Court: Court of Special Appeals of Maryland; May 27, 2011; Maryland; State Appellate Court
The Court of Special Appeals of Maryland addressed the validity of COMAR 21.11.03.14, a regulation from the Board of Public Works (BPW), determining it to be ultra vires as it conflicted with Maryland's State Finance and Procurement Article. The case arose from Salisbury University's rejection of a bid by Joseph M. Zimmer, Inc., which was deemed non-responsive due to its proposed subcontractor's lack of minority business entity (MBE) certification, despite the bid being the lowest. Zimmer protested this rejection, asserting compliance with MBE goals, but Salisbury University refused to finalize its decision, citing the regulation as a barrier to the protest. The Maryland State Board of Contract Appeals dismissed the appeal based on this regulation, leading Zimmer to seek judicial review. The Circuit Court for Baltimore County reversed the Board's decision, prompting Salisbury University to appeal. The appellate court emphasized its direct review of the Board's legal interpretation, asserting that legal conclusions do not receive deference. Ultimately, the court found COMAR 21.11.03.14 invalid, confirming the legitimacy of the appeal's issues, including the question of mootness and the regulation's validity.
Title 11 of the State Finance, Procurement Article outlines general procurement law, defining "procurement" broadly to include leasing and acquiring various goods and services, and "procurement contract" as any agreement for procurement. Title 12 addresses the "State Procurement Organization," granting the Board of Public Works (BPW) control over procurement and the authority to adopt regulations. Title 13 focuses on source selection and contract formation, which are not relevant to this case. Title 14 covers procurement preferences, particularly the Minority Business Enterprise (MBE) program defined in Subtitle 3. An MBE is a legal entity, not a joint venture, that is at least 51% owned and controlled by socially and economically disadvantaged individuals. The definition of a disadvantaged individual includes certain minority groups and those certified by the certification agency. Under F.P. 14-303, the BPW can adopt regulations consistent with the subtitle's purpose, leading to the adoption of COMAR 21.11.03.14, which limits protests related to MBE certification and procurement agency actions. Subsection (b) of F.P. 14-303 outlines required regulations, none of which address MBE dispute resolution. Title 15, focusing on dispute resolution for procurement contracts, mandates the Maryland State Board of Contract Appeals (MSBCA) to create regulations for resolving appeals informally and inexpensively. Relevant sections define protests related to contract formation and the processes for initiating them.
A prospective bidder, bidder, or offeror may submit a protest to the procurement officer, while those awarded a procurement contract can submit a contract claim. F.P. 15-202 specifically exempts contracts for architectural or engineering services from Subtitle 2 of Title 15, which otherwise applies to all procurement contracts, including Minority Business Enterprises (MBEs). The appellee contends that COMAR 21.11.03.14, which prohibits filing a bid protest if a bidder's MBE program is deemed inadequate, conflicts with F.P. 15-215 and 15-217, which allow protests regarding bidder qualifications and successful bidder determinations.
In response, the appellant raises four main arguments:
1. The preamble of Maryland's first MBE law from 1978 indicates that the law does not create a private right of action but is enforceable through General Assembly oversight, supporting the prohibition on MBE-related protests.
2. The Maryland State Board of Contract Appeals (MSBCA) has applied COMAR 21.11.03.14, asserting it lacks jurisdiction over MBE matters, and the General Assembly re-enacted the MBE law in 2006, indicating legislative intent aligned with the regulation.
3. Appellant argues that there is no inconsistency between COMAR 21.11.03.14 and F.P. 15-215 and 15-217 since the General Assembly may grant the Board jurisdiction over general procurement disputes but not MBE-specific disputes under Title 14.
4. COMAR 21.11.03.14 allows for judicial review of agency actions regarding MBE laws through a writ of administrative mandamus, providing bidders a remedy in circuit courts.
Additionally, the appellant claims the case is moot because the contract in question has been awarded and completed. The appellee counters that the case is not moot due to a statutory right to recover costs if the protest is upheld and argues that exceptions to the mootness doctrine apply, emphasizing the need for a ruling on an important public concern and the potential for similar improper actions to recur undetected by the courts.
A case is deemed moot when there is no ongoing controversy or the court cannot provide an effective remedy. However, an exception exists for controversies that are likely to recur but evade judicial review. The court finds that the current case falls under this exception, as the appellee intends to continue participating in future procurement bids, leading to potential replication of the issue across other bidders and state agencies.
Additionally, the court invalidates COMAR 21.11.03.14, asserting that it contradicts statutory provisions F.P. 15-215 and 15-217, which grant contractors the right to submit bid protests against agency MBE decisions. The regulation is deemed ultra vires as it conflicts with the procurement statute. The appellant's arguments against this ruling, including references to the MBE law's preamble and legislative amendments, are deemed unpersuasive and irrelevant, as the statutory language clearly supports the right to protest without regulation interference.
The General Assembly's re-enactment of the MBE program was focused on policy objectives rather than specific contracts, and its renewal does not negate the statutory language in F.P. 15-215 and 15-217, which invalidates the regulation in question. The appellant's argument that the General Assembly could limit the Board's jurisdiction over disputes is flawed, as Title 15 encompasses all procurement contracts, granting the Board jurisdiction over MBE disputes without exclusion from Title 14. Furthermore, the appellant's claim that circuit courts provide sufficient remedies for contractors is irrelevant; the central issue is whether aggrieved MBE bidders have a statutory right to file bid protests administratively, which they do. The judgment is affirmed, with costs to be borne by the appellant. Notably, Title 14 lacks provisions for MBE-related dispute resolution, except for F.P. 14-304, which pertains solely to MBE decertification. Authority to adopt regulations differs between Titles 15 and 14 but does not impact this analysis. Previous case David A. Bramble, Inc. v. Maryland Department of General Services is not precedential and does not support the current ultra vires argument since both parties in that case agreed on the Board's lack of jurisdiction over MBE-related protests.
