2017-0548

Katherine E. Hedges
An associate at Hage Hodes in Manchester practicing civil litigation and corporate law.

Oct. 16, 2018

Affirmed

  • The Court considered whether: (1) the plaintiff had standing to bring the claims asserted; (2) whether the NH Department of Transportation (DOT) lacked procurement authority and violated the separation of powers doctrine when it engaged in procurement; and (3) if the DOT had procurement authority, did it lack authority to use the “best value” method for evaluating competing bids.

The plaintiff, Conduent State & Local Solutions, Inc. (Conduent)  brought several claims against the DOT and defendant Cubic Transportation System’s Inc. (Cubic) arising out of a bidding process for providing “backroom” administrative services for the State’s E-ZPass System. The plaintiff, who previously had a contract with the DOT to provide this service, was scored highest on price. But Cubic scored higher on the technical proposal and higher overall, so the DOT negotiated and entered into a contract with Cubic.

Before the trial court, Conduent moved for partial summary judgment in its the claim that the DOT exceeded its statutory authority and violated the separation of powers doctrine in the bidding process. The defendants moved to dismiss those same claims, arguing they were entitled to dismissal as a matter of law. Cubic also asserted that Conduent lacked standing to bring the claim. The trial court assumed without deciding that Conduent had standing, but found the DOT had appropriate procurement authority and that it had authority to use the “best value” bid process it used.

The DOT collects tolls electronically through the “E-ZPass” system, which allows the account associated with a detected transponder to be charged while the vehicle passes through the toll lane without stopping. In December 2014, the DOT solicited new bids for the provision of the “backroom” support for maintaining this system, such as managing accounts and distributing transponders. Conduent had the contract to provide these services prior to the new bid. The request for proposal (RFP) stated that bids would be evaluated on a 100-point scale, with 70 points allocated to the technical aspects of the proposal and 30-points to the price, and set forth other criteria by which the bids would be judged. The RFP stated that the DOT could enter into contract discussions with the best-qualified bidder based on that criteria.

The Court first determined that Conduent had standing because it demonstrated the requisite causal connection between the injury of not being the selected bidder and the claimed violation of the DOT lacking authority to evaluate bids using the best value method.

The Court next considered Conduent’s argument that pursuant to RSA 21-I:11, only the Department of Administrative Services (DAS) had authority to procure this bid. The Court found that pursuant to the plain meaning of the statute, DAS’s procurement authority was not exclusive because the statute stated that DAS was responsible for certain purchasing, except as otherwise provided by law.

The Court also affirmed the trial court’s finding that RSA 237 provided the DOT with authority to solicit the bids because it gave the DOT broad authority to improve, operate, and maintain the New Hampshire Turnpike System. The Court found that RSA 237 expressly provides the DOT with broad authority to act, including authority to operate the E-ZPass system and to enter into contracts, and this bidding process fell within that authority.

Finally, the Court affirmed the trial court’s determination that RSA 21-I:22-a and :22-b granted the DOT the authority to use the best value method to evaluate bids. While the plaintiff asserted that state agencies were required to award contracts to the lowest bidder meeting the project specification, the Court found that the statutes permitted subjective criteria to be considered and do not require greater weight to be given to price above other criteria in this type of a bid. The Court rejected Conduent’s claim that the DOT contract with Cubic was ultra vires and violated the separation of powers doctrine and affirmed the trial court’s resolution of that claim in the defendants’ favor.

Bryan K. Gould (orally and on the brief) and Philip R. Braley and Cooley A. Arroyo (on the brief), Cleveland, Waters and Bass, Concord, for plaintiff. Gordon J. MacDonald, attorney general (Jessica King), for defendant DOT. Daniel M. Deschenes (orally and on the brief) and Cori P. Palmer (on the brief), Hinckley, Allen & Snyder, Manchester, for defendant Cubic Transportation Systems, Inc.