Summer 2011As the increase in public construction winds down, many contractors have expanded their territory across state lines. Between Oregon and Washington, the resulting increase in competition for public projects has made it more important than ever for contractors to understand the public bidding practices of each state. When it comes to bid protests (i.e., challenging the award of a public construction contract to another bidder), knowing the differences in those practices can be the difference between working and sitting idle.
Eligibility and Timing
The law governing the eligibility of bidders to protest an award to another bidder is the same in Oregon and Washington. A protesting bidder must claim that all lower bidders are ineligible. In other words, the third-lowest bidder cannot protest an award unless it can say that the two lower bidders are ineligible.
In both states, protesting bidders should quickly submit a written protest to the contracting authority. Under the rules that govern most authorities in Oregon, written protests must be submitted to the authority within seven calendar days of the authority's issuance of a notice of intent to award a contract (the deadline is three business days for protests to the Oregon Department of Transportation). In Washington, written protests typically must be submitted to the authority within two business days.
In Washington, if a contracting authority rejects a protest, the authority cannot execute a contract for at least two business days after it gives the protesting bidder written notice of the rejection. Those two days are critical because they provide time to file a lawsuit before the contracting authority enters into a contract with another bidder.
In Oregon, there is no specific period after a contracting authority rejects a protest during which the authority is prohibited from entering into a contract. The law only prevents contracting authorities from entering into a contract with another bidder before they respond in writing to all timely submitted protests. Therefore, Oregon protestors must be ready to file a lawsuit immediately upon filing a written protest to the contracting authority (and should consider filing the lawsuit even before receipt of the authority's written response).
In both states, it is essential to file a lawsuit to prevent a contracting authority from entering into a contract with another bidder before the contracting authority has actually done so. After a contracting authority awards a contract, a court will not force the contracting authority to award the contract to the protesting bidder even if the protestor is right.
Moreover, Washington protestors are not entitled to recover their bid preparation costs or lost profits and may even be required to pay the contracting authority's attorney fees if they file a lawsuit after a contracting authority has entered into a contract with another bidder. Although Oregon protestors may recover bid preparation costs and attorney fees in such a situation, bid preparation costs are difficult to prove and any award will probably be significantly less than what would be realized in winning the contract.
The point here is — disappointed bidders must act quickly to submit a written protest and initiate a lawsuit to preserve any chance of being awarded the contract.
Since no court will overturn an authority's decision on an issue within the authority's discretion, filing a lawsuit to challenge such an issue is pointless. Similarly, accusatory and inflammatory protests of discretionary decisions will not help. On issues within a contracting authority's discretion, protestors should describe the basis for the protest in a simple and polite manner. Since the authority's decision will be final on such issues, protestors who convince the authority of the legitimacy of their protest without offending have the best chance of success.
In Oregon, contracting authorities have discretion to waive minor informalities and clerical errors. A "minor informality" is a bid mistake that can be waived or corrected without giving the bidder an unfair advantage over the other bidders. A mistake involving price, quality, quantity, or delivery is not a minor informality and may not be waived. But returning fewer than the required number of signed bids to the contracting authority could be a minor informality. Clerical errors (e.g., transposition errors or typographical mistakes) may be waived if the error is obvious and the bidder confirms the correction in writing.
Washington contracting authorities may waive informalities and errors if they are not "material." An informality or error is material only if it gives a bidder a substantial advantage over other bidders. Although it is debatable whether there is a practical difference between an unfair advantage (the Oregon test) and a substantial advantage (the Washington test), the language indicates that contracting authorities in Washington have more discretion than their Oregon counterparts, which reduces the likelihood of overturning a Washington contracting authority's decision on a bidding issue.
Even on issues outside of a contracting authority's discretion, where there is a good possibility that a court will uphold the protest, protests should be simple and polite. After all, if a protestor wins, the protestor will be working with the authority to complete the project, and a damaged relationship can result in a costly project.
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