Md. State Highway Admin. v. Milani Constr., LLC

MARYLAND STATE HIGHWAY ADMINISTRATION, ET AL. v. MILANI CONSTRUCTION, LLC

No. 1334

COURT OF SPECIAL APPEALS OF MARYLAND

September Term, 2019

September 29, 2020

Circuit Court for Anne Arundel County

Case No. C-02-CV-19-000414

UNREPORTED

Fader, C.J., Nazarian, Adkins, Sally D. (Senior Judge, Specially Assigned), JJ.

Opinion by Fader, C.J.

* This is an unreported opinion, and it may not be cited in any paper, brief, motion, or other document filed in this Court or any other Maryland Court as either precedent within the rule of stare decisis or as persuasive authority. Md. Rule 1-104.

This appeal arises in the context of bid protests that were filed in connection with an invitation for bids issued by appellant Maryland State Highway Administration ("SHA"). The apparent lowest bidder was Milani Construction, LLC, the appellee. The apparent second-lowest bidder was appellant Total Civil Construction & Engineering, LLC. Seven days after bids were opened, Total Civil filed a bid protest in which it argued that Milani's bid was defective and that Milani should be disqualified as a nonresponsive bidder. Milani did not challenge Total Civil's protest, which SHA subsequently upheld, and that proceeding is now closed.

Three days after receiving notice of Total Civil's protest, Milani filed a bid protest of its own. Milani alleged that SHA's invitation for bids had misrepresented a critical fact related to the timing of the project and asked SHA to cancel all bids and issue a new solicitation. SHA rejected Milani's protest, but the Maryland State Board of Contract Appeals (the "Board") reversed the SHA decision, and the Circuit Court for Anne Arundel County affirmed the Board. In this appeal from the circuit court's ruling, neither SHA nor Total Civil disputes the merits of Milani's protest. Instead, they contend that the Board's ruling must be reversed because (1) the protest was untimely and, (2) in light of Milani's disqualification, it lacked standing to file the protest. We conclude that Milani's protest was untimely and, therefore, will reverse.

BACKGROUND

Relevant Regulatory Background

As relevant to this procurement, bid protests are governed by Title 21, Subtitle 10, Chapter 02 of the Code of Maryland Regulations ("COMAR"). Under COMAR21.10.02.02, "[a]n interested party may protest to the appropriate procurement officer against the award or the proposed award of a contract subject to this title[.]" An "interested party" is "an actual or prospective bidder, offeror, or contractor that may be aggrieved by the solicitation or award of a contract, or by the protest." COMAR 21.10.02.01B(1).

If a protest is "based upon alleged improprieties in a solicitation that are apparent before bid opening or the closing date for receipt of initial proposals," it must "be filed before bid opening or the closing date for receipt of initial proposals." COMAR 21.10.02.03A. Any other protest "shall be filed not later than 7 days after the basis for protest is known or should have been known, whichever is earlier." COMAR 21.10.02.03B. "A protest received by the procurement officer after [these] time limits . . . may not be considered." COMAR 21.10.02.03C.

The Bid Solicitation

On October 24, 2017, SHA issued a public bid solicitation for a highway reconstruction contract in Calvert County, the second phase of a five-phase project. The purpose of the solicitation was to widen MD 2/4 between Fox Run Boulevard and MD 231 to add highway lanes, sidewalks, bike lines, and "signal upgrades at major intersections." SHA emphasized in the solicitation that because the project was considered high priority, it "desire[d] to expedite construction . . . and to reduce the time of construction." To achieve that goal, SHA would evaluate each bid by adding "the bidder's base bid for the work and . . . proposed schedule duration multiplied by a daily incentive/disincentive amount" of $16,200. Under this formula, "a base bid with a shorter schedule would beevaluated more favorably than the same base bid with a longer schedule." As further incentive, if the recipient of the award finished the project early, it would receive a bonus of $16,200 for every day by which it beat the schedule, up to 30 days. On the other hand, if the project were not completed on time, the contract recipient would be penalized by $16,200 for every day of delay, with no cap.

One important factor driving the timing for completion of the project was the relocation of certain utility lines. Among the affected utility line owners was Verizon, which would need to "adjust and relocate 3964 ft. of underground cables and two manholes." Bid documents stated that "[t]he Verizon relocation and adjustment would be concurrent to construction work," and identified David Metcalfe as the point of contact at Verizon for prospective bidders.

SHA issued several addenda to the initial invitation for bids. As relevant to this appeal, on January 2, 2018, SHA issued "Addendum No. 5" to answer questions from prospective bidders. In response to one question about the timing of utility owners' relocation of utility lines, Addendum No. 5 stated:

[T]he utility relocations should be accounted for in the contractor's time proposal. Utility relocations are scheduled to be completed by October 2018. The contractor shall coordinate directly with utility companies for a detailed schedule.

(Emphasis removed).

Eight bidders ultimately submitted bids, which SHA opened on January 18, 2018. Milani's bid contained the lowest total price—$27,711,900—and the shortest construction schedule—256 days. Total Civil was the apparent second-lowest bidder, with a price of$29,614,481 and a construction schedule of 463 days, which was approximately 80% longer than Milani's.

Events Following the Bid Opening

On January 18, 2018, the day of bid opening, Milani's Project Manager, Silvanna R. Mendez, sent a letter by email to Mr. Metcalfe of Verizon in which she: (1) stated that Milani was the "apparent low bidder" on the project; (2) noted that the contract documents stated that "Verizon will relocate 3,964 feet of cable and 2 manholes by October 2018"; and (3) stated that Milani "would like to meet with Verizon to discuss this work[.]"¹ The letter identified copies sent to two SHA employees, who were identified by position as "ADE Construction" and "Utility Engineer." SHA's procurement officer was not copied on the letter.

Mr. Metcalfe responded the next morning, January 19, by email, stating, in full:

I've read the attached letter and I believe the letter expresses some information and assumptions that may not be accurate.

I do not believe Verizon will have our utility relocation efforts completed by the October of 2018 timeframe mentioned in your letter.

I estimate our relocation work duration will take approx. 10-13[ ]months and some work can only begin AFTER grading is complete along Commerce Drive.

Please call me to discuss in more detail.

Mr. Metcalfe's email copied the same two SHA employees as had Milani's letter.

Later in the morning of January 19, a Milani Vice President, Ira Kaplan—who was not listed as a cc on either Milani's January 18 letter or Mr. Metcalfe's response—called Mr. Metcalfe. Mr. Kaplan later testified that he called Mr. Metcalfe that morning because he "wanted to know more about [ ] what [Mr. Metcalfe] said since we already had kind of a definitive end date in the contract[.]" The two men "briefly discussed Verizon's proposed work locations and estimated work durations," and Mr. Metcalfe reiterated that he was "concerned that Verizon could not meet the October completion schedule." The two scheduled an in-person "coordination meeting" to take place on January 24, which Mr. Kaplan promptly sought to confirm in a follow-up email. In the email, Mr. Kaplan professed optimism that "a good portion of the Verizon relocations do not interfere with our work, and, thus, will not hinder our ability to meet our project delivery date."

Mr. Metcalfe later testified that "the whole reason for the meeting" on January 24 was because Milani "had concerns" about the utility relocation completion schedule. Mr. Kaplan testified as well that after seeing the email, Mr. Metcalfe's statements "needed to be explored" to see "what that meant to us." Mr. Kaplan explained that because Addendum No. 5 "said October of '18" as the utility completion date, the email "was something that was worth exploring," and so Milani and Mr. Metcalfe "just really had to sit down . . . and go over the [Verizon] documents and [Milani's] documents, and proceed from that point." They "agreed to discuss this at a meeting," to "see what [Mr. Metcalfe] was talking about."

During the January 24 meeting, Mr. Metcalfe presented Milani representatives with Verizon's "most up-to-date [] relocation plans," and the parties discussed, among other things, "known conflicts with existing communication lines." Mr. Metcalfe explained during this meeting "that the earliest [Verizon] could relocate the [utility] lines was between February and April 2019." No SHA representatives were present at the meeting.

On January 25, seven days after bid opening, Total Civil filed a timely bid protest with SHA in which it alleged, among other grounds, that "Milani's Bid was non-responsive because Milani neither achieved the [Minority Business Enterprise ("MBE")] participation goal of 12%, nor requested a waiver thereof." According to the protest, in presenting its bid, Milani had improperly counted toward meeting the MBE goal a contractor who was "not certified to perform work as a 'regular dealer,' and therefore may not be counted" toward the goal. (Emphasis removed). Total Civil asked SHA to reject Milani's bid and award the contract to Total Civil as the resulting lowest responsive bidder. Milani, which received notice of Total Civil's bid protest a day later, never contested Total Civil's protest or its allegation that Milani's bid was nonresponsive.

On January 29, 2018, three days after...