SUCCESSFUL BID PROTEST WHERE SCHOOL DISTRICT AWARDED CONTRACT TO COMPETITOR BASED ON POST-SUBMISSION INFORMATION
A public works contractor who loses a competitive bid often has little recourse. If a bidder has the lowest bid, but is not awarded the contract due to a public authority's determination that it is non-responsive or non-responsible, that bidder may seek review of that determination, commonly known as a bid protest. Usually bid protests are unsuccessful due to the broad discretion most public authorities are granted in these matters. However, one contractor represented by this firm was awarded a public school contract following a bid protest, where the school district improperly considered information offered by a competing bidder after the submission of all bids relating to that bidder's own failure to complete the bid form properly.
In this case, the school district requested sealed bids in November 1999 for certain contracting work to be bid as a "base bid" and roofing work to be bid as an "alternate bid". An addendum was issued requesting an additional alternate bid for the opening of the schools walls in June 2000. The bid form, however, was not amended and only provided a line for one alternate bid. All but one bidder drew an extra line for the second alternate bid. That one bidder only submitted bids for the base contract work and the one alternate bid. Approximately an hour after the district unsealed the bids, that bidder contacted the school district and allegedly stated that the one alternate bid it had submitted included work for both alternates. Relying upon the bidder's post-submission statement, the district concluded that that bidder had the lowest bid. The district that bidder awarded the contract, in spite of the fact that the bid could only be considered lowest if both alternates were accepted by the district. If only one alternate bid was selected, that bidder's submission would have been automatically rejected for its incompleteness.
Although a municipality may waive a "technical noncompliance with bid specifications, if the defect is a mere irregularity and it is in the best interests of the municipality to do so", a bid containing a substantial defect must be rejected. A substantial defect exists where it would impair the district's interests or place some bidders at a competitive disadvantage.
In the instant case, the court held that the award was not in the best interests of the district as it put some bidders at a competitive disadvantage. These bidders may have reduced their bids if they had known with certainty that both alternates would be incorporated into the contract. As such, the district would have received lower bids. The court determined that the district's actions were arbitrary and capricious and stated:
"[a] municipality may not allow a bidder to comply with specification after bids have been submitted nor waive material variances in bids received... Were it otherwise, legitimate bidder who might have been willing to reduce their bids had they known that the specification s of the job would be relaxed, would be unfairly deprived of the opportunity to do so. This combined with the danger of favoritism, fraud or corruption inherent in a selection process conducted under such circumstances, might well discourage contractors from bidding on future contracts, this diminishing competition to the detriment of the public.
The court prevented the school district from awarding the contract to the other bidder and ordered it to award the contract to our client, the protesting contractor, as the lowest responsive and responsible bidder.
