Government Contracts: Bid Protest Procedure
Unsuccessful bidders have become a nightmare in all construction contracting. Public and utility procurers must be very careful when awarding public contracts to ensure full compliance and implementing effective remedies to deal with this type of issues.
The increase in the number of challenges can be explained by:
- unsuccessful bidders becoming increasingly aware of their rights;
- procedural changes that have enabled unsuccessful bidders to obtain the background material required for a challenge; and
- the current financial climate, which has reduced the number of contracts awarded, so unsuccessful bidders may be prepared to challenge the award of a contract.
What is Bid Protest
A bid protest is a challenge to the award or proposed award of a contract for procurement of goods and services or a challenge to the terms of a solicitation for such a contract. A bid might be protested or cancelled by an interested party when it claims that the selection procedure was based on improprieties in the award of the contract. An interested party could be a potential bidder for the contract or an actual bidder that did not win the contract. Other factors, such as the bidder’s standing in the competition and the nature of the issues raised may affect whether it qualifies as an interested party.
One of the key requirements to prevail under a formal bid protest is a showing that the protester has been prejudiced by improper agency activities. A protester who prevails is entitled to a remedy, usually in the form of corrections in the bidding process or monetary damages.
When to Protest a Bid
Protesting a bid must be done following procurement instructions and must be filed before the time for receipt of initial proposals. If the protest challenges the award of the contract, it must usually be filed within 10 days of when the protester knows or should know of the basis of the protest. Regulations and norms to timely file a protest depend on each particular circumstance and those instructions should be strictly followed. When the case pertains to the federal government, the GAO, has created some Bid Protest Regulations under 4 C.F.R. § 21.2.
What Happens after a Bid has Been Protested
When the bid has protested, the corresponding agency or procurement division must within a reasonable time present a report with their findings. Shortly after, the protester must file comments addressing the initial report after receiving it. Failure to file comments might result in dismissal of the bid protest. The procurement office might decide to re-evaluate proposals, choose a new bidder, amend a decision, or take other actions.
What Happens When the Bid Protest Is Valid
When the bid protest has been validated and found admissible by the procurement agency, the agency should decide on one of these alternatives:
- Refrain from exercising options under the contract;
- Terminate the contract;
- Recompete the contract;
- Issue a new solicitation;
- Award a contract consistent with statute and regulation; or
- Such other recommendation(s) as the agency determines necessary to promote compliance
How to Present a Bid Protest
A detailed statement to present a bid protest must include:
- The facts upon which the protest is based.
- Present each and every procedure that was violated and how it was violated.
- Specify each reason that all other bidders that participated in the process should not be considered to be awarded the contract.
- Submit all relevant exhibits that will clarify any single concern that the procurement agency should have.
- The bid protest is a document that shall not be amended; the bid protest should include all possible violations.