county, municipality, district), all local government entities must adhere to the terms of their RFP/ITB, and can be challenged for deviating from the specifications of their RFP/ITB. See, e.g., City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798, 800, 802 (Fla. 3rd DCA 2002) (City’s award based upon categories and criteria not included in the bid documents was arbitrary, capricious, and contrary to Florida’s competitive bid statutes); Hemophilia Health Services, Inc., v. AHCA, No. 05-2804BID, 2005 WL 3733800, ¶¶ 38-40, 44-46, 75 (DOAH Dec. 2, 2005; AHCA FO Jan. 26, 2005) (evaluation sheets used by evaluators did not correspond to the RFP evaluation criteria); Syslogic Tech. Servs., Inc. v. South Florida Water Mgmt. Vill., No. 01-4385BID, 2002 WL 76312 at ¶¶ 24, 36, 104-05, 108-110 (DOAH Jan. 18, 2002; AHCA FO March 6, 2002 104-111) (scoring was contrary to the RFP and contrary to competition).

Conclusion

Local government bid protest procedures and requirements are often quite confusing and may vary greatly depending on the local government’s ordinances, codes, charters, etc. Because there are no uniform procedures for challenging local government procurement decisions, and because the bid protest process proceeds on an extremely fast track, important rights can be waived if not immediately asserted. For these and other reasons, it is crucial that you know your rights whenever you or your company becomes involved in any local government procurement, and that you involve experienced bid protest counsel as early as possible. Experienced bid protest counsel can assist in compliance with local government bid procedures, ensure that your rights are protected throughout the bid process, timely protest any unfavorable decisions, and advocate for your interests at the local government level, as well as in circuit and appellate court proceedings.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced federal, state, and local bid protest law for over 20 years.

1 Florida Statutes and rules governing state bid protests include, but are not limited to: Chapter 120, Florida Statutes (Florida’s Administrative Procedure Act); Chapter 287, Florida Statutes (state procurement); and Chapter 28-110, Florida Administrative Code (state bid protests).
2 http://en.wikipedia.org/wiki/List_of_municipalities_in_Florida; https://dca.deo.myflorida.com/fhcd/sdip/OfficialListdeo/index.cfm.
3 For a detailed overview of the bid protest process for challenging state agency procurement decisions, including a discussion of common grounds for protesting state agency procurement decisions, please see “Bid Protests: Know Your Rights – the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”).
4 Chapter 120 (the Administrative Procedures Act), Florida Statutes, provides uniform procedures applicable to state agencies, which by definition, do not include local government entities, and section 120.57(3), Florida Statutes, specifically governs bid protests against Florida state agencies. While section 255.20, Florida Statutes, addresses local government competitive bidding for public construction projects, it does not address bid protest procedures. Moreover, there is no Florida Statute governing bid protest procedures for local government procurement of goods or other services.
5 See Palm Beach County School Board, Policy 6.14, for an example of a local government entity that explicitly implements the bid protest procedures of the Administrative Procedures Act, section 120.57 (3), Florida Statutes, and Chapter 28-110, Florida Administrative Code.
6 Several of the representative examples outlined in this article were taken from recent bid protest cases litigated and resolved by Smith & Associates.
7 See §120.57(3)(b), Fla. Stat., and State Bid Protest article, cited infra note 2.
8 Such variations from Florida Statutes’ timeframes, are also seen in larger municipalities, such as the City of Miami, whose purchasing process is outlined in its municipal code, Section 18-104, entitled “Resolution of protested solicitations and awards.” (See http://www.miamigov.com/procurement/docs/BidProtest.pdf). Section 18-104 provides that aggrieved proposers must file a notice of protest within two days after receipt of the notice of proposed award, and then must file its written protest within five days after the date the notice of protest was filed. Once again, we see the truncated timeframe for filing a protest at the local level, as compared to protesting state agency procurement decisions. See also Orange County Bid Protest Procedures (Orange County Florida Code of Ordinances, Sec. 17-313), which requires that a notice of protest to a bid solicitation or intended award be filed within five days of the date of posting, and that the formal written protest be filed within five days after the date of the filing of the notice of protest.
9 There are competing arguments as to whether Florida state universities and colleges are considered “state agencies” for purposes of Chapter 120 bid protest rights. Section 120.57(3), Florida Statutes, governing state agency bid protest procedures, specifically provides in subsection 120.57(3)(g), Florida Statues, that “the definitions in s. 287.012 apply.” Section 287.012, Florida Statutes, expressly states that the definition of Agency “does not include the university and college boards of trustees or the state universities and colleges.” However, this definition appears to conflict with the definition of “Agency” in section 120.52, Florida Statutes, which provides that “Agency” includes educational units, including state universities when the university is acting pursuant to statutory authority.” Further confusing the issue, bid protests of state universities are routinely referred to DOAH for hearing. See e.g., Schlage Lock Company, LLC v. State University System, University of North Florida, Case No. 14-1559BID (DOAH April 10, 2014). For purposes of this bid protest article, universities and colleges are classified as non-state agencies.
10 http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_Florida
11 While Florida State Statutes provides for competitive solicitation for state agencies for all contract awards in excess of $35,000 (hereinafter “competitive solicitation threshold”), the threshold amount requiring competitive bidding varies dramatically for each local government entity depending on its specific local charter, ordinances, code, etc. For example, Miami-Dade County’s competitive solicitation threshold is $25,000 (Miami-Dade County Implementing Order 3-21) (check); University of North Florida Board’s competitive solicitation threshold is $75,000 (UNF Purchasing Regulation 13.0010R); Village of Wellington’s competitive solicitation threshold is $25,000 (Wellington Purchasing Manual, Ch. 2, A, at p. 3); and Canaveral Port Harbor District’s competitive solicitation threshold is $100,000.
12 One exception to this is that many local governments provide in their governing procurement documents that a preference be given to local businesses. (For example, Miami-Dade County’s governing procurement document provides in its preference for local businesses, that “If the Low Bidder is not a Local Business, then any and all responsive and responsible Local Businesses submitting a price within ten percent of the Low Bid…shall have an opportunity to submit a best and final bid equal to or lower than the Low Bid.” See Miami-Dade County, Section 1.10, General Terms and Conditions). The preference criteria should be outlined in the local government documents and any deviations from the specified criteria can be subject to challenge. Miami-Dade County, Section 1.10, General Terms and Conditions.
13 Section 120.57(3) provides:
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. See also Cianbro Corp. v. Jacksonville Transp. Auth., 473 So. 2d 209, 212 (Fla. 1st DCA 1985) (statutory scheme providing for stay of intended contract award “should be upset in only the most compelling circumstances.”).
14 While beyond the scope of this article, for a detailed discussion of potential legal remedies after you have been awarded a contract, see http://smithlawtlh.com/unfairness-or-public-corruption-in-government-contracting/.

BMI Copyright Infringement Lawsuits

Yesterday, BMI filed two copyright infringement lawsuits against area restaurants. In these lawsuits, BMI maintains that these restaurants allowed the unauthorized public performance of songs to which it holds the copyright. In layman’s terms, this means that the restaurant played the radio over the speakers without first purchasing a license from BMI.

Many restaurant owners are not aware that the simple act of playing songs over the speakers can constitute copyright infringement if the appropriate license is not purchased. This simple act can have large consequences. For each unauthorized song played, the restaurant can be liable for up to $150,000.00 in statutory damages plus attorney’s fees and costs. All of this just by turning on the radio.

If you or your company have been contacted by BMI regarding unauthorized performance of songs, you mast act quickly to protect your rights. At Smith & Associates, we not understand litigation and copyright law. If you need help addressing this or any other copyright issue, please contact us for a free consultation.

With Bid Protests, Deadlines are Essential

Recently, the GAO denied the bid protest of Bridges System Integration, LLC (“Bridge”) (decision here). This bid protest involved an RFP for a standing solicitation for the provision of professional audio/video, telemetry/tracking, recording, reproducing and signal data solutions. Bridge’s bid was rejected for not complying with the RFP. While there were multiple issues involved in this decision, this article focuses on Bridge’s challenge to the terms of the solicitation as they related to its already submitted and rejected bid.

The GAO held that “[t]o be timely, a challenge to the terms of this solicitation had to be raised prior to submitting a proposal under the terms of that solicitation.” It further held that for standing orders, which do not have a set time for submissions, “challenges to the terms of a standing FSS solicitation are untimely, with respect to the application of these terms to the evaluation of an offeror’s proposal, if the protest is filed after the protester has submitted a proposal under that solicitation.” For this, and other reasons enumerated in the decision, the bid protest was denied.

Timelines are key to bid protest cases. Failure to timely file a bid protest can forfeit your rights to even bring the protest. If you believe that the specifications for an RFP are biased or unfair, contact the experienced bid protest attorneys at Smith & Associates for a free consultation.