Bidders beware of disqualified electronic bids

MORE AND MORE owners and general contractors are moving toward electronic submission of bids. Not surprisingly, until all the bugs have been worked out of this new use of technology, bidders will tend to be the ones to suffer from glitches in the system. Since the federal government has already taken the lead in this area, we can learn what to watch out for through the painful experiences of some

MORE AND MORE owners and general contractors are moving toward electronic submission of bids. Not surprisingly, until all the bugs have been worked out of this new use of technology, bidders will tend to be the ones to suffer from glitches in the system. Since the federal government has already taken the lead in this area, we can learn what to watch out for through the painful experiences of some other contractors.

PMTech Inc. submitted an offer to the Department of Energy for technical services supporting the job of reviewing classified documents to see if they can be released to the public. The request for proposals said that the offers had to be submitted electronically, through the DOE’s Web site by noon, Eastern Standard Time on July 25, 2002 (at which time DOE would have been on Eastern Daylight Time, but that’s what the decision says). PMTech’s e-mail started to arrive at 11:46:29, but only the cover sheet got through, along with a message “SSL Handshake failed.” It was not until after 12 noon that the rest of the file came through. The offer was rejected.

PMTech’s argument to the comptroller general of the General Accounting Office, the arm of Congress that rules on bid protests, was that it took all reasonable steps to submit its proposal in a timely manner, that the error must have been on DOE’s end and that it should not be penalized for a DOE mistake. The comptroller general did not agree.

“We view it as an offeror’s responsibility, when transmitting its proposal electronically, to ensure the proposal’s timely delivery by transmitting the proposal sufficiently in advance of the time set for receipt of proposals to allow for timely receipt by the agency,” the comptroller general ruled.

As it turns out, a specific Federal Acquisition Regulation addresses the point: FAR §15.208(b)(1)(i) says that an offeror will always be safe if it gets the e-mail to “the initial point of entry” by 5 p.m. the evening before the deadline. By waiting until 10 minutes before the deadline, PMTech did not satisfy the regulation.

It appears to me that the comptroller general was influenced by the fact that the other offerors got their e-mails through, indicating that the problem may not have been on DOE’s end of the electronic transmission. Matter of PMTech Inc., B-291,082, 2002 WL 31303100 (10/11/02).

Less than three weeks later, GAO got another chance to point out to contractors how technical the government was going to be on these e-mailed bids in Matter of Sea Box Inc., B-291,056, 2002 WL 31445297 (10/31/02).

Sea Box Inc. could have submitted its offer to sell roll-in/out platforms to the Army either by fax or e-mail, and chose e-mail. Its entire bid was received at the “initial point of entry” some eight to 10 minutes before the deadline, where it was “held” for a period of some 17-33 minutes before being forwarded to the government virus scanner. From there it went to the procuring office at - you guessed it - from seven to 24 minutes after the opening time.

Here Sea Box argued that since it got its message in to the “initial point of entry” on time, and since Sea Box did not have control over the message (it could not change or withdraw it), it should not be penalized. Once again, GAO was, to use its word, “unpersuaded.”

Had it gotten the e-mail to that initial point of entry by 5 p.m. the day before, it would have fallen under the exception to the rule discussed above, but in this case, it only sent the e-mail eight to 10 minutes before the deadline. If Sea Box did not want to take the chance of this backup or submit its bid the night before, GAO pointed out that it could have faxed the bid in (although the same thing can happen to a faxed bid that doesn’t get through in time, and GAO has denied protests in the case of faxed bids too).

Electronic bidding is spreading, and the problems encountered by these two firms will plague others at the federal, state, local and private levels. We can hope, as agencies and bidders become more familiar with the processes, that they will learn where the bugs are in the system and how to avoid them. In the meantime, I think we all have to expect to see a lot of computer glitches result in bidder disqualification. Taking a little time to understand what the requirements are and getting a great computer person to assist you in submitting your bids sound like two good ideas for now.

Susan McGreevy is a partner at Husch & Eppenberger, Kansas City, Mo., tel. 816/421-4800, e-mail to [email protected].