The Consequences of Providing Inaccurate Information on a Bid for a Public Construction Contract
Public contracting can pose a challenge for even experienced Florida builders. There are a myriad of rules and regulations that need to be followed when dealing with a public construction project. And if you fail to follow the state’s procedures to the letter, you can quickly find yourself dealing with the legal fallout in court.
Affordable Housing Developer Loses Funding Due to Failure to Disclose “Existing Units”
A recent decision from the Florida First District Court of Appeal, Heritage Oaks, LLP v. Madison Pointe, LLC, offers an important cautionary tale on this point. This case involved a legal challenge to the Florida Housing Finance Corporation’s decision to rescind an award earmarked for the construction of affordable housing. The appeals court ultimately agreed with an administrative law judge’s ruling upholding that decision.
Here is a brief overview of what happened. Florida Housing issued a request for applications (RFA) seeking bids to build affordable housing units for several counties. In response to the RFA, an applicant proposed the creation of 85 “newly constructed housing units” under the name Heritage Oaks.
Florida Housing required all applicants to fill out an application. One of the questions on the application asked about the “total number of units” proposed. The question further elaborated that applicants must indicate the number of “existing units” on the proposed site, including units that were not currently occupied. The Heritage Oaks group answered there were no existing units on its proposed site.
Florida Housing subsequently awarded project funding to several applicants, including Heritage Oaks. Another applicant that did not receive a contract, Madison Pointe, subsequently filed a protest with Florida Housing. Madison Pointe alleged Heritage Oaks “gave several inaccurate answers in its application.” As relevant here, Madison Pointe said there were existing units on Heritage Oaks’ proposed site, contrary to what it said in its application.
An administrative law judge ultimately agreed with Madison Pointe. The judge noted the RFA asks about existing units so that Florida Housing can ensure any tenants can be relocated. Heritage Oaks said it believed the question about existing units only applied to housing that was to be rehabilitated, as opposed to its proposed site, where all units were to be demolished.
But as the appeals court explained, “such a reading is not reasonable.” The term ‘existing units’ as it appeared on the RFA clearly meant “units existing on the development site at the time of application.” And Heritage Oaks’ incorrect answer was not a “minor irregularity” that Florida Housing could simply ignore. It was an “omission of material information” that justified Florida Housing’s decision to revoke Heritage Oaks’ award.
Get Advice from a Florida Construction & Public Contracting Attorney Today
There are no minor or insignificant issues when it comes to public contracts. That is why it is critical to work with a Florida bid protests, bid disputes, and public contracting lawyer. Contact Linkhorst & Hockin today if you need advice or assistance related to any construction law matter.