Filed: November
5, 2012
Opinion by Judge Audrey J.S. Carrion
Held: (1) The majority of Plaintiff’s claims
failed because the disputed government contract was not “procurement” as
defined by applicable statutes, regulations, and the Request for Proposal; (2)
although the winning bid was not approved by one of three legislative
committees before being awarded as required by statute, the court declined to
void the contract for public policy reasons.
Facts: Plaintiff sued the Maryland Transportation
Authority (“MTA”) and various administrative agency leaders, alleging that a
public-private agreement to develop and operate two travel plazas was awarded
improperly. Plaintiff argued that the
MTA’s award of the Interstate 95 Travel Plaza Redevelopment Public Private
Partnership Lease and Concession Agreement (“I-95 P3”) was illegal under
applicable procurement laws and regulations.
Plaintiff sought a declaratory judgment that the award of the I-95 P3
was null and void and imposing procedural requirements for a re-bidding
process. The MTA moved to dismiss. After a thorough examination of the statutory,
regulatory, and administrative law concepts controlling the dispute, the
Circuit Court for Baltimore City dismissed Plaintiff’s complaint in its
entirety with prejudice.
Analysis: The
I-95 P3 and other public-private partnerships like it are being used
increasingly by state and local governments to develop infrastructure with less
funding by “delegate[ing] project risks and construction management to private
parties[.]” With those goals in mind,
the MTA sought a party to lease two travel plazas and “to enter into a
concession agreement for thirty-five years, during which time the private-sector
partner would be fully responsible for redeveloping and then maintaining and
operating these travel plazas.” The
court noted that the contract was estimated to be worth approximately $400
million.
The court
determined that the procurement laws and regulations at issue did not apply to
MTA’s proposal and award of the I-95 P3.
Under those laws, a “procurement occurs where the State buys or
temporarily obtains, as lessee, goods or services.” Md. Code Ann., Transp. Art. §§
11-101(m)(1)(i)-(ii). Further, MTA
regulations exclude “from procurement the occurrence when the State of Maryland
leases its own property.” COMAR
21.01.03.03(B)(1)(d) (2012). Last, the
court noted that the Request for Proposal, “which Plaintiff agreed to abide by
in bidding for this P3 agreement,” was clear that the project would not be
subject to procurement laws. Thus, the
court concluded, “the I-95 P3 lease of State travel plazas in exchange for
revenue and other benefits is not covered by the term ‘procurement’ as defined
by Maryland law and regulation.”
The court
dismissed with prejudice the majority of Plaintiff’s claims because the
procurement laws and regulations the MTA allegedly violated did not apply to
the I-95 P3 project. The court dismissed
other claims, such as biased and capricious action by the MTA, for incomplete factual
pleading. Plaintiff’s sole remaining
claim was that the award was illegal and void because the MTA submitted it to
only two of three legislative committees as required by the Maryland Code,
Transportation Article § 4-406(f). The
court agreed that MTA failed to comply with the statute, but it invoked policy
justifications in declining to void the award for a technical statutory
violations. The court reasoned: “Nothing
in the record suggests that the public interest will be seriously harmed by the
enforcement of this agreement as opposed to a rehashing of the bidding and
award process.” Further supporting the
court’s conclusion was Plaintiff’s waiver of this claim by its failure to raise
the issue during the bidding process.
The full opinion is available in PDF.
