This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its April 2011 decision in Bluechip Energy LLC v. University of Central Florida, the Florida Division of Administrative Hearings upheld the right to reject a technically non-compliant bid. The case dealt with an Invitation to Bid (ITB) issued by the University of Central Florida (UCF) for emergency battery back-up systems installations for school buildings designated as emergency shelters. After submitting a $6.4 million bid, the complainant was notified that its bid was rejected for failing to meet the required specifications. The complainant wrote the UCF, claiming that the grounds for its rejection were baseless and asserting that it would initiate investigations into the alleged conflict of interest of the UCF employees involved in the bidding process:
Due to the spurious and baseless nature of the issues raised by your November 19 letter we insist UCF immediately reinstate and reconsider our bid. In the absence of that we will have no choice but to initiate a media investigation and congressional and Florida Energy Commission inquiry into the administration of UCF bid 1030LCSAR and the possible conflict of interest of UCF employees and related parties.
However, the Court found that the complainant failed to provide any evidence regarding the alleged conflict of interest of the UCF employees. The Court agreed that the rejected bid failed to meet the minimum specifications required to ensure that the proposed back-up system would actually turn on and work in the event of an emergency:
Appendix 1, section 2(C)(8), of the ITB states: “The battery bank shall have a minimum usable capacity (at C/100) of 25kWh.” BlueChip’s bid specifies a battery bank capable of producing and delivering a maximum energy output of 24 volts to its specified Sunny Island 5048US inverter. In order to turn on and function, the Sunny Island 5048US inverter requires a minimum energy input of 41 volts from the battery bank. The 24 volts produced by the battery bank specified by BlueChip is insufficient to turn on the inverter. Therefore, the PV system bid by BlueChip would not be functional and would not meet the minimum usable capacity required by the ITB, because the inverter could not be activated by the battery bank.
While the complainant argued that the technical non-compliance was a “minor irregularity” that could be cured after award during the system certification process, the Court disagreed, finding that the technical non-compliance was material and that the complainant could not correct the defect after the bid deadline, as this constituted an unfair advantage over other bidders:
The failure to bid a system that would work is not a minor irregularity. To allow BlueChip to bid a nonfunctional system and make corrections to the system after the bids were opened in order to make the system functional would give BlueChip an unfair advantage over the other bidders.
The Court therefore dismissed the complaint, rejecting the argument that the decision to disqualify the bid was arbitrary due to the complainant’s failure to adhere to the solicitation’s specifications.
