An Overview of Bid Protests

An Overview of Bid Protests

The general purpose of a public agency’s procurement codes or rules is to create a system where goods and services can be acquired for the lowest cost. If the bidder presents the lowest and best bid, or if the proposer comes up with the best and most cost-effective proposal, they will probably be awarded the contract. The intent of the procurement process is to protect the interest of the taxpayers, and for each bidder or proposer to be on equal terms to get fair consideration of its submission. If substantive or procedural specifications in the evaluation process have been violated, a losing bidder or proposer may have grounds to object to, or “protest,” the agency’s award.

Protesting a proposed contract award to another vendor is a highly specialized area of the law for several reasons. Each agency has a unique set of rules and regulations governing its procurement process which must be followed. Further, the deadline to submit a protest is usually very short, and the format and method in which to submit it in may be specific. The reasons for the bid, and an understanding of the agency’s protest procedure, must be determined very quickly.

Some agencies may require a Notice of Intent to Protest an award before a formal protest is due. The Notice of Intent to Protest may be short statement from the protestor that it is going to file a protest. The grounds of the protest may not be required to be stated in the Notice of Intent to Protest, but the content of the Notice may vary by agency.

If you file a protest, you may be required to produce a protest bond. The amount of the bond varies from agency to agency. Sometimes the amount is 1% of the protestor’s bid or proposal amount. Or it could be a set sum like $5,000. The most important thing about the bond is that if it is required, the protestor must file it when and where it is due. Otherwise, the entire protest proceedings may be waived, and the protestor will lose the protest.

The formal protest is usually the more substantive letter, memorandum, or other written submission that is submitted to the agency and discusses in detail all the protest grounds raised. Some agencies’ codes require the protestor to list every protest ground, and will not consider any protest grounds not raised in the formal protest.

Some agencies’ codes also require protestors to submit all supporting evidence with the formal protest, and will not consider evidence submitted after the protest is received. You can usually get a copy of the agency’s protest policies or code on its website, or through online services like Municode (www.municode.com).

Not all bidders have the right, or “standing,” to protest. Generally, a protesting party must demonstrate that its substantial interests will be affected by the proposed agency action. That usually means the protest has to show that its rights under the procurement process might have been violated, and it could have won the bid or achieved the highest rank.

The ability to protest may be based on the protestor’s ranking. A second ranked bidder generally has standing to protest because it was next in line for the award. Bidders or proposers ranked third or lower may still be able to protest if its substantial interests are or will be affected. If the second ranked bidder protests, a bidder or proposers ranked third or lower may be able to “intervene,” in the protest process in order to protect its position in the ranking. Intervening basically allows the bidder or proposer to monitor and have limited participation in the underlying protest.

Generally, once a protest is received by an agency, the agency will stop, or “stay,” the solicitation or contract award process. This will continue until the protest is resolved by the agency.