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Western District says bid protest came to court too early

A vendor that lost points in its proposal to operate a Department of Revenue license office in Troy over an address mishap received good news and bad news from the Missouri Court of Appeals Western District.

The Missouri Office of Administration sought a new operator of the Department of Revenue’s (DOR) Troy license office with a May 2020 request for proposal. Businesses within five miles of the license office would receive maximum points for proximity and be docked points based on distance from the office, and the vendor with the greatest total evaluation score would win the contract.

David Koester, a former operator of the office under a different LLC, submitted a proposal through his LLC LO Management after renting a unit in Troy within five miles of the current Troy license office. But the office space did not have a formally assigned address from Lincoln County, and mapping systems assigned it to a vacant lot a few blocks from the office space.

The same day a DOR evaluation committee gave LO Management full proximity points and had authorized OA to award the contract to LO Management, Missouri Senator Jeanie Riddle had contacted OA and “expressed concern” that LO Management was operating from a vacant lot. The executive director of another vendor submitting a proposal, the Troy Chamber of Commerce, had emailed the OA and Riddle and Missouri Rep. Randy Pietzman claiming that LO Management’s business was “nothing but a fake address, empty lot at best.”

DOR checked with Google Maps and the Lincoln County Assessor and sent an employee to the incorrect address, and each confirmed it was a vacant lot but never confirmed this with LO Management or checked the physical addresses of other proposals. As a result, LO Management received zero proximity points and Troy Chamber of Commerce won the contract with a 1.5–point difference.

OA denied LO Management’s bid protest, claiming that it should have received full proximity points. LO Management sued as a result in Cole County, and the court ruled in LO Management’s favor on all counts.

Chuck Hatfield of Stinson in Jefferson City is on the attorney team for LO Management and did not respond to a call requesting comment. Assistant Attorney General Craig H. Jacobs represents the OA. Chris Nuelle, a spokesman for the Missouri Attorney General’s Office, did not respond to an email requesting comment.

On the OA’s appeal, the Western District disagreed with the lower court’s full favor of LO Management because a statute at issue makes clear that the decision is up to the OA in a clear administrative process, and the plaintiffs did not exhaust its administrative remedies.

At the same time, the Western District did determine that the communication between a fellow bidder and involved government agencies was unlawful. Judge Lisa White Hardwick wrote the Dec. 20 opinion.

“OA allowed a competing bidder, the Troy Chamber of Commerce, to have inappropriate contacts with state employees — a ground for suspension and/or exclusion from specific procurements under the May RFP — and then used the information gleaned from those inappropriate contacts …” White Hardwick wrote.

Judges Thomas N. Chapman and Janet Sutton concurred.

The case is LO Management et al. v. Office of Administration et al., WD84954 and WD84956.