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Construction Law Authority / Procurement  / Court Finds Late Bid Was Not Late

Court Finds Late Bid Was Not Late

By: Mark J. Stempler

The case:  INSIGHT SYSTEMS CORP., and CENTERSCOPE TECHNOLOGIES, INC. v. THE UNITED STATES

The court: The United States Court of Federal Claims

 

A computer glitch forced disqualified proposers to challenge a U.S. government agency.  Here is an abridged version of what happened.  The United States Agency for International Development (USAID) advertised a Request for Quotations (RFQ).  Eventually during the process, proposers were allowed to submit their revised final quotes either in hard copy form, or electronically via email.  If the proposer submitted the quote electronically, it was its proposer’s responsibility to send in the appropriate information, and to do so timely to the people designated to receive it. 

 

The two Plaintiffs in this case submitted quotations in response, and did so electronically and in their opinion, before the deadline.  The way the system was set up, emails from outside sources directed to the specified USAID email addresses pass from the outside mail server through a sequence of three (3) agency-controlled computer servers, before they are ultimately delivered to the recipients.  To make a long story short, the emails were received by the first USAID server, but due to technical error, were not passed on to the ultimate recipients until after the submittal deadline.  USAID notified the proposers that their proposals would not be considered because they were received after the deadline.  Arguing that late is late, the USAID felt that it did not matter whether the perceived lateness was due to technological malfunctions with its own computer system.

FAR § 52.212-1(f)(2)(i) provides that “[a]ny offer . . . received at the Government office designated in the solicitation after the exact time specified for receipt of offers is ‘late’ and will not be considered.”  During oral argument, USAID argued hypothetically that a proposal would be late even if, owing to the design of the agency’s email system, the email was not distributed to the recipient’s inbox because he or she had turned off their computer before the deadline and did not reboot until the deadline passed.  The Court, however, examined an exception to the FAR provision that allowed for acceptance of a proposal if there was evidence it was received at the government installation and was under the government’s control before the deadline.  The Court interpreted that exception to apply to electronic communications. 

 

As a result, the Court, in an often pointed and clever opinion, held that USAID’s refusal to accept plaintiffs’ proposals was arbitrary, capricious, and contrary to law.  It then granted injunctive relief and reinstated its proposal in the procurement.  Here is a link to the opinion: http://www.linkedin.com/redirect?url=http%3A%2F%2Fwww%2Euscfc%2Euscourts%2Egov%2Fsites%2Fdefault%2Ffiles%2FALLEGRA%2EINSIGHT050613%2Epdf&urlhash=NuLy&_t=tracking_anet

 

A lesson here is that while bidders should take all necessary steps to ensure that they have submitted their bids, proposals, quotes, etc. timely, depending on the law and rules in place, they might not be disqualified if the bid is not received due to technical error, and the bidder can show the agency had control of the submission before the deadline.

Mark J. Stempler

Mark Stempler

mstempler@bplegal.com

Mr. Stempler focuses his practice in the areas of construction litigation, government bid protests, and civil litigation. He is Board Certified by the Florida Bar in Construction Law, and is certified as a LEED Green Associate by the United States Green Building Council. He represents clients in commercial and residential construction lawsuits, involving defects, delays, contractual disputes, mold claims, liens and lien disputes, bond claims, and insurance disputes. Clients include owners, developers, general contractors, subcontractors, design professionals, sureties, and manufacturers.

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