A ruling by the Comptroller General's office last week amounted to a slap on the wrist for the D.C. government for its questionable handling of competitive bids on a procurement contract last year.
On the other hand, the decision sustained business' position in a pivotal dispute with the District and, in the process, may have restored faith in competitive bidding procedures.
District officials did their best to make a mockery of the process last summer when they used unannounced criteria to award a contract for 90 police vehicles to a local Chevrolet dealer even though his was the highest of three competitive bids.
It took more than six months to complete an investigation and reach a decision in the matter, but the comptroller sustained formal protests by Ford Motor Co. and Chrysler Corp., which had submitted lower bids for the contract to provide the vehicles.
Given the circumstances of the contract award to Curtis Chevrolet, the comptroller maintained, "We find the District's actions to have been arbitrary and capricious."
Ford's claim for reimbursement of bid preparation costs was not considered, however, because the GAO does not have authority to settle claims against the District government, the comptroller agency explained.
Moreover, neither Ford nor Chrysler will be allowed to compete under the same contract because the 90 vehicles have already been delivered by Curtis and are in service.
The comptroller's decision is a moral victory, nonetheless, for Ford and Chrysler. To be sure, the decision is an important one for all firms that do business with the District via the competitive bidding process.
Clearly, D.C. procurement officials failed to observe proper procedures in awarding the contract to Curtis. That was obvious to anyone who read the invitation for bids six months ago.
The comptroller concluded its lengthy investigation with a finding that "unannounced evaluation criteria were used to exclude low bids under District of Columbia procurement for police cars."
In other words, the comptroller sustained the protests by Ford and Chrysler because the District changed the rules in the middle of the game.
In fact, three days after the bids were opened, Ford, as apparent low bidder, was asked to submit an affirmative action plan for fulfilling the contract.
Despite a figure that was approximately $1,500 lower than the unit price quoted by Curtis, however, Ford's bid was rejected. Chrysler's total bid was $134,387 less than the total submitted by Curtis.
The District rejected Ford's bid, however, alleging that the police department previously experienced extensive safety and repair problems with Ford products. At the same time, Police Chief Maurice Turner concurred with his fleet manager that new Chrysler cars would be more expensive to operate than comparable Chevrolet models.
Despite the justifications for rejecting the lower bids, the police department said nothing to procurement officials about safety or repair problems before bids were let last March.
The Ford and Chrysler bids "cannot said to be responsive" to the District's invitation for bids, the Comptroller said, because the invitation for bids contained no provisions bearing on the so-called deficiencies.
"... The District has not shown how either Ford or Chrysler failed to perform under prior contracts; rather, the alleged Ford product deficiencies arose after the prior contract had been performed," the comptroller's office said.
The decision to reject the Ford and Chrysler bids, it added, was based essentially on "perceived deficiencies" in the cars to be provided.
"Ford and Chrysler were evaluated on the basis of standards not present in the solicitation, and their bids could not, therefore, be rejected for criteria revealed after bid opening," the comptroller said.
Although their claims for administrative costs were dismissed, Ford and Chrysler officials say they are pleased with the outcome. "I'm very pleased to know that there is in fact a process that works," said a Ford official.
"I just didn't think it was correct to let this type of government go unchallenged," added his counterpart at Chrysler.
And because it was challenged, the District is on notice that it cannot run a shell game in contract bid solicitations for products and services.