1. Nancy Brooks Director of Purchasing Iowa State University AVOIDING BID PROTESTS and HANDLING THE ONES THAT HAPPEN 1 Annual Meeting April 7 - 10, 2013 Orlando, Florida

2. Overview What Is A Bid Protest? A formal complaint against some aspect of a procurement process which asserts either: – A violation of policy, procedure or law; or – A decision that lacks any rational basis Annual Meeting April 7 - 10, 2013 Orlando, Florida 2

3. Overview What is a decision lacking a rational basis? – A decision or action that lacks logical support at all – A decision based on materially mistaken or erroneous facts – A decision contrary to the solicitation – A decision based on improper motives Annual Meeting April 7 - 10, 2013 Orlando, Florida 3

4. Common Protestable Issues Failure to advertise the solicitation as required; Specifications give one bidder an unfair advantage over its competitors; A bidder had improper communications or relationship with contracting officer which gave the appearance of impropriety; Winning bidder failed to satisfy minimum qualifications or was not responsible or responsive; Annual Meeting April 7 - 10, 2013 Orlando, Florida 4

5. Common Protestable Issues Evaluation criteria were applied that were different from those stated in solicitation; More weight was afforded to one evaluation area than was disclosed in solicitation; Irregularities in receipt or opening of bids (acceptance of late bid or opening at different times) Annual Meeting April 7 - 10, 2013 Orlando, Florida 5

6. Common Protestable Issues Source selection not rational or consistent with the evaluation criteria; Past performance evaluations may appear unfair or not supported by facts; Improper discussions or debriefings; or Conflict of interest created by awardee’s involvement in certain activities. Annual Meeting April 7 - 10, 2013 Orlando, Florida 6

7. Common Protestable Issues Sole source contracts; Best-value determinations; or Abuse of discretion and disparate treatment of bidders. Annual Meeting April 7 - 10, 2013 Orlando, Florida 7

8. Bid Protest Trends Federal procurement protest increased – 1,652 in 2008 to 2,475 in 2012 Why? – Difficult economy – Shrinking pots of public money – Law firms specializing in bid protests “Leading name in bid protests – team of attorneys have been nationally recognized for their work in pre-award and post-award protests.” Annual Meeting April 7 - 10, 2013 Orlando, Florida 8

9. Protests Court Cases – Blue Cross & Blue Shield of Rhode Island v. Najarian, (Rhode Island Supreme Court, 2005) Trial Court sustained a protest against the award & issued an injunction Supreme Court reversed – While the contract award was not handled perfectly (at least partly due to understaffing), a “fair and open bid process was conducted in good faith and we must afford a presumption of correctness to the State’s decision. Any mistakes made during the process simply do not rise to the level of palpable abuse of discretion.” Annual Meeting April 7 - 10, 2013 Orlando, Florida 9

10. Protests Court Cases – Glidepath, LLC v. Columbus Regional Airport Authority, (Ohio Court of Appeals, 2012) Evaluation committee determined Glidepath was not responsible. Airport’s finance director on committee and analyzed financial statements & D&B reports. Company had late payments to subs and limited project mgmt. experience. “Airport performed its duties in a lawful manner. Made qualitative determinations regarding Glidepath’s resources, capacity, and overall ability to perform…..determination was supported by logic and reason.” Annual Meeting April 7 - 10, 2013 Orlando, Florida 10

11. Protests Court Case: – Professional Building Maintenance Corp. v. School Board of County of Spotsylvania (Virginia Supreme Court, 2012) County held 2 post-award meetings with vendor (1st) emphasized weakness in Environmentally Preferable Purchasing Program and (2 nd ) gave reasons regarding responsibility, transitioning plan, and method of conducting background checks. Found that award decision was arbitrary and capricious. Annual Meeting April 7 - 10, 2013 Orlando, Florida 11

12. Protests Court Case: – A&A Industrial Piping, Inc. v. County of Passaic (New Jersey Supreme Court, 2012) Protested award to low bidder on grounds that apparent awardee was not prequalified by county. County realized it inadvertently omitted prequalification in solicitation so cancelled it. Court sustained the county’s decision that it did not abuse its discretion in determining it needed to rebid. Court reasoned that this put potential bidders on an equal footing. Annual Meeting April 7 - 10, 2013 Orlando, Florida 12

13. Protests Avoidance is best practice Protests are time consuming and costly Damages relationships Annual Meeting April 7 - 10, 2013 Orlando, Florida 13

14. HOW TO AVOID BID PROTESTS Sometimes You Can’t! Even when you are confident with your award YOU MAY BE CHALLENGED Annual Meeting April 7 - 10, 2013 Orlando, Florida 14

15. EXAMPLES OF PROTESTS Emergency Generator & Transfer Switches awarded to low compliant bidders (in-state) – Protest: From low non-compliant bidder (out-of-state) – Based on: Price No local preference clause in bid Failure to notify all bidders with bid tab within 7 days per state statute (?) Annual Meeting April 7 - 10, 2013 Orlando, Florida 15

16. Examples of Protests Disposable Gloves for Dining Services awarded to low bidder (local WBE) – Protest: From bidder with higher price (out-of-state) – Based on: Awardee’s bid was materially non-responsive by failing to answer all questions listed in Section D or including mandatory electronic copy in their proposal. Annual Meeting April 7 - 10, 2013 Orlando, Florida 16

17. Examples of Protests Vending Machine Energy Control Units awarded to low compliant bidder – Protest: From bidder with higher price – Based on: “Violation of NAEP Code of Ethics Rules #7 – Use only by consent original ideas & designs devised by one vendor for competitive purchasing purposes” “Request a 3 rd party review of protest – Rule #8 – be willing to submit any major controversies to arbitration or other 3 rd party review insofar as established policies of institution permit.” Annual Meeting April 7 - 10, 2013 Orlando, Florida 17

18. Examples of Protests Version Control Software awarded to low compliant bidder with best solution – Protest: From other bidder – Based on: 1.Challenged the evaluation process and criteria 2.Bid process be reopened and allow them to engage more in decision making process 3.Keep request confidential Annual Meeting April 7 - 10, 2013 Orlando, Florida 18

19. Examples of Protests Tent Rental and Event Set-Up Contract awarded to second low bidder based upon reference checks indicating poor communications and damage to grounds – Protest: From low bidder (local company) – Based on: Low bid and lack of evidence that company could not perform. Annual Meeting April 7 - 10, 2013 Orlando, Florida 19

20. Protest Avoidance Strategies Published policy and procedure for vendor disputes Develop RFP to remove the appearance of an arbitrary or proprietary process Post RFPs on Internet Communicate your decision with all respondents prior to final award (debriefing) Annual Meeting April 7 - 10, 2013 Orlando, Florida 20

21. Protest Avoidance Strategies Keep communication lines open Always respond to questions/protests in diplomatic manner. Keep conversations factual and objection Be consistent with evaluation criteria stated in RFP Annual Meeting April 7 - 10, 2013 Orlando, Florida 21

22. Protest Avoidance Strategies Understand your position and institution’s will to support your decision Be consistent and follow your policies & procedures MAKE SURE YOU CAN DEFEND YOUR EVALUATION & AWARD DECISION Annual Meeting April 7 - 10, 2013 Orlando, Florida 22

23. Protests Avoidance is best practice Protests are time consuming & costly Damage relationships Annual Meeting April 7 - 10, 2013 Orlando, Florida 23

24. THANK YOU QUESTIONS? Annual Meeting April 7 - 10, 2013 Orlando, Florida 24