JUNEAU, Alaska (Legal Newsline) - Following guidelines may or may not pay off. Silver Bow Construction learned this lesson in its bid for a renovation contract with State of Alaska.
In November 2010, the State issued a request for proposals (RFP) to perform exterior renovations to the Governor’s House in Juneau.
“The contract was to perform roofing and other exterior renovations at the Governor's Mansion in Juneau,” said Matt DeVries, a Nashville-based construction lawyer with Burr & Forman LLP and author of www.bestpracticesconstructionlaw.com.
“Part of the project was to remove and replace lead-based paint that was blistering and cracking on the outside of the 100-plus-year home. A prior renovation project occurred in 2011 and this project was bid out to finalize and complete the work. The final phase was approximately $365,000.”
The request imposed specific submission requirements and guidelines. One such imposition was that proposals are to be no longer than 10 pages.
Paragraph 8 warned that “Criteria Responses which exceed the maximum page limit or otherwise do not meet requirements stated herein, may result in disqualification.”
Silver Bow Construction submitted a proposal exactly 10 pages. A rival company, Alaska Commercial Contractors, submitted a 15-page proposal. Silver Bow lost the bid, which was awarded to Alaska Commercial.
Silver Bow went to court, protesting the bid and arguing that the over-length bid by Alaska Commercial was non-responsive, unfair and should have been disqualified.
They recently lost that argument, as the Alaska Supreme Court found that Alaska Commercial did nothing wrong. It concluded that the wording in the guidelines did not give an unfair advantage to the winning bid.
“When determining whether a bidder has an unfair advantage, you first have to look at the specific bid requirements and instructions to bidders,” DeVries said.
“In this case, although the request for proposals stated that responses shall not exceed 10 pages, it also said that any response that exceeded the maximum page limit ‘may result in disqualification.’
"Given the instructions, it is hard to conclude that there was an unfair advantage for the longer proposal, particularly where the court found that the page limit was a minor informality that could be waived by the state.”
The decision “highlights the distinction of substantive and non-substantive issues in a request for proposal” and does not set any real new standard or precedent, according to DeVries.
“I do not think that the Silver Bow decision raises a new standard in public contracts. For example, whether you are talking about state or federal projects, the public owner generally has a right to waive minor informalities, which is merely a matter of form and not of substance," he said.
"The Federal Regulations provide some examples as being a bidder's failure to return the right number of copies of a proposal, failure to furnish the number of employees if required by the instructions, and even the failure to sign the proposal in certain circumstances.
" If, however, the failure relates to a substantive matter - such as a contractor's failure to comply with the state's drug free workplace program - then I think that is a relevant basis to disqualify a bid.”
But DeVries still encourages everyone to follow the instructions.
“We all learned the lesson in elementary school that we should follow instructions to the best of our ability,” he said.
“If we make a mistake, we need to understand that there may be consequences, depending on the impact of that failure to follow the instructions. In the public contracts arena, bidders should be held to a tight standard in order to make the competitive process fair.”