Fighting for public dollars: procedures and pitfalls of protesting government bid awards.

• Author: Cea, William J.
• Position: Florida

With the economy mired in a recession, unemployment has soared to double digits in Florida, and to the highest levels since 1975. (1) New contracts are scarce for many businesses which previously relied on Florida's seemingly unending growth and prosperity. Businesses of all sizes are now scrambling to find good paying work, forcing many private companies to seek public sector projects. Since the $787 billion economic stimulus package was signed into law on February 17, 2009, only a small portion of those funds have been released. As more funds become available in Florida, greater opportunities will exist for contractors seeking public work projects. Recognizing that competition will be fierce, unique opportunities to capture public work may evaporate unless contractors adhere to the deadline driven procurement process. In the wake of a difficult economy, bid protests will likely multiply given the competitive fight for dollars to contractors operating in financial survival mode. Counsel for successful and unsuccessful bidders must be mindful that bid protests have a unique procedure requiring short-fused appellate style contests requiring intense submittal deadlines and split-second decision making. This article will review the procedures and pitfalls of the protest process and practices to be employed when representing bidders in competition for public work under F.S. Ch. 120, the Administrative Procedure Act (APA).

Due to the current economic climate, competition for public projects is intensifying. (2) For many small and midsize contractors, the award of a single public contract can make or break their business. Generally, public contracts for commodities or services valued at $25,000 or greater are subject to competitive procurement. (3) Political subdivisions must also competitively award contracts for public construction projects estimated to cost greater than $300,000. (4)

The Public Procurement Process

Projects may be solicited through a variety of methods, such as invitations for bid or requests for proposals. In an invitation for bid, price is the primary consideration. In a request for proposal, there may be different or additional criteria upon which the proposals are evaluated. (5) Other methods may focus on nonprice criteria, such as the qualifications of an entity, which are typically solicited through a request for qualifications. (6) When cost is the primary factor, the bidder found to be the lowest, most responsive, and most responsible will be awarded the contract. (7)

Generally, bids are evaluated by agency staff and are tabulated to determine the lowest priced responsive and responsible bidder. Where price is not the only consideration, proposals may be evaluated by the procuring entity's selection committee. The bidders are then ranked according to the advertised criteria, and the top-ranked firm or firms are selected to enter into contracts with the procuring entity. Firms that are not selected, but believe they should have been, may have an opportunity to challenge the award through a protest. However, there are limitations as to who is eligible to protest and the grounds for a protest.

Procurements by state agencies are governed by Florida Statutes and the Florida Administrative Code (FAC). In addition, local governments, such as counties and municipalities, have their own rules and procedures. (8) It is of paramount importance for counsel to be knowledgeable of the applicable statutes and rules.

Bid Protests

The Third District Court of Appeal in Hotel China & Glassware Co. v. Bd. of Pub. Instruction, 130 So. 2d 78 (Fla. 1st DCA 1961), succinctly described the purpose of competitive bidding as follows:

Florida's competitive bid statutes ... create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received. The principal benefit flowing to the public authority is the opportunity of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference. (9)

F.S. [section]120.57(3), sets forth the procedures that each agency is required to adopt for bid protests. First, each agency is required to electronically post all decisions or intended decisions with regard to a solicitation, contract award, or exceptional purchase. (10) The notice must contain the statutory language stating that the failure to file a protest of the decision within the time set forth in F.S. [section]120.57 shall constitute a waiver of the protest proceedings.

Not all bidders have standing to protest. Under F.S. [section]120.57(3), a protesting party must demonstrate that its substantial interests will be affected by the proposed agency action,11 and will result in an injury to the protesting party of sufficient immediacy to justify a hearing. Additionally, it must be shown that the injury is of the type that the statute under which the agency is acting is designed to protect. (12) A second-ranked bidder has standing to protest. (13) It has been held that the third-ranked bidder, or below, does not have standing to file a bid protest where the second-ranked bid was not improper, because even if the award to the top-ranked firm was made in error, the...