At the April 21, 1998, Council meeting, Councilmember Kawczynski requested that Council’s role in the resolution of bid protests be considered as a study issue during the Fiscal Year 1998/99. This Report to Council is submitted in response to that request.

Staff recommends no changes to the current bid protest process, but provides a general explanation for the benefit of Council and the public.

Only a small percentage of the City’s competitive bids result in bid protests; and protests are commonly resolvable at the staff level. To the best recollection of staff, only one aggrieved bidder has requested an opportunity to present evidence to Council in the past seven years.

A low bidder facing rejection of a bid on the grounds of lack of responsibility must be afforded an opportunity for a hearing by the awarding authority since the determination may affect the bidder’s professional and business reputation.

The City has no formal policies or procedures relative to bid protests and the topic is not addressed in the Sunnyvale Municipal Code. These matters are handled in conformance with state case law.

A finding that a bidder is not responsive simply means that a bid does not respond to all the required elements in the solicitation. It does not reflect on the overall suitability of the bidder and, as a result, does not trigger the need for due process procedures. In contrast, a finding that a bidder is not responsible does reflect on the suitability of the bidder and, therefore, requires an opportunity to present evidence of qualifications to do the job. The "awarding authority"—the body with the authority to award the contract—must be the body that determines the issue of whether or not a bidder is responsible.

A bidder may believe that it has been disadvantaged for a number of reasons. The most common are:

• The bidder has been determined by City staff to be non-responsive; and the bid has, therefore, been removed from consideration for contract award. A non-responsive bid is one that does not conform to the requirements of the bid solicitation document. For example, a bidder would be deemed non-responsive if the bid solicitation document stated that the bidder must submit bid security with the bid response; and the bidder failed to do so.
• The bidder believes bid specifications to be arbitrary and unnecessarily restrictive, thereby excluding the bidder from participation.
• The bidder has been excluded from the procurement process by a determination that the City’s needs can be met only by a single patented, copyrighted or proprietary article or process which is available only from the bidder’s competitor.
• The bidder has submitted the lowest bid pricing, but has been determined by City staff to be non-responsible and, therefore, ineligible for contract award. A bidder might be determined to be non-responsible because staff investigation has revealed that the bidder does not have the ability, capacity, resources, experience or skill to comply with bid specifications or the bidder has a record of poor performance under prior contracts.

Following are the procedures for bid protests:

City staff carefully reviews any bid protest and, if warranted, issues an addendum modifying bid specifications before bids are received. The deadline for receipt of bids may be extended to allow sufficient time to adequately determine the validity of the bid protest.

Non-responsive Bidders – If staff makes a determination that will remove an apparent low bidder from consideration for contract award, staff notifies that bidder prior to recommending award of contract to the next low bidder. This notice includes the basis for the determination and establishes a reasonable period of time in which the bidder can submit a written rebuttal.

If the bidder fails to dispute the determination within the period of time set forth in the notice, the determination is final. If the bidder provides a rebuttal, staff reviews the information and makes a final determination. Notice is given to the bidder of the determination.

For protests resulting from a determination of nonresponsibility, the bidder may submit written and/or oral rebuttal of the determination to the awarding authority.

If the awarding authority is the City Manager, the City Manager (or designee) must afford the bidder an opportunity to present evidence that it is qualified to perform the contract.

If the awarding authority is the City Council, the bidder is afforded an opportunity to present evidence to the Council that it is qualified to perform the contract. In either situation, if the bidder elects not to present evidence, the awarding authority reviews any available materials. The awarding authority then makes a final determination of the matter and provides written notice to the bidder.

No change to current practice is recommended because current practice conforms with what is required by law and because, as indicated in the discussion, there have been very few instances of protests reaching the point at which a hearing is necessitated. Staff has made, and will continue to make, every effort to resolve bid protests in an expeditious and amicable fashion. However, if in a situation where a bidder is to be deemed "not responsible" the bidder seeks to have a hearing, there is no alternative but for the Council to hear the matter.

None

Publication of agenda.

Staff recommends Alternative 1 above.

Prepared by:

Elaine Wesely
Purchasing Officer

Reviewed by:

Mary Bradley
Director of Finance

Reviewed by:

Marvin Rose
Director of Public Works

Approved by:

Robert S. LaSala
City Manager