12-3-214 - Authority to resolve protested bids, bid process or procedures, and awards. - Tennessee Statutes

12-3-214. Authority to resolve protested bids, bid process or procedures, and awards.

(a)  Right to Protest.  Prior to the commencement of an action in court concerning the controversy, any actual bidder who claims to be aggrieved in connection with a bid, the bid process, or a pending award of a contract may protest to the commissioner. The protest shall be submitted in writing within seven (7) days after such claimant knows or should have known of the facts giving rise to the protest. Any issues raised by the protesting party after the seven (7) day period shall not be considered as part of the protest. In the case of a pending award, a stay of award in accordance with subsection (f) may be requested.

(b)  Signature on Protest Constitutes Certificate.  The signature of an attorney or protesting party on a request for consideration, protest, motion, or other document constitutes a certificate by the signer that the signer has read such document, that to the best of the signer's knowledge, information, and belief formed after reasonable inquiry, it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass, limit competition, or to cause unnecessary delay or needless increase in the cost of the procurement or of the litigation. If a request for consideration, protest, pleading, motion, or other document is signed in violation of this subsection (b) before or after appeal to the board of standards, the board of standards, upon motion or upon its own initiative, may impose upon the person who signed it, a represented party, or both, an appropriate sanction, which may include an order to pay to the other party or parties, including the affected state department or agency, the amount of the reasonable expenses incurred because of the filing of the protest, a petition for a stay of award, pleading, motion, or other paper, including reasonable attorneys fees.

(c)  Protest Bond Required. 

     (1)  Neither a protest nor a stay of award shall proceed under this section unless the protesting party posts a protest bond. The protesting party shall post with the commissioner, at the time of filing a notice of protest, a bond payable to the state in the amount of five percent (5%) of the lowest bid evaluated. The protest bond shall be in form and substance acceptable to the state and shall be immediately payable to the state conditioned upon a decision by the board of standards that:

          (A)  A request for consideration, protest, pleading, motion or other document is signed, before or after appeal to the board of standards, in violation of subsection (b);

          (B)  The protest has been brought or pursued in bad faith; or

          (C)  The protest does not state on its face a valid basis for protest.

     (2)  The state shall hold the protest bond for at least eleven (11) calendar days after the date of the final determination by the commissioner. If the protesting party appeals the commissioner's determination to the board of standards, the commissioner shall hold the protest bond until instructed by the board of standards to either keep the bond or return it to the protesting party.

(d)  Exemption from Bond Requirement. 

     (1)  At the time of filing notice of a protest of a procurement in which the lowest evaluated bid is less than one million dollars ($1,000,000), a minority or small business protesting party may submit a written petition for exemption from the protest bond requirement of subsection (c). The petition must include clear evidence of minority or small business status. On the day of receipt, the petition shall be given to the commissioner or the commissioner's designee. The commissioner or the commissioner's designee has five (5) business days in which to make a determination. If an exemption from the protest bond requirement is granted, the protest shall proceed as though the bond were posted. Should the commissioner deny an exemption from the requirement, the protesting party shall post the protest bond with the commissioner as required in subsection (c) within three (3) business days of the determination.

     (2)  For purposes of this section:

          (A)  “Minority business” is defined as solely owned or at least fifty-one percent (51%) owned by a person or persons who control the daily operation of the business and who is disabled, having a physical or mental impairment that, in the written opinion of the person's licensed physician, substantially limits one (1) or more of the major life activities of the person, including caring for oneself, and performing manual tasks, which include writing, walking, seeing, hearing, speaking and breathing; African American, having origins in any of the Black racial groups of Africa; Asian American, having origins in any of the original peoples of the Far East, Southeast Asia and Asia, the subcontinent or the Pacific Islands; Hispanic American, of Cuban, Mexican, Puerto Rican, Central or South American, or other Spanish or Portuguese origin, culture or descent, regardless of race; or Native American, having origins in any of the original peoples of North America; and

          (B)  “Small business” means one that is independently owned and operated, has total gross receipts of no more than two million dollars ($2,000,000) for the most recently ended federal tax year, and employs no more than thirty (30) persons on a full-time basis.

(e)  Authority to Resolve Protests. 

     (1)  The commissioner or the commissioner's designee has the authority to settle and resolve a protest of a bidder or vendor, actual or prospective, concerning a bid, the bid process, or a pending award of a contract. This authority shall be exercised in accordance with rules and procedures approved by the board of standards. The final determination of the commissioner or the commissioner's designee shall be given in writing and submitted to the protestor and the board of standards.

     (2)  If a protest is not resolved by mutual agreement, the protestor may request that the matter be considered at a meeting with the board of standards. The request for consideration before the board of standards shall be made in writing within seven (7) days from the date of the final determination by the commissioner or the commissioner's designee.

     (3)  The results of the meeting with the board of standards shall be reported in writing to the protestor.

(f)  Stay of Procurements During Protests.  Prior to the award of a contract, bidders who have protested may submit to the commissioner a written petition for stay of award. Such stay shall become effective upon receipt by the state. The state shall not proceed further with the bid process or with the award of the contract until the protest has been resolved in accordance with this section, unless the board of standards makes a written determination that continuation of the bid process or the award of the contract without delay is necessary to protect substantial interests of the state. It shall be the responsibility of the commissioner, with the assistance of the procuring agency, to seek such a determination by the board of standards.

(g)  Protests Subsequent to Award.  The Tennessee claims commission has exclusive jurisdiction to determine all monetary claims against the state under this section for the negligent deprivation of statutory rights pursuant to § 9-8-307(a)(1)(N).

(h)  Appeal to Chancery Court.   Protests appealed to the chancery court from the board of standards shall be by common law writ of certiorari. The scope of review in the proceedings shall be limited to the record made before the board of standards and shall involve only an inquiry into whether the board of standards exceeded its jurisdiction, followed an unlawful procedure, or acted illegally, fraudulently or arbitrarily without material evidence to support its action.

[Acts 1987, ch. 337, § 15; 1988, ch. 641, §§ 1-5; 1991, ch. 55, §§ 1, 2; 1998, ch. 785, § 8; 2000, ch. 924, §§ 3-5; 2008, ch. 682, §§ 1, 2.]