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You are here: Procurement Alert > Maryland Procurement Alert July 2014

July 2014


Disappointed Bidders Know Basis Of Protest When Told Of Bid Rejection

The Maryland State Board of Contract Appeals ("MSBCA") dismissed a bid protest appeal on the grounds that a protestor failed to meet the seven-day timeliness requirement for filing a protest. The protestor was told by the agency that the bid contained a flaw with regard to a proposed Disadvantaged Business Enterprise ("DBE") more than seven days prior to filing a protest.

In Advanced Fire Protection Systems, LLC, MSBCA No. 2868 (Feb. 21, 2014), protestor Advanced Fire Protection Systems ("Advanced") - the low bidder for a fire suppression systems services contract – had initially been told by the Maryland Transit Administration ("MTA") that it would receive contract documents from the agency in the days following bid opening. However, in a letter dated nearly two months after bid opening, MTA rejected Advanced’s bid on the grounds that Advanced "offered the fifteen percent (15%) of the overall DBE goal, however the DBE firm you chose is not in the correct category for this particular type of work." Advanced's bid indicated only a single DBE firm on the participation schedule.

Rather than filing a protest, Advanced attempted to discuss the matter with the procurement officer and MTA Office of Fair Practices. After a number of communications with the agency, the procurement officer explained to Advanced the basis for the determination that Advanced's DBE did not possess the proper certification category. The day after that communication, Advanced filed a protest. This protest was filed nearly three weeks after receiving the initial bid rejection letter.

In dismissing the appeal, the MSBCA found that MTA's initial letter rejecting the bid constituted "actual knowledge that the basis of the bid rejection determination was that its designated DBE … was alleged by MTA to be not in a correct labor category for the work to be performed." The MSBCA instructed that, "even if discussions are … still pending and advancing toward a bidder's anticipated resolution of a dispute over a bid rejection," an aggrieved bidder must note its bid protest within the 7-day timeframe.

While not addressing the merits of the protest, the MSBCA did note its concern that the State was poised to spend "nearly 50% over the [Advanced] bid" simply on the basis of a DBE category discrepancy."

Bidders Must Honestly and Accurately Calculate Minority Participation

The MSBCA denied a bid protest appeal on the grounds that a bid failed to meet the MBE participation goal by way of a sole MBE fuel supplier that could not reasonably be expected to supply fuel equal to 25% of the contract’s dollar value.

In Fence Connection, Inc., MSBCA No. 2867 (Jan. 29, 2014), the Maryland Aviation Administration ("MAA") issued an Invitation for Bids for fence installation and repair at two airports. The Invitation for Bids set forth a Minority Business Enterprise ("MBE") participation goal of 15%.

Fence Connection's low bid indicated that Fence Connection would achieve the entire 15% MBE participation goal by way of a single MBE supplier, Apex Petroleum. Because Apex Petroleum was an MBE supplier, only 60% of Fence Connection's expenditures for supplies from Apex Petroleum could be counted towards achievement of the contract goal. (See MDOT MBE Program Manual at p. 32). This would require Fence Connection to spend 25% of the contract dollar amount on supplies from Apex Petroleum.

In the days following bid opening, MAA asked Fence Connection to explain how Apex would be used as a subcontractor. Fence Connection explained that "Apex will provide Fence Connection our fuel for our trucks, Bobcats & generators." MAA also asked how Fence Connection intended to calculate fuel usage, to which Fence Connection responded that it "cannot honestly and accurately calculate how much fuel Fence Connection would use on this maintenance contract to be applied to our MBE goal ... ."

Because of Fence Connection's response to MAA's inquiries - as well as Fence Connection's fuel usage on the incumbent contract - MAA determined that Fence Connection's bid did not conform to the requirements of the Invitation for Bids by demonstrating that Fence Connection would meet the 15% MBE goal by way of fuel expenditures. Thus, Fence Connection's bid was nonresponsive pursuant to COMAR, which sets forth, "[t]he failure of a bidder to accurately complete and submit the MBE utilization affidavit and the MBE participation schedule shall result in a determination that the bid is not responsive."

Fence Connection protested MAA's rejection of the bid. Among the grounds for protest, Fence Connection disagreed with MAA's determination that Fence Connection could not satisfy the MBE goal by way of fuel purchases from Apex Petroleum. MAA denied the protest on this ground on the basis that Fence Connection could not accurately account for and verify its fuel usage to satisfy the contract's MBE requirements. Fence Connection appealed to the MSBCA.

The MSBCA denied the appeal. The MSBCA found that MAA reasonably rejected the bid because Fence Connection could not "accurately calculate how much fuel it would use on the contract." Part of the reason for this determination was Fence Connection's inability to demonstrate a method by which MAA could monitor fuel usage on the contract.

Failing To Replace Pages Changed By Addenda Is Not A Fatal Flaw If Addendum Is Acknowledged In Bid

The MSBCA held that the State Highway Administration ("SHA") acted arbitrarily in rejecting a bid as non-responsive where the only flaw was the bidder's failure to replace an amended page from the bid regarding the contract duration and the bidder had acknowledged the relevant addendum.

In H.D. Myles, Inc., MSBCA Nos. 2883 & 2888 (May 21, 2014), SHA issued addenda to the Invitation for Bids, including Addendum No. 3, which changed the duration of the contract. Addendum No. 3 instructed bidders to replace page 114 of the bid package with an updated version to reflect this change. The low bidder, H.D. Myles, attached to its bid the instructions page of Addendum No. 3 – setting forth the replacement language - yet failed to actually replace page 114 which still indicated the original contract duration.

The second low bidder protested on the grounds that this failure to replace page 114 rendered H.D. Myles’ bid non-responsive. SHA granted the protest, and H.D. Myles appealed SHA’s final decision.

The MSBCA granted H.D. Myles’ appeal, finding that SHA acted improperly in rejecting H.D. Myles' bid for a "substantially similar irregularity" to that which was waived by SHA in David A. Bramble, Inc., MSBCA No. 2550 (Sept. 2006). In Bramble, the bidder neglected to attach to its bid an entire copy of the IFB and Addenda, as required. However, SHA properly determined that bid responsive because the bidder "extended an unambiguous offer to comply with all of the terms of the contract" despite the "minor irregularity" regarding the form of submission.

In terms of Maryland procurement jurisprudence, H.D. Myles is notable because the MSBCA has held that an agency acted arbitrarily where it did not waive a bid flaw as a "minor irregularity" where substantially similar circumstances led to a such a waiver. Maryland agencies must now carefully examine their prior determinations of waivable or curable minor irregularies and ensure that subsequent determinations comport with those actions.

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Scott A. Livingston, Esq.
301.951.0172 (fax)
7979 Old Georgetown Rd.
Suite 400
Bethesda, MD 20814
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