1. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 1 PROTESTS A Presentation to SCAGPO 2013 Forum Voight Shealy State Chief Procurement Officer for Supplies and Services

2. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 2 Objectives of the Presentation –The Code’s Protest Provisions –The FY 2012/2013 Protest Activity –Significant Panel Rulings –Significant CPO Rulings –Observations by the three CPOs

3. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 3 Consolidated Procurement Code A prospective bidder, offeror, contractor, or subcontractor who is aggrieved in connection with the solicitation of a contract shall protest to the appropriate chief procurement officer in the manner stated in subsection (2)(a) within fifteen days of the date of issuance of the Invitation For Bids or Requests for Proposals or other solicitation documents, whichever is applicable, or any amendment to it, if the amendment is at issue.

4. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 4 Consolidated Procurement Code Any actual bidder, offeror, contractor, or subcontractor who is aggrieved in connection with the intended award or award of a contract shall protest to the appropriate chief procurement officer in the manner stated in subsection (2)(b) within ten days of the date award or notification of intent to award, whichever is earlier, is posted in accordance with this code; except that a matter that could have been raised pursuant to (a) as a protest of the solicitation may not be raised as a protest of the award or intended award of a contract.

5. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 5 FY 2012/2013 CPO Protests CPOReceivedGranted IT102 Construction124 Everything Else423

6. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 6 FY 2012/2013 Panel Decisions Panel Decisions during FY2012-2013 8 Decisions affirming CPO decisions 4 Decisions overturning CPO decisions 2 Order of dismissal on withdrawal of Protest 1 Decision on CPO written determination 1

7. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 7 Significant Panel Tendencies During FY 2012/2013 the Panel: –Affirmed its unwavering support for RFP evaluators –Affirmed its support of Procurement Manager determinations of bidder non-responsibility –Affirmed its position that an emergency procurement is protestable

8. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 8 “Although the Panel agrees with the CPO that the evaluators' conduct was arbitrary and capricious, the Panel finds that the conduct did not affect the outcome of the procurement and was harmless error. Thus, the Panel reverses the CPO's cancellation of the solicitation and remands it back to the CPO for award in accordance with the Procurement Code and consistent with the findings herein.” [ Excent Corporation, 2013- 2] Panel Support of Evaluators

9. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 9 “The Panel has noted that it will not overturn a finding of non-responsibility on the grounds that it is arbitrary or capricious unless the appellant “’demonstrate[s] a lack of reasonable or rational basis for the agency decision... ‘” [Trinity 7, Case No. 2012-8] Panel Support for Procurement Managers

10. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 10 Otis Elevator Company, Case No. 2013-8 Emergency Procurements Protestable

11. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 11 New Panel Precedence The automatic stay imposed by 11-35-4210(7) applies not only to any advance of the procurement towards award, it also applies to the cancellation of a solicitation under appeal to the Panel [Excent Corporation, Case No. 2013-3] The time allowed to protest an emergency procurement award starts when the protestant actually knew about the award [Otis Elevator, Case No. 2013- 8] Unbalanced Bids [Advanced Imaging Systems, Case No. 2013-07]

12. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 12 Panel Precedence – Automatic Stay The Code reads, “In the event of a timely protest pursuant to subsection (1), the State shall not proceed further with the solicitation or award of the contract until ten days after a decision is posted by the appropriate chief procurement officer, or, in the event of timely appeal to the Procurement Review Panel, until a decision is rendered by the panel except that solicitation or award of a protested contract is not stayed if the appropriate chief procurement officer, after consultation with the head of the using agency, makes a written determination that the solicitation or award of the contract without further delay is necessary to protect the best interests of the State. [11-35- 4210(7) Automatic Stay of Procurement During Protests]

13. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 13 New Panel Precedence- Automatic Stay The Panel finds that the automatic stay imposed by section 11-35-4210(7) precludes any action, including cancellation, with regard to a protested solicitation so long as the protest or appeal to the Panel is pending unless the stay is lifted first. This finding does not prohibit the CPO from canceling a solicitation during the protest process, it merely confirms that he must do so in compliance with the requirements of section 11-35-4210(7). [Excent Corp. Case No. 2012-3]

14. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 14 New Panel Precedence – Emergency Procurements (1) “The Panel finds that this statutory Provision [11-35-1570] does not mention any posting (of award) requirement, nor does it incorporate by reference the requirements of competitive sealed bidding set forth in section 11-35-1520 of the Procurement Code.” [Otis Elevator Company, Case No. 2013-8]

15. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 15 New Panel Precedence – Emergency Procurements (2) “The Panel concludes that because USC was not required to post an award notice, Otis’ argument that the protest period remains open until ten days after such posting occurs is without merit.” “It is reasonable to apply an actual notice standard in circumstances where the posting of a formal notice is not required.” [Otis Elevator Company, Case No. 2013-8]

16. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 16 – The State may reject an Offer as nonresponsive if the prices bid are materially unbalanced between line items or subline items. A bid is materially unbalanced when it is based on prices significantly less than cost for some work and prices which are significantly overstated in relation to cost for other work, and if there is a reasonable doubt that the bid will result in the lowest overall cost to the State even though it may be the low evaluated bid, or if it is so unbalanced as to be tantamount to allowing an advance payment. [The Compendium] New Panel Precedence – Unbalanced Bids (1)

17. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 17 “The Panel finds that the following elements must be proven in the instant case to establish a materially unbalanced bid: (1) there must be evidence showing that some prices are significantly less than cost for some line items; (2) there must be evidence showing that some prices are significantly more than cost for some line items; and (3) there is reasonable doubt that the bid will result in the lowest overall cost to the State despite being the low evaluated bid.” [Advanced Imaging Systems, Case No. 2013-07] New Panel Precedence – Unbalanced Bids (2)

18. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 18 Bids Submitted or Were They? (1) –Bidder submitted a bid on-line in SCEIS and also hand delivered a different hard copy bid to the bid opening. Agency stamped in the hard copy, but upon learning his on-line bid was received, handed the hard copy bid back to the bidder. –Bidder alleged he delivered his hard copy bid prior to the bid opening so it should be considered. [CPO Case No. 2013-124] Other CPO Issues This Year

19. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 19 Bids Submitted or Were They? (2) –Bidder submitted an on-line bid in SCEIS and received confirmation from SCEIS, which she printed. –But, because the bidder had two windows open in SCEIS, the system did not accept the bid. –[CPO Case No. 2013-127] Other CPO Issues This Year

20. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 20 CPO Observations Determination of responsibility conducted on the parent company, not the subsidiary actual offeror Requirements of Part III, Scope of Work v. Part IV, Information for Offerors to Submit

21. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 21 CPO Observations Determination of responsibility conducted on the parent company, not the subsidiary actual offeror BIG Parent Company Mid-Level Holding Company LLC Actual Offeror Make sure you are looking at the actual offeror, or get the parent to underwrite the contract.

22. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 22 CPO Observations Requirements of Compendium Part III, Scope of Work v. Part IV, Information for Offerors to Submit Part III, Scope of Work – addresses the performance requirements of the solicitation Part IV, Information for Offerors to Submit – addresses how we would like offerors to organize their proposals

23. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 23 CPO Observations Part III, Scope of Work –Addresses the “essential requirements” of the solicitation –Responsiveness should be determined based upon offerors’ answers to Part III

24. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 24 CPO Observations Part IV, Information for Offerors to Submit –Does not add “essential requirements” of the solicitation –Too often, agencies try to add “non-essential” requirements in Part IV and evaluate offeror responsiveness on what they provide in response to Part IV. –Examples: References, “similar references”, answers to certain questions, responsibility

25. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 25 Come on Man! I’m a responsible bidder even though the State of SC filed two tax liens against my company My quote was lower (even though I didn’t submit a bid) My voluntary suspension should be lifted even though I did not meet its terms You should consider my hardcopy bid even though I never actually surrendered it I was trapped in the stairwell causing my bid to be late

26. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 26 Questions

27. PROCUREMENT SERVICES DIVISION www.state.sc.us/mmo 27