This article originally published in the August 20, 2021 edition of the Daily Journal of Commerce Oregon.
Bidders on public works projects in Oregon and Washington are probably at least passingly familiar with the bid protest process. Typically, if the second low bidder is aware of a material irregularity or informality in the apparent low bidder’s bid, the second low bidder may protest that defect to the contracting agency and it must do so within a very brief window of time. This article discusses the significant differences between the bid protest deadlines and procedures in Oregon and Washington, of which contractors should be aware.
One caveat at the outset—this article is based on the standard procedures under Washington and Oregon statutes and regulations; however, contracting agencies are free to modify these statutes and regulations through the terms of their solicitations (i.e., the invitation to bid or request for proposals). So, it is vital that a contractor be familiar with the protest procedure provided for in the solicitation and follow that procedure should it wish to submit a bid protest. If the solicitation does not contain a protest procedure, then a contractor should assume that the applicable statutes and regulations apply.
The general rule in Oregon is that bidders on public construction projects are required to submit bid protests within seven calendar days of issuance of notice of intent to award to the apparent low responsive bidder. The Oregon regulation expressly provides that the seven-day protest period applies unless a different protest period is provided for in the solicitation. Thus, the triggering event in Oregon is not when the apparent low bidder is revealed at bid opening, but when the contracting agency gives notice of its intent to award. Therefore, a disappointed bidder must submit a protest within seven days of that event.
If a contracting agency denies the bid protest, the bidder can then seek judicial review of the denial in the Circuit Court in the county in which the contracting agency is located. While the statute does not provide for a specific timeframe for bringing such an action, as a practical matter, a bidder would be wise to file a lawsuit as quickly as possible to prevent notice to proceed or performance of the work on the project. Waiting until performance has commenced to file a lawsuit gives the contracting agency a persuasive argument that stopping performance and redoing the solicitation would not be in the public interest. The most prudent course of action would be for a disappointed bidder to immediately file an action for injunctive relief and declaratory judgment and a motion for a temporary restraining order, which a bidder may be able to obtain without notice to the contracting agency. The statute also provides that the prevailing party may recover its damages and attorney fees incurred in prosecuting or defending against the protest. Therefore, before commencing litigation, disappointed bidders should consider the risk of having to pay the contracting agency’s damages and attorney fees in the event the protest is denied.
As noted above, there are some important distinctions between the bid protest procedures in Oregon and Washington. The general rule in Washington (simplified for purposes of this article), is that bidders are required to submit bid protests within two business days of bid opening. That is, the triggering event for the protest period in Washington is bid opening, not issuance of notice of intent to award, as in Oregon. This distinction may seem minor, but could have important impacts on whether a bidder’s protest is timely. For example, in Oregon, if a bidder is fifth low, it would generally not be required to file a protest of an irregularity in the fourth low bidder’s bid, as such a protest would have no effect on contract award. Conversely, in Washington, applying the plain meaning of the bid protest statute to the hypothetical above, the fifth low bidder would be required to protest irregularities in the bids of other bidders who were not in line for award, in order to preserve their legal rights. While seemingly inefficient and impractical—as it would require the contracting agency to make a determination regarding bids that would have no effect on contract award—this is what the language of the statute requires of bidders. Therefore, the prudent bidder would request copies of all bids, review them carefully, and protest any irregularities it finds.
If the contracting agency denies the bid protest, Washington case law holds that a bidder must seek a temporary restraining order before the contract is executed. As mentioned above, it is merely advisable that an adversely affected bidder in Oregon seek injunctive relief immediately, while in Washington it is required to preserve a bidder’s legal rights. Thus, an aggrieved bidder in Washington must act quickly and file an action in Superior Court for injunctive and declaratory relief. Under Washington case law, a bidder is not entitled to recover its damages or attorney fees, though a contracting agency may be entitled to recover its attorney fees if a court finds that the temporary restraining order was “wrongfully issued,” which in the context of bid protests means that the bidder seeking injunctive relief lacked a reasonable basis for doing so. Therefore, as with bid protests in Oregon, a bidder must consider the risk of having to pay the contracting agency’s attorney fees when evaluating whether to seek judicial review of the denial of a protest.
The takeaway from this article is that there are significant differences in Oregon and Washington bid protest law and contractors need to be aware of those differences. An Oregon-based contractor may occasionally bid on Washington projects or vice versa, and assume the rules are the same. However, as the above demonstrates, there are key differences between the procedures in the two states which could affect contractors’ bid protest rights. Again, the first place to look to determine the proper procedure is the solicitation. If it provides no guidance, then contractors should assume the above rules apply and do their best to strictly comply with them. As with all bid protests, timing is key and knowing the deadlines ahead of time will help bidders preserve their protest rights.
Brent Carpenter is a shareholder at Jordan Ramis and focuses his practice on construction law. Contact him at (503) 598-5524 or firstname.lastname@example.org.
Tags: Construction, Construction and Development