Builders and Contractors Exchange
Weekly Bulletin: 28 Mar 2005
Bid Or Proposal Rejected?
What's A Bidder Or Offeror To Do On Virginia Public Procurements?
Part 1
By: Neil Lowenstein
The practice is common; most owners do not sole source construction, they solicit bids or proposals from either an open or limited field of contractors. The differences between bids and offers will be the source of a subsequent article, but for this article a bid is based on price and a proposal is based on additional factors, such as the best overall value to the owner. This article addresses options of the losing bidder or offeror.
The rules are different on public and private projects. Private owners can generally contract with whomever they desire for whatever reason. Therefore, while there are some exceptions that will be addressed in a future article, as a rule, there is no mechanism to protest a private owner's decision to not accept a bid or proposal. In contrast, however, almost every public body is subject to procurement laws that provide a procedure.
Most federal procurements are governed by the Competition in Contracting Act (CICA), and the Federal Acquisition Regulations (FAR). State and local procurements (in Virginia) are typically governed by the Virginia Public Procurement Act (VPPA) and local ordinance. This article will focus on Virginia public procurement.
The VPPA includes guidelines governing the protest of an award or the decision to make award for both an invitation to bid (ITB) and a request for proposal (RFP). Under the VPPA, any bidder or offeror who desires to protest the award or decision to award a contract must submit the protest in writing to the public body (or official designated by the public body) within ten (10) days after the award or the announcement of the decision to award, whichever is sooner. Prior to making the decision to protest, however, the bidder or offeror may request access to certain of the public records relating to the procurement, and if the protest depends in whole or in part on information contained in the records, then the time to protest expires ten (10) days after the records are made available for inspection.
You normally cannot protest on the grounds that another bidder or offeror is not a responsible bidder (i.e., does not have the capability to perform the contract). Also, under Virginia law you cannot protest the validity of the terms or conditions of the ITB or RFP, Virginia Code § 2-2-4360(A). Therefore, most protests address issues of responsiveness or defects with the procurement procedure.
The protest must be in writing and include the basis of the protest and the relief sought by the protestor. The public body must issue a written decision in response to the protest within ten (10) days of receipt of the protest, which thereafter becomes final unless appealed within ten (10) days of the protestor's receipt of the decision using the public body's administrative procedures, if any, or by instituting legal action; choice of the two options, if the former is available, being at the protestor's option.
Although the avenue for protest is there, the remedies are limited. The bidder cannot obtain money damages from the public body, nor can a judge normally require the public body to make award to the protestor, even if the judge finds wrongdoing. Instead, if the protestor prevails prior to award, the typical relief is a finding by the court that leads the public body to cancel the award or revise the award to comply with the law. If the protestor prevails after award but before performance has begun, the court may enjoin further performance. If the protestor prevails after award but after performance has begun, the public body may declare the contract void upon a finding that doing so is in the best interest of the public. When a contract is declared void, the awardee is entitled to compensation for performance up to that time, but not to lost profits.
The standard of appeal is high; whether the public body's decision was arbitrary or capricious or involved fraud or corruption. Obviously, this is only a snapshot of Virginia public procurement protest, but we hope you find it thought provoking. In future articles we will address other protest related topics, including federal protests.
Questions?
If you have any questions about this article or any other related matters, please contact:
This article is meant to bring awareness to this topic and is not intended to be used as legal advice.