When bidding work within the public sector, there are numerous requirements that must be met before a contract is officially awarded. When a contractor is the lowest bidder, it is not necessarily the winning bidder. There are other responsibilities and obligations that the contractor must comply with under the terms of the bid in order to be awarded the contract. If those responsibilities and obligations are not met, a losing bidder can challenge the award.
A losing bidder has certain rights. In a bid protest, protesting bidders are often frustrated by the fact that the public owners can waive minor irregularities in the winning contractor’s bid. If the irregularity is not material, the owner’s discretionary decision to waive the irregularity will generally not be disturbed by a Court. The issue becomes what is considered an irregularity and whether it is material or not.
Often, when there is an irregularity in a bid proposal, the public owner will allow the contractor to correct the irregularity after the bid opening, as opposed to rejecting the bid. The protesting bidder would have to prove in Court that the irregularity was material and that it was disadvantaged by the correction of the low contractor’s bid.
Moreover, if the bid protestor commences an action in court, one of the criteria it must satisfy is that the public owner’s actions were arbitrary and capricious. This means that the public agency had no rational basis upon which to make its decision when it waived the irregularity and allowed the winning bidder to correct the deficiency. Even if the Court disagreed with the actions of the public owner, it is not difficult for a public agency to show some rationale or factual basis to justify what it did and prevail in the action.
Despite these obstacles, a bid protest is still winnable in certain circumstances.
It is up to the bid protestor to establish that the discrepancy or irregularity is material. For instance, in certain circumstances, the winning bidder failed to provide evidence of participation in a state approved apprenticeship training program. The court felt that this was a material aspect of the bid and the ability by the public owner to permit the irregularity to be cured was an error. As a result, the project was rebid.
The key aspect to any bid protest is to ensure that the winning bidder complied with all of the terms and conditions of the bid. While not every item set forth in the bid proposal will be deemed material, it is essential that the bid protestor review the terms and determine whether the issues are material or not.
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