Lately, competition for public works projects is fierce, and bidders, using every possible advantage to obtain contracting opportunities, seem resigned to combing through a low bid to determine if “all I’s are dotted and T’s are crossed.”
As part of this process, the Disadvantaged Business Enterprise (“DBE”) compliance requirements have turned out to be a fertile ground for bid protests, particularly on federally funded state highway projects. The DBE program provides a vehicle for woman and minority-owned, small businesses to participate in public projects. As part of this program, contractors on federal public contracts are required to meet certain DBE subcontracting goals (for example, 12% of the total bid amount must be subcontracted to certified woman or minority-owned firms).
The requirements for demonstrating DBE participation, however, can be complicated and fraught with pitfalls for both DBEs and contractors alike. Failure to comply with the DBE bidding requirements to the letter is a common basis for finding a bid non-responsive, and, thus, provides numerous bidders with a basis to protest, including (i) questioning a prime contractor’s achievement of the project’s DBE goal or good faith efforts to meet that goal, (ii) the legitimacy or certification of a listed DBE entity, or (iii) a DBE’s ability to perform a Commercially Useful Function on a project.
For example, a general contractor who submitted a bid which came in “second,” may challenge award of the project to the apparent low bidder on the basis that the DBE firm that the low bidder proposes to use is either not properly certified to perform the work proposed or is not a legitimate DBE firm. Such protests provide a lucrative opportunity for the second low bidder who may ultimately be awarded the project.
Keep reading this article at: http://www.ac-lawyers.com/news/2013/05/14/dbe-bid-protests-one-contractors-loss-is-anothers-gain
