State and Local Procurement Law

The Missouri Court of Appeals decision in Penzel Constr. Co. v. Jackson R-2 School District, No. ED103878 (Mo. Ct. App. Feb. 14, 2017), is an important development for public construction contracting in Missouri. The decision adopts the Spearin Doctrine and approves the use of the Modified Total Cost method for proving damages. While these concepts have been used widely in federal construction contracting, the Penzel decision is the first published decision recognizing them in Missouri.

The Penzel case involved additions to a public high school. The School District hired an architect. The architect retained an electrical engineering sub-consultant. When the project went to bid, the School District furnished bidders with the architect’s plans and specifications. Penzel Construction Company submitted a bid as the general contractor.

Penzel’s electrical subcontractor was Total Electric. Total’s bid was $1,040,444. Neither Penzel nor Total “noticed” any errors, omissions, or other problems with the plans and specifications during the bidding process.

Total encountered delays totaling 16 months, which Total attributed to “defects and inadequacies” in the electrical design. Under a liquidating agreement between Penzel and Total, Penzel sued the District. Penzel alleged that the District impliedly warranted the design. Penzel claimed the design was not adequate for completing the project.

In addition to proving liability, Penzel needed to prove the damages associated with its loss of productivity claim. To do so, Penzel sought to use the Modified Total Cost Method. The claimed damages were comprised of additional project management and supervision costs, wage escalation, unpaid change order work, and consultant’s fees. Continue Reading The Spearin Doctrine and Modified Total Cost claims on Missouri public projects

https://www.transportation.gov/fastlane/enbridge-updateIn a Presidential Memorandum issued January 24, 2017, President Trump directed the Secretary of Commerce to develop a plan within 180 days to require that pipelines in the United States use materials and equipment produced in the United States “to the maximum extent possible and to the extent permitted by law.” The plan will extend to newly constructed pipelines as well as to those that are “retrofitted, repaired and expanded . . . inside the borders of the United States.”

With respect to iron or steel products, the Memorandum makes it clear that all stages of the manufacturing process must occur in the United States. The Memorandum states:

“Produced in the United States” shall mean:

(i)        With regard to iron or steel products, that all manufacturing processes for such iron or steel products, from the initial melting stage through the application of coatings, occurred in the United States.

(ii)       Steel or iron material or products manufactured abroad from semi-finished steel or iron from the United States are not “produced in the United States” for purposes of this memorandum.

(iii)      Steel or iron material or products manufactured in the United States from semi-finished steel or iron of foreign origin are not “produced in the United States” for purposes of this memorandum.

The notions that iron and steel products must be manufactured in the United States and that all of the manufacturing processes must occur in the United States are not new. Substantially similar requirements are used in the “Buy America” provision of the Surface Transportation Assistance Act of 1982. See 49 U.S.C. § 5323(j)The Federal Transit Administration and the Federal Highway Administration have used this approach for state and local highway and transit projects funded wholly or partially with federal funds. See, e.g., 49 C.F.R. § 661.5. Continue Reading President Trump mandates “Buy American” for construction of US pipelines

HB Asbestos_Map_v4Contracts with Virginia agencies, counties, municipal governments, and school boards are governed by the Virginia Public Procurement Act. The Act requires the use of competitive procedures in the solicitation and award of public contracts. It also establishes a procedure for the submission and resolution of bid protests. See Va. Code Ann. § 2.2-4360(A).

How and when to protest a contract award decision

An actual or prospective bidder seeking to challenge the award of a Virginia government contract must submit a protest to the procuring agency or to an official designated by the agency. The protest must be submitted in writing. It must include the basis for the protest and the relief sought. A bid protest must be submitted no later than ten days after the award or the announcement of the decision to award, whichever occurs first. This deadline is extended if the protest depends on obtaining access to documents. In those situations, the protest must be submitted within ten days after the records are made available. The VPPA does not specifically allow for the submission of a pre-award protest that challenges the terms and conditions of a solicitation.

If a protest is timely filed, the award and performance of the contract is automatically stayed unless the agency determines in writing that “proceeding without delay is necessary to protect the public interest or unless that bid or offer would expire.”  Va. Code Ann. § 2.2-4362. Continue Reading Bid protests in Virginia

HB Asbestos_Map_v4The Colorado Procurement Code grants the right to submit a protest to “[a]ny actual or prospective bidder, offeror, or contractor who is aggrieved in connection with the solicitation or award of a contract.” Colo. Rev. Stat. § 24-109-102(1).

A protest must be submitted in writing within seven working days after the protester knew or should have known of the grounds for the protest, usually directly after the contract award decision by the agency issuing the solicitation or bid request. The protest must be submitted to the head of the agency or his designee, who is usually the purchasing agent for the agency.

The purchasing agent for the agency may settle and resolve protests concerning the solicitation and contract award. Absent a settlement, a written decision is required within seven working days after the protest is filed. This decision is to be based on and limited to the issues raised in the protest. It must explain each of the factors taken into account in reaching the determination and must advise the protester of its appeal rights. Colo. Rev. Stat. § 24-109-107. The protest decision must be mailed or otherwise furnished immediately to the protester and is final and conclusive unless the protester files a timely appeal or initiates a court proceeding to challenge the decision. Continue Reading Colorado bid protests

HB Asbestos_Map_v4Public procurement in Missouri is conducted according to statutes and the rules published by the Division of Purchasing and Materials Management within the Missouri Office of Administration. See Chapter 34, Revised Statutes of Missouri; Missouri Code of State Regulations, Title 1, Division 40, Chapter 1—Procurement [pdf]. Although many protesters opt to bring their protest actions directly in court, there are voluntary procedures for the submission and resolution of bid protests involving purchases by Missouri state government agencies in 1 Mo. CSR 40-1.050(9). Continue Reading Missouri bid protest procedures

Tennessee law explicitly provides interested parties the right to protest the terms of a solicitation for a contract with a state agency or the award or intended award of a state government contract. In each case, Tennessee’s procurement code and procurement regulations require the submission of a protest letter directed to the “Chief Procurement Officer” located in Nashville.

What is required to file a protest?

HB Asbestos_Map_v4Bid protests be submitted in writing and identify all of the reasons for the protest. They should be presented in the form of a letter that identifies the solicitation and the interested parties and summarizes the grounds for the protest. The specific grounds of protest that are available under Tennessee law are listed at Tenn. Comp. R. & Regs. 0690-03-01-.12(2)(a). Continue Reading The Tennessee bid protest process

South Carolina law provides a statutory procedure for the submission and resolution of bid protests. Under section 11-35-4210 of South Carolina’s Consolidated Procurement Code and section 19-445 of South Carolina’s procurement regulations, bid protests relating to procurements greater than $50,000 may be initiated with a letter directed to the appropriate chief procurement officer (“CPO”).

Filing the protest

A protest must be in writing and must set forth the grounds of protest and the relief requested with enough particularity to give notice of the issues to be decided. S.C. Code Ann. § 11-35-4210(2).

As with federal procurements and those of many other states, the deadline for the submission of a bid protest is short. If challenging the terms of a solicitation, a prospective bidder must file the protest within 15 days of the issue date of the invitation for bids or request for proposals. If an amendment to the solicitation is at issue, the protest must be filed within 15 days of the amendment.

South CarolinaThe deadline for protesting the award or intended award of a contract is even shorter. Unsuccessful bidders must file such protests within 10 days of the date of award or notification of intent to award, whichever is earlier. The protest can be amended after it is filed, but such amendments must be filed within 15 days after the date of award. S.C. Code Ann. § 11-35-4210(1)(b). Continue Reading South Carolina bid protests