LAW: THE CONTRACTOR'S SIDE: Ticking bid bomb

Dec. 17, 2010


A disappointed bidder on a public project is always under tight time restraints to acquaint itself with all of the relevant facts surrounding the procurement and to decide whether a protest is appropriate.


A disappointed bidder on a public project is always under tight time restraints to acquaint itself with all of the relevant facts surrounding the procurement and to decide whether a protest is appropriate.

In most cases, the triggering event that starts the protest clock running is the public entity’s decision to disallow a bid or its decision to award the contract. However, as demonstrated in a case involving the Pennsylvania Department of Transportation (PennDOT), when the grounds of the protest lie in the bid documents themselves and not in the decision of the public entity, the clock to protest might start to run even before bids are submitted.

On Jan. 30, 2008, PennDOT advertised for bids on a highway-construction project that involved maintenance and repair of traffic-safety devices. The proposal for the project identified 91 work items, each of which was assigned a prequalification classification code. Notably, the classification code “J3” was assigned in full or in part to 75 of these work items. Collinson Inc., which was prequalified in numerous PennDOT categories, submitted its bid on March 6, 2008, along with other bidders. On March 7, 2008, PennDOT informed Collinson that it was rejecting its bid, which was the lowest one received, because Collinson was not prequalified to self-perform work items constituting more than 50% of the total bid price as required by PennDOT’s specifications. Collinson disagreed and on March 12 filed a bid protest.

The applicable bid protest statute requires a bidder or prospective contractor to file a protest “within seven days after the aggrieved bidder . . . or prospective contractor knew or should have known of the facts giving rise to the protest.” Even though Collinson’s protest was filed within seven days after its bid was thrown out, PennDOT rejected the protest as untimely. Collinson sued.

In its protest and before the court, Collinson claimed that when it last received a prequalification renewal in June 2006, it was approved to do work in all of the work codes that existed at the time under the J category, including J, J1 and J2, and that the work now comprised by J3 was included within the previous three categories. However, at some point thereafter, PennDOT added category J3 and even though it does not possess a J3 classification, it has always been permitted to perform the work in that category.

Collinson also argued that PennDOT erred when it assigned the J3 classification to many of the bid items and that other classifications were more appropriate.

The court considered both of the grounds that served as the basis of Collinson’s protest and agreed with PennDOT that both involved the bid documents rather than PennDOT’s decision to reject Collinson’s bid. Accordingly, the court concluded that because Collinson “knew or should have known” of the grounds of protest shortly after receiving the bid package, the protest was untimely.

The Collinson case demonstrates the difficulty that sometimes exists in determining whether protest grounds lie in the bid documents or the post-bid decision of the public entity and it illustrates the harsh results that can follow if contractors fail to identify the true triggering event giving rise to the protest. In this case, the contractor should have sought clarification from PennDOT concerning the J3 classification, or protested PennDOT’s assignment of the J3 classification to various bid items, before bidding.

Although not all bid protest statutes and relevant protest provisions start the clock for filing a protest before bids are opened, many do. It is, therefore, important that contractors fully acclimate themselves to the bid-protest requirements for each jurisdiction in which they bid work. It is equally important that contractors raise any questions they have concerning the bid documents with the public entity before bids are due so that potential prebid protest rights are not waived.

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