Electronic bidding is now widely utilized in public contracting, but as demonstrated in a recent federal contracting case, it introduces uncontrollable factors that may impact a bid’s timeliness.
On July 27, 2009, the Army Corps of Engineers issued a request for proposals (RFP) for the design and construction of a barracks project. The procurement was in two phases: one to narrow the field of bidders based upon their qualifications and the second to consider “the best value to the government” from price and technical proposals submitted by a narrowed field.
After receiving proposals from the narrowed field of three proposers, the contracting officer (CO) notified Watterson Construction Co. that it was the “apparent successful offeror.” Two weeks later, however, the CO informed Watterson that no award would be made, and shortly thereafter, the Corps issued an amendment to the RFP instructing all three entities to submit revised proposals by Feb. 19, 2010, at 12 p.m. This time, the Corps failed to award the project and all proposals expired on March 12. Next, the Corps set a new deadline of March 16, 2010, at 12 p.m. for revised proposals and agreed to accept them either in electronic form—via e-mail to the CO—or hard copy to the CO’s physical office address.
On March 16 at 11:01-11:02 a.m., Watterson sent its second revised proposal by e-mail to the CO’s e-mail address. At 11:29 a.m., Watterson’s e-mail proposal was received by gw4?.usace.army.mil, the first of four Corps servers located directly behind the agency’s firewall from the Internet. However, the e-mail did not arrive in the CO’s e-mail inbox until 12:04 p.m.—four minutes after the deadline. A similar scenario occurred with respect to the second of three bidders and on March 18, and the CO deemed both proposals late and disqualified from consideration.
Upon learning of the CO’s decision, Watterson immediately filed a timely pre-award bid protest with the Government Accountability Office (GAO). By rule, Watterson’s protest prevented the Corps from proceeding with the award. Unfortunately, due to an unexplained miscommunication with the Corps, which Watterson later claimed was inaccurate and misleading, Watterson withdrew its protest on March 26, and the Corps proceeded with the award to the sole remaining proposer on April 1.
During a required debriefing with the Corps on April 9, Watterson learned that it had received an overall rating of “excellent” on its technical proposal, whereas the successful offer had received only an “acceptable” rating and Watterson’s price was $2 million lower. Watterson thus filed a protest with the U.S. Court of Federal Claims, but since the Corps had already awarded the project, Watterson was eligible to recover its bid preparation costs only.
The court applied long-established law governing the submission of paper bids to electronic bids and, in doing so, observed that the RFP allowed proposals to be delivered by hand or mail to the CO’s office address or electronically to the CO’s e-mail address. The court noted that, pursuant to established precedent, if a paper proposal had been submitted, it would have been timely once actually received at the designated government office and although addressed to the CO, it need not actually reach the CO by the specified deadline. By analogy, the court ruled that once the e-mail reached the Corps’ server, it was “received” and the time it actually was distributed by the server to the CO’s inbox is irrelevant. Watterson thus prevailed, and the court instructed it to submit its proposal preparation costs for consideration.
The Watterson case highlights the uncontrollable variables that exist in electronic bidding. Second, although the outcome in this case favored Watterson, decisions under state law might be different. Lastly, Watterson illustrates the importance of filing—and maintaining—timely protests, because in most cases, the disappointed bidder’s remedies depend upon it.