The Supreme Court reviewed Delaware’s procurement statutes, and found they have two purposes: first, to allow the state to obtain the highest quality goods at the lowest price; and second, to assure fair and equitable treatment for all bidders, where the bidders must bid upon the same thing and on substantially the same terms. The court stated that a responsive bid is one that “conform[s] in all material respects to the requirements and criteria set forth in the contract plans and specifications.” Del DOT’s decision would only be overturned if it was arbitrary and capricious.

JJID argued its failure to include paint certifications did not provide any competitive advantage, and that it submitted the paint certifications within a couple days after bid opening. In addition, its bid was almost $700,000 lower than the next lowest bid. As a result, it argued that Del DOT should have waived its requirement that the paint certifications be submitted with its bid.

The court found some merit to JJID’s reasoning, stating that “[its] position would be stronger if the lack of paint certifications were the only non-responsive aspect of its bid.” However, the court also found that JJID’s bid was non-responsive in a material way because it did not comply with the plans. Del DOT required the steel beams supporting the railroad bridge be repainted and reused. Unknown to JJID, Del DOT had discussed with Amtrak possibly using new steel beams before soliciting bids. However the parties agreed to re-use the existing steel because new steel beams would need to conform to stricter loading requirements, which would result in a new track profile that would increase potential flooding problems with Mill Creek.

Brian Morrow

Although JJID’s bid was the lowest, it did not obtain approval for its proposed change from Del DOT. Instead, JJID knowingly submitted a bid that did not conform to the RFP requirements. As a result, the court found that Del DOT properly rejected JJID’s bid as non-responsive.

The Julian case highlights the importance of complying with all material requirements of a solicitation for bids. Although minor deviations from bid requirements may be waived, material deviations will result in rejection of the bid, even if it is substantially lower than other bids and provides an improvement over the government’s requirements. The rationale is one of the purposes behind competitive bidding statutes — to allow bidders to play on a level playing field where all bidders must bid upon the same thing and on substantially the same terms. As a result, contractors need to be careful to bid on exactly what is required. No more, no less. (For a downloadble PDF of this “In Court,” click here.)

About the author: Brian Morrow is a partner in Newmeyer & Dillion LLP, a law firm with offices in Newport Beach and Walnut Creek, California. Mr. Morrow possesses B.S. and M.S. degrees in civil engineering, is a licensed California Civil Engineer and attorney and specializes in the field of construction law, including road, transportation and heavy construction. He can be contacted via e-mail at brian.morrow@ndlf.com.