Better Roads Digital Magazine
Issue link: https://read.dmtmag.com/i/85911
On September 19, 2011, VIDPW officials advised the FHWA they were still concerned that VIP "had not been performing on other VIDPW projects," and that they were "getting political pressure" not to concur in the award. Nevertheless, the VIDPW concurred in the award to VIP. However, one hour after concurring in the award, the VIDPW requested a call with FHWA, during which they continued to express concerns about VIP. After several days of meetings between FHWA and VIDPW, including VIP's written confirmation of its low bid, the FHWA issued a memo advising the con- tracting officer (CO) that, based on the government's concerns, the CO was not able to determine fair and reasonable pricing to the contractor (VIP) and the government. Therefore, the CO justified its conclu- sion that accepting VIP's bid would be unfair to VIP. As a result, on September 22, the FHWA awarded the contract to the second low bidder, IRC. On September 27, VIP filed a bid protest, which the FHWA denied. On October 17, VIP filed a complaint with the U.S. Court of Federal Claims, seeking a ruling that the FHWA was required to accept VIP's bid because it was the lowest price and was also responsive. The court re- viewed the facts and held that FHWA's rejection of VIP's bid was improper. The evidence showed that, as of September 19, the FHWA determined: there was no misunderstanding by VIP or IRC regarding the line items that were analyzed; an analysis of IRC's and VIP's bids found nothing that would raise a concern; while VIP's past performance raised some concerns, these concerns were not out- weighed by VIP's good past performance ratings; and there was no indication that VIP's bid contained any mistakes. The court found the apparent reason for FHWA's scrutiny of VIP's bid was because the Virgin Islands governor wanted assurance that VIP would complete the work. As a result, FHWA's counsel suggested the bid could be awarded to the second low bidder if VIP's bid was determined to contain a mistake (despite VIP's representation its bid was correct). However, the FHWA failed to identify any particular mistake in VIP's bid, and failed to provide any analysis suggesting that VIP's bid — which was 20.9-percent below the engineer's esti- mate and 14.6-percent below IRC's bid — was mistaken. FHWA concluded that VIP's bid contained a mistake based on poor past performance. However, the evidence suggested the CO's decision to award the contract to IRC was a fait accompli. The FHWA was not trying to as- sess whether VIP made a mistake, but instead was trying to find a way to reject VIP's low bid. The court also found that, if the FHWA was worried about VIP's ability to perform, the appropriate response was for the FHWA to make an adverse responsibility referral to the Small Business Administration. The court held that FHWA's decision not to proceed in this manner, if its general concern was about VIP's ability to perform, was also arbitrary, capricious and contrary to law. v Brian Morrow is a partner in Newmeyer & Dillion LLP, a law firm in California. He is a licensed California Civil Engineer, and specializes in the field of construction law, including road and heavy construction. Contact him at brian.morrow@ndlf.com Better Roads February 2012 36 Better Roads March 2012 31b