When submitting a bid to perform public work, pay attention to the solicitation requirements for the bidding entity. Must the bidding entity possess a particular license? Can any of the work be subcontracted? Do subcontractors have to be listed in the bid? These are all important questions that should be evaluated well in advance of bid submission. Failure to adhere to these requirements may result in disqualification.
Similarly, bidders oftentimes rely on the qualifications of parent or affiliated companies to fulfill experience components of a solicitation. Here too, bidders should carefully review whether such reliance will be considered responsive or if the bidding entity itself must directly possess all of the requisite experience.
For example, Florida Statutes defines “Responsive bid,” “responsive proposal,” or “responsive reply” to mean a bid, or proposal, or reply submitted by a responsive and responsible vendor which conforms in all material respects to the solicitation. What if the solicitation terms require that a bidder possess two years of comparable experience and the bidder relies on a parent or affiliate company to satisfy the requirement? Depending upon the specific terms of the solicitation, the bid may be non-responsive and rejected.
That is exactly what happened in one case. In reviewing an intended award by the Florida Department of Transportation, the Administrative Law Judge for the Division of Administrative Hearings concluded that an ITB contained a requirement that the bidder set forth its experience under penalty of being determined non-responsive if the bidder failed to do so. The low bidder stated that it and its predecessor had been in business for more that two years. The Administrative Law Judge concluded that, on its face, this statement was not responsive, and entered an order finding that an award to the low bidder would therefore be arbitrary and capricious. (See, Statewide Process Service of Florida, Inc. v. Department of Transportation, Fla. Div.Admin.Hrgs, Case No. 95-5035BID).
So even though principals of the bidder may have the requisite experience by and through another entity, if the entity that actually submits the bid does not directly possess the experience, the bid may be rejected. If the solicitation documents are unclear as to whether affiliated entity experience may be considered, there may be a process to seek clarification. If the agency agrees that clarification is needed, it may issue an addendum. Putting in the time to review the terms and conditions of the solicitation and bidding through an appropriately qualified entity may be the difference between an award and loss of a business opportunity.