FirstDigital Telecom, LLC v. Procurement Policy Board

2015 UT App 47
_________________________________________________________

THE UTAH COURT OF APPEALS

FIRSTDIGITAL TELECOM, LLC,
Petitioner,
v.
PROCUREMENT POLICY BOARD AND BOARD OF REGENTS,
Respondents.

Memorandum Decision
No. 20130899-CA
Filed February 26, 2015

Original Proceeding in this Court

James L. Ahlstrom and Thomas E. Goodwin,
Attorneys for Petitioner

Sean D. Reyes and Brent A. Burnett, Attorneys
for Respondents

JUDGE KATE A. TOOMEY authored this Memorandum Decision, in
which JUDGES GREGORY K. ORME and JAMES Z. DAVIS concurred.

TOOMEY, Judge:

¶1 FirstDigital Telecom, LLC petitions from the decision of
the Procurement Policy Board dismissing its appeal for failing to
submit a timely bond. We allow the Procurement Policy Board’s
decision to stand.

¶2 On June 21, 2013, the Utah Board of Regents (the Board)
issued a request for proposals (RFP) for telecommunications
services. The RFP included a summary of the services sought
and a description of the scoring evaluation criteria for proposals.
FirstDigital, through President and Chief Executive Officer
Wesley McDougal, submitted a proposal in July 2013.
FirstDigital Telecom, LLC v. Procurement Policy Board

¶3 Although FirstDigital was one of two finalists, on August
12 the Board notified FirstDigital that it was awarding the
contract to Integra. On August 14, McDougal contacted the
Board employees Bob McRae and Bryce Jex by email, the subject
of which was identified as ‚Proposed meeting to discuss.‛
McDougal stated, ‚We configured our proposal based on your
current set up and usage. We are not sure you or other
competitors fully understood the services you are receiving,‛
and complained that the Board did not correctly compare certain
technical areas in evaluating the proposals. Finally, McDougal
proposed to meet with McRae and Jex to discuss the evaluation
comparisons.

¶4 After this meeting, McDougal on August 30 emailed the
Board representative Richard Davis to reiterate flaws McDougal
perceived in the proposal evaluations. McDougal stated, ‚[W]e
are weighing whether we will file a formal protest to the bid.‛
He added, ‚[W]e don’t believe, among other things, that our
network architecture, service nor pricing were evaluated
correctly,‛ and suggested the Board ‚throw out this RFP and
allow all carriers to put forth a new proposal and compete on
like solutions.‛

¶5 On September 6, 2013, McDougal again emailed McRae
and Davis, this time stating that FirstDigital ‚ha*d+ been forced
to examine formal protest provisions contained in the state
procurement code.‛ He stated, ‚As we have examined those
provisions, it has become clear that the email . . . on August 14,
2013, constitutes a formal protest in accordance with [Utah Code
section] 63G-6a-1602.‛ FirstDigital requested a formal written
decision in response to the August 14 email, which it
optimistically characterized as the ‚Protest.‛

¶6 On September 18, 2013, McRae, acting in his capacity as
the Board Protest Officer, responded to the September 6 email,
dismissing FirstDigital’s protest as untimely. McRae stated,

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‚You were informed of the Board’s decision on 8/12/2013. As a
result, your protest should have been made by 8/19/2013.‛

¶7 He also disputed McDougal’s characterization of the
August 14 email as a protest because the subject line merely
stated ‚*p+roposed meeting to discuss‛ and ‚nowhere in the
email was there a statement indicating a protest was being
made.‛ McRae pointed out that in a conversation with Davis on
August 29, and in McDougal’s August 30 email to Davis,
McDougal mentioned that FirstDigital was still considering
filing a protest, and therefore ‚your 8/14/13 email did not initiate
the protest process.‛ McRae added, ‚Even if *FirstDigital’s+
protest had been timely, it failed to establish sufficient grounds
for reversing the Board’s decision.‛

¶8 FirstDigital filed an appeal with the chair of the
Procurement Policy Board on September 25, 2013. Chair Lois
Wiesemann dismissed the appeal on September 27, 2013,
because FirstDigital had not paid a security deposit or posted a
bond with the Protest Officer. In response, FirstDigital promptly
delivered $500 to the Utah Higher Education Assistance
Authority (UHEAA). Wiesemann instructed UHEAA to return
the $500 check to FirstDigital because the appeal was dismissed
and would not be considered.

¶9 FirstDigital again emailed Wiesemann on September 30,
asking her to reconsider her decision to dismiss FirstDigital’s
appeal. In an exchange of emails, the Attorney General’s office
responded to FirstDigital’s request for reconsideration, ‚[W]e do
not see how [Wiesemann+ can alter the decision to dismiss‛
because the clear language of the statute requires that failure to
submit a deposit or bond with the appeal will result in a
dismissal. The Attorney General’s office also specified that ‚the
amount to use in the [security deposit or bond] calculation is
$305,000.‛ FirstDigital then filed a security deposit of $15,250
with UHEAA, which was later returned as untimely. FirstDigital
appeals.

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FirstDigital Telecom, LLC v. Procurement Policy Board

¶10 FirstDigital argues Wiesemann erred in dismissing its
appeal because it substantially complied with the statute when it
sent a written appeal to the Procurement Policy Board on
September 25, 2013, then paid $500 on September 27 and $15,250
on October 2.1 Specifically, FirstDigital argues the Procurement
Policy Board’s decision to dismiss the appeal was arbitrary and
capricious because FirstDigital substantially complied by
providing a security deposit when it became aware of the correct
amount—5% of Integra’s proposed contract. It also argues that
McRae had an obligation to inform FirstDigital of the deposit
amount when he informed it of the right to review. We do not
address whether the statute requires strict or substantial
compliance, because FirstDigital did not even substantially
comply with the statute. Accordingly, we conclude the
Procurement Policy Board did not err when it dismissed
FirstDigital’s appeal.

¶11 To appeal a Protest Officer’s dismissal, FirstDigital was
required to submit an appeal to the Procurement Policy Board
within seven days of the Protest Officer’s decision. See Utah
Code Ann. § 63G-6a-1702(2)(a) (LexisNexis Supp. 2013). The
Utah Code also requires that ‚at the time that the appeal is
filed,‛ anyone who files an appeal with the Procurement Policy
Board shall ‚pay a security deposit or post a bond with the
protest officer in an amount that is the greater‛ of $1,000 or 5%
of the lowest cost proposed in response to the RFP.2 See id. § 63G-

1. Although both parties briefed the Protest Officer’s dismissal of
FirstDigital’s purported protest, this court may review only the
final agency action, and we therefore do not address this issue.
See Utah Code Ann. § 63G-4-403(1) (LexisNexis 2011); see also
id. § 63G-6a-1802 (LexisNexis Supp. 2013).

2. The legislature has updated and revised the statute effective
March 2014. See Utah Code Ann. § 63G-6a-1703 (LexisNexis
(continued...)

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6a-1703(1). Moreover, ‚*t+he chair of the [Procurement Policy
Board] shall dismiss a protest filed under Section 63G-6a-1702 if
the actual or prospective bidder, offeror, or contractor fails to
timely pay the security deposit or post the bond required under
Subsection (1).‛ Id. § 63G-6a-1703(3). We ‚may not overturn a
finding or decision of the . . . [Procurement Policy Board], unless
the finding or decision is arbitrary and capricious or clearly
erroneous.‛ Id. § 63G-6a-1802(3)(c).

¶12 Although FirstDigital filed the appeal within the seven-
day limit, it did not submit the security deposit at the time of the
appeal, as required by the statute. Instead, it paid $500 two days
after the seven-day period for appeal had lapsed, then paid the
correct amount of $15,250 a week later. As Wiesemann informed
FirstDigital, ‚No security deposit or bond was received by Mr.
McRae at the time FirstDigital filed the appeal.‛ The clear
language of the statute required Wiesemann to dismiss the
appeal for FirstDigital’s failure to submit a timely deposit or
bond. See id. § 63G-6a-1703(3).

¶13 FirstDigital’s $500 deposit was significantly less than the
amount required by the statute. See id. § 63G-6a-1703(1). It only
filed the correct amount on October 2, 2013, a week after the
seven-day appeal deadline had lapsed. FirstDigital asserts the
Board caused its delay in posting the correct bond amount by
not providing the contract amount. But, apart from citing its own
counsel’s assertions that the Board denied its requests for
Integra’s contract information, FirstDigital fails to point to any

2014) (providing that the security deposit or bond may be filed
‚before the expiration of the time provided under Subsection
63G-6a-1702(2)‛). But we apply the version of the statute in effect
‚‘at the time of the events giving rise to [the proceeding].’‛ Salt
Lake County v. Holliday Water Co., 2010 UT 45, ¶ 41, 234 P.3d 1105
(quoting Taghipour v. Jerez, 2002 UT 74, ¶ 5 n.1, 52 P.3d 1252).

20130899-CA 5 2015 UT App 47
FirstDigital Telecom, LLC v. Procurement Policy Board

evidence to support its claim that before October 1, 2013, ‚the
Board denied FirstDigital’s previous attempts to gain access to
the Integra contract.‛

¶14 Moreover, McRae was not obligated to inform FirstDigital
of the direct deposit or bond requirement. Utah Code section
63G-6a-1603(3) states, ‚The *Protest Officer’s+ decision shall . . .
inform the protestor . . . of the right to judicial or administrative
review.‛ In his written decision, McRae expressly stated,
‚FirstDigital has the right to appeal my decision to the chair of
the procurement policy board pursuant to Utah Code Ann.
§ 63G-6a-1702.‛ McRae, therefore, met his obligation to inform
FirstDigital of its right to administrative review and directed
FirstDigital to section 63G-6a-1702 of the Utah Code, which
explicitly provides that an appeal must comply with ‚the
requirements of Section 63G-6a-1703 regarding the posting of a
security deposit or a bond.‛ Id. § 63G-6a-1702(2)(c).

¶15 In conclusion, the Procurement Policy Board’s decision to
dismiss FirstDigital’s appeal was not arbitrary and capricious or
clearly erroneous, and we decline to disturb its decision.
Accordingly, we do not address whether the Board acted
arbitrarily and capriciously or erred in awarding the
telecommunications services contract to Integra.

_____________

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