Challenges to Bid Specifications – Don’t be Afraid to Rock the Boat!

Businesses involved in contracting with federal, state, or local government agencies as vendors or service providers are likely well aware of the complexity and detail typically included in the specifications and requirements for public contract solicitations contained in Invitations to Bid, Requests for Proposals, Invitations to Negotiate, and other similar documents. (For ease of reference I will refer to these documents as “bid solicitations” in this article.) Far too often, parties interested in responding to bid solicitations fail to timely ask questions, seek clarifications, or challenge the specifications, which can result in a waiver of the right to raise such issues later in the evaluation and contract award process. In some instances, it is simply a failure of the proposed vendor to do the tough job of plowing through the specifications to make sure that the bid solicitation is clear and unambiguous, and that their product or service can meet the specifications as written. In other instances, the proposed vendor may identify unclear terms, or worse, specifications that they may not meet, and still decide that they don’t want to “rock the boat” by raising the concerns with contracting authority.

This is a common error for businesses seeking government contracts, as most contracting authorities have strict timelines for raising problems or questions about the bid solicitation documents. The failure to do so often results in a waiver of the right to raise these issues or questions later should the vendor be disqualified as “non-responsive” or “non-responsible” or simply fail to score well in the evaluation process.

At the federal level, for example, Federal Acquisition Regulation 33.103 provides that:

(e) Protests based on alleged apparent improprieties in a solicitation shall be filed before bid opening or the closing date for receipt of proposals. In all other cases, protests shall be filed no later than 10 days after the basis of protest is known or should have been known, whichever is earlier. The agency, for good cause shown, or where it determines that a protest raises issues significant to the agency’s acquisition system, may consider the merits of any protest which is not timely filed.

Federal decisions of the General Accounting Office have rejected untimely protests noting that “[T]his view is consistent with the purpose behind our Regulations’ timeliness rule for protests alleging solicitation improprieties: i.e., to give the agency notice of the protest before bid opening or receipt of proposals, to provide an opportunity for the agency to take action before bids or proposals are prepared and submitted. Applied Controls Co., Inc., Recon., B-228568.2, Nov. 30, 1987, 87-2 CPD ¶ 528 at 1; ERA Helicopters, Inc., B-218607, Aug. 1, 1985, 85-2 CPD ¶ 114 at 2.”

In Florida, the law is clearly stated in Section 120.57(3)(b), Fla. Stat., which includes specific waiver language as follows:

(b) Any person who is adversely affected by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the notice of decision or intended decision. With respect to a protest of the terms, conditions, and specifications contained in a solicitation, including any provisions governing the methods for ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract, the notice of protest shall be filed in writing within 72 hours after the posting of the solicitation. The formal written protest shall be filed within 10 days after the date the notice of protest is filed. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter.

Similar provisions are included in numerous county and municipal procurement codes and ordinances throughout Florida, as well as set forth in many bid solicitation documents expressly.

The consequences of failing to raise timely questions can be severe. Below are just a few of the many cases where a bid protest challenge was rejected for failing to timely raise the matter in a protest to the bid solicitation.

  • Soly Interiors Division of Lyons Construction Company, As Agent For Wellco Carpet Corporation, Petitioner v. Department of General Services, Division of Purchasing, Respondent., 1988 WL 616900. The record reflects that petitioner received a “bid specimen” containing the questioned item long before the ITB was issued. However, Soly did not seek clarification as to how the certification should be completed or what meaning should be ascribed to the terms “manufacturer,” “supplier” and “open account.” By failing to do so, Soly waived any objection to a lack of clarity in the special condition.
  • Capeletti Brothers, Inc. v. Department of Transportation, 499 So.2d 855, 857 (Fla. 1st DCA 1986). The failure to timely seek correction or clarification of plans and specifications constitutes a waiver of that claim.
  • Juvenile Services Program, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-6280BID (DOAH 2011). In this case, it is concluded that Petitioner failed to timely challenge the terms of the RFP and thereby waived any claim that sought to challenge the specifications of the RFP.
  • Eckerd Youth Alternatives, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-0535BID; Judge Susan B. Harrell. Even though it was not stated in the RFP, the calculation using an “Average” recidivism rate had been the Department’s prior policy and the proposer was aware of this and did not challenge the lack of clear methodology within 72 hours of the RFP being issued. Therefore, the issue of unclear specification was waived, and it was not arbitrary or capricious to use the long-standing prior policy.
  • Optimum Technology, Inc. v. Department of Health, DOAH Case No. 11-0275BID; Judge Robert E. Meale. DOH issued an RFP for a prescription drug monitoring system. Petitioner argued that the process was flawed because it did not include any meeting to “normalize” the scores of the evaluators to eliminate bias or arbitrary scoring. The court held such argument could only be raised within 72 hours of issuing RFP and was therefore waived.
  • Troy Foundation, Inc. v. Department of Juvenile Justice, DOAH Case No. 10-0536BID; Judge Claude B. Arrington. The RFP included a clear footnote that the specific type of program considered would be considered in evaluation of past performance. The disappointed proposer failed to raise any challenge to this specification within 72 hours of the RFP being issued, and the issue was therefore waived.

Thus, it is abundantly clear that vendors and contractors with government agencies must carefully review bid solicitations when they are issued. If there is any perceived problem with the solicitation, the potential vendor or supplier must act quickly to preserve rights to raise the issue. Vendors will be ill-served by seeking to avoid controversy with the issuing government authority or being afraid to “rock the boat.” In fact, in many instances, a party raising a challenge will be doing the procurement agency a favor by allowing the opportunity to fix a potential problem.

Some common problems in bid solicitations include:

  • Unclear or Ambiguous Terms. It has long been recognized that public agencies have a duty to write clear and unambiguous bid specification. When specifications are unclear or indefinite, potential bidders should act quickly to protest unclear provisions.
  • Biased or “Proprietary” Specifications. Specifications may intentionally or unwittingly be designed in a manner that unfairly favors or discriminates against a specific vendor. Specifications may not be drawn in a manner that would permit only one bidder to qualify. Robinson’s, Inc. v. Short, 146 So.2d 108 (Fla. 1st DCA 1962). For example, a manufacturer of truck-weighing scales was entitled to a formal administrative hearing based on its claim that the Department of Transportation had specified a static scale system that could be supplied by only one vendor. Fairbanks, Inc. v. State, Dept. of Transportation, 635 So.2d 58 (Fla. 1st DCA 1994). Mayes Printing Co. v. Flowers, 154 So.2d 859 (Fla. 1st DCA 1963) offers another illustration of an exclusionary bid.
  • Unreasonable Qualifications, References, Certifications or Experience Requirements. Use of “gatekeeper” provisions that set forth unreasonable experience, references, certifications, or other provisions to be considered qualified for the contract and that are designed to eliminate otherwise qualified bidders, products, and services from the solicitation process are certainly suspect. While a government contracting agency may have legitimate reasons for such provisions, they should not be overly restrictive nor designed to limit competition or provide an unfair advantage to one or more contractors. If a vendor can legitimately provide the product or service being sought, then restrictive provisions that serve no real purpose other than limiting legitimate competition should be challenged.
  • Use of an RFP, ITN, or Other Solicitation Method When an ITB Based Upon Price Should Be Used. Most procuring government agencies have a hierarchy that recognizes an Invitation to Bid, where lowest cost prevails, is the preferred method of government procurement since it saves taxpayers dollars and avoids “sweetheart deals.” Unfortunately, many governmental agencies gloss over the preferences in statutes, ordinances, and regulations for decision making based upon the lowest priced proposal for comparable products and services. If the products or services can be described with reasonable specificity, and the government is not looking to proposers to invent or create a new solution to a general problem, then an ITB should likely be the preferred solicitation method.

While an exhaustive discussion of all potential protests is beyond the scope of this article, any vendor should carefully review bid solicitations when issued. Any problems or questions need to be asserted in a timely manner.

For a more detailed look into bid protests, please review our article – Bid Protests – Know Your Rights.

Should you have any questions or need assistance with a bid protest, please contact an experiences bid protest attorney at Smith & Associates for a free consultation.