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By Procore Editorial staff
July 17, 2016
Bid protests come into play on public works projects when a bidder disagrees with the bid being rejected, or with whom a contract was awarded to. This contention causes many participants in the public bidding process to adopt a defensive position and in some cases, causes bidders to look for opportunities to challenge contract awards to other bidders––even while compiling their own bids. Many public bidders even commit time and money to preparing for challenges to their bids.
If you bid on public projects, it’s important to be familiar with bid protests because they are not only happening with greater frequency, but are also beginning to enter uncharted legal territory as government procurement agencies explore alternative delivery methods like design-build, P3s, and lease-leaseback.
Bid protests on federal government contracts have been rising since 2006. At the same time, those doing the protesting have had less luck getting the outcomes they wanted. In 2015, of the 2,639 cases filed, courts only decided 12% of the cases in favor of those protesting. While in 2006, 29% of the protesters received favorable rulings.
There are more than 100 issues companies cite when protesting bids. General issues include items like lack of advanced planning, excessive modifications beyond the scope, and restrictive provisions. Other issues fall under the headings of negotiation and sealed bidding. These cover challenges from how the public agency handles proposals and information, to mistakes in bids and pricing factors. While the issues cited when protesting bids are numerous there are really just two main reasons they occur: the apparent low bidder doesn’t get the contract, and protests, or the awarding authority gives the contract to a low bidder, but another bidder protests the award.
In today’s contracting environment there are factors making bid protests more complex. Governments are increasingly interested in the advantages that come with alternative delivery methods. That’s causing problems with bid protests that have historically been lodged where low-bid-procurement and firm-fixed-price contracting have dominated. When something other than price is behind the contract award decisions, traditional bid protests no longer work. Not only are the disputes reframed, but the rules and the remedies are often unclear, or even nonexistent, according to Aaron P Silberman, a shareholder at Rogers Joseph O’Donnell, and section vice chair of the American Bar Association Section of Public Contract Law.
Now, the alternative procurement methods themselves are coming under fire from protests as contractors challenge public agency use of them. Even where a public agency has the discretion to use something other than a low bid method to award a contract, bidders have the chance to question the agency’s discretion.
When it comes to bid protests today, no matter which side you are on, you face a difficult road. First of all, there is the multitude of rules that can affect not only whether you can lodge a protest, but also whether or not you did it in time.
Furthermore, if you are challenged after notification that you are the successful bidder, you could find it difficult to defend yourself simply because you didn’t follow some obscure rule. And, you might not be able to even defend the award, because most case laws for public construction are still rooted in traditional methods of contracting. Whether you are bringing or defending a protest related to less traditional methods, you may find it especially difficult to prevail, according to Silberman.
Attorney Bernard S. Kamine says there are five critical aspects to keep in mind when it comes to bid protests.
Even though competitive bidding is still widely required by most governments, be sure that is the case for the contract you are bidding on
Know the rules, procedures, and time limitations related to protesting a bid
When a public agency doesn’t allow timely inspection and copying of the bids, you should lodge a complaint right away with the elected officials who govern the agency
Become familiar with the ins and outs of the two general reasons for bid protests: a non-responsive bid and lack of bidder responsibility
Know the costs and the risks related to bid protests within the jurisdiction where you are bidding
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