Bid Protests Under the Administrative Procedure Act: The Standard of Review, the Protest Hearing, and Further Review.

Author:Mendez, Victoria
Position:City, County and Local Government Law - Florida

The touchstone of our democracy is federalism with powers within the government separated horizontally and vertically. The purpose of such separation is to ensure that each branch of government, both at the federal and state levels, functions efficiently without becoming too powerful. That stated, the Administrative Procedure Act (APA) was adopted in Florida in 1961, and codified in F.S. Ch. 120, to serve this principle of separation of power.

With the APA in effect, Florida citizens are equipped with the ability to interact with public agencies in their decision-making processes and challenge their decisions should they act arbitrarily or capriciously. Conversely, public agencies are empowered with rule-making authority so long as they act in accord with the procedures provided for by F.S. [section]120.54. (1)

In the context of bid protests, as addressed in this article, the APA oversees procedures for which purchasing contracts for goods or services may be solicited, evaluated, awarded, and protested. This article presents and analyzes the current procedures for bid protests under the APA or similar local procedures for protests that follow its most important aspects.

Governing Laws and Jurisdiction

Public agencies have no common law duty to offer competitive bidding for every purchase of goods or services. (2) Competitive bidding is statutorily mandated for the protection of the public, not only by ensuring fair costs, but also by protecting against collusion, favoritism, and fraud in the award of public contracts. (3) In Florida, the four main statutes that govern competitive bidding are [section]112.08, Ch. 255, Ch. 287, and Ch. 120, where the APA is codified. Section 112.08 covers the purchase of group insurance for public officers, employees, and certain volunteers. Chapter 255 provides the procurement process for public construction works. It also provides for a scenario in which proposals are unsolicited by a public agency. (4) Part I of Ch. 287 governs procurement of personal property and services. Section 287.055, also referred to as Consultants' Competitive Negotiation Act, covers professional services. Regarding Ch. 120, it is important to note that municipalities are not automatically bound by the APA, but they may adopt relevant parts under their own ordinances and codes.

Section 287.001 reflects the legislative intent that maintaining fair and open competition in public procurement through the use of competitive solicitations is essential for the effective and ethical procurement of commodities and contractual services. (5) Section 287.001 states that, to accomplish this objective, part I of Ch. 287 provides a system of uniform procedures to be used by state agencies in managing and procuring their commodities and contractual services, requires that detailed justification of an agency's decisions in those procurements be maintained, and requires adherence by the agency and the vendor to specific ethical considerations. (6) Per [section]287.057, a competitive solicitation process must be used for the procurement of commodities or contractual services in excess of the threshold amount set forth in [section]287.017(2), which is currently $35,000.

The three main competitive solicitation processes, as set out in [section]287.057, are 1) invitation to bid (ITB); 2) request for proposals (RFP); and 3) invitation to negotiate (ITN). Each of these processes has its own criteria as defined within the same statutory provision. Public contracts of the state of Florida are also subject to Ch. 120, including [section]120.569(1), which governs "proceedings in which the substantial interests of a party are determined by an agency." Additionally, [section]120.57(3) provides the specific procedures for protests to contract solicitations or awards. These procedures apply to state agencies and other organs of the state executive branch; while at the local level, cities and counties may adopt their own processes for bid protests. (7)

Under [section][section]120.569 and 120.57(1) and (3), the Division of Administrative Hearings (DOAH) has jurisdiction to hear procurement protests and issue recommended orders for the same. The DOAH conducts a de novo proceeding to decide whether a public agency acted "contrary to the agency's governing statutes, the agency's rules or policies, or the [procurement] specifications." (8) In such proceedings, deference is given to the agency's decision. (9) DOAH does not substitute its judgment for that of the agency. (10)

What Can Be Protested?

Parties to a competitive procurement process can protest the decision of a public agency regarding a solicitation (an ITB, RFP, or ITN), a recommendation for award, and a rejection of all bids, proposals, or replies.

The filing of a bid protest operates as a stay of the contract award process and prevents final agency action from being taken until after the protest proceeding is concluded. (11) For example, in U.S. Service Industries-Florida v. State of Florida Dept. of Health and Rehabilitative Services, 385 So. 2d 1147 (Fla. 1st DCA 1980), the court held that the state agency was required to grant the losing bidder on a janitorial service contract an...

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