- Local Bid Protests - You Can Fight City Hall: Protesting Your County, Municipality, or District, Procurement Decisions
- July 24, 2015 | Author: Geoffrey D. Smith
- Law Firm: Smith & Associates - Tallahassee Office
This article provides a brief overview of local government bid protest procedures. Unlike the state bid protest process, which is primarily governed by Florida state statutes and rules1, and is discussed at length in our previous article, “Bid Protests: Know Your Rights - the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”), the bid protest procedures for local government entities (counties; municipalities - cities, towns, villages; special districts) vary with each particular local authority.
In Florida, there are 67 counties, 282 cities, 109 towns, 19 villages, and over 1600 Special Districts2, and there is no uniform process or procedure for challenging the procurement decisions of each local entity. While the same substantive arguments typically raised in state agency bid protests (e.g., non-responsive bids, non-responsible bidder issues, bias/favoritism, arbitrary scoring, ex-parte communications)3, can often be raised when challenging local government entity decisions, the procedural process and timing for local government entity bid protests is not controlled by state statutes.4 Instead, the process varies for each county, municipality, and special district, depending on their individual authorizing charters, ordinances, procurement codes, and policies.
Some local government entities expressly adopt or follow, in whole or in part, the state procurement process and state procedures for challenging bid awards5, but more often the local government entities create their own procurement process and procedures, which are governed by their individual charters, ordinances, rules, as well as by their specific bid proposals (e.g., ITB, RFP specifications). In addition, judicial precedents and Florida’s strong public policy in favor of fair competition (discussed briefly below, and in more detail in our State Bid Protest article) provide avenues for challengers to contest unfair and arbitrary bid award decisions.
No Uniformity: Examples of Various Local Government Entity’s Bid Protest Procedures
As discussed at length in our prior State Bid Protest article, there is a uniform and rather straightforward bid protest process for challenging state agencies: the timeframe for bringing a notice of protest challenging a state agency’s bid solicitation specifications is 72 hours from date of posting of award, and the protester then has an additional 10 days after the notice of protest to file its formal written protest. The timeframes for challenging intended state agency awards are consistent with the timeframes for challenging solicitation specifications: 72 hours from the posting of the contract award to file a notice of intent to protest, and 10 days thereafter to file the formal written protest of intended award.
After receipt of a bid protest, the process thereafter is also relatively straightforward and uniform with regard to state agency bid protests: upon receipt of the formal written protest, the agency shall attempt to resolve the protest by mutual agreement within 7 days. If there is no mutual resolution of the protest within the 7 days after receipt of written protest, and there are disputed issues of material fact, the agency shall refer the protest to the Division of Administrative Hearings for assignment of an Administrative Law Judge to conduct a hearing within 30 days, and shall issue a Recommended Order (RO) within 30 days after the hearing (or within 30 days from receipt of the hearing transcript, whichever is later). Each party shall have 10 days to file written exceptions to the RO, and a Final Order (FO) shall be entered by the agency within 30 days after entry of the RO. See 120.57(3), Florida Statutes.
In contrast, the bid protest process for challenging local government entities is far from uniform and simple, as it varies within each specific local entity. In other words, each county, city, township, district has its own bid protest process.
Below are just a few examples from various county, village, city, and district governing procurement documents in order to demonstrate the complexity and lack of uniformity in local bid protest procedures, and the need for experienced legal counsel to represent vendor interests in any challenge to a local government entity’s competitive bidding process.6
County Example: Miami-Dade County
The primary governing procurement document for Miami-Dade County is Implementing Order 3-21, entitled Bid Protest Procedures. See http://www.miamidade.gov/aopdfdoc/aopdf/pdffiles/IO3-21.pdf.
Protests of Solicitation Specifications: Pursuant to Implementing Order 3-21, written protests of solicitation specifications must be brought at least two days prior to the hour of bid opening or will be deemed waived. (“Any question, issue, objection or disagreement concerning, generated by, or arising from the published requirements, terms, conditions or processes contained in the solicitation document shall be deemed waived by the protestor and shall be rejected as a basis for a bid protest, unless it was brought by that bidder or proposer to the attention, in writing, of the procurement agent, buyer, contracting officer or other contact person of the County department that issued the solicitation document, at least two work days (not less than 48 hours) prior to the hour of bid opening or proposal submission.”). Compare to Florida Statutes governing state agency protests, which provides that a “notice of protest” of state agency solicitation specifications shall be made within 72 hours of the posting of the solicitation, and the “formal written protest” shall be filed 10 days after the “notice of protest.”
Protest of Intended Contract Award: With respect to formal (concerning contract award amounts over $250,000) and informal (concerning contract award amounts between $25,000 and $250,000) bid protests of intended contract awards, bidders/proposers may protest an award recommendation by filing a written intent to protest within three work days of the filing of the award recommendation. The bidder/proposer must then file its formal written protest (including all pertinent documents and supporting evidence) within three work days after the filing of the intent to protest. (Compare section 120.57(3)(b), Florida Statutes, regarding protest deadlines for challenging state agency awards, which provides that the notice of protest must be filed 72 hours from the posting of the notice of intent, and the formal written protest must be filed within 10 days after the date the notice of protest is filed).7 Thus, Miami-Dade County’s timeframes for filing a written protest significantly differ from those outlined in Florida Statutes regarding challenging state agency decisions, and failure to adhere to the more stringent timeframes in the local administrative order may result in waiver of the right to protest.
The protest shall be filed with the Clerk of the Board of the County Commission, and, depending on the intended contract award amount, may thereafter be referred to a hearing examiner appointed by the Clerk of the Board within 5 days after the filing of the written protest, and, if so referred, a hearing will be conducted within 10 days thereafter. The hearing examiner will issue a Recommended Order (RO) within 5 days of the hearing.
Hearing Process Dependent on Contract Award Amount: Depending on the contract amount in question, the hearing process proceeds differently. Intended contract award bid protests concerning expenditures over $250,000 and that exceed the county manager’s delegated authority, proceed as follows: the hearing examiner’s findings and recommendation shall be presented to the Commission by the County Manager together with the recommendation of the County Manager. If the hearing examiner’s recommendation concurs with the County Manager’s recommendation, the Commission shall not allow presentations by participants at the time the matter is presented to the Commission, and a 2/3 vote of the Commission shall be required to take action other than that which was recommended. If the hearing examiner does not concur in the County Manager’s recommendation, the participants in the competitive process and their representatives may make presentations to the Commission and the Commission shall decide the matter by majority vote.
In contrast, protests where the amount in question is over $250,000 but does not exceed the County Manager’s delegated authority, proceed as follows: if the hearing examiner concurs in the award recommendation of the Department of Procurement or other issuing department, the department shall be bound thereby and shall implement such recommendation within 5 days. If the hearing examiner does not concur in the award recommendation, the Director of the Department of Procurement Management or of the issuing department shall either accept the hearing examiner’s recommendation and implement such recommendation with 5 days, or shall submit a written recommendation to the County Manager with 5 days stating the reasons why the County Manager should approve the department’s recommendation, despite the hearing officer’s recommendation, and the County Manager shall, within 5 days, choose either the department’s or the hearing examiner’s recommendation and instruct the department to implement such recommendation.
For intended contract awards under $250,000 but over $25,000, the procedure is as follows: the issuing Department Director shall review the protest, and after consultation with the County Attorney, shall issue a report and recommendation within 20 days of the filing of the protest stating the Department’s recommendation. The Department Director’s findings shall be forwarded to the County Manager for final determination and disposition of the protest. There will be an opportunity to settle the protest within 5 days of the filing of the protest.
In addition to Implementing Order 3-21, Miami-Dade County’s procurement process is governed by its Charter and County Code, specifically section 2-8.4 of the Code of Miami-Dade County, entitled “Protest Procedures.” (See http://miamidade.fl.eregulations.us/code/cid10620/2-8.4/) Moreover, all county vendor contracts in Miami-Dade County are subject to the General Terms and Conditions found at: http://www.miamidade.gov/procurement/library/boilerplate/general-terms-and-conditions.pdf.
Municipality Example: The Village of Wellington’s (“Wellington”)
The Village of Wellington’s procurement process is governed primarily by its Purchasing Manual, as well as by the requirements outlined in the specific ITB/RFP at issue. The Purchasing Manual establishes specific directions, guidelines and requirements for purchasing, and states that all purchases “shall be in accordance with this Manual…” (See Purchasing Manual at http://wellingtonfl.gov/images/stories/departments/Purchasing/docs/Code_and_policy/Final%20Purchasing%20Manual%202014.pdf.)
With regard to ranking bids, Wellington’s Purchasing Manual specifies the criteria to be used to decide a tie if two or more bids are tied. One factor that may be considered is the date and time that the bid was received by Wellington. In other words, if there’s a tie, and if other specified criteria do not resolve the tie, Wellington will consider which bid was received first in awarding the contract. These types of details and nuances specific to each locale are very important for vendors to be aware of prior to submitting their bids, as they may very well impact the outcome of the award.
Protests of Solicitation Specifications: With regard to protesting solicitation specifications, Wellington’s purchasing manual provides that prospective bidders must file its written protest to the solicitation within three days after the advertising/posting of the competitive solicitation. (“A prospective bidder, proposer or offeror may submit a protest in writing to the Purchasing Manager challenging the terms, conditions, or specifications of a competitive solicitation, including any provision governing the methods for ranking bids, proposals, or replies, awarding contracts, reserving rights of further negotiation, or modifying or amending any contract…. The protest must be filed in three (3) days . . . after the public posting… Failure to file a protest as to the terms, conditions, or specifications of a competitive solicitation shall be deemed a waiver of the right to protest on those grounds.”). Compare Florida Statutes, which provides that only a “notice of protest” to a solicitation specification must be filed within three days, and that the formal written protest may be filed ten days thereafter.
Protest of Intended Contract Award: Similarly, Wellington’s procedure for challenging an intended award of a bid contract also requires that the formal written protest be made within three days of the notice of intended award. Again compare Florida Statutes, which provides that only a “notice of protest” must be filed within three days, and that the formal written protest may be filed ten days thereafter.
Thus, Wellington’s truncated timeframes vary significantly from those required pursuant to Florida Statutes governing challenges to state agency solicitation and intended awards. It is crucial that bid proposers are aware of the local government entity’s timeframes, which often vary greatly from those specified in Florida Statutes, in order to ensure that no rights are waived.8
Bid Protest Process: The process for Wellington’s bid protests is as follows: the written protest must be submitted to the Purchasing Manager of the Purchasing Division within three days of the notice of intended award. Within 7 days of receipt of the written protest, the Purchasing Manager shall attempt to settle or resolve the dispute, with or without a hearing and within his/her sole discretion, and shall render a written decision. Any person aggrieved by the decision of the Purchasing Manager may appeal to the Village Manager within 7 days from the date of the Purchasing Manager’s decision. The Manager shall attempt to resolve the matter, with or without a hearing and within his/her sole discretion, and shall render a decision within 7 days following receipt of the appeal.
Discretionary Hearing: In the event that either the Purchasing Manager or Manager decides to conduct a hearing, such hearings shall be informal and Florida Rules of Evidence shall not apply. All evidence of a type commonly relied upon by reasonably prudent persons may be considered, and other bidders or proposers who have standing to intervene may be permitted to participate in the hearing.
Appeal to Council: The Manager’s decision shall be final and conclusive unless the protestor files a written appeal directly with Wellington’s Council within 3 days of the Manager’s decision. The Council shall consider the appeal within 30 days, and shall hold a quasi-judicial evidentiary hearing on the appeal. Failure to follow these protest procedures shall nullify any protest.
Special District Example: The Canaveral Harbor Port District (Canaveral Port District).
The Canaveral Harbor Port District (Canaveral Port District), created by the Florida Legislature and encompassing approximately one-half of Brevard County, Florida, is primarily governed by its Charter (Chapter No. 2014-241, Laws of Florida Special Acts of 1953, as amended). (See http://www.portcanaveral.com/PortCanaveral/media/Publications/2014Charter.pdf). The procurement process for the Canaveral Port District is addressed in Article XVII of its Charter, entitled, “Contracts; Competition.” While the Charter briefly discusses the bid proposal process and specifies that competitive bidding shall be enforced when contracts exceed $100,000, it is silent with regard to any procedure or process for challenging bid awards. Thus, those wishing to challenge are left with little guidance regarding the procedure for doing so. Florida Statutes, case law, public policy, the specific ITB or RFP criteria and instructions, and resort to Circuit Court will thus be instrumental in any protest.
Other Non-State Agency Protest Example9 – University of North Florida (“UNF”)
In Florida, there are 12 state universities, and 28 community and state colleges10, and each has its own procurement process. For example, University of North Florida’s procurement process is governed by its Purchasing Regulations, specifically 13.0020R, entitled “Notice and Protest Procedures Related to a University Contract Procurement Process” (See https://www.unf.edu/president/policies_regulations/13-Procurement_Services/13_0020R.aspx), as well as the Board of Governors’ Regulations 18.002 and 18.003.
Protests of Solicitation Specifications: Similar to the bid protest process for state agencies, UNF’s regulations provide that the Notice of Intent to protest a solicitation specification must be filed within 72 hours of the posting of the specification. Failure to timely file within the 72 hours shall constitute waiver of the right to protest proceedings related to the specification. A Formal Protest must be filed within 10 days after filing the Notice of Protest.
Protest of Intended Contract Award: Also similar to the bid protest process for state agencies, UNF regulations provide that a Notice of Protest of an intended contract award must be filed within 72 hours of the posting of the University’s notice of decision or intended decision, and that the Formal Protest must be filed within 10 days after filing the Notice of Protest.
Pursuant to UNF Regulations, the UNF President/President’s Designee may, in response to a Protest of a specification or intended award, terminate the contract procurement process, terminate the solicitation process, and/or reject all bids. If any such action is taken, the Protest shall be automatically dismissed, and the University may, if desired, reinitiate the contract procurement process.
Bid Protest Process: According to UNF Regulations, within 7 days of the filing of the Formal Protest, the University may hold informal discussions with the protester to attempt to resolve the protest by mutual agreement. If no resolution is reached, the protest shall proceed to a summary proceeding presided upon by a University official if there are no disputed issues of material fact, or to a quasi-judicial hearing if there are disputed issues of material fact.
Quasi-Judicial Hearing: If the Formal Protest contains issues of material fact, the President/President’s Designee shall either refer the Formal Protest to an appointed quasi-judicial officer for a quasi-judicial hearing or may forward a request for hearing to DOAH for assignment of an Administrative Law Judge (“ALJ”) to conduct the quasi-judicial hearing (in the same fashion as state agency bid protests). The hearing shall be conducted within forty (40) days after the date the Formal Protest was filed. The quasi-judicial hearing shall be a de novo proceeding to determine whether the University’s decision or intended decision is contrary to the statutes, regulations, or policies governing the University, or contrary to the Specifications. The standard of proof for the proceedings shall be whether the proposed University action was clearly erroneous, contrary to competition, arbitrary, or capricious.
All parties have an opportunity to present evidence; to respond to all issues involved; to conduct cross-examination and submit rebuttal evidence; and to submit proposed findings of fact and proposed orders. The hearing shall be conducted in conformity with the Florida Rules of Civil Procedure and the Florida Rules of Evidence. The Quasi-Judicial Officer will issue a written Recommended Order, and the University President shall thereafter issue a Preliminary Order, to which the parties may file objections, after which the President will review any timely filed objections and render a Final Order.
Judicial review of the University’s final decision shall be in accordance with Florida Rules of Appellate Procedure Rule 9.190(b)(3), applicable to review of quasi-judicial decisions of an administrative body not subject to the Administrative Procedure Act. A request for review may be made by filing a petition for certiorari review with the appropriate circuit court within thirty (30) days after the University’s final decision. Failure to seek timely review shall constitute a waiver of the right to appeal the University’s final decision.
It is clear from just the few examples highlighted above that there are no uniform timeframes or procedures for challenging local government entity procurement solicitation specifications and intended decisions, and that the procedures for challenging a local government entity’s procurement process are often extremely complex, and entirely dependent upon the local government entity’s governing procurement documents.
In addition to the different timeframes for bringing protests, each local entity’s governing purchasing documents may vary in terms of the contract amount that is subject to competitive bidding11, and the specific steps for protesting – the who, what, where, and how of protesting solicitations and intended awards (e.g., who does it need to be submitted to, who reviews the challenge, who do you appeal your challenge to; what information is required to be included, what information are you entitled to include; where should it be submitted, where do you appeal; and how do you ensure you exhaust your administrative remedies).
Typical Process in Local Government Bid Protests Despite Lack of Uniform Procedures
Despite the many procedural differences in each locale, the typical protest process pursuant to most local government procurement codes involves submitting a written protest to the local government’s administrative procurement staff (e.g., the Purchasing Department, the Purchasing Division, Procurement Office), and then appealing up the chain of command if unsuccessful below. Typically, there will be informal attempts to negotiate a settlement once a protest has been filed. Ultimately, most counties, municipalities, and districts will allow for an informal hearing (quasi-judicial hearing) before their Board or Commission. (See below re: quasi-judicial hearing).
Vendors will need to make several strategic decisions along with way. First, they will need to decide if they should challenge the solicitation specification. If they don’t timely object to the solicitation specifications, then they will waive the right to raise such issues later after the intended contract award has been made. However, if they do timely object, they run the risk of possibly offending or ultimately being disfavored by the local entity that they are protesting, and thus putting themselves in a vulnerable position vis-à-vis ultimately being awarded the contract.
Additionally, vendors will need to decide if and when to file suit in circuit court. Depending on the facts and the local government procurement procedures, it may be prudent to file in circuit court prior to any final decision by the Commission. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978). Conversely, depending on the facts and the likelihood of being successfully awarded the contract, it may be more beneficial to wait until after the Commission renders its final decision, and then if adverse, to seek a circuit court injunction or petition for writ of certiorari. (Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997) (holding that unsuccessful bidder’s circuit court action to enjoin College’s contract award to another contractor should have been granted due to the irreparable injury caused by College’s violation of sunshine laws).
What to do - Step by Step
The first step in determining whether to protest is to be sure to familiarize yourself with the local authority’s governing purchasing documents, ordinances, charters, etc., as well state statutes and relevant case law, in case the documents are silent on various procedures.
Next, once you are notified of a solicitation/intended award that you think is improper, it is crucial to act quickly and submit your protest so as not to miss any deadlines and waive any rights. It is imperative to follow the specific protest procedures outlined by the local entity’s governing documents.
Challenge to Bid Solicitation Specifications: Most local government procurement documents specify the timeframes and procedures for challenging bid solicitation specifications, and provide that the failure to timely file a protest to the specifications of a bid solicitation shall preclude the protester from raising those issues in a bid protest after the contract has been awarded. (For example, Miami-Dade County provides that a protest to solicitation specifications must be made 2 days prior to bid opening or are waived, at IO 3-21; The Village of Wellington provides that a protest to solicitation specifications must be filed within 3 days of the posting of the competitive solicitation, and that failure to do so shall be deemed a waiver of the right to protest on those grounds.).
Thus, if a bidder wishes to challenge the terms, conditions, or specifications contained in the solicitation (including any provision governing the methods for ranking bids, awarding contracts, reserving rights for further negotiation, or modifying or amending any contract) the protest to the solicitation must be timely filed in accordance with the local governing procurement documents, typically within a few days of the posting of the solicitation.
While it is illegal in competitive bidding for a local government entity to tailor bid criteria or specifications in favor of a preferred vendor, it is a fairly frequent problem in public procurement.12 If a vendor believes that any part of the solicitation is suspect, it must timely file the required protest pursuant to the local governing procurement documents or the issue is forever waived.
One of the most common problems in public procurement – whether local or state procurement – is that a vendor fails to timely challenge the bid specifications or criteria although the vendor believes that a particular criteria or specification is unfair, unnecessary, or one that the vendor simply cannot meet. A vendor might forego challenging a specification in an effort to remain on good terms with the local authority out of fear that an action may potentially bias the contracting entity against the vendor.
Failure to timely file a protest to the solicitation specification within the timeframe outlined in the local entity’s governing procurement documents will result in waiver of the right to challenge such specifications. In other words, if they wait until after the notice of intended award, and then file a protest attempting to raise bid specification irregularities, those allegations will be excluded from consideration.
This results in several procedural and tactical questions for the vendor to consider and weigh in consultation with its attorney. Often vendors are concerned that if they protest the solicitation specifications, regardless of the outcome of that protest, that the local entity may harbor resentment or ill will toward them, and fear that the local entity may become biased against them, and that ultimately they will fair less well in any final decision regarding awarding them the contract. These considerations should be discussed and weighed with experienced bid protest counsel.
Challenge to Intended Contract Awards: If the local entity improperly awards the contract to another bidder, vendors shall timely file a protest to the intended contract award in accordance with the local government entity’s procurement code/ordinances. Depending on the local procurement process, the vendor may be required to first file a Notice of Protest and then to follow up with a formal Written Protest. In other locales, the vendor may be required to file the formal Written Protest without any initial Notice of Protest. Intervening holidays and weekends are typically excluded in computing the Notice of Protest due dates and typically included in computing the formal Written Protest due dates, but again, this will depend entirely on the governing local procurement documents.
As discussed above, challenges will typically be filed with procurement administrative staff (Purchasing Department, Procurement Office, etc.), and will be appealed up the chain of command, ultimately concluding in a quasi-judicial hearing before the Commission. Additionally, there will typically be opportunities to informally resolve the protest through settlement negotiations.
Bid Protest Bond: Local government procurement documents typically require, similar to the state agency bid protests, that the protestor file a bond payable to the local government. The amount of the bid protest bond will depend on the local government’s procurement documents. (For example, Miami-Dade County has an escalating bond fee schedule that increases the fee amount based on the contract award amount, ranging from a $500 filing fee for contract award under $250,000 to a $5,000 filing fee for contracts awards over $5 million). Failure to timely file the bond in accordance with the local government procurement process shall typically constitute waiver of the protestor’s right to protest and/or the denial and dismissal of the protest.
Quasi-Judicial Hearing: Unresolved bid protests are typically set for quasi-judicial hearing before the Board or Commission. Depending on the local entity’s procurement process, these hearings may range from informal presentations by the parties and/or their representatives to full-fledged quasi-judicial hearings involving witness testimony, cross-examination, presentation of evidence, and written submissions. Typically the rules of evidence do not apply. Participating parties shall be afforded notice and the opportunity to be heard. Additionally, in a quasi-judicial proceeding certain standards of fairness and due process are afforded to the parties.
Seeking Relief in Circuit Court: Unsuccessful bidders may seek a temporary injunction in circuit court prohibiting the local authority from awarding the contract to the successful bidder. In order to prevail on an injunction in circuit court, the complaining party generally must establish: (1) a likelihood of irreparable harm; (2) the unavailability of an adequate remedy at law; (3) a substantial likelihood of success on the merits; and (4) public interest considerations. See Wood-Hopkins Contracting Co. v. Roger J. Au & Son, Inc., 354 So. 2d 446, 448 (Fla. 1st DCA 1978) (affirming temporary injunction and stating that “trial court was correct in taking action to preserve the status quo and secure the rights of the parties to equitable relief”); Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (affirming denial of temporary injunction and holding that protestor did not have a substantial likelihood of success on the merits); Charlotte County v. Grant Medical Transp., Inc., 68 So. 3d 920 (Fla. 2nd DCA 2011); Silver Exp. Co. v. Dist. Bd. of Lower Tribunal Trustees of Miami-Dade Cmty. Coll., 691 So. 2d 1099, 1102 (Fla. Dist. Ct. App. 1997). See also Naegele Outdoor Adver. Co. v. City of Jacksonville, 659 So. 2d 1046, 1047 (Fla.1995); Smith Barney Shearson, Inc. v. Berman, 678 So. 2d 376, 377 (Fla. 3d DCA 1996).
While there is strong judicial deference afforded to a local authority’s discretion to competitively award contracts, such discretion must not be arbitrary or capricious, illegal, or fraudulent. Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference). However, a local authority’s honest exercise of discretion in awarding a contract will not be overturned even if it appears erroneous or if reasonable persons could disagree. See Miami-Dade Cnty. v. Church & Tower, Inc., 715 So. 2d 1084, 1087 (Fla. 3d DCA 1998) (disappointed bidder’s protest did not show arbitrary or capricious action; thus, bidder failed to demonstrate a substantial likelihood of success in its challenge to the commission decision, and temporary injunction barring further proceeding on the contact was not warranted).
Circuit Court Remedies: It is important to obtain an injunction in circuit court to stop the contract award before the contract is executed and relied upon. While section 120.57(3)(c), Florida Statutes, expressly provides that any intended contract awards shall be stayed pending resolution of a timely filed bid protest13, there is no similar uniform requirement for a stay of intended contract awards for local government bid protests. Accordingly, it is very possible that the contract will be awarded and relied upon prior to your “winning” your appeal.
So what happens if the contract has already been executed and then you “win” your appeal? Some courts have held that you are only entitled to the cost of preparing the bid, while other courts have held that the government entity shall provide a comparable contract at a later point in time. To date, no Florida courts have held that an unsuccessful bidder is entitled to lost profits. See Miami Dade Cnty. Sch. Bd. v. J. Ruiz Sch. Bus Serv., Inc., 874 So. 2d 59, 62-65 (Fla. 3d DCA 2004) (reversing award of lost profits and remanding with directions that appellees be awarded equitable relief in the form of future comparable contracts, if possible, or, in the alternative, that their damages be limited to their bid preparation and/or bid protest costs.). See also City of Cape Coral v. Water Servs. of Am., Inc., 567 So. 2d 510, 512 (Fla. 2d DCA 1990) (holding that (1) unsuccessful bidder was entitled to recover bid preparation costs and prejudgment interest thereon when city failed to adhere to its representation that bid would not be rejected on ground that bidder was not licensed general contractor; (2) unsuccessful bidder had no cause of action against public entity for lost profits; and (3) bidder was not entitled to award of attorney fees.); City of Tallahassee v. Blankenship & Lee, 736 So. 2d 29 (Fla. 1st DCA 1999) (disappointed bidder on natural gas line construction project that sued city for disqualification of bid was not entitled to award of attorney fees, despite award of bid preparation costs; there was no contractual or statutory authority for recovery of attorney fees from city and litigation was against city and not third party).14
Florida’s Public Policy and Case Law in Support of Fair Competition
In addition to the specific protest procedures for each local government entity, government contracting in Florida is guided by strong public policy considerations aimed at the protection of the public against collusive contracts, fraud, bias, and favoritism. While public bodies have discretion in contracting for goods and services, they cannot act illegally, arbitrarily, capriciously, or fraudulently. See, e.g., Wester v. Belote, 103 Fla. 976, 138 So. 721 (Fla. 1931) (laws of this kind requiring contracts to be let to the lowest bidder are based upon public economy, are of great importance to the taxpayers, and ought not to be frittered away by exceptions; they serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers’ expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated) (emphasis added); Emerald Corr. Mgmt. v. Bay Cnty. Bd. of Cnty. Comm’rs, 955 So. 2d 647, 652 (Fla. 1st DCA 2007) (holding county to arbitrary and capricious competitive bidding standard); Hotel China & Glassware Co. v. Bd. of Public Constr. of Alachua Cnty., 130 So. 2d 78, 81 (Fla. 1st DCA 1961) (public authority may not arbitrarily or capriciously discriminate between bidders, or make award on basis of personal preference); City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798 (Fla. 3d DCA 2002) (applying arbitrary and capricious standard to RFPs as well as bids). Florida’s public policy, case law, and statutes dictate that competitive procurement, regardless of the local government entity’s bid protest process, is designed to secure fair competition on equal terms to all bidders, to secure the best values at the lowest possible expense, to provide an opportunity for an exact comparison of bids, and to assure that the most responsive bid is accepted. Additionally, government entities must afford fundamental due process rights to its citizens and must allow for a clear point of entry to challenge its decisions. See, e.g., Capeletti Brothers, Inc. v. Dep’t of Transp., 362 So. 2d 346, 348 (Fla. 1st DCA 1978) (holding that agency must afford due process right of clear point of entry to challenge agency decision).
Finally, regardless of the type of local government (county, municipality, district), all local government entities must adhere to the terms of their RFP/ITB, and can be challenged for deviating from the specifications of their RFP/ITB. See, e.g., City of Sweetwater v. Solo Constr. Corp., 823 So. 2d 798, 800, 802 (Fla. 3rd DCA 2002) (City’s award based upon categories and criteria not included in the bid documents was arbitrary, capricious, and contrary to Florida’s competitive bid statutes); Hemophilia Health Services, Inc., v. AHCA, No. 05-2804BID, 2005 WL 3733800, ¶¶ 38-40, 44-46, 75 (DOAH Dec. 2, 2005; AHCA FO Jan. 26, 2005) (evaluation sheets used by evaluators did not correspond to the RFP evaluation criteria); Syslogic Tech. Servs., Inc. v. South Florida Water Mgmt. Vill., No. 01-4385BID, 2002 WL 76312 at ¶¶ 24, 36, 104-05, 108-110 (DOAH Jan. 18, 2002; AHCA FO March 6, 2002 104-111) (scoring was contrary to the RFP and contrary to competition).
Local government bid protest procedures and requirements are often quite confusing and may vary greatly depending on the local government’s ordinances, codes, charters, etc. Because there are no uniform procedures for challenging local government procurement decisions, and because the bid protest process proceeds on an extremely fast track, important rights can be waived if not immediately asserted. For these and other reasons, it is crucial that you know your rights whenever you or your company becomes involved in any local government procurement, and that you involve experienced bid protest counsel as early as possible. Experienced bid protest counsel can assist in compliance with local government bid procedures, ensure that your rights are protected throughout the bid process, timely protest any unfavorable decisions, and advocate for your interests at the local government level, as well as in circuit and appellate court proceedings.
1 Florida Statutes and rules governing state bid protests include, but are not limited to: Chapter 120, Florida Statutes (Florida’s Administrative Procedure Act); Chapter 287, Florida Statutes (state procurement); and Chapter 28-110, Florida Administrative Code (state bid protests).
2 http://en.wikipedia.org/wiki/List_of_municipalities_in_Florida; https://dca.deo.myflorida.com/fhcd/sdip/OfficialListdeo/index.cfm.
3 For a detailed overview of the bid protest process for challenging state agency procurement decisions, including a discussion of common grounds for protesting state agency procurement decisions, please see “Bid Protests: Know Your Rights – the Clock is Ticking” at http://smithlawtlh.com/bid-protests-know-your-rights-the-clock-is-ticking/ (“State Bid Protest article”).
4 Chapter 120 (the Administrative Procedures Act), Florida Statutes, provides uniform procedures applicable to state agencies, which by definition, do not include local government entities, and section 120.57(3), Florida Statutes, specifically governs bid protests against Florida state agencies. While section 255.20, Florida Statutes, addresses local government competitive bidding for public construction projects, it does not address bid protest procedures. Moreover, there is no Florida Statute governing bid protest procedures for local government procurement of goods or other services.
5 See Palm Beach County School Board, Policy 6.14, for an example of a local government entity that explicitly implements the bid protest procedures of the Administrative Procedures Act, section 120.57 (3), Florida Statutes, and Chapter 28-110, Florida Administrative Code.
6 Several of the representative examples outlined in this article were taken from recent bid protest cases litigated and resolved by Smith & Associates.
7 See §120.57(3)(b), Fla. Stat., and State Bid Protest article, cited infra note 2.
8 Such variations from Florida Statutes’ timeframes, are also seen in larger municipalities, such as the City of Miami, whose purchasing process is outlined in its municipal code, Section 18-104, entitled “Resolution of protested solicitations and awards.” (See http://www.miamigov.com/procurement/docs/BidProtest.pdf). Section 18-104 provides that aggrieved proposers must file a notice of protest within two days after receipt of the notice of proposed award, and then must file its written protest within five days after the date the notice of protest was filed. Once again, we see the truncated timeframe for filing a protest at the local level, as compared to protesting state agency procurement decisions. See also Orange County Bid Protest Procedures (Orange County Florida Code of Ordinances, Sec. 17-313), which requires that a notice of protest to a bid solicitation or intended award be filed within five days of the date of posting, and that the formal written protest be filed within five days after the date of the filing of the notice of protest.
9 There are competing arguments as to whether Florida state universities and colleges are considered “state agencies” for purposes of Chapter 120 bid protest rights. Section 120.57(3), Florida Statutes, governing state agency bid protest procedures, specifically provides in subsection 120.57(3)(g), Florida Statues, that “the definitions in s. 287.012 apply.” Section 287.012, Florida Statutes, expressly states that the definition of Agency “does not include the university and college boards of trustees or the state universities and colleges.” However, this definition appears to conflict with the definition of “Agency” in section 120.52, Florida Statutes, which provides that “Agency” includes educational units, including state universities when the university is acting pursuant to statutory authority.” Further confusing the issue, bid protests of state universities are routinely referred to DOAH for hearing. See e.g., Schlage Lock Company, LLC v. State University System, University of North Florida, Case No. 14-1559BID (DOAH April 10, 2014). For purposes of this bid protest article, universities and colleges are classified as non-state agencies.
11 While Florida State Statutes provides for competitive solicitation for state agencies for all contract awards in excess of $35,000 (hereinafter “competitive solicitation threshold”), the threshold amount requiring competitive bidding varies dramatically for each local government entity depending on its specific local charter, ordinances, code, etc. For example, Miami-Dade County’s competitive solicitation threshold is $25,000 (Miami-Dade County Implementing Order 3-21) (check); University of North Florida Board’s competitive solicitation threshold is $75,000 (UNF Purchasing Regulation 13.0010R); Village of Wellington’s competitive solicitation threshold is $25,000 (Wellington Purchasing Manual, Ch. 2, A, at p. 3); and Canaveral Port Harbor District’s competitive solicitation threshold is $100,000.
12 One exception to this is that many local governments provide in their governing procurement documents that a preference be given to local businesses. (For example, Miami-Dade County’s governing procurement document provides in its preference for local businesses, that “If the Low Bidder is not a Local Business, then any and all responsive and responsible Local Businesses submitting a price within ten percent of the Low Bid…shall have an opportunity to submit a best and final bid equal to or lower than the Low Bid.” See Miami-Dade County, Section 1.10, General Terms and Conditions). The preference criteria should be outlined in the local government documents and any deviations from the specified criteria can be subject to challenge. Miami-Dade County, Section 1.10, General Terms and Conditions.
13 Section 120.57(3) provides:
Upon receipt of the formal written protest that has been timely filed, the agency shall stop the solicitation or contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the solicitation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare. § 120.57(3), Fla. Stat. See also Cianbro Corp. v. Jacksonville Transp. Auth., 473 So. 2d 209, 212 (Fla. 1st DCA 1985) (statutory scheme providing for stay of intended contract award “should be upset in only the most compelling circumstances.”).
14 While beyond the scope of this article, for a detailed discussion of potential legal remedies after you have been awarded a contract, see http://smithlawtlh.com/unfairness-or-public-corruption-in-government-contracting/.