This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2015 decision in Community Maritime Park Associates Inc. v. Maritime Park Development Partners LLC, the U.S. Court of Appeals struck down a contract award for violating a Florida state purchasing statute due to a flawed evaluation and award process that saw a selected bidder substituted with another firm during contract award negotiations.
The case dealt with a Request for Quotations (RFQ) for professional urban development services issued by Community Maritime Park Associates, Inc., a non-profit organization created by the City of Pensacola, to oversee the City’s Community Maritime Park project. The Court of Appeals found that the procurement was governed by Florida’s Consultants’ Competitive Negotiation Act (CCNA) and that the contract award was legally void since it breached the requirements of that statute. In its decision, the Court of Appeals noted that the relevant statutory provisions required contract award negotiations to proceed based on the results of prior stages of the bidding process and found that the attempt to substitute a new firm after the originally selected firm became insolvent was in breach of those provisions:
The claim at the core of CMPA’s action is that MPDP improperly substituted itself for Land Capital late in the CCNA-mandated process, once Land Capital became insolvent. The CCNA makes clear that the competitive negotiation procedure—the final stage in the process—must proceed based on the results of the earlier stages. Fla. Stat. § 287.055(5)(a) (requiring an agency to negotiate with “the most qualified firm[,]” which plainly refers to the set of firms whose qualifications and proposals were already under review). The district court found that MPDP’s sudden appearance at the negotiation stage took the process out of compliance with the CCNA because MPDP was not a firm identified during the RFQ or one that responded to the RFP. We agree.
Given this breach of the applicable statutory provisions, the appeal court concluded that “the Agreement was void as a matter of public policy”.
As this case illustrates, public institutions that are subject to procurement statutes should ensure that their evaluation and award procedures comply with all applicable statutory requirements since non-compliance can result in undermining the legal validity of a contract award.
