This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 2018 decision in Tallahassee Corporate Center, LLC v. Florida Fish and Wildlife Conservation Commission, the Florida Department of Administrative Hearings upheld the Florida Fish and Wildlife Conservation Commission’s decision to reject a materially non-compliant bid. The case dealt with an Invitation to Negotiate (ITN) for the provision of 53,000 square feet of leased office space. While the complainant, named below as TCC, challenged the rejection of its bid for non-compliance, the Court found that the bid contained significant irregularities that, if accepted, would give that bidder an unfair advantage over other bidders:
Based upon the foregoing, TCC’s bid submission added a tenant-improvement cap, failed to comply with the broker commission rate, failed to provide supporting documents to demonstrate proof of property ownership, and added additional conditions regarding compliance with the ITN requirements. The information requested and terms of the ITN were required for TCC’s bid to be responsive. TCC did not file a challenge to the specifications or any of the requirements of the ITN. It is now too late for such a challenge. TCC’s inclusion of a tenant-improvement allowance limits the amount that would pay for improvements. The lower broker commission increases the profit advantage for TCC more than for other bidders, which would be an unfair advantage over other bidders.
The Court determined that the irregularities in question constituted material deviations, which rendered the bid non-compliant and ineligible for acceptance. The Court further explained that deviations which affect price should be considered material when they give a bidder an advantage over other bidders:
In Florida, there are two criteria that are used to determine whether a deviation is material as follows: (1) whether the effect of waiving the deviation would be to deprive the agency of assurance that the contract will be performed and guaranteed according to its specified requirements; or (2) whether the deviation is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition. Id. The First District Court of Appeal has found that, by definition, anything affecting the price of a bid is not a minor irregularity and may not be waived by the agency. Rather, a deviation affecting price is material and may not be waived by the agency. Mercedes Lighting & Elec. Supp., Inc. v. Fla. Dep’t of Gen. Servs., 560 So. 2d 272, 278 (Fla. 1st DCA 1990). TCC’s deviations from the ITN requirements were material. As stated above, in the findings of fact above, the deviations affected price and afforded TCC a competitive advantage over other bidders.
In finding that the deviation was material, the Court upheld the Commission’s decision to reject the non-compliant bid.
As this case illustrates, purchasing institutions should tread carefully when distinguishing between minor irregularities that are not fatal to the validity of a bid and material deviations that render the bid non-compliant and legally incapable of acceptance, since the decision to either accept or reject the bid can result in a legal challenge.
