I have had occasion to work with a number of clients confronted with bad outcomes in a government procurement process. The disputes have involved state, local and University of Tennessee procurements. Although each dispute involved unique issues, some elements are common to any bid protest.
Grounds to Protest? The protestor carries the burden of establishing that the procurement agency’s decision was arbitrary, capricious, an abuse of discretion, or exceeded its authority. That burden can be carried by evidence that a policy or other regulatory provision was violated, failure to follow the rules set forth in the solicitation, collusion, or technical or mathematical mistake or error in the evaluation process.
Unique Rules of Engagement – the procedures for when and how a protest can be lodged vary widely among government authorities. It’s critical to understand and strictly adhere to all applicable procedural rules. At the state level, T.C.A. §12-3-514(a) requires that the protest be submitted in writing within seven (7) calendar days after such claimant knows or should have known of the facts giving rise to the protest. Any issues raised by the protesting party after the seven-day period shall not be considered as part of the protest. Local governments may impose an even shorter window for protests. One Tennessee county’s rules provide that “[c]omplaints received after three (3) business days after the award decision has been made will not be considered.”
Multiple Levels of Review – Protests are typically first reviewed by the chief procurement officer of the procuring agency, then subject to layers of administrative. It’s important to know where your protest may be headed next. Many local government procedures require review by the chief procurement officer, then the senior finance director, and then the mayor. The University of Tennessee’s protest review starts with the Purchasing Director, then the campus/institute chief business officer, then chief financial officer.
Bond Requirements – a protest bond is often required to be posted, and obtaining bond on a short timeline can be a challenge in itself. Protests subject to state law require a bond payable to the state in the amount of five percent (5%) of the lowest cost proposal evaluated or, if a protest is filed prior to the opening of cost proposals, the bond payable shall be five percent (5%) of the estimated maximum liability provided in the procurement document. T.C.A. §12-3-514(c). The state has adopted a bond form it deems acceptable.
Remedies – Although the successful protestor may score the big win gaining the contract in fair “do over”, monetary damages are generally limited to the protestor’s costs of filing and pursuing the protest, including potential recovery of reasonable attorneys, and consultant and expert witness fees, and costs of preparing its bid proposal.
Photo: USFWS – Pacific Region