This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its November 1982 decision in Bergeron Land Development, Inc. v. Department of General Services, the Florida Division of Administrative Hearings struck down a Department of General Services decision to cancel and re-tender a contract opportunity. The case dealt with a tendering process call for the rough site preparation and grading contract for a reception centre and correctional institution in Dade County, Florida. The cancellation was due to an allegedly material error in the solicitation.
After the release of the solicitation document, one of the competing bidders, Capeletti Brothers, Inc., wrote the Department stating that the site access road in the specifications was a private road on private property, and that the bidder enjoyed an exclusive right-of-way to that road, over which it had erected a gated fence to block third-party access. Despite the correspondence, other bidders were not notified of this issue until after the bids were submitted. A competing bidder, Bergeron Land Development, Inc., submitted a $1.99 million low bid, which was $415,000 lower than the government’s estimated costs. Capeletti Brothers then initiated a bid protest, claiming that all other bids should be rejected as non-compliant. Capeletti Brothers further claimed that they should be awarded the contract based on their $2.57 million bid and sole ability to perform the required work.
Subsequently, the Department, named as DGS below, notified all bidders that it was cancelling the bidding process due to a material omission in the solicitation document regarding access to the job site. Bergeron then brought a legal challenge, arguing that it had submitted a compliant low bid and should be awarded the contract. The Court agreed with Bergeron, finding that the decision to cancel the process due to the omission of allegedly material information was speculative and that access to any particular road was never represented in the solicitation. Additionally, the Court found that there was no proof Bergeron had relied on access to the road in question to prepare its bid, nor was there proof that access to the blocked road was material to Bergeron’s ability to perform the contract:
To simply infer from the face of the documents themselves that this representation was in any way misleading to the other bidders, none of whom were called to testify, would require the rankest form of speculation. It is, therefore, concluded, as a matter of law, that the contract documents did not contain a mistake of material fact concerning access to the job site; indeed they contained no representation concerning access at all.
Neither does the record support DGS’ contention that Bergeron cannot perform the contract because of lack of access to the job site. Bergeron has acknowledged in the course of this proceeding that it is its responsibility to obtain that access, and that it is willing to abide by the time requirements of the contract in performing its obligations notwithstanding this fact. In the face of this commitment, DGS’ fear of potential claims for delay damages would appear unfounded.
Finally, the error concerning the length of the entrance road to be built on the project site is not a material misrepresentation, in that no evidence was adduced to show that this mistake in any way affected the amount of any bid submitted in response to the invitation to bid.
Since the Court concluded that the tendering process was improperly cancelled, it ordered the government to award the contract to the complainant, based on the complainant’s low bid.
