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LLC v. Kent County Levy Court

Court of Chancery of Delaware

June 1, 2017

Charlie's Waste Services, LLC
Kent County Levy Court

          Date Submitted: May 31, 2017

          John W. Paradee, Esquire Daniel F. McAllister, Esquire Baird Mandalas Brockstedt, LLC.

          Ryan P. Newell, Esquire Connolly Gallagher LLP.

          Megan T. Mantzavinos, Esquire Marks, O'Neill, O'Brien, Doherty & Kelley, P.C.

          Joseph C. Schoell, Esquire Michael J. Maimone, Esquire Drinker Biddle & Reath LLP.

         Dear Counsel:

         This case arises from Kent County's solicitation of bids in connection with Contract T-18 for FY2018-FY2020 Trash Collection Services. Specifically, on February 8, 2017, Kent County issued an invitation to submit sealed bids for a waste removal services contract. According to the bid invitation, the County advised interested bidders that two contracts would be awarded to two bidders. Charlie's Waste Services, LLC ("Charlie's") initiated this action against Kent County Levy Court (the "County"), Waste Industries of Delaware LLC ("Waste Industries") and BFI Industries, LLC d/b/a Republic Services of Delmarva ("Republic") seeking to enjoin the County from awarding the waste removal contracts to Waste Industries or Republic, neither of which submitted the lowest bid. Charlie's alleges that it was the lowest responsible bidder and, therefore, the County was required by statute to award the contract to Charlie's.

         I previously denied Charlie's motion for a temporary restraining order/preliminary injunction upon finding that Charlie's was, in essence, seeking permanent injunctive relief. I did, however, grant Charlie's motion to expedite so that a final adjudication of the matter could occur prior to the effective date of the contracts at issue here.[1] Thereafter, I asked the parties to address a threshold statutory issue so that I could determine the applicable law and frame the factual issue(s) to be decided.[2] After offering that guidance, I allowed limited discovery directed to the issue of whether the County had complied with Section 4725 in awarding the bid to Waste Industries and Republic. The parties completed that discovery and then submitted briefs on the questions of whether the County complied with the applicable statute and whether Charlie's is entitled to the injunctive relief it seeks. I heard oral argument on these issues on May 30, 2017.

         By letters dated May 31, 2017, all parties agreed that, given the expedited nature of these proceedings, the Court should consider the record as submitted to be a "stipulated trial record" from which the Court may make a final determination of whether the County complied with Section 4725 in its award of Contract T-18 to Waste Industries and Republic.[3] For the reasons that follow, I conclude that the County has complied with its statutory mandate and that Charlie's request for a permanent injunction, therefore, must be denied.

         I. Factual Background[4]

         Prior to Contract T-18, the contract for the County's trash collection services had always been awarded to the lowest bidder. By all accounts, the County has been unhappy with the current provider of trash collection services-the company that submitted the lowest bid during the last procurement process for this contract-and has, in fact, determined that the contractor was not qualified to do the required work. The problems with the current contractor have included missed pickups, destruction of trashcans and other property, poor vehicle maintenance and poorly trained personnel. In fact, the County has had to hire others on an emergency basis to fulfill the contract as a stopgap.[5]

         Given these past difficulties, the County determined that it was best to take a different approach to procurement for Contract T-18.[6] Specifically, the County included the following elements in its Invitation to Bid Contract T-18 (the "ITB") that all bidders would have to demonstrate:

i. Demonstrated history of providing equipment and services of comparable specifications, scope and value.
ii. The background, experience, resources, reputation, financial resources, years in business and references.
iii. Customer service, i.e., method of addressing missed cans, special events, guaranteed turnaround times for cart maintenance, and other customer service items.
iv. The bid and pricing structure.[7]

         In addition to these evaluative criteria, the ITB also required bidders to provide a Bid Bond, three work-related references, three letters of recommendation from current municipal contracts in the State of Delaware and documentation of insurance coverage with a General Aggregate Limit of Liability of $5, 000, 000.[8]

         Bidders were advised that the contract award would be based, in large part, upon scores attributed to the bidder's ability to satisfy the criteria outlined in the ITB as determined by evaluators designated by the County.[9] The County named three evaluators-Andrew Jakubowitch, Director of Public Works for Kent County; Susan L. Durham, Director of Finance for Kent County; and Michael J. Petit de Mange, County Administrator for Kent County.[10] Nothing in the bid solicitation materials states that the evaluators were to reject bidders from the process that they deemed unqualified. Instead, the ...

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