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Maryland Procurement Alert, August 2012
Subcontractors Have No Standing To Protest
U.K. Construction & Management, MSBCA No. 2773 (Aug. 1, 2011)
In U.K. Construction, the MSBCA again ruled that a potential subcontractor is not an interested party with standing to pursue an appeal under COMAR 21.10.02.02A. In this matter, the Department of Housing and Community Development ("DHCD") issued a Request for Proposals for services related to housing loans. The Appellant was a potential Minority Business Enterprise ("MBE") subcontractor to M&T Bank, who contacted Appellant prior to submitting a proposal. M&T Bank eventually decided not to include Appellant in its proposal as an MBE subcontractor. Appellant filed a protest with DHCD against award to M&T Bank.
In dismissing the appeal, the MSBCA identified two COMAR regulations that establish a party's standing to file a protest. COMAR 21.10.02.02A states that "an interested party may protest to the appropriate procurement officer against the award or the proposed award of a contract subject to this title ." COMAR 21.10.02.01A(1) defines an interested party as "an actual or prospective bidder, offeror, or contractor that may be aggrieved by the solicitation or award of a contract, or by the protest."
Because of this definition, the MSBCA explained that Appellant did not have a justiciable claim as an interested party. Only actual or prospective contractors to the State have standing with the MSBCA because they have potential privity of contract with the State in the event of contract award.
Contractors Must Actually Bid, Timely Appeal, And Employ Counsel To Pursue Appeal
Delaware Elevator, MSBCA No. 2774 (Sept. 1, 2011)
In Delaware Elevator, the MSBCA granted the Department of General Services' ("DGS'") Motion to Dismiss the appeal for three reasons: (1) the Appellant did not submit a bid in response to the Invitation for Bids; (2) the Appellant did not file a timely appeal; and (3) the Appellant was not represented by counsel.
With regard to the first ground of dismissal, DGS never received an actual electronic bid from Appellant at bid opening. Bids were to be submitted electronically through the State's eMaryland Marketplace system. After receiving a notification from DGS that it failed to submit a bid, Appellant informed DGS that it believed it had in fact submitted a bid prior to bid opening. After an investigation, DGS determined that Appellant began preparation of a bid, saving drafts of the bid 14 times. However, Appellant never submitted a final bid to DGS through the system. By not submitting a bid, Appellant was not an interested party with standing to file a protest and appeal.
With regard to the second ground, COMAR 21.10.02.10A allows a protestor 10 days to file an appeal from receipt of notice of the State's final decision. Appellant waited until 14 days after receipt of the Procurement Officer's final decision to file an appeal with the MSBCA. The MSBCA considered this a "strict 10-day limitation on the right to note an appeal."
With regard to the third ground, COMAR 21.10.05.03A requires corporations, partnerships and joint ventures to be represented before the MSBCA by an attorney licensed to practice in Maryland. Because no attorney entered an appearance on behalf of Appellant, the MSBCA found that the appeal could not stand.
Whether A Bidder Meets Small Business Size Guidelines Is A Matter of Responsibility
Sun Technical Services, Inc., MSBCA No. 2776 (Sept. 30, 2011)
In Sun Technical, the MSBCA affirmed that Small Business certification by the Department of General Services ("DGS") is a matter of responsibility that may be determined after bid opening and prior to contract award.
In May 2011, the State Highway Administration issued an Invitation for Bids ("IFB") for courier service in Southern Maryland. The IFB notified bidders that the contract was a Small Business Reserve ("SBR") procurement, which could only be awarded to "certified small business vendors" registered with DGS in accordance with State Fin. & Proc. §§ 14-501 through 14-505.
After bid opening, Appellant, the third-low bidder, protested award to the two low bidders on the grounds that both bids were non-responsive. The low bidder, Unified, was found non-responsive on unrelated grounds, leaving the second-low bidder, Bay Express, as the apparent awardee. The Procurement Officer denied Appellant's protest that Bay Express was not a certified Small Business. In denying these protest grounds, SHA stated that Bay Express was a "responsible bidder."
Appellant filed a timely appeal of this denial. In its appeal, Appellant raised the additional issue of Bay Express' failure to satisfy the IFBs requirement of three references by listing only two.
Upon review, the MSBCA denied the appeal by finding that SHA properly deemed the initial issue - i.e., whether Bay Express was a certified Small Business for purposes of the IFB's SBR requirement - a matter of bidder responsibility rather than bid responsiveness. Because this was a matter of responsibility, SHA needed only confirm that Bay Express was SBR certified prior to contract award.
The MSBCA also denied the second ground for appeal relating to Bay Express' references for two reasons. First, Appellant failed to timely protest the issue within the required 7 days after bid opening - as set forth in COMAR 21.10.02.03B - when Appellant should have known of the deficiency in the bid documents. Second, even if the issue had been timely protested, SHA properly deemed the references a matter of responsibility and permitted Bay Express to provide an additional, satisfactory reference prior to contract award.
Long Form Unit Prices Are Not Necessary; MBE Certification Numbers Do Not Need To Be Accurate
Southern Improvement Co., MSBCA No. 2778 (Dec. 7, 2011)
In Southern Improvement Co., the MSBCA denied an appeal on grounds, among others, that long form unit prices were an unnecessary "convenience" and the failure to indicate an accurate MBE Certification Number on the Participation Schedule is a minor irregularity.
On June 16, 2011, the Maryland Aviation Administration ("MAA") published an Invitation for Bids ("IFB") for a task order contract to perform certain construction and repair work. Pursuant to the IFB, MAA would select up to four contractors based upon a total base bid of five sample tasks for which bidders were to provide pricing. The IFB set forth a contract award amount of $10 million.
At bid opening on July 12, 2011, nine bidders submitted bids. MAA recommended the Board of Public Works award contracts to the three low responsible bidders based on the total bid price: Mid-Atlantic General Contractors, Inc. ("Mid-Atlantic"), Baltimore Contractors, Inc. ("BCI"), and Stancliff Construction ("Stancliff"). On July 19, 2011, the highest-priced bidder - Southern Improvement Co. ("Southern") - protested on the grounds that all eight lower-priced offerors were non-responsive.
On July 28, 2011, MAA rejected Southern's bid on all grounds, addressing only the three low bids which were recommended for award. Upon appeal, the MSBCA rejected Southern's protest with regard to all three low bids as follows:
Mid-Atlantic: Southern first protested that Mid-Atlantic failed to write the dollar amount in words for one of the task items; Mid-Atlantic indicated that unit price solely in numbers. The MSBCA found that Mid-Atlantic's bid was responsive because the long-form written price is unnecessary and is merely a convenience to the State in the event there is uncertainty as to the numerical figures.
Southern also protested that Mid-Atlantic's MBE participation amount was not based upon the total of all task orders. The MSBCA found that Mid-Atlantic correctly based its MBE participation amount based on the "total contract award" as instructed in the Pre-Bid meeting minutes.
BCI: Southern protested that BCI's bid was non-responsive because BCI indicated the wrong MBE certification number for Acorn Supply on the participation schedule. The MSBCA held that MAA properly considered this error a waivable minor irregularity because sufficient information was present in the bid documents to determine the proper certification number from the MBE directory.
Southern also protested that BCI's MBE participation amount was not based upon the total of all task orders. For the same reasons cited for Mid-Atlantics bid, the MSBCA denied this protest ground.
Stancliff: Southern protested that Stancliff's bid was non-responsive because Stancliff failed to affix a corporate seal to its bid. The MSBCA found that, pursuant to Corps. & Ass'ns. § 1-304, it was sufficient for Stancliff to place the word "seal" adjacent to the signature of the person authorized to sign the document on behalf of the corporation.
In its Appeal, Southern added a new allegation that Stancliff's bid was non-responsive because Stancliff allegedly changed its MBE participation plan. The MSBCA found that it lacked jurisdiction to hear this ground on appeal because there was no final State action pursuant to COMAR 21.10.07.03C.
Selection of Higher Priced Offeror Not Arbitrary Where Price Was A "Virtual Tie"
Hunt Reporting Co., MSBCA No. 2783 (Feb. 1, 2012)
In Hunt Reporting Co., the MSBCA affirmed its long held position that "procurement officials may award a contract to a higher priced, technically superior proposal if it is determined that the higher priced, technically superior proposal is also the proposal most advantageous to the State."
Prior to the deadline for submission, three offerors submitted proposals including Hunt Reporting Co. ("Hunt") and For the Record, Inc. ("FTR"). OAH's evaluation committee ranked FTR's technical proposal higher than Hunt's technical proposal, based on various factors including:
- FTR's experience and capabilities
- range of complimentary services, and
- greater amount of employees versus subcontractors.
After receiving Best and Final Offers ("BAFOs"), FTR's price was less than 1% of Hunt's price, which the MSBCA described as a "virtual tie." After evaluation of BAFOs, the Evaluation Committee requested detailed pricing for certain services included in the RFP's scope of work. FTR submitted more favorable pricing with respect to a specific item - 10-day turnaround - while Hunt submitted more favorable pricing for 3- and 5-day turnarounds. The Evaluation Committee's Summary of financial proposals noted that the small savings in Hunt's financial proposal could be offset as OAH evaluates the need for 3- and 5-day turnarounds.
On August 9, 2011, the Procurement Officer notified Hunt that the determination to award to FTR had been made because FTR had "more resources." Hunt protested this determination on two grounds: (1) Hunt did not receive credit from the Evaluation Committee for its lower price; and (2) FTR should not have received credit from the Evaluation Committee for staff beyond that which was adequate to perform the contract. OAH denied the protest and Hunt appealed to the MSBCA.
Upon appeal, the MSBCA found that no evidence had been submitted by Hunt that would demonstrate any unreasonable or arbitrary actions by procurement officials. The MSBCA noted that the Evaluation Committee reviewed the RFP "carefully" and issued a "comprehensive," five-page comparison of both proposals. An issue not discussed in this opinion is whether OAH awarded the contract based upon undisclosed criteria - namely, the unit pricing requested after submission of BAFOs. It is possible that Hunt could have raised this protest ground after disclosure of the Evaluation Committee's Summary.