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Bid Protests in Virginia
Thursday, January 4, 2024

Bradley has been publishing an ongoing survey of state-level bid protest processes and procedures (see, e.g., our post on “Bid Protests in New York” and our “Update on Bid Protests in Alabama”). For the next state in this ongoing series, we focus on the bid protest procedures in the Commonwealth of Virginia.

Who May Protest and When?

  • Under the Virginia Public Procurement Act, any bidder or offeror who desires to protest the award or decision to award a contract shall submit the protest in writing to the public body, or an official designated by the public body, no later than 10 days after the award or the announcement of the decision to award, whichever occurs first. Va. Code § 2.2-4360.
     
  • Any potential bidder or offeror on a contract negotiated on a sole source or emergency basis who desires to protest the award or decision to award such contract shall submit the protest in the same manner no later than 10 days after posting or publication of the notice of such contract as provided in § 2.2-4303.
     
  • However, if the protest of any actual or potential bidder or offeror depends in whole or in part upon information contained in public records pertaining to the procurement transaction that are subject to inspection under § 2.2-4342, then the time within which the protest shall be submitted shall expire 10 days after those records are available for inspection by such bidder or offeror under § 2.2-4342, or at such later time as provided in this section.
     
  • Bidders or offerors who are deemed ineligible (§ 2.2-4357), have lost an appeal of a withdrawal of their bid (§ 2.2-4358), and/or have been deemed non-responsible (§ 2.2-4359) may also challenge those decisions in accordance with the procedures set forth in these respective sections. 

When Will a Decision on the Protest Be Issued?

  • The public body or designated official shall issue a decision in writing within 10 days stating the reasons for the action taken.
     
  • This decision shall be final unless the bidder or offeror appeals within 10 days of receipt of the written decision by invoking administrative procedures meeting the standards of § 2.2-4365, if available, or in the alternative by instituting legal action as provided in § 2.2-4364.

What Type of Relief Is Available?

  • If prior to an award it is determined that the decision to award is arbitrary or capricious, “then the sole relief shall be a finding to that effect.” The public body shall cancel the proposed award or revise it to comply with the law.
     
  • If, after an award, it is determined that an award of a contract was arbitrary or capricious, then the sole relief shall be as follows:
    • Where the award has been made but performance has not begun, the performance of the contract may be enjoined.
       
    • Where the award has been made and performance has begun, the public body may declare the contract void upon a finding that this action is in the best interest of the public. Where a contract is declared void, the performing contractor shall be compensated for the cost of performance up to the time of such declaration.
       
  • Where a public body, an official designated by that public body, or an appeals board determines, after a hearing held following reasonable notice to all bidders, that there is probable cause to believe that a decision to award was based on fraud or corruption or on an act in violation of Article 6 (§ 2.2-4367 et seq.) of the Code of Virginia, the public body, designated official or appeals board may enjoin the award of the contract to a particular bidder.

Is There a Stay of Award During the Protest?

  • A contract award need not be delayed for the period allowed a bidder or offeror to protest, “but in the event of a timely protest as provided in § 2.2-4360, or the filing of a timely legal action as provided in § 2.2-4364, no further action to award the contract shall be taken unless there is a written determination that proceeding without delay is necessary to protect the public interest or unless the bid or offer would expire.” § 2.2-4362.

What Are the Available Appeal Options?

  • When a protest is denied, the disappointed protester has two appeal options.
    • First, under section 2.2-4365, there might be an administrative appeal procedure.
       
      • “A public body may establish an administrative procedure for hearing (i) protests of a decision to award or an award, (ii) appeals from refusals to allow withdrawal of bids, (iii) appeals from disqualifications and determinations of nonresponsibility, and (iv) appeals from decisions on disputes arising during the performance of a contract, or (v) any of these.”“Such administrative procedure shall provide for a hearing before a disinterested person or panel, the opportunity to present pertinent information and the issuance of a written decision containing findings of fact. The disinterested person or panel shall not be an employee of the governmental entity against whom the claim has been filed.”“The findings of fact shall be final and conclusive and shall not be set aside unless the same are (a) fraudulent, arbitrary or capricious; (b) so grossly erroneous as to imply bad faith; or (c) in the case of denial of prequalification, the findings were not based upon the criteria for denial of prequalification set forth in subsection B of § 2.2-4317.”“No determination on an issue of law shall be final if appropriate legal action is instituted in a timely manner.”“Any party to the administrative procedure, including the public body, shall be entitled to institute judicial review if such action is brought within thirty days of receipt of the written decision.”Administrative review procedures are not compulsory but, if the protester invokes them, then “the procedures shall be exhausted prior to instituting legal action concerning the same procurement transaction unless the public body agrees otherwise.” § 2.2-4364(F).
         
    • Alternatively, a protester “may bring an action in the appropriate circuit court challenging a proposed award or the award of a contract, which shall be reversed only if the petitioner establishes that the proposed award or the award is not (i) an honest exercise of discretion, but rather is arbitrary or capricious or (ii) in accordance with the Constitution of Virginia, applicable state law or regulation, or the terms and conditions of the Invitation to Bid or Request for Proposal.” § 2.2-4364(C).

Does the Awardee Have a Right to Intervene?

  • The Virginia Public Procurement Act does not specifically provide for intervention in a bid protest by an interested party, which would typically be the prospective contract awardee, either in the protest itself or in any administrative appeal. 
     
  • In the event, however, that a party were to appeal an adverse bid protest decision to a Virginia Circuit Court, then Rule 3:14 of the Rules of the Supreme Court of Virginia states, “A new party may by leave of court file a pleading to intervene as a plaintiff or defendant to assert any claim or defense germane to the subject matter of the proceeding.” The Virginia Supreme Court has construed this rule to mean that intervention is limited “to those parties who are legitimately plaintiffs or defendants in litigation because the nature of their claim includes some right that is involved in the litigation.” See Daily Press, LLC v. Commonwealth, 878 S.E.2d 390, 402 (Va. 2022) (internal quotation & citations omitted).

What Is the Effect of a Protest or an Appeal?

  • The contract award is presumed to be valid during the appeal. Pending final determination of a protest or appeal, “the validity of a contract awarded and accepted in good faith in accordance with this chapter shall not be affected by the fact that a protest or appeal has been filed.” § 2.2-4361.
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