The Mouzis Law Firm successful in bid protest

Gerald W. Mouzis and Adrienne N. Matheson of The Mouzis Law Firm were recently successful in a bid protest submitted to the Riverside County Flood Control District for a proposed public work of improvement in Palm Springs, California.

In November, 2009, the District published a Notice to Contractors, inviting sealed proposals for the construction of the Palm Canyon Wash Levee Rehabilitation & Channel Restoration project in Palm Springs. The Qualification of Bidders included a specification which provided that, within five working days after bid opening, the low bidder was required to submit financial statements audited within the last 12 months. The specification also permitted the District to review the financial statements as part of the “contract award consideration.”

Bedon Construction, Inc., a client of The Mouzis Law Firm, was the low bidder on the Project, and submitted financial statements as per the District’s request. After reviewing the financial statements, the District claimed that Bedon did not provide financial statements “audited within the last 12 months,” and thus awarded the contract to the second lowest bidder for an amount approximately 12 % higher than Bedon’s bid. Bedon timely submitted a bid protest.

Bedon challenged the disqualification of its bid and the resulting award of the contract to the second lowest bidder on several substantive and procedural grounds, contending that the specification was in violation of the competitive bidding statutes of the Public Contract Code, including section 20101(a), which permits a public entity to require each prospective bidder to complete a standardized questionnaire and financial statements for confidential submission to the public entity, but which does not authorize a requirement for the public submission of financial information after bid opening. Bedon further argued that, in its application, the specification permitted the District, at its sole discretion, to reject low bids after bid opening under the pretext of irregularities in financial statements, notwithstanding contractors, such as Bedon, who had bonds in place from AAA-rated sureties, thus providing the public entity with the financial security required.

After re-consideration, the District awarded the project to Bedon as the lowest responsible bidder.