This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its May 2002 decision in City of Sweetwater v. Solo Construction Corporation, the Florida Third District Court of Appeal granted an injunction against the City of Sweetwater after the bidder, Solo Construction Corporation, was rejected based on hidden evaluation criteria and political interference. The case dealt with a municipal Invitation to Bid (ITB) for a stormwater improvement project. The complainant submitted a $2.2 million low bid, but that bid was rejected. Instead of awarding to the low bid, the City selected the third-lowest bid, which was $171,000 higher than the low bid and included a proposed construction schedule that was 90 days slower than the low bid. The low bidder challenged this award.
As the Court noted, while the low bidder was found to be the lowest “responsible bidder”, meaning that its bid complied with the eligibility requirements in the solicitation document, the City mayor appointed a three-member panel to identify the “most responsible” bidder based on undisclosed evaluation criteria that were inconsistently applied by that panel:
The bid review committee members were given “Contractor Selection Scoring” sheets by the Mayor and asked to find the most responsible bidder. The contractor selection scoring sheets included numerous categories, which were not advertised as part of the bid manual and included columns to score and compare each bidder. (Plaintiff’s Exhibit 6.) The scoring criteria for the various and sundry categories was not advertised, or defined in the bid documents. (Plaintiff’s Exhibit 1.) The members of the selection committee were not given any directions or standards as to how the bidders were to be scored. Ultimately, the manner in which bidders were scored was not uniform. (Testimony of Greg Jeffries, Domingo Moya, Carlos Lanza.)
The testimony given by the bid committee members revealed a wide disparity in how bidders were scored. Carlos Lanza did not recall completing his contractor selection scoring sheet and as he had only recently been appointed to his position, did little to evaluate the bidders. Domingo Moya did not perform any investigation into the bidders, and scored his selection sheet based solely upon the City of Sweetwater Police Department’s Background check. Greg Jeffries made some calls to public agencies to attempt to ascertain recommendations about the bidders, but admitted that such recommendations could be arbitrary. (Testimony of Greg Jeffries, Transcript p. 90 lines 14-15.) All of the bid committee members compared the various bidders based upon their total scores to arrive at a winner or most responsible bidder. (Plaintiffs Exhibits 6 and 10). United Engineering Corporation was selected for award as the most responsible bidder as it was scored the highest on the Contractor Selection Scoring Sheets.
The Court concluded that the use of hidden criteria resulted in a seriously flawed evaluation process that was prejudicial to the low bidder, and that, to protect the public interest and integrity of the bidding process, the low bidder should have been awarded the contract:
As the lowest responsive, responsible bidder, Solo Construction Corporation has a clear legal right to the award of the Contract for Stormwater Improvements from the City of Sweetwater. As the lowest responsive, responsible bidder, Solo has suffered an injury which is different than that of the community as a whole and does not have an adequate remedy at law. Mid-American Waste Systems of Florida, Inc. v. City of Jacksonville, 596 So.2d 1187 (Fla. 1st DCA 1992), Miami-Dade County v. Church & Tower, Inc., 715 So.2d 1084, 1086 (Fla. 3d DCA 1998).
There is a great public interest in ensuring that contracts be awarded to effectuate the intent of the competitive bid laws. See Engineering Contractors of South Florida, Inc. v. Broward County, 789 So.2d 445 (Fla. 4th DCA 2001); City of Miami Beach v. Klinger, 179 So.2d 864 (Fla. 3d DCA 1965).
The Court also noted that Florida’s statutory framework entrenches fair process requirements into the public bidding process and prohibits arbitrary contract award decisions:
Florida’s competitive bid statutes are enacted for the protection of the public. They create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and confers upon them reciprocal obligations. The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received. The principal benefit to the public authority is the opportunity of purchasing the goods and services required of it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the bid based upon personal preference.” Marriott Corp. v. Metro. Dade County, 383 So.2d 662, 665 (Fla. 3d DCA 1980)(quoting Hotel China and Glassware Co. v. Bd. of Pub. Instruction, 130 So.2d 78, 81 (Fla. 1st DCA 1961)).
The purpose of competitive bidding is to secure the lowest responsible offer. See Robinson Elec. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982). While a public authority has wide discretion in award of contracts for public works on competitive bids, such discretion must be exercised based upon clearly defined criteria, and may not be exercised arbitrarily or capriciously. Liberty County v. Baxter’s Asphalt & Concrete, Inc., 421 So.2d 505 (Fla.1982), Miami-Dade County, supra, at 1088, City of Miami Beach, supra.
The Court concluded that the introduction of the hidden evaluation criteria was based on fundamentally flawed logic, resulting in the arbitrary and legally invalid award to the third-lowest bidder:
The City of Sweetwater published an Invitation to Bidders, which indicated that the Stormwater Improvement Contract would be awarded to the lowest responsible bidder. Solo Construction Corporation was the lowest responsible bidder. The bid review committee commenced a competition to find the most responsible bidder based upon categories and criteria that were not advertised in the bid documents. The committee members completed their scoring in a random and sometimes haphazard manner. Rather than following the award process advertised in the bid documents or provided in the City Code, the award process for the Stormwater Improvement Project seemed to be improvised as it went along and was based upon the fundamentally flawed logic that the project could be awarded to the most responsible bidder.
In Decarion v. Monroe County, 853 F.Supp. 1415 (S.D.Fla.1994) the United States District Court for the Southern District of Florida defined arbitrary and capricious for substantive due process purposes to include acts taken with improper motive, without reason or for a reason which is merely pretextual. The City of Sweetwater’s actions, in attempting to award the contract to the most responsible bidder as opposed to the lowest responsible bidder, demonstrates that the attempted award was made without reason, or for a reason that is merely pretextual in that it is devoid of any legal basis. Accordingly, the City’s decision to award the contract to United Engineering Corporation was arbitrary and capricious and based upon criteria that were neither included in the bid documents nor clearly defined in any manner whatsoever. The City of Sweetwater’s actions in attempting to award the contract to United Engineering Corporation are, not only, arbitrary and capricious, but also, are contrary to Florida’s competitive bid statutes.
Given these serious procedural flaws, the Court granted an injunction against the City, prohibiting it from awarding the contract to the third-lowest bidder, and issued a writ of mandamus, ordering the mayor and commissioners to award the contract to the low bidder.
As this case illustrates, evaluation irregularities can result in the voiding of contract awards and court orders redirecting those awards to protesting bidders when the fair process rights of those bidders are breached.
