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Real Property & Development Review

STITA Bid Protest Loss Underscores Need To Comply with Solicitation’s Protest Procedures

Posted in Construction

On June 8, Division I of the Court of Appeals issued an unreported decision on the challenge by STITA, the incumbent provider of taxi services for Sea-Tac Airport, to a procurement by the Port of Seattle that led to an award to a competitor. The Court affirmed the trial court’s denial of injunctive relief to STITA, based primarily on STITA’s failure to comply with what the Court termed a ”clear” process for handling protests stated in an addendum to the solicitation. Although the decision is unpublished, we address it here because of the case’s notoriety. You can view it here: Download file.

STITA had been the exclusive provider of taxi services at Sea-Tac for many years. In 2009, the Port issued a request for proposal for a new five-year concession. The RFP changed the method of calculating the compensation to be paid to the Port, and revenue guaranteed to the Port accounted for 30% of the evaluative score. The Port held pre-proposal conferences and answered written questions in an addendum prior to the deadline for submitting a proposal.

A competitor of STITA (Yellow Cab) scored highest in evaluations; STITA placed third. STITA filed a written protest, which the Port rejected. STITA filed a complaint in King County Superior Court for declaratory and injunctive relief. It alleged that the new method for calculating the Port’s compensation was unlawful. STITA obtained a temporary restraining order prohibiting the Port from entering into a contract with Yellow Cab. However, less than two weeks later, the trial court heard and denied STITA’s motion for preliminary injunction. Although the trial court remarked that STITA had made a good case that the Port had not met certain statutory requirements, it found that STITA had waived its protest by proceeding through the RFP process and then objecting.

STITA immediately appealed, first obtaining injunctive relief prohibiting the Port from proceeding during the pendency of the appeal. Relief was granted because, once the Port signed a contract with Yellow Cab, STITA would lose its standing to protest.

The Court of Appeals first held that STITA had not filed a timely objection to the RFP, based upon the following written Q&A in Addendum 3 of the RFP:

 2. Q: Does the Port have a deadline or process for challenging the RFP itself or any substantive or procedural requirement it sets forth?

A: The Port has yet to promulgate a formal bid protest procedure for non-public works. Nonetheless, a potential proposer who believes that there is a problem with the RFP (as opposed to any particular proposer’s response) should bring the issue to the Port’s attention, in the manner for written questions, prior to the deadline for questions. The Port may then address any such issue before proposers have submitted their proposals. The Port specifically reserves the right to deny any protest arising from the RFP or any substantive or procedural requirement it sets forth if such protest is not submitted in this manner. …

 

The Court held this provision provided a “clear process” for protesting the RFP. STITA failed to raise the issues it raised in its lawsuit prior to the deadline for questions and accordingly lost the right to protest.

Second, the Court held that STITA waived the right to protest by actually submitting a proposal and waiting to see whether it was awarded the contract.

Third and finally, the Court dismissed STITA’s challenges to the legality of the RFP on the merits.

The lessons to be drawn? Bidders must strictly comply with protest requirements — even if at first glance the “requirements” may seem vague, inconclusive, or permissive rather than mandatory — and may lose their right to protest if they submit a proposal to an RFP they later challenge as unlawful.