Stites & Harbison, PLLC

In 2009, the Stimulus Act has made "shovel-ready" a buzz word. The tight economy that the Act is to stimulate, however, may also lead to more bid protests.

On February 20, 2009, the American Recovery and Reinvestment Act was signed into law. Out of the nearly $700 billion in stimulus money, about $135 billion focuses on infrastructure. The Act defines "shovel-ready" projects as those that can begin "not later than 120 days after the date" of the Stimulus Act. Half of the funds are to receive a preference for shovel-ready projects.

Last year, there was a 17 percent increase in the number of bid protests filed at the federal level. The same trend in the rise of bid protests is also being seen at the state level. This is due to what contractors are seeing with their subcontracts: fewer projects are resulting in more bidders and, in the public contracting context, more bid protests. As a result, the "shovel-ready" projects may also be protest-ready.

Each state has its own bid protest procedures, with distinct timelines for filing. Filing bid protests is a time sensitive matter, with rights to protest waived if not made timely. While typically there is not an express statutory provision, state agencies may allow the awardee to respond to a bid protest. Further, there is federal authority which states that if a bidder seeks to protest the terms of a solicitation, the bidder waives that protest if it bids on the solicitation without protesting first. See Parsons Precision Products, Inc., Comp. Gen. B-249940, 92-2 CPD 431.

To add to the possibility of bid protests, projects funded by the Stimulus Act are to be "awarded as fixed price contracts through the use of competitive procedures." Moreover, the Stimulus Act creates a review board. One of the board’s express functions is to review "whether competition requirements applicable to contracts and grants using covered funds have been satisfied." This may serve as yet another forum that reviews how a public project was awarded.

If bidding on a public project, some dates to keep in mind are:

• When the solicitation is issued;
• When the solicitation is awarded; and
• The time the particular state requires a protest for each to be filed.

A disappointed bidder would want to ensure it timely files its protest. With many states now posting public projects through an online system, vigilance is necessary to avoid missing a deadline. An intended awardee should stay apprised of whether a protest has been filed, if it can have an opportunity to respond, and whether the protest has stopped the project from progressing until the protest is resolved. In some instances, the project can proceed despite a protest being filed.

The Stimulus Act is scheduled to result in at least $26 billion for highways and bridges, with more funds to be provided for other projects, as well. With half of this money receiving a preference for "shovel-ready" projects, and with more bidders looking for this sort of work, the Act will undoubtedly stimulate bid protests.