How do Bid Protests Fail?
(“HPC”) and its attorneys convinced the Government Accountability Office (“GAO”) that the devil is, indeed, in the details. On August 11, 2014, the GAO sustained HPC’s bid protest against the Veterans Affairs’ (“VA”) contract award to Utility Systems Solutions, Inc. (“US2”). The contract called for US2 to replace the current steam trap system at the VA Medical Center in Baltimore, Maryland and, in its place, install a new steam trap monitoring system.
The Initial Bids
The VA initially received nine sealed bids. US2 submitted the second lowest bid at $336,717 while HPC submitted the third lowest bid at $369,429. The VA rejected the lowest bid because the bidder was not listed in the VA’s Vendor Information Pages database as a verified and eligible bidder.
The VA’s Invitation for Bids (“IFB”) required that each bidder submit an original and a copy of its sealed bid. In addition, the IFB required that bidders submit a bid guarantee (i.e. a bid bond). US2 submitted the original and a copy of its sealed bid. US2 did not include a bid guarantee with the original bid; however, US2 included a copy of its bid guarantee with the copy of its bid. US2 claimed that its failure to include the bid bond with its original bid was inadvertent; the VA concluded that US2’s failure constituted a minor informality and determined that it should not reject US2’s bid based on this minor informality.
The GAO Decision
The GAO disagreed. According to prior GAO decisions, the bid must clearly comply with all “material” aspects of the IFB when the Agency opens the bids. The GAO requires clear material compliance at bid opening so that a bidder cannot manipulate the bidding process after the Agency has revealed the bids. In addition, prior GAO decisions have found that, when required by the IFB, a bid guarantee is a “material” aspect of the IFB.
Here, the GAO determined that US2 could not later submit its original bid guarantee because the later submission would occur after bid opening, in violation of GAO precedent. In addition, the GAO determined that the VA could not rely on the copy of US2’s bid guarantee because there is a possibility that the copy could have been changed (and, thus, would be different from the original). The GAO concluded that US2’s bid did not clearly comply with all “material” aspects of the IFB when the VA opened the bids (and, thus, the VA wrongly concluded that US2’s error constituted a minor informality) since the IFB required a bid guarantee, the VA did not receive US2’s original bid guarantee and could not later receive US2’s original bid bond, and the VA could not rely on the copy of US2’s bid guarantee.
Ultimately, the GAO recommended that the VA reject US2’s bid and award the contract to the next, lowest-priced responsive bidder (presumably HPC). In addition, the GAO recommended that the VA reimburse HPC with its protest costs and attorney’s fees.
Don’t Make the Same Mistake
As HPC demonstrated, bidders should pay careful attention to the procedural details involved in the bid process. If your business is involved in government contracting and procurement, the attorneys at Whitcomb Law, P.C. can help protect your business and prevent similar mistakes.