This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its November 2003 decision in Royal Concrete Concepts, Inc. v. Broward County School Board, the Florida Division of Administrative Hearings upheld the Broward County School Board’s decision to cancel a tendering process due to flaws in its specifications and evaluation criteria. The case dealt with a tendering process for the provision of relocatable classroom buildings. As the Court summarized, after the bids were submitted, significant concerns were raised within the School Board over the lack of clarity in the specifications and evaluation criteria:
The issue of how to review the bid proposals was not adequately anticipated by the Respondent. From the outset the bid document evolved from unusual circumstances. Whether the bid document was intended to be a request for proposals (RFP) or an invitation to bid (ITB) was a primary confusion among the Board’s staff. If the proposals were to be deemed responsive or not and then ranked solely on price (thus making the bid process more like an ITB) how could staff effectively determine the threshold question of responsiveness? If the proposals were to be ranked based upon a point or qualitative approach (more like an RFP) where were the criteria by which to score the proposals? In fact, there were no objective criteria disclosed in the bid document by which a proposal could be evaluated. More curious is that no bidder brought this lack of evaluation criteria to the Board’s attention during the mandatory bidder’s conference. Moreover, no one challenged the bid specifications. Presumably, the bidders believed it was an “all or nothing” award. That is, if they were the lowest responsive bidder, they would receive the award. The question of who would be responsive and how that decision would be resolved did not come to light until after the bids had been opened.
Given the above-noted flaws, the School Board decided to cancel the process. While the complainant challenged that decision, the Court ultimately upheld the cancellation:
In order to cure the problems discovered through the review of this bid process the Board elected to take the matter back to the drawing board and to begin the process anew. This decision will hopefully result in clear specifications and review criteria. If the Board wants a “concrete reinforced structure” it can define specifically what that term means. If the Board is willing to accept a steel structure with an applied concrete coating, it can do so. If hybrid buildings are acceptable all parties will know what is acceptable. More important, the Board will be able to determine and disclose if price alone will drive the award of the bid. If the Board wants the flexibility to award design points for choosing a higher standard (and thereby assume a higher cost) all parties will be aware of the potential to build that flexibility to their proposal. Currently, there is no way to determine if the parties were submitting the same quality product. No assessment was or could be made to yield that determination. Accordingly, the Board’s decision to reject all proposals must be upheld.
As this case illustrates, to reduce legal challenges, purchasing institutions should avoid using their termination rights as a substitute to drafting clear specifications and evaluation criteria.
