One Strike and You’re Out: Bid Protest Requirements for Texas Government Contracts

When protesting the award of a Texas government contract, you have to play by the agency’s rules. State agencies are not eager to reconsider and reverse a contract award—they think they got it right the first time. An agency will likely reject even the most well-reasoned protest if it can be easily dismissed on a technicality (e.g. failure to have the protest sworn or provide copies of the protest to all interested parties can result in rejection of the protest without consideration of the merits). You should carefully review the agency’s bid protest rules to make sure your protest meets every requirement.

Many agencies’ requirements for bid protests are similar, but there are differences, too.

Protests must be in writing and sworn. A few agencies require the protest to be notarized as well.[1] The protest must be delivered and addressed to a specific person at the agency, such as the contracts manager or a division director, as identified in the agency’s bid protest rules or the solicitation for the contract. Nearly all agencies also require the protesting party to mail or deliver copies of the protest to interested parties, which includes all other vendors who submitted bids or proposals.[2] A list of interested parties can be obtained from the agency upon request.

In terms of content, generally a protest must contain the following information:

1. the specific statutory or regulatory provision(s) that the action complained of is alleged to have violated;
2. a specific description of each act by the agency alleged to have violated the statutory or regulatory provision(s) identified in the protest;
3. a precise statement of the relevant facts;
4. an identification of the issues or issues to be resolved;
5. argument and authorities in support of the protest; and
6. a statement that copies of the protest have been mailed or delivered to all other identifiable interested parties.

Some agencies have slightly different or additional content requirements for protests.[3] For example, DPS requires the protesting party to attach supporting exhibits, evidence or documents to substantiate the alleged violation, unless not available at the time of filing, in which case the expected availability date must be indicated. The Texas Lottery Commission and the DPS require protests to contain an affidavit that the contents of the protest are true and correct. 16 Tex. Admin. Code § 401.102; 37 Tex. Admin. Code § 1.264.

General disagreement with the agency’s subjective evaluation judgments, or accusations of unfairness or bias, will likely be unsuccessful. Instead, your protest should allege specific violations of applicable statutes and rules.

“Best value” standard. Texas law requires state agencies to award contracts “that provide the best value for the state” based on specified factors. Tex. Gov’t Code § 2155.074. The vendor’s proposed purchase price and ability to meet the specifications of the Request for Proposal (RFP) are the most important considerations, but agencies may also consider other relevant factors, like past performance. The most common complaints for bid protests are that (i) the awardee’s bid had an excessive purchase price , (ii) the awardee’s bid failed to provide information required by the RFP, (iii) the awardee misrepresented its ability to meet RFP specifications, (iv) the awardee is unable or unwilling to meet RFP specifications, or (v) the awardee has a record of sub-par performance of past contracts.

HUB subcontracting plan. When a government contract has a value of $100,000 or more and the agency determines that there will be subcontracting opportunities under the contract, each vendor’s bid must include a historically underutilized business (HUB) subcontracting plan. Tex. Gov’t Code § 2161.252. Most state agencies have adopted the Comptroller’s requirements for HUB subcontracting plans. The Comptroller requires vendors to identify the expected percentage of work to be subcontracted, state the approximate dollar value of that work, and name the subcontractors that will be used. The vendor also has to meet one of the following requirements: (i) notify at least 3 HUB businesses or 2 trade organizations or development centers that serve HUBS of the subcontracting opportunities, (ii) submit documentation that 100% of the subcontracting will be performed by HUBs, or (ii) submit documentation that HUB subcontractors will be used and that the total value of the subcontracts will meet or exceed a specified percentage of the contract award. A bid that does not include a completed HUB subcontracting plan is considered unresponsive and must be rejected by the agency. E.g. 34 Tex. Admin. Code § 20.285.

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[1] The RRC, TCEQ, DPS, and Texas State Board of Pharmacy require bid protests to be notarized: 16 Tex. Admin. Code § 20.1; 30 Tex. Admin. Code § 11.2; 37 Tex. Admin. Code § 1.264; 22 Tex. Admin. Code § 281.14.

[2] The RRC, Department of State Health Services, and Texas State Board of Pharmacy do not require the protesting party to provide copies of the protest to interested parties. 16 Tex. Admin. Code § 20.1; 25 Tex. Admin. Code § 4.1; 22 Tex. Admin. Code § 281.14.

[3] 16 Tex. Admin. Code § 20.1 (RRC); 37 Tex. Admin. Code § 155.41 (Dept. of Criminal Justice); 1 Tex. Admin. Code § 201.1 (Dept. of Information Resources); 37 Tex. Admin. Code § 1.264 (DPS); 25 Tex. Admin. Code § 4.1 (Dept. of State Health Services); 16 Tex. Admin. Code § 401.102 (Texas Lottery Commission); 40 Tex. Admin. Code § 806.62 (Texas Workforce Commission—rules are applicable to bid protests for purchases of products and services from people with disabilities).