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The curious case of lowest bid vs. best value

October 7, 2012 12:10 am

IN 2000, Virginia's General Assembly amended the Public Procurement Act (PPA) to introduce the concept of "best value," in which price is one of several factors to consider when awarding a service contract for a public institution. According to the amendment, "best value" refers to the overall combination of quality, price, and other specific elements that meet the public body's needs.

However, last spring, the Virginia Supreme Court issued a decision overturning the Spotsylvania County School Board's award of a custodial services contract to a cleaning service provider that the board deemed to offer "best value." Basing its decision on the PPA and its requirement that the "lowest responsive and responsible bidder" be selected, the Supreme Court ruled that the board erred in failing to accept the lowest bid.

When seeking bids for custodial services for various county schools, the Spotsylvania County School Board published a "Best Value Invitation for Bid," stating that the School Board would utilize the PPA's "best value" criteria to select the winning bidder. While Professional Building Maintenance Corp. (PBM) submitted the lowest-priced bid, the School Board awarded the contract to another bidder that met the broader "best value" criteria they considered.

BPM filed a formal bid protest and ultimately sued the School Board. The suit was rejected by a lower court, but the Virginia Supreme Court's decision overturned that ruling and granted PPM the contract.

At face value, it's hard to argue with the court's decision because PBM was the lowest bidder for the custodial services contract. However, in selecting its cleaning services provider, the Spotsylvania County School Board considered a multitude of factors and set up a system that awarded "points" for the bidder's experience, proposed equipment and supplies, quality control programs, and price. Ultimately, the bid was awarded to the company that achieved the highest score, as the board determined it was the "best value bidder." The Virginia Supreme Court rejected the use of the "best value procurement" doctrine when it concluded that the board failed to make the correct decision.

At a time when the connection between cleaning and health is becoming better understood and there is a greater appreciation for the "total cost of cleaning" as it relates to protecting facility assets, environmental sustainability, and the health and safety of building occupants, the Virginia Supreme Court's decision and the underlying procurement law are extremely troublesome. This is especially true given that the court's majority opinion did not reference an amendment to the law that specifically allows for the use of "best value" methodology, as well as the challenge in determining exactly what "responsive and responsible" means.

In this case, the board's goal was to identify and select a cleaning service provider that they were confident could deliver a healthy and productive learning environment, and the board implemented a system that they believed could help them achieve this goal. However, the court ruled that once bidders were deemed "responsive and responsible," no other factors are allowed to come into play; the lowest bidder must be selected.

Not allowing a facility to engage in a reasonable selection process based on factors beyond mere "responsibility" and price is a dangerous precedent. Cleaning, after all, is a true investment in health, safety, and the indoor environment, and is a key piece to the environmental sustainability puzzle. To treat cleaning as less--a simple commodity--increases risk to all of these important investments.

(Note: ISSA does not pass judgment on the specific process used by the Spotsylvania County School Board in this case and whether the board acted in an "arbitrary and capricious manner," as the plaintiff organization alleged.)

Dan Wagner is director of Facility Service Programs, ISSA.





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