This article is an excerpt from The Art of Tendering: A Global Due Diligence Guide, which is available for purchase.
In its September 2012 decision in Traveler Elevator v. Florida School for the Deaf and the Blind, the Florida Division of Administrative Hearings upheld the Florida School for the Deaf and the Blind’s decision to cancel the tendering process and re-tender the contract due to irregularities at a mandatory pre-bid meeting. The case dealt with an Invitation to Bid (ITB) process for an elevator repair and maintenance contract. As the Court noted, the solicitation included the requirement of a mandatory pre-bid meeting. One of the bidding teams, Otis, arrived late for that meeting after a computer failure at the building security desk delayed the issuance of visitor security badges:
Ms. Bowden had read a couple of pages of the contract, when Mr. Ramos, Mr. Stanley, and Mr. Baskin came into the meeting. Ms. Bowden said, “You’re late.” As soon as she did so, Mr. Arsenault instinctively looked at the clock on the wall. He testified that it read 10:07 a.m. Mr. Baker also testified that it was seven or eight minutes past 10:00 when the men arrived. One of the men responded to Ms. Bowden’s comment with the statement that police security had already called the secretary. Ms. Bowden left the conference room and went to Ms. Thompson’s office. Ms. Bowden asked Ms. Thompson if she knew why the bidders had been late. Ms. Thompson explained that she had received a call from Officer Hardy, stating that the Campus Police had held them up there. Ms. Bowden thanked her and returned to the conference room.
Once back in the conference room, Ms. Bowden restarted the meeting. She began reading the contract again from the beginning. No questions had been asked before the late arrivals, and there was no information that had been given earlier that was not repeated when the meeting was restarted. The late-bidders were allowed to sign the attendance roster. No one protested that late-bidders were allowed to attend the meeting, that the meeting was restarted, or that the late- bidders were allowed to sign the attendance roster.
Ms. Bowden was aware that the ITB stated that any bidder late to the pre-bid conference would not be eligible to sign the attendance roster and could not submit a bid. However, based on the information she had from Ms. Thompson, Ms. Bowden decided that it had been the School’s fault, and not their own, that the late bidders had not arrived at the conference room on time. She allowed the late-bidders from Kone and Otis to attend the pre-bid conference because under the circumstances she thought their late arrival was a minor irregularity. As indicated in the ITB, attendance at the pre-bid conference was mandatory to allow all potential bidders to receive the benefit of answers to their own and others’ technical questions firsthand. Ms. Bowden had received no questions prior to the entry of the Kone and Otis representatives, and she started the meeting over to ensure that all bidders received the same information.
While the complainant never took issue at the bid opening, nor when they discovered that Otis had submitted a bid, they later challenged the outcome after discovering that Otis was selected as the winning bidder. As the Court summarized, due to the bid protest and the concerns over the validity of the mandatory pre-bid meeting, the School decided to cancel the contract award and re-tender:
On June 14, there was a public bid opening, which was attended by Mr. DeWitt of Traveler as well as Mr. Baskin and another representative of Otis, among others. Traveler could hear who the bidders were, and was aware that Otis had been allowed to submit a bid. At that time, Traveler made no objection that Otis had been permitted to bid.
The School applied the same criterion to all bids when evaluating them. Rankings in various categories were combined pursuant to a weighted formula to arrive at a total weight for each bidder. In the overall ranking of the bids, Otis ranked first, while Traveler came in second. On June 18, 2012, at 9:30 a.m., the Bid Tabulation and Notice of Award Recommendation was posted. The School prepared and disseminated it to each of the bidders. It indicated that the School was recommending that the contract be awarded to Otis as the lowest responsive bidder. Traveler was listed as the second lowest bidder.
Traveler e-mailed a Notice of Protest in response to the School’s recommendation about 10:49 a.m. on June 18, 2012, followed the same day by a formal protest. As grounds for its protest, Traveler contended that Otis had been late to the pre-bid conference, and pursuant to the procedures set forth in the ITB should not have been allowed to sign the attendance roster or submit a bid. Ms. Bowden still believed the late arrival of Otis was a minor irregularity, but she could not know if an administrative law judge would necessarily agree. Traveler was contesting that conclusion, claiming that the failure of Otis was a material deviation from the explicit bid specifications and that the School was required to reject the Otis bid and award the contract to Traveler. She testified that if she had determined that the late arrival to the pre-bid conference by Otis had been a material deviation, and awarded the contract to Traveler, that she believed that Otis would surely have protested. After careful consideration and discussions with counsel, Ms. Bowden decided to reject all bids.
While the complainant challenged the cancellation decision, arguing that it should have been awarded the contract, the Court ultimately agreed that the process should be cancelled and re-tendered due to confusion caused by the procedural irregularity at the mandatory pre-bid meeting. As this case illustrates, procedural irregularities should be avoided whenever possible since they subject a tendering process to potential subsequent legal challenges.
