Controversy in the Competitive Bidding Process
by Alfredo Gonzalez on Categories: corporate
Competitive bidding is at the center of most contractual relationships between private parties and the government. Even when no statute or constitutional provision requires that a particular contract be awarded by public bid, Florida public policy strongly discourages expending public funds without competitive bidding.1 Competitive bidding is designed to protect the public against collusive contracts, favoritism, unfair competition, and private gain by public officials.
The process of competitive bidding necessarily implies winners and losers. Disappointed bidders, believing some procedure in the bidding process granted their competitors an unfair advantage, or that the governmental entity failed to abide by statutory guidelines, often file bid protests or lawsuits. This article addresses some of the major issues in such cases.
In analyzing the merits of a bid protest, one must review the bid documents, responses and evaluations of the public entity’s staff and any relevant committees. Such a review will produce at least three valuable results. First, it may disclose support for the protest. Secondly, it will highlight arguments against the bid protest. Third, it allows one last chance to convince staff that the recommended bidder is nonresponsive and that its bid should be disqualified.
Preparing for the Protest Hearing
Most bid protests will result in a formal or informal hearing. The form of the hearing will vary from a visit with the departmental head to a public hearing before a municipal authority or hearing officer. In any case, preparation is critical if the bid protest is to have any chance of success.
An important aspect of preparing for the hearing is drafting a memorandum supporting the arguments for disqualifying the selected bid. Such a memorandum should be filed as early before the hearing as allowed under municipal code.
It is essential that local government procedures be followed. In this respect, it is critical that all communication comply with the requirements of the applicable code of ordinances.
Legal Issues Regarding Bid Protests
In framing the bid protest, it is essential to recognize that most bid protests are not won in court; they are won, if at all, at the administrative level, since courts generally support the public entity.
In determining the chances for success in court, several issues must be addressed. In the first instance, to be disqualified, the bid must contain a “material variance” from the plans and specifications.2 A material variance is one that gives a bidder a substantial advantage over other bidders and restricts or stifles competition.3 Another important consideration is whether the winning bidder meets the selection criteria designated in the bid documents. The selection criteria must be articulated in the bidding documents.4
A protest can also be based on a failure of a prospective bidder to be a responsible bidder. Florida law and the purchasing authority defines the requirements that each bidder must have as of bid opening. This can include: certifications, licenses, delinquencies on other projects, etc. Failure to meet conditions required to be a responsible bidder can lead to disqualification.5
Lastly, the courts have repeatedly supported government in its ability to reject all bids in the event of a bid dispute. The request, however, is not limitless and cannot be arbitrary, capricious or used to confer and unfair advantage on a favorite bidder.6 The client must be involved in determining possible deviations from the process that could support a protest.
Politics is an integral part of any bidding process, and enjoys special importance in a bid protest. The issues involved in most bid protests are technical, and the elected officials deciding the protest usually have no previous exposure to the specific problems involved and must be educated and persuaded to support the protest.
An important part of the political process is to discuss with the client the possibility of retaining one or more lobbyists or a public relations firm to help present the case to the public body and thus, take advantage of their credibility with public officials.
A thorough approach to preparing for a bid protest will not only increase one’s chances of success at the public hearing, but also will further ensure an appropriate record in the event of an appeal or other legal actions, if necessary.
1 1966 Op. Att’y Gen. Fla. 66-9 (Feb. 7, 1966).
2 Robinson Electrical Co., Inc. v. Dade County, 417 So. 2d 1032 (Fla. 3d DCA 1982).
3 Liberty County v. Baxter’s Asphalt and Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982).
4 Marriott Corp. v. Metropolitan Dade County, 383 So. 2d. In that case the court refused to enforce a local preference articulated only at the commission meeting.
5 Couch Construction Co., Inc. v. Dept. of Transportation, 361 So. 2d 184, 187 (Fla. 1st DCA 1978)
6 Caber Systems, Inc. v. Department of General Services, 530 So. 2d 325 (Fla. App. 1st District 1988).
By ALFREDO L. GONZALEZ
Genovese Joblove & Battista, P.A.
100 Southeast Second Street, 44th Floor
Miami, Florida 33131
South Florida Legal Guide 2014 Edition