Maryland Procurement ALERT || March 2024

Potential Offerors Must Look Past Written Minimum Requirements in RFPs

? It is black letter Maryland law that procurement evaluations must be based only on those factors set forth in requests for proposals and that factors “not specified in the request for proposals may not be considered.” The recent decision of the Maryland State Board of Contract Appeals in Peek, LLC, MSBCA 3248 (Feb. 15, 2024), however, offers a cautionary tale to those submitting proposals to Maryland agencies that they should look past written minimum qualification requirements and look to other parts of Requests for Proposals when setting forth the offerors’ experience.

In Peek, the Maryland Department of Commerce sought contractors to manage and administer the Maryland Small Business Development Financing Authority (“MSBDFA”) Program.? The RFP required proposers to demonstrate following written minimum qualifications:

The minimum qualifications did not specify that offerors must have experience with “direct lending.” ?Other sections of the RFP, however, included references to “direct loans.”? Peek thus submitted a proposal setting forth its more than five years of experience in providing Financial or Investment services, but it failed to express its “direct lending” experience to the satisfaction of the evaluation committee.

The Procurement Officer took the position that Peek’s proposal was not reasonably susceptible for award because it did not “illustrate a comprehensive understanding of the work requirements,” and “lacks significant experience in direct lending[.]”? Peek protested this denial and contended that the Procurement Officer wrongfully disregarded Peek’s experience, including its “actual direct lending history, State Small Business Credit Initiative expertise, program knowledge, clients that met the stated requirements for minimum capital deployed, and citations to originated loans … .”

? Apparently, this protest weighed on the Procurement Officer. She allowed Peek to provide additional references.? None of these references, however, provided information about Peek’s “direct lending” experience sufficient to alter the Procurement Officer’s initial classification of the proposal as being not reasonably susceptible for award. ?The Procurement Officer thus denied Peek’s protest and recommended two other offerors for award of the contract.

? On appeal, the key issue before the Board “was whether the RFP required offerors to have significant direct lending experience.”? To answer this question in the affirmative, the Board relied on inferences drawn from the other portions of the RFP, and on the testimony of agency officials who stated that “direct lending is the single most important part of the MSBDFA program.”? It is beyond the scope of this article to speculate why the RFP omitted this singularly important element when spelling out the written minimum qualifications.

? Though Board relied on witness testimony to explain the minimum requirements of the RFP, it declined to consider testimony by Peek’s principal, which gave “more detail concerning experience set forth in Peek’s proposal at the hearing.” The Board ruled that information provided in the testimony was not before the Evaluation Committee or the Procurement Officer at the time the State determined that Peek was not reasonably susceptible for award and, therefore, could not serve as a basis for the Board to review the denial of the Protest.?

? The Board’s denial of Peek’s appeal should serve as a warning to potential offerors to read the minimum requirements of an RFP with an eye towards the scope of work, purpose, functions and other provisions of the solicitation.? Prospective offerors who find that the minimum qualifications do not seem to align with the scope of work and other elements of the RFP are advised to submit questions to the PO prior to submission and to protest ambiguities before the date of the submission.

?

?Deposition Denied as Irrelevant

?In Milani Construction, LLC, MSBCA No. 3206 (Feb. 2, 2024), the Maryland State Board of Contract Appeals, in a somewhat rare opinion concerning discovery, denied a motion to compel a deposition on grounds of relevance.? The Appellant, Milani Construction, sought to depose a corporate designee of the agency, the State Highway Administration.? Milani wanted to question the agency about its practices in other cases, which Milani alleged ran counter to this case, making its practices here arbitrary and capricious.? The Board, however, in a split opinion, rejected this basis and refused to compel the deposition.

? The appeal before the MSBCA arose from a contract claim that Milani brought for delay costs resulting from utility relocations on a highway construction project.? Milani claimed that SHA was responsible for establishing the appropriate time frame for the utility relocation work and for adequately monitoring the work, and that SHA’s failures caused the delay in the project.? The SHA, in turn, relied upon standard state contract language that disclaimed agency responsibility for utility relocation.? Milani, however, knew of SHA’s practice of approving change orders to account for utility relocation costs; it had obtained discovery of several such instances.?

? Milani sought, pursuant to COMAR 21.10.06.14D, to depose the corporate designee of SHA and ask about “instances in which SHA has granted a compensable time extension to contractors for a utility relocation delay … .”? Milani contended that SHA’s inconsistent application of the standard contract language created an ambiguity and was evidence of “intentional wrongdoing, misrepresentation, gross negligence, or fraud on the part of the State.”?

? The Board denied these contentions.? The Board noted that the question of contract ambiguity was a question of law, not fact, and that there was no allegation or finding that the standard contract language was ambiguous as a matter of law.? Concerning wrongdoing, the Board stated that “we fail to see how information regarding change orders issued by SHA in other contracts to other contractors under other circumstances can be probative of SHA’s conduct in the administration of this contract.” (Emphasis supplied.)

This latter ruling drew a dissent from Member Bethamy Brinkley.? Ms. Brinkley noted that the standard contract provision is limited “when there is gross negligence or misrepresentation by the agency, which Appellant alleges has occurred here.”? She would allow the deposition because “the reasons why SHA does not apply and enforce this mandatory provision in all contracts, against all contractors, is, and will thus remain, a secret.”? (Emphasis supplied.)? Ms. Brinkley pointed out that “no one, particularly Appellant in this instance, is permitted to discover why SHA selectively, and perhaps arbitrarily, chose to waive enforcement of this provision in disputes with at least four other contractors, yet asserts it as a defense to Appellant’s Claim in this Appeal.”? ?

? In Milani Construction, the SHA also objected to the deposition on grounds of the deliberative process privilege.? Because it precluded the deposition on relevance grounds, the Board majority refrained from reaching this issue.

Want to join the conversation? Follow our LinkedIn page or ask to become a member of our LinkedIn Group.

Or you can visit our website.