Tennessee law explicitly provides interested parties the right to protest the terms of a solicitation for a contract with a state agency or the award or intended award of a state government contract. In each case, Tennessee’s procurement code and procurement regulations require the submission of a protest letter directed to the “Chief Procurement Officer” located in Nashville.
What is required to file a protest?
Bid protests be submitted in writing and identify all of the reasons for the protest. They should be presented in the form of a letter that identifies the solicitation and the interested parties and summarizes the grounds for the protest. The specific grounds of protest that are available under Tennessee law are listed at Tenn. Comp. R. & Regs. 0690-03-01-.12(2)(a).
Although there are exceptions for small businesses bidding on contracts under $1 million, a bid protest in Tennessee must be accompanied by a bond or other security. The amount of the bond is five percent of the lowest evaluated cost or five percent of the estimated maximum liability established in the solicitation. The bond will be forfeited if the protest is not well-grounded or is filed in bad faith. Tenn. Code Ann. § 12-3-514(c).
When must a protest be filed?
Pre-award protests addressing ambiguities or defects in a solicitation that are apparent before bid opening or the closing date for receipt of initial proposals must be submitted within seven calendar days after the solicitation has been posted to the website of the Central Procurement Office or the Delegated State Agency. Tenn. Comp. R. & Regs. 0690-03-01-.12(1)(a).
Post-award protests must be submitted within seven calendar days after the notice of award or notice of intent to award the contract is issued, whichever is earlier. Issues raised after the seven-day period will not be considered. Tenn. Code Ann. § 12-3-514(a).
The notice of award or notice of intent to award usually specifies a date on which the agency’s procurement files, which contains the agency’s proposal evaluations, will be open to bidders. This is known as the “Open File Period.” Under Tennessee law, bidders are deemed to know all of the facts in the agency’s files on the first day of the Open File Period, so a post-award protest must be submitted within seven calendar days from the start of the Open File Period. Tenn. Comp. R. & Regs. 0690-03-01.12(2)(a).
Does Tennessee have an automatic stay?
Tennessee law imposes an automatic stay that goes into effect upon the state’s receipt of a protest and supporting bond. There is a procedure that allows the state to override the stay if it is necessary to protect the interests of the state. Tenn. Code Ann. § 12-3-514(e).
Who makes a decision on the protest?
The Chief Procurement Officer, in consultation with the head of the state agency, has the authority to resolve a bid protest. The Chief Procurement Officer is generally required to resolve a protest within 60 calendar days after it is filed. The final determination of the Chief Procurement Officer is made in writing and is submitted to the protesting party, the Protest Committee, and the Comptroller of the Treasury. Tenn. Code Ann. § 12-3-514(d)(3).
A protest may be resolved in the protester’s favor only under one or more of five circumstances—
- the contract award was arbitrary, an abuse of discretion or exceeded the authority of the Central Procurement Office or the State Agency;
- the procurement process violated a constitutional, statutory, or regulatory provision;
- the Central Procurement Office or the Delegated State Agency did not follow the rules of the procurement set forth in the solicitation in making the award, and their failure to follow the rules of the procurement materially affected the contract award;
- the procurement process involved responses that were not independently arrived at in open competition, were collusive, or were submitted in bad faith; or
- the contract award was the result of a technical or mathematical error during the evaluation process. Tenn. Comp. R. & Regs. 0690-03-01-.12(2)(a)(3).
Can an initial protest decision be appealed?
A protester may challenge a decision by the Chief Procurement Officer by appealing to the State Protest Committee within seven calendar days of the decision. Tenn. Code Ann. § 12-3-514(d)(4). An appeal may also be filed directly with the State Protest Committee if the Chief Procurement Officer fails to acknowledge the protest within 15 calendar days after receiving it, fails to resolve the protest within 60 calendar days, or consents in writing to a direct appeal to the Protest Committee. Tenn. Comp. R. & Regs. 0690-03-01-.12(2)(a)(5).
Decisions issued by the State Protest Committee may be appealed to state chancery court. Court review is limited to the record made before the protest committee and involves only an inquiry into whether the protest committee exceeded its jurisdiction, followed an unlawful procedure, or acted illegally, fraudulently, or arbitrarily without material evidence to support its action. Tenn. Code Ann. § 12-3-514(h).
Can a successful protestor recover attorney’s fees?
Tennessee law does not specify the recovery of costs for filing a protest. Because each prospective contractor could justifiably expect fair consideration of its offer by the state, in rare cases, a protester may be able to recover attorney’s fees as well as protest and bid preparation costs under the theory of promissory estoppel. See Owen of Georgia, Inc. v. Shelby County, 648 F.2d 1084, 1095 (6th Cir. 1981) (construing Tennessee law).
Attorneys’ fees are also available in a successful challenge to bid specifications under the Tennessee Freedom in Contracting Act (“FICA”). The FICA prohibits solicitation provisions that establish or require relationships with labor organizations or which discriminate against workers. But those are very limited circumstances that rarely occur. Tenn. Code Ann. § 12-4-905.