Introduction

Protesting and disputing government contract awards can appear intimidating at first glance. If you are a business that either has a contract with the state or federal government, a state or federal agency, or a municipality, or has pursued obtaining a government contract with any of those entities, you have probably been involved in a public bidding (or government procurement) process.

This process is where the government issues a request for proposals or request for quotes (otherwise known as an “RFP” or “RFQ”), and then you, the business, submit a proposal for the services or products being requested.

What happens if your business submitted a proposal for the contract, but the government declined to award the contract to you, and you believe the process was unfair? For example, a vendor that should have been disqualified wasn’t, or another vendor forgot to submit a critical portion of the proposal, or the government awarded the contract to a vendor whose proposal was not scored properly or whose proposal was more expensive than yours.

Fortunately, despite the fact that the party on the other side of this equation is the government, you can protest and dispute government contract awards. In any of the situations above, the government likely violated competitive bidding standards. Here is a simple step-by-step process for protesting and disputing government contract awards:

What are Competitive Bidding Standards?

Regardless whether the government contract that was awarded was a state contract or a federal contract, a public bidding process administrated by the government usually must comply with certain standards. These standards are known as “competitive bidding standards” or “public procurement standards.” They are usually identified in a specific statute, or they are developed through case law, or both.

Competitive bidding standards dictate that (1) the bidding process must be open and transparent, (2) the government must be fair and unbiased, and (3) the government must place all bidders on a level playing field. This usually means all bidders must respond to every component of an RFP, and the government must treat all bidders fairly.

For example, if the RFP states that a bidder must submit 10 different materials, or append four specific attachments to its proposal, or quote two specific prices, then the bidder must satisfy those requirements. If a bidder submits only nine materials, forgets to append one of the four attachments, or quotes three prices instead of two, the government usually must reject that proposal. Similarly, if a bidder’s proposal is late – even by five minutes – the government cannot accept it. The government usually cannot “waive” any of these requirements for any one bidder, unless it does so for all bidders.

If the government violates these standards (even what some might consider a minor or “technical” violation), the contract that was awarded is usually void and illegal as a matter of law.

You Believe the Government Acted Unfairly. Now What?

If you believe the government was unfair in its administration of the bidding process or in its award of the contract, you have to undertake two steps. You should pursue both – immediately – in the following order.

The First Step: Government Records Request

There is usually some statutory process for requesting public records from the government that relate to the bidding process.

For example, in New Hampshire, this process is called the right-to-know law. In other states, such as Florida, it is referred to as a “sunshine law.” At the federal level, it is called the Freedom of Information Act.

You should locate the applicable law in your jurisdiction and submit a written request to the government for documents concerning the bidding process. You should contact an experienced attorney to assist you so that you can ensure it is done properly.

The request can usually be submitted as a letter. It usually does not have to be filed in court. The letter can be brief and state simply, “This is a written request for records under [identify the applicable statute]. I request that you provide the following documents . . . ” You should then identify, at a minimum, the following documents:

• Other bidders’ proposals;
• Communications between other bidders and government officials;
• Communications between and amongst government officials;
• Minutes of any meetings;
• Memorandums or other documents prepared by government officials;
• Notes prepared by government officials, including evaluation committee members; and
• Scoring records regarding the proposals.

The government usually has a maximum of several days to comply with and respond to this request. The government can usually either make the documents available for you to inspect and/or copy, or it can provide you with a set of either physical paper copies or electronic copies (which is becoming the norm).

When you receive this information, you should review it immediately, so you can then make a reasoned determination about whether your suspicions are accurate: Was the bidding process unfair, and did the government act appropriately? Obtaining this information is important because you acquire a fairly complete view of the events, and you can validate your suspicions.

In these instances, an attorney can help you make this determination, because he or she can identify the specific statute, RFP provision, or other legal authority that was violated (if at all). This is a consuming, highly technical process that must be completed within a matter of days (the reasons for which are explained below), so I do not recommend you go it alone.

How Minor or Technical Can a Violation Be?

A violation of competitive bidding standards does not need to be major. As noted above, a violation can be as simple or as minor as a missing attachment, a late proposal, or a proposal that does not comply or respond to a specific request in the RFP.

Because the public bidding process must be open and transparent, courts usually mandate that competitive bidding standards and requirements in RFPs be “strictly” followed. Even a small violation of any standard or requirement will “taint” the process. In these situations, as noted above, a court will conclude the contract that was awarded is similarly “tainted” and must be declared void.

The Second Step: Protest and Dispute the Government Contract Award

If you determine, based on your review of the information you receive, that the government violated competitive bidding standards, you should protest and dispute the contract award.

There is usually a legal procedure for protesting the award. In many instances, there will be an administrative procedure operated by the agency that announced the RFP and ran the process. This is where the agency will determine if the law was violated, whether the contract should be declared void, and whether the contract should then be re-bid. There is normally a tight deadline for initiating this process; thus, your review of the records you receive from the government must be completed quickly.

An informed agency (i.e., one that does the “right thing”) will usually understand the potential pitfalls of adhering to a contract award that was tainted by a competitive bidding violation (e.g., bad publicity, lack of trust in the process, etc.). Accordingly, it will either correct the error – and award the contract to the right bidder – or, if the errors are too numerous or fundamental, it will announce a new bidding process. In a new bidding process, you will have a fairer opportunity at winning the contract on a more level playing field.

If, however, the administrative protest you invoke is unsuccessful, or if there is no such process, you can usually file a lawsuit in court and request a preliminary injunction. A preliminary injunction is a preliminary order that halts performance of the contract – to prevent harm – while the parties litigate the dispute. You can then proceed with the suit and pursue a permanent injunction and an order that declares the contract void and instructs that the contract be re-bid.

You should not view this process as a traditional, full-blown lawsuit. Although, technically, it is a lawsuit (and you would have the option of continuing on and pursuing permanent injunctive relief and possibly even money damages), this process is usually won or lost at the preliminary injunction stage. If you succeed in obtaining a preliminary injunction, it will likely not make economic sense for the government to continue litigating and attempt to obtain an order that legitimizes the contract. Rather, the government will usually cut its losses, accept the injunction, and re-bid the contract and announce a new bidding process.

In either step above – the administrative process or a lawsuit – you should engage an attorney to represent you because he or she will be familiar with the process and the nuances of litigating these disputes.

Should You Protest and Dispute a Government Contract Award?

As you review these steps, a key decision that must be made – usually before you undertake either step above – is whether you should protest and dispute the award at all? In many instances, protesting an award represents sound business judgment.

As explained above, the process for challenging these awards is brief, streamlined, and can produce a favorable result very quickly (i.e., in a matter of weeks or just a few months). If the value of the government contract to your business represents a high five-figure, or a six- or seven-figure, benefit, it makes economic sense to invest in either the protest process at the administrative level and/or a lawsuit in court. These efforts will likely be worthwhile because they will ensure you have a fair chance at obtaining a valuable contract that will generate revenue for your business.

Meet the author: Robert Fojo

Robert assists clients with business and commercial transactions, civil litigation, and complex dispute resolution. He helps businesses defend themselves when lawsuits are filed against them and prosecute their own lawsuits when they have been wronged. In this regard, Robert handles a wide variety of legal issues, including general commercial disputes, construction matters, class action lawsuits, real estate disputes, disputes concerning the competitive bidding process and government procurement and contracting, employment claims, and appellate litigation. Robert also assists small-to-medium size privately held businesses, venture investors, and entrepreneurs with cost effective legal solutions that address their specific business needs.