Livingston Procurement Law
Procurement Alert
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Maryland Procurement Alert Fall 2010
This edition of the Procurement Alert focuses on recent legal developments concerning the Minority Business Enterprise and Disadvantaged Business Enterprise preferences at the federal, state and local levels.

Eastern Shore bidder sought a waiver of the DGS MBE goals, rather than increase his bid to meet the MBE goals.

In the minutes prior to bid submission for a Maryland Department of General Services (DGS) construction contract, the estimator was faced with a choice: either increase the bid to cover the higher quote from the MBE electrical sub or else use the much lower quote from the non-MBE sub and seek a partial waiver of the goals. The estimator used the low quote from the non-MBE and requested the partial waiver. DGS rejected the waiver request, mostly because the second, third, and fourth low bidders did not seek a waiver of the MBE goals. The second low bid was based on a low quote from an MBE who did not provide a quote to any other bidder.

On appeal from a circuit court dismissal of the complaint, the Court of Special Appeals ruled that DGS’ denial of the waiver was not “arbitrary and capricious.” The plaintiffs argued that “strict scrutiny” is the proper scope of judicial review. The contractor argued that the waiver must be granted unless the government could show that denial of the waiver was necessary means of remedying past discrimination. Despite these contentions, the Court of Special Appeals upheld the trial court. Appellants filed for review by the Court of Appeals.

For a copy of the Court of Special Appeals unreported decision, click Unreported-Court-Of-Special-Appeals-Decision.pdf

For a copy of Appellants’ Petition for Writ of Certiorari, click Petition-For-Writ-Of-Certiorari.pdf

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U.S. District Court dismissed claims brought by disappointed bidder on $40M Baltimore City DPW sanitary sewer contract.

In 2008, the Board of Estimates selected the low bidder for potential award of a contract but the bidder started work before the contract was awarded. There was a bid protest because of flaws in its MBE proposal. City officials warned the bidder that it acted at its peril if it incurred costs for work prior to Notice to Proceed. Eventually, the low bidder was unable to negotiate subcontracts with the MBEs. The low bidder, who still wanted the contract, requested a waiver of the MBE goals and the request was denied. The Board of Estimates awarded the contract to the second low bidder who met the MBE goals. The low bidder sued for damages. The City cross-filed for damages. The U.S. District Court for the District of Maryland dismissed most of the bidder’s complaint, but found that the bidder had breached the contract and therefore, awarded the City one dollar in damages.

For a copy of the U.S. District Court dismissal of the claims brought by the disappointed bidder, click Dismissal-Of-Claims.pdf


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