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Thursday, September 1, 2016

An irresponsible determination of nonresponsibility?

Baltimore painting company sues Delaware River Port Authority over Commodore Barry Bridge bid contract
A Baltimore company has initiated legal action in a New Jersey federal court, claiming they were passed over by the Delaware River Port Authority of Pennsylvania and New Jersey (DRPA) as the lowest bidder for a $17 million contract to paint the Commodore Barry Bridge. According to a lawsuit filed by The Alpha Painting & Construction Company, Inc., DRPA “wrongfully deemed the lowest bidder ‘not responsible’ and is in the process of awarding the [bridge painting] contract to a higher bidder.”

On May 5, the DRPA first put out invitations for bids to paint the Pennsylvania Approach Spans of the Commodore Barry Bridge, which allows for travel over the Delaware River from Bridgeport, N.J. to Chester, Penn. Alpha submitted a bid for this project on June 16 in the amount of $17,886,000, which conformed to the project’s bid specifications and rendered it the lowest bidder for the project, according to the lawsuit. DRPA decided to award the bid contract to Corcon, Inc. – whose original bid clocked in at a price roughly $10.2 million more than Alpha’s.

Amy L. Ash, Acting Manager of Contract Administration for DRPA, declared that DRPA had conducted an ‘investigation’ of Alpha’s bid and found that Alpha had ‘not submitted an OSHA Form 300 or otherwise detailed workplace incidents over the past three years and the applicable Experience Modification Factors,” according to Alpha’s lawsuit.

Alpha claimed DRPA “willfully ignored the merits of the low bidder’s protest, and refused to hold a hearing on the disputed factual issues regarding this procurement, despite multiple requests to conduct such a hearing.” Alpha alleged DRPA declared Alpha ‘not responsible’ for failure to supply the documents, and rejected Alpha’s bid. The Aug. 4 Denial Letter noted that through the course of DRPA’s ‘investigation,’ it had allegedly ‘contacted Alpha’s insurance broker, Beverly Annunziatta of HMS Insurance Associates, Inc., on July 8, 2016’ and ‘offered Ms. Annunziatta an opportunity to supplement the accident experience information attached to Alpha’s bid submission, but she did not do so,” per the lawsuit.

Alpha disagreed with this contention, saying it had provided said information and pointed out DRPA never revealed what constituted its “investigation” of the bid, nor contacted it regarding any such investigation in the first place. When Alpha protested this result, the company says DRPA “denied it a hearing to resolve the outstanding factual discrepancies. DRPA contended, “DRPA was not required to make its responsibility determination within 10 business days, nor is DRPA required to hold a hearing in the event of a protest of that determination. Accordingly, Alpha’s request for a hearing is denied.”
Now, I have taken these bits and pieces from the article, paraphrased and probably distorted them to create a hypothetical case for consideration of how one might view this situation from the standpoint of Guam's procurement law, which is heavily filtered through the provisions of the ABA Model Procurement Code.

In this context: Would Alpha have the right to protest the rejection of the bid on the ground that the bidder was determined to be non-responsible? Clearly, yes.

The ABA Model Code allows any bidder who may be aggrieved to file a protest, and that protest, if not resolved mutually before adversarial processes begin, would be entitled to a hearing administratively, followed by judicial review as a matter of right. (See for starters ABA MPC §9-101, Guam 5 GCA § 5425)

But was Alpha properly determined to be non-responsible? That is a question of judgment, ultimately, and the person making that judgment is generally give a lot of latitude in making the judgment call. That said, the process of coming to that judgment must be fair and equitable under basic principles of procurement. (See ABA MPC § 1-101 and Guam 5 GCA § 5001, as well as 5 GCA § 5003: "This Chapter requires all parties involved in the negotiation, performance, or administration of territorial contracts to act in good faith.")

Under the ABA MPC and Guam's version of it, a determination of responsibility contemplates that the contract officer will conduct an inquiry. "The unreasonable failure of a bidder or offeror to promptly supply information in connection with an inquiry with respect to responsibility may be grounds for a determination of nonresponsibility...." Also the implementing regulations of both codes describe one of the many standards of responsibility as whether the prospective bidder has "supplied all necessary information in connection with the inquiry concerning responsibility".

Recognizing that the article above likely is not a true and completely accurate statement of facts in this case, but sticking to the hypothetical theme here, the only inquiry conducted was not with the bidder, but rather with a third party, and the question asked of that third party hardly fully answered the question whether Alpha's "satisfactory record of performance" was adequate.  Particularly when it is understood that even if there were some OSHA claims made as confirmed by the insurance broker, there is no indication of the severity, quantity or other circumstances of the claims. Thus, it would appear that the judgment of nonresponsibility was made without any reasonable basis or any effective inquiry.

If you have any interest in the real story and the other issues raised in it, read it at the link above.

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