This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its March 1994 decision in National Medical Care, Inc. v. Department of Corrections, the Florida Division of Administrative Hearings upheld the Department of Corrections’ decision to cancel its tendering process due to evaluation irregularities. The case dealt with a Request for Proposals (RFP) for health services. As the Court summarized, the Department, referred to below as the DOC, discovered irregularities in its price evaluation, along with potentially improper interference by the incumbent with members of the evaluation team:
On November 24, 1993, the DOC notified all bidders of its intent to reject all bids. In addition to the initial miscalculation of price in the bid, the DOC discovered what it considers to be other irregularities in the evaluation in this case. BMA was the existing provider at the time the RFP issued. The bid evaluators worked closely on a day to day basis with Petitioner’s employees. The DOC believes the evaluators preferred that Petitioner be awarded the contract and that the evaluators were not objective. During the process of evaluation, the evaluators were provided a letter from a party representing one of the bidders which contained allegations regarding negative background information on other bidders. The DOC believes that the letter should not have been given to the evaluators and that access to the letter further affected the evaluator’s ability to be objective.
While the complainant took issue with the cancellation, arguing that its competitors would know its pricing in any subsequent re-tendering process, the Court ruled that the cancellation decision was valid under the circumstances and that the disclosure of bidder pricing was an inherent part of the public bidding process in Florida:
Petitioner’s chief underlying complaint in this case is that DOC rejected all bids after NMC’s competitors were privy to the contents of BMA’s submission. At some point in the process, the access to bid submissions by competitors (as well as the general public) is an attendant condition in the public procurement process. Petitioner argues that its problem stems from the DOC’s “back door” exit through the RFP provision providing for the agency to reject all bids when to do so is in the best interest of the Department. But the RFP clearly informed all bidders, in advance, that the “back door” exit might be available to DOC and NMC has admitted facts which clearly demonstrate that, in this case, rebidding is in the agency’s best interest.
The Court therefore upheld the Department’s decision to cancel its tendering process, finding no improper motive in the Department’s decision.
As this case illustrates, since tender cancellation decisions remain subject to legal challenge, those decisions should only be made in appropriate situations and for well-documented reasons that can withstand legal scrutiny in a bid protest.
