Rivada Networks sues to contest bid disqualification in Mexico, alleges procurement-related robbery

Rivada Networks yesterday filed suit in a Mexican federal court in an attempt to have its Red Compartida bid—a proposal to build and operate a nationwide 700 MHz wholesale LTE network in Mexico—evaluated after Mexico’s government disqualified Rivada for failing to provide a bid bond for the project by the bid deadline, according to a company spokesman.

Mexican officials informed Rivada Networks last Friday that the company’s bid was being disqualified, because it did not provide a letter of credit, or a bid bond—valued at $50-55 million—when the proposal was submitted on Oct. 20, according to Rivada Networks spokesman Brian Carney.

“We had a bid bond worked out, but there was a delay in getting it executed,” Carney said during an interview with IWCE’s Urgent Communications.

Rivada Networks realized the problem on Oct. 19, the day before the bid was due, Carney said. The company took alternative actions in an effort to address the issue, he said.

“In lieu of the bid bond, we pledged $200 million-plus in assets—more than four times the value of the bid bond—and basically sent in a letter saying, ‘There’s been a paperwork problem, and we’ll get you the bid bond as soon as we can,” Carney said. “We did that. We turned it in on Oct. 31.

“This past Friday [Nov.  4] was the first day that they needed the bid bond anyway, so they had it well before it became an issue, but it was past the due date. We had pledged assets in its place, and we had been led to believe that it would be OK. On Friday, they said that our bid … was basically noncompliant, because our bid bond had not been received on the 20^th.”

Although various media outlets indicated throughout the weekend that Rivada Networks CEO Declan Ganley already had filed suit, Rivada Networks actually filed the lawsuit today, Carney said.

“We filed suit this morning [Nov. 7] contesting that disqualification,” he said yesterday. “We believe that, under Mexican law, they should have requested that we address the omission of the bid bond and given us the opportunity to remedy it; they didn’t. We also believe that it was, under Mexican law, not really a material omission. Because, by the time they actually needed the bid bond, they had it, so it should have been accepted when it was turned in.

“We’ve filed in the federal courts in Mexico, and we’ll see what they say.”

Although Mexico’s Red Compartida project is a government-led initiative that calls for the winning contractor to build a nationwide LTE network in the 700 MHz band, there are several significant differences between Red Compartida and the FirstNet effort in the United States.