Advisory

1. Who may protest? Any bidder or offeror. Potential bidders or offerors may protest sole source or emergency contracts only.

2. When must the protest be filed? No later than ten days after public notice of the award or announcement of the decision to award, whichever occurs first. If protest depends in whole or in part on information contained in public procurement records subject to inspection, the protest time expires ten days after those records are available for inspection.

3. What protest grounds will not be considered? (1) An allegation that the selected awardee is not a responsible bidder or offeror; (2) A challenge to the validity of the terms or conditions of the Invitation to Bid or Request for Proposal.

4. What must the protest contain? The basis for the protest and the relief sought.

5. What must the agency do in response to the protest? Issue a decision in writing within ten days stating reasons.

6. What finality attaches to the decision? The decision is final unless the protester appeals within ten days of receipt by filing an administrative appeal or instituting legal action.

7. What relief is available? If the agency determines before award that the selection decision was arbitrary or capricious, the public body shall cancel the proposed award or revise it to comply with the law. If award has been made but performance has not begun, the performance of the contract may be enjoined. Where performance has begun, the public body may declare the contract void on finding it is in the best interest of the public. The contractor shall be compensated for its cost of performance but will not be entitled to lost profits. Note: the prohibition against injunction after performance has begun does not apply to a circuit court's exercise of equitable powers on appeal of a protest decision. MFS Network Technologies v. Commonwealth, 33 Va. Cir. 406 (City of Richmond 1994).

8. What is the effect of filing of protest on awarded contract? Pending final determination of protest or appeal, the validity of a contract awarded and accepted in good faith shall not be affected.

9. Will the agency stay award during protest? Contract award need not be delayed for the time allowed for protest, but in the event of timely protest or legal action, no further action to award the contract will be taken without written determination that it is necessary to protect the public interest or unless the bid or offer would expire.

10. What administrative appeal procedures are available? A public body may establish administrative procedures for hearing protests of awards, appeals from disqualifications and determinations of nonresponsibility. Procedures shall provide for hearing before a disinterested person or panel, opportunity to present information and issuance of a written decision containing findings of fact. See W.M. Schlosser Co., Inc. v. Board of Supervisors of Fairfax County, 245 Va. 451 (Va. 1993)(county employee is not a disinterested person). Those findings of fact shall be final and conclusive unless (1) fraudulent, arbitrary or capricious; (2) so grossly erroneous as to imply bad faith; or (3) in the case of denial of prequalification, not based on proper criteria. No determination on an issue of law shall be final if timely legal action is instituted.

11. May a disappointed bidder, or a bidder denied withdrawal of a bid, bring legal action instead of an administrative appeal? Yes, in the appropriate circuit court.

12. Must the protester exhaust administrative appeal remedies, once begun? Yes. While the protester need not resort to administrative appeal remedies, those procedures, once invoked, shall be exhausted before instituting legal action unless the public body agrees otherwise.

13. When must judicial review of the administrative decision be sought? Any party, including the public body, may institute judicial review within thirty days of receipt of the written decision.

14. What is the standard of review? Petitioner must establish that the decision was not an honest exercise of discretion, but rather was arbitrary or capricious or not in accordance with the Constitution of Virginia, applicable state law or regulation, or the terms or conditions of the solicitation. In the case of denial of prequalification, petitioner must show the decision was not based on applicable criteria. If the court reverses a finding that the apparent low bidder was nonresponsible, the court may direct the public body to award the contract to that bidder.

15. Must the court require posting of security? Yes. If injunctive relief is granted, the court, on request of the public body, shall require the posting of reasonable security to protect the public body.

Source: Virginia Public Procurement Act, §§ 11-63 - 11-71, Code of Virginia

Special considerations:

1. The VPPA applies only to public agencies of the Commonwealth of Virginia; there is no common law bid protest remedy.

Washington-Dulles Transportation, Ltd. (WDT) filed an administrative protest with the Metropolitan Washington Airports Authority (MWAA), challenging the award of the Dulles Airport taxi concession contract to Dulles Taxi Systems. When MWAA denied the protest, WDT sued in the United States District Court for the Eastern District of Virginia, seeking to compel compliance with the lease which requires the Authority to obtain full and open competition through the use of published competitive procedures. The court dismissed for lack of federal jurisdiction, holding the statutes creating the Authority conferred original jurisdiction in Virginia courts, applying Virginia law. Order dated July 19, 2000; Order denying plaintiff's motion to vacate dated December 19, 2000. WDT's appeal to the United States Court of Appeals for the Fourth Circuit is pending (argued June 5, 2001).

Following the federal court's dismissal for lack of jurisdiction, WDT filed an action in the Circuit Court of Fairfax County. There WDT's difficulty was that the Authority, although otherwise subject to Virginia law, is not an agency of the Commonwealth and is specifically exempt from the VPPA. On October 13, 2000, the Circuit Court sustained demurrers filed by the Authority and awardee Dulles Taxi Systems, holding there is no cause of action at Virginia common law for a disappointed bidder. On April 16, 2001, the Virginia Supreme Court refused WDT's petition for appeal, holding there was no reversible error in the Circuit Court's judgment sustaining the demurrers.

2. The absolute privilege for statements made during a judicial proceeding does not apply to an administrative bid protest in Virginia.

In 1995, Lockheed Information Management Systems Company, Inc. filed a bid protest with the Virginia Department of Social Services (DSS), alleging undisclosed conflicts of interest by the evaluation panel, including an allegation that an evaluator had been employed by awardee-select Maximus, Inc. while on leave from DSS and had been offered empoyment with Maximus. After receiving the protest, DSS canceled the notice of intent to award and resolicited. Maximus then sued Lockheed in Richmond Circuit Court, alleging tortious interference with contract expectancy and conspiracy to injure Maximus's business reputation. The jury returned a substantial verdict for Maximus.

The Virginia Supreme Court, rejecting Lockheed's arguments, held that the absolute privilege for statements made during a judicial proceeding does not apply to a Virginia administrative bid protest because of the absence of judicial safeguards. Those safeguards include the power to issue subpoenas, liability for perjury, and the applicability of the rules of evidence. Under the Virginia protest procedures, the court noted, "neither notice nor hearing is afforded any other party or bidder, including the successful bidder." Lockheed, said the court, could have been entitled to a qualified privilege defense on the basis of legitimate business competition, but Lockheed had the burden to establish its conduct was "legitimate business competition," and failed to persuade the jury. Lockheed Information Management Systems Company, Inc. v. Maximus, Inc., 259 Va. 92, 524 S.E.2d 420 (2000). Query: does the absolute privilege for statements made in a judicial proceeding apply to bid protests before the U.S. General Accounting Office?