This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its August 1986 decision in Tropabest Foods, Inc. v. Department of General Services, the Florida First District Court of Appeal ruled that the Department of General Services was within its rights when it accepted a bid that exceeded its minimum requirements. The case dealt with an Invitation to Bid (ITB) for the provision of over 300 food items, including juice powder mix. The contract was awarded to a bidder offering a power concentrate that yielded three-and-a-half gallons of juice per unit, rather than the one-gallon per unit required by the specifications. A competing bidder challenged the contract award, arguing that the competing bid was non-compliant for exceeding the specifications.
While the Court of Appeal agreed that exceeding specifications was an irregularity, it ruled that this did not give an unfair advantage to the winning bidder and instead resulted in better monetary value for the taxpayer:
Further, we do not find that the language of the individual item specifications involved herein can be interpreted so that a yield of 3.5 gallons conforms to a specification calling for a yield of “approximately one gallon.” As the hearing officer found, “approximately” means “more or less but about and near the amount or quantity specified.” Black’s Law Dictionary, 5th ed. (1979). Words in an instrument should be given their natural or most commonly understood meaning. Thompson v. C.H.B., Inc., 454 So. 2d 55 (Fla. 4th DCA 1984). Because 3.5 gallons is not “about and near the quantity specified,” i.e. 1 gallon, Bernard’s bid on these items was at variance with the specifications therefor.
However, although a bid containing a material variance is unacceptable, not every deviation from the invitation to bid is material. It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition. Robinson Electrical Co., Inc. v. Dade Co., 417 So. 2d 1032, 1034 (Fla. 3d DCA 1982). See also Rule 13A-1.02(9), Fla. Admin. Code, which reserves to the agency the right to waive any minor irregularities in an otherwise valid bid, a minor irregularity being a variation which “does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders or does not adversely impact the interests of the agency.” In this case, it is not the variation at issue, i.e. a yield of 3.5 gallons instead of 1 gallon, which “affects the price of the bid.” Rather, it is that Bernard’s beverage mix contains a more concentrated sweetener than Tropabest’s so that a pound of mix yields more beverage. Neither Tropabest nor Bernard was restricted by the specifications to a particular “strength” of mix or type of sweetener. Tropabest does not argue that it had a product which could have bettered Bernard’s price, if only it had known a 3.5 gallon per pound yield would be acceptable, thus giving Bernard an unfair advantage. Its mix simply was less concentrated and yielded less than Bernard’s, therefore costing more per serving. It was this characteristic and not the variation complained of which allowed Bernard to undercut Tropabest’s price.
The Court of Appeal therefore upheld the contract award decision as the bidder that offered the higher-yielding juice concentrate represented better value for money. As this case illustrates, purchasing institutions should be careful in how they draft their specifications, since contract award decisions can be subject to detailed scrutiny in post-award bid protests and can be subject to different interpretations when they are ambiguous.
