Act Promptly To Avoid A Public Works Bid Protest Waiver
William C. Last, Jr.
Preceding articles have reviewed the standards for the award of a competitively bid California public works project contract. This article will discuss, in greater detail, the bid protest process.
An Overview of the Competitive Bidding Requirements
As the earlier article stated, there are primarily two statutes that mandate that California public works projects be competitively bid. The competitive bidding laws are intended “to eliminate favoritism, fraud and corruption in the awarding of public contracts.” Generally, the project can only be awarded to the lowest responsible bidder who submits a responsive bid.
A responsible bidder must typically be a licensed contractor who has not been barred from government contracts for prior misconduct. In addition, a responsible bidder must have the equipment and skills necessary to perform the work in question or have a subcontractor who has those particular skills.
The bid must also be responsive. Quite simply, the bid must be an unconditional offer to provide the goods and services that are being bid upon and the bid must comply with all the bid procedures that are set forth in the requirements of the bid documents.
Generally, a California public agency is barred from awarding a contract to bidder who does not meet all three requirements. However, there are exceptions to the bar on awarding the contract to a bidder who fails to meet all three requirements. For example, a public entity can reserve the right to waive minor irregularities relative to the responsiveness of the bid. However, if the entity waives the regularity it cannot result in the bid process being unfair or give the low bidder an unfair advantage over the other bidders.
The Bid Protest Process
Generally, each public entity has its own specific bid protest procedure. The following discussion is an overview of the process. If you intend to file a protest, you should review the specific procedures for the public agency that is accepting the bid which you intend to protest.
1. The Notice of Award.
The first step is the opening of the bid and the public agency’s notification to the public of who will be awarded the contract.
2. File A Written Protest.
Most bid packages contain the procedures for filing a bid protest. For example, in the case of MCM Construction, Inc. v. City and County of San Francisco the appellate court reviewed protest requirements that the City set forth in the bid package for the project. The Court concluded that those requirements were a prerequisite to pursuing a bid protest. In the MCM case, the court held that the unsuccessful bidder waived its right to pursue a bid protest since it failed to file a timely bid protest. To avoid a bid protest waiver, it may be advisable to file your protest immediately after the bid opening rather than wait for the agency to announce who was awarded the contract.
The San Francisco bid protest procedures provide a framework that should be followed if the public agency that you are lodging your bid protest with does not have formal bid protest procedures. The City’s procedures include the following requirements:
“a. Any bid protest must be submitted in writing.....before 5 pm of the 10th business day following bid opening.
b. The initial protest document shall contain a complete statement of the basis for the protest.
c. The protest shall refer to the specific portion of the document which forms the basis for the protest.
d. The protest shall include the name, address and telephone number of the person representing the protesting party.
e. The party filing the protest shall concurrently transmit a copy of the initial protest document and any attached documentation to all other parties with a direct financial interest which may be adversely affected by the outcome of the protest. Such parties shall include all other Bidders or proposers who appear to have a reasonable prospect of receiving an award depending upon the outcome of the protest.”
It should be noted that the bid protest procedures that were set forth in the MCM case went on to state that if the agency “determines that a protest is frivolous, the party originating the protest may be determined to be irresponsible and that party may be determined to be ineligible for future contract awards.” If you have any questions about bid protest procedure or if you are uncertain if your protest is frivolous, you should always consult with an experienced attorney.
3. Request for, Notice of and Hearing.
Many public agencies will hold a hearing on the bid protest. Once again, you should review the agency’s procedures relative to the hearing process. If the agency sets a public hearing you should request notice of the hearing date, time and place. For example, you should determine if witnesses will be called and allowed to testify. If there is a public hearing, you should have your witnesses prepared to testify and you should present to the body any relevant documents.
4. The Public Agencies Decision and Subsequent Legal Challenges.
If you are dissatisfied with the agency’s decision, you should consider legal challenges that may be available to overturn the agency’s decision. Once you have exhausted your administrative remedies, you still may have a right to pursue a legal remedy in the state courts. Generally, the legal remedy is to seek a writ of mandate. If the court issues a writ of mandate, the writ will order the public agency to refrain from awarding the contract to the chosen bidder.
Typically, the courts will issue a writ of mandate if the public agency abuses its discretion to determine to whom the contract will be awarded. An abuse of discretion can be established if the public agency acted illogically, capriciously or arbitrarily. Examples of an agency abusing its discretion include: (a) failure to comply with competitive bidding laws, (b) fraud in the bid process, and (c) “bid rigging” or collusion.
If you have reasonable grounds for lodging a protest against the award of the contract to the apparent low bidder, you should act promptly if you intend to pursue a protest. The protest you lodge should follow the requirements of the awarding agency. If the agency does not have specific procedures, it is advisable to model your protest after agencies who have stringent bid protest procedures.
Finally, the protest should seek to establish that the award of the contract to the apparent low bidder will be an abuse of discretion by the public agency. The written protest and the evidence that you present at the hearing should tend to prove that the award of the contract to the apparent low bidder will violate the agency’s bidding procedures and the public procurement laws. Due to strict requirements that must be followed to avoid a protest waiver and the legal nature of the protest, if you intend to pursue the protest in earnest you should seek input of competent legal counsel throughout the bid protest process.
This article, ©1999, was written by William C. Last, Jr., a partner in the firm of Last, Harrelson & Faoro. Mr. Last is an attorney who has specialized in construction law for over twenty years, he also holds an “A” and “B” contractors license. He can be contacted at 650-425-7679. This bulletin provides only general information about current legal issues, and is not a substitute for proper legal counsel. If you have a specific legal question or need legal advice, you should contact an attorney.