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Recent Change in Washington Bid Protest Law Benefits Contractors

by | Jan 17, 2020 | Commercial Real Estate

A recent change to Washington’s bid protest law gives contractors additional time to determine if their bid was improperly rejected by guaranteeing them an opportunity to review competing bids as long as a timely request is made.  Effective July 28, 2019, contractors may now request that they receive copies of competing bids within two days after the bid opening.  Once the competing bids are received, the disappointed contractor then has an additional two days to submit a bid protest.  Because a bid protest is the only way for rejected bidders to challenge errors, omissions, or other irregularities in the bidding process on public works projects, having the opportunity to review competing bids before submitting a bid protest better ensures the transparency and integrity of the public bidding system while guaranteeing contractors a more meaningful remedy.

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the old bid protest law

Under the old law, contractors were required to submit their bid protest within two days after the bid opening. However, without seeing the other bids — and often the disappointed contractor does not receive the other bids before the protest is due — the contractor cannot determine whether the winning bid was responsive. Thus, the rejected contractor won’t know if there is a valid basis to protest an award. Although some owners provide copies of the bids if requested at the bid opening, some owners refuse to provide copies of the other bids until after the expiration of the 2-day protest period. This practice deprives disappointed contractors of a meaningful opportunity to protest.

the new bid protest law

The new law, ESSB 5418, now RCW 39.04.105, provides that, as long as a timely request for competing bids is made, a disappointed bidder has two days after the competing bids are provided to submit a protest. In other words, if bid copies are timely requested (and the law in its current form is not entirely clear as to when the request for competing bids must be made), the owner must wait at least two full business days after providing copies before awarding the contract.

If the written protest is submitted either within two business days after the bid opening or within two business days after the agency provides bid copies to those bidders requesting them, the agency cannot execute a contract for the project with anyone other than the protesting bidder without first providing at least two business days’ written notice of its intent to execute a contract for the project. Notably, if the contractor does not request copies of the competing bids within two days after the bid opening, the old rule still applies and the contractor must submit its written protest to the owner within two days after the bid opening.

“In the wake of the new law, contractors should always consider requesting copies of competing bids.”

grounds for bid protest

By law, local government agencies are required to award public works contracts to a responsible bidder with the lowest responsive bid. To be considered “responsible,” a bidder must:

  • Have a certificate of registration
  • Have a current state Unified Business Identifier (UBI) number
  • Have industrial/workers’ comp. insurance coverage
  • Have an Employment Security Department (ESD) account
  • Have a state excise tax registration number
  • Not be disqualified from bidding on any public works contract
  • Not have any apprenticeship violations (if applicable)
  • Have received training on the requirements related to public works and prevailing wage or have experience completing at least three public works projects and have maintained a business license in Washington for at least 3 years (this is a new requirement as of July 1, 2019)
  • Within the three-year period immediately preceding the date of the bid solicitation, not have been determined by a final and binding citation and notice of assessment to have willfully violated minimum wage requirements and labor standards

If any of these criteria have not been met, a disappointed bidder may have grounds for a bid protest. Another basis for a bid protest may be that the winning bid was non-responsive. Responsive bids are those submitted on time with all of the information the agency requested. Bids submitted after the submittal deadline or at the wrong location should be rejected as non-responsive.

Typically, bidders must provide the following information at the time of bidding:

  • Sealed bids, with the name of the project and the time and date of the bid opening clearly stated on the outside of the bid packet
  • Bid guarantee in the form of a bid bond, cashier’s check, certified check, or personal money order
  • Lump sums, unit prices, and total prices in the spaces provided on all of the bid forms, including all appropriate sales taxes
  • Receipt of addenda acknowledged
  • Acknowledgment of attendance at mandatory pre-bid meeting (if required)
  • Non-collusion affidavit certificate
  • Completed mandatory bidder responsibility questionnaire
  • For projects that cost an estimated $1 million or more, a list of all subcontractors for HVAC, plumbing, or electrical work (this may be required shortly after bid opening)

If the winning bidder failed to provide any of the above information with their bid, or the bid was untimely, a disappointed bidder may have grounds for a bid protest.

the substantial advantage test

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Importantly, while contracting agencies may properly reject bids which materially vary from the requirements of the bid invitation, the agency may waive the irregularity as an informality in the bidding if the irregularity is immaterial. Washington courts will apply a “substantial advantage” test to determine the materiality of a variance. That is, if the variance gives a bidder a substantial advantage or benefit not enjoyed by other bidders, the court will likely uphold a challenge to the agency’s waiver of the irregularity.

takeaway from new bid protest law

In the wake of the new law, contractors should always consider requesting copies of competing bids. Because the new law is unclear as to whether the disappointed bidder can wait until after bid opening to request copies of competing bids, a bidder’s best practice is to submit its request as part of the bid package. As noted above, once the agency provides bid copies, it must wait at least two full business days before awarding the contract. This gives contractors time to determine the viability of a protest and to initiate a lawsuit, which may also include a request for injunctive relief against awarding the contract to the winning bidder.

how i can help

I represent contractors, property developers, and municipalities in all aspects of Construction Law, including bid protests, bond claims, contractor disputes, design contracts, design defects, government contracts, lien claims, payment disputes, and subcontractor disputes. If you need assistance with a construction matter, I welcome you to contact me at (509) 662-2452.