Tuesday, August 28, 2012

The Facts and Feelings of Bid Protests

A bid protest can delay or derail a project.  There are a number of steps a public agency can take to help manage bid protests.

Develop clear bidding documents:  Probably the best deterrent to bid protests is to ensure that the bidding documents and process are clear.  It's important for public agencies to have a good internal review process of the documents to eliminate ambiguities.  Of course, in this difficult economic climate, sometimes protests will be filed even if the bidding documents are clear, as businesses seek to have a proposed award to their competition tossed out, often on a technicality.

Have policies and procedures:  Public agencies should have policies and procedures governing the filing of bid protests.  Often, there are state or local requirements that may apply.  In the interest of transparency, I think it's a good idea for the bid protest process to be included in the bidding documents for all to see. 

Evaluate the facts:  Bid protests may have substance or they may be frivolous.  When a bid protest is filed, it is important to carefully evaluate not only the specific facts and situation relating to the protest, but whether the protester followed the right process.  Recognize that if you accept a bid protest and declare the low bid non-responsive, you may have an appeal from the bidder whose bid you have tossed.  So it's important to objectively evaluate protests and weigh the risks of specific actions you might take. Involve your agency's attorney in responding to bid protests. 

Provide a hearing for the protester:  Some agencies respond to bid protests in writing after having only read the bid protest letter and investigated the facts.  I think it's very important, however, to provide a hearing or meeting for the protester to have the opportunity to personally make their case to the public agency.   Include the firm whose bid is being protested in the hearing.

Feelings matter in bid protests:  If a protester feels that their concerns have been carefully listened to and addressed (even if the final decision doesn't support the protest), the protester may choose to not take the protest to the next level (obtaining a temporary restraining order from the courts).  By creating an open, transparent, and deliberative process, the issues related to the protest can be sorted out.  Agencies should treat both parties fairly and ask critical questions of each.  Protesters want to be treated fairly and to feel that their concerns have been seriously considered.

Questions for public agencies:
  • What state or local regulations govern how your agency handles bid protests?
  • Does your agency have an internal quality control process for bidding documents?
  • Does your agency have a bid protest policy and procedure?
  • Does your agency include bid protest procedures in your bidding documents?
  • What is your agency's practice on how to investigate and respond to bid protests?
  • Does your agency conduct a hearing to evaluate the merits of a bid protest?
Mike Purdy's Public Contracting Blog 
© 2012 by Michael E. Purdy Associates, LLC 

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