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By W. Samuel Niece
This
article discusses two interesting developments in California
public contract bidding.
The Defensive Bid Protest
Under
federal practice, a bid protest will be accepted only from
a bidder who would be in line for award if the protest were
to be sustained. American Overseas Marine Corporation,
Comptroller General Decision B-227965, 87-2 CPD 190. This
is consistent with the legal requirement for standing, i.e.,
in order for a complaining party to have standing, some
benefit must accrue to the party if it wins or some detriment
if it loses. Parker v. Bowron, 40 Cal.2d 344, 354
(1953). Accordingly, post-opening bid protests historically
have been filed by the second-low monetary bidder challenging
the responsibility of the low bidder or the responsiveness
of the low bid. Occasionally, the third- or even fourth-low
bidder files a protest challenging award to the first-,
second- and even third-low bidders. The common thread is
that in each of these cases, the protester stands to obtain
the award if its protest is sustained.
On
the other hand, it would seem that a low monetary bidder
has neither standing nor a reason to file a bid protest.
Virtually all competitive bidding statutes (e.g., the California
Public Contract Code and the various city charters and municipal
codes) require award to the responsible bidder who submits
the low, responsive bid. Furthermore, there can be no degrees
of responsibility or responsiveness. A bidder is either
responsible or not, and a bid is either responsive or not.
An awarding authority cannot pick and choose between two
low bidders on the basis of relative superiority. City
of Inglewood-L.A. County Civic Center Authority v. Superior
Court, 7 Cal.3d 861, 867 (1972). Thus, if the low monetary
bidder is responsible and its bid is responsive, then it
is entitled to the award. On the other hand, if the low
monetary bidder is not responsible or its bid is non-responsive,
then it is out of the running and has no interest (i.e.,
accrues no benefit or detriment) in whether the award goes
to the second- or third-low monetary bidder. Accordingly,
there have been very few bid protests filed by low bidders.
However,
in MCM Construction, Inc. v. City and County of San Francisco,
66 Cal.App.4th 359 (1998), the First District Court of Appeal
agreed with the second-low bidder's argument that the low
bidder (MCM) could not challenge the San Francisco Airport
Commission's decision to award to the second-low bidder
(Myers) because MCM had not filed a bid protest. The discussion
of MCM's failure to file a bid protest is contained in Part
II of the court's opinion. In Part I, the court held that
the Airport Commission had not abused its discretion in
finding MCM's bid nonresponsive. Accordingly, the discussion
in Part II about MCM's failure to protest the award to Myers
is arguably dicta (because the court found another, independent
reason to sustain the rejection of MCM's bid). Nevertheless,
it is a statement in a reported decision by a California
appellate court, so it can be cited as authority for the
proposition that a low bidder must file a protest in order
to preserve its rights.
Accordingly,
low monetary bidders on any project (such as in MCM)
where the bid instructions set forth procedures and a deadline
(e.g., "before 5 p.m. of the 10th business day following
bid opening") need to seriously consider filing a timely
bid protest challenging award to the second- and possibly
third-low bidder unless they can establish that no other
bidder will file a timely protest challenging award to them.
Otherwise, they run the risk of the awarding authority sustaining
the protest against them and then finding the door of the
courthouse closed to legal action by them seeking to overturn
the awarding authority's decision.
Pre-Opening Protests
It
is appropriate to file a protest before bid opening when
potential bidders take exception to the terms of the solicitation.
An example would be a solicitation that impermissibly limits
the bidding to one product or entity in violation of Public
Contract Code §3400 or otherwise favors one competitor
over another. In such a situation, if the bidder cannot
resolve the matter informally with the agency staff, the
bidder should file a protest well before the date set for
bid opening. The courts take a dim view of post-bid opening
protests based upon something that should have been apparent
before the bid opening. Bidders cannot wait to see if they
are awarded the contract and then protest if they do not
get it. The courts view this as trying to take two bites
at the apple.
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