This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its January 1989 decision in Department of Corrections v. Rainbow Properties, the Florida Division of Administrative Hearings reinstated a contract award after finding that the government improperly revoked that award based on an informal complaint by a non-compliant competing bidder. The case dealt with a tendering process for an office space lease for the Department of Corrections. After the Department announced that the contract had been awarded to C. Leon Brooks, Rainbow Properties, an unsuccessful competing bidder that had been rejected as non-compliant, raised an informal complaint. In response to that complaint, the Department announced that it was revoking the contract award to Brooks and rejecting both bids. Brooks then filed a notice of protest, challenging the rejection of its bid.
While the Court determined that the Rainbow Properties bid was properly rejected for failing to provide the required square footage, parking spaces, and architectural designs, it ruled that the Brooks bid was improperly rejected as non-compliant after the Department held an improper protest meeting with Rainbow Properties:
This brings to the forefront the question of the propriety of the Department conducting an informal meeting with one of the two contending bidders, after the bids were opened and the initial award had been made to Brooks. That meeting resulted in the Department changing its position and on May 11, 1988, announcing to the parties that the bids would be rejected for alleged non-responsiveness, and the project rebid. In this regard, the above quoted statutory language only provides for such an informal meeting with “the parties” presumably meaning all parties to a bid dispute proceeding and not just one of them. That informal discussion, under the terms of the statute quoted above, can only occur within seven days after receipt of the formal written protest which at the point of the meeting of May 10, had not even been filed yet. The language … “within seven days, excluding Saturdays, Sundays and legal holidays, of receipt of a formal written protest…” can only be interpreted to mean within seven days after receipt of a formal written protest.
The Court found that the relevant statutory provisions did not provide any “mechanism and authority to the agency to conduct such discussions or meetings with one of two contending bidders, without the presence of the other bidder, and even if the other bidder had been present, the statute provides that such meetings and discussions can only occur after receipt of a formal protest.” The Court then found that Department’s rejection of the Brooks bid, which was based on the Department’s reinterpretation of the solicitation requirements at the unauthorized meeting with Rainbow Properties, constituted an arbitrary override of the evaluation committee’s initial assessment of the Brooks bid:
The agency in this instance had its own committee evaluate the bids, determine that Brooks’ bid was sufficiently responsive to justify awarding to it and then merely because its interest was “piqued” as a result of its informal discussion with the protestant, revisited that question and determined that the “winning bidder’s” bid should then be rejected also. Such a result, stemming from the agency’s conduct of ex parte discussions with the protestant bidder, in a manner not authorized by statute, would clearly be arbitrary. Unrefuted evidence of record shows that the discussion with Rainbow, outside Brook’s presence, is what prompted the agency to revisit its initial decision and change its position to Brooks’ detriment. The evidence of record and the above findings of fact simply contain no legitimate justification for the rejection of the bids and proposed rebidding of the project.
The Court therefore overruled the decision to reject the Brooks bid and ordered the Department to reinstate the contract award to Brooks.
As this case illustrates, purchasing institutions should be careful to follow proper evaluation and bid protest procedures. Additionally, purchasing institutions should not approve resolutions to informal bid protests, since failing to follow due process can undermine the validity of any resulting contract award decisions.
