E-Alert Case Updates
Aggrieved MBE Bidders Have the Right to Administrative Review
Salisbury Univ. v. Joseph M. Zimmer, Inc.
In Salisbury Univ. v. Joseph M. Zimmer, Inc., the Court of Special Appeals of Maryland concluded that aggrieved Minority Business Entity (“MBE”) bidders have a statutory right to submit bid protests in the administrative context. The Court held that the plain language of Md. Code Ann., State Fin. & Proc. §§ 15-215 and 15-217 (“§§ 15-215 and 15-217”) invalidates COMAR 21.11.03.14.
By way of background, COMAR 21.11.03.14, a regulation issued by the Board of Public Works (“BPW”), states that a bidder cannot file a bid protest if the bidder is denied a contract for failure to meet MBE requirements. Under §§ 15-215 and 15-217, bidders have the unlimited right to file a bid protest concerning the determination of the successful bidder or bidder qualification.
Here, Salisbury University (“University”) solicited bids to replace a chiller. Zimmer (“Contractor”) submitted the low bid, which was later rejected by the University because the bid failed to meet the MBE participation goal of 10 percent. Specifically, the Contractor proposed to use a subcontractor that was not certified as a minority business. The Contractor filed a bid protest with the University. The University responded that, under COMAR 21.11.03.14, the Contractor had no right to protest the rejection of its bid.
The Contractor appealed the University’s rejection to the Maryland State Board of Contract Appeals (“Board”). The University argued that, under COMAR 21.11.03.14, a protest could not be filed to challenge MBE issues, and the Board lacked jurisdiction to consider the protest. Agreeing with the University, the Board concluded that it did not have jurisdiction to consider the protest. On judicial review, the Circuit Court for Baltimore County reversed the Board’s decision.
The Contractor argued that COMAR 21.11.03.14 is ultra vires because it is in direct conflict with §§ 15-215 and 15-217. As a threshold matter, the University argued that the case should be dismissed as moot. On the merits, the University made four additional arguments. First, that the preamble to Maryland’s original MBE law supports COMAR 21.11.03.14’s prohibition on filing MBE-related protests. Second, that the General Assembly’s re-enactment of the MBE statute after the Board’s decision to apply the regulation is evidence that the regulation conforms to the legislative intent behind the MBE statute. Third, that the General Assembly could give the Board jurisdiction to hear procurement disputes generally, but not give the Board jurisdiction to hear MBE-related procurement disputes specifically. Fourth, that contractors aggrieved by an agency’s MBE-related decision have a sufficient remedy in the circuit courts.
As a threshold matter, the Court did not dismiss the appeal on mootness grounds because the controversy between the parties was capable of repetition. See Hamot v. Telos Corp., 185 Md. App. 352, 364 (2009) (citing State v. Parker, 334 Md. 576, 584 (1994) (“[a] limited exception to the mootness doctrine will be found, even if no controversy exists at the moment of review, if the controversy between the parties is capable of repetition, yet evading review.”) . Specifically, the Court stated that it was reasonable to expect that the Contractor would be involved in other MBE-related bid protests, which would be appealed to the Board. Repetition and evasion of this issue would occur in the context of other bidders and other State agencies involved in MBE-related bid disputes.
Arriving at the case's merits, the Court found that the §§ 15-215 and 15-217 statutory provisions trump COMAR 21.11.03.14. The Court first reasoned that the preamble to Maryland’s original MBE law was of little consequence in interpreting §§ 15-215 and 15-217. Second, the Court found that because the language of §§ 15-215 and 15-217 invalidates the regulation, the General Assembly’s re-enactment of the MBE law does not override the relevant statutory language. Third, the Court reasoned that because Title 15 of Md. Code Ann., State Fin. & Proc. gives the Board jurisdiction to hear all disputes, and Title 14 of Md. Code Ann., State Fin. & Proc. does not purport to take that jurisdiction away, the Board has jurisdiction to hear MBE decisions. Although contractors aggrieved by an agency’s MBE-related decision have a remedy in the circuit courts, the Court concluded that a statutory right to submit bid protests in the administrative context also exists. Accordingly, the judgment of the Circuit Court for Baltimore County was affirmed.
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