The recent opinion of Protech Solutions, Inc. v. The Delaware Department of Health and Human ServicesC.A. No. 2017-0642-TMR (Del. Ch. Nov. 30, 2017) sets forth a helpful roadmap in terms of the Court’s determination of whether to uphold a state contract for professional services.

There, Plaintiff Protech Solutions, Inc. (“Protech”) challenged the decision of the State of Delaware Department of Health and Social Services, Division of Child Support Services to grant a contract to another bidder in response to a Request for Proposal (“RFP”) for maintenance and operations (“M&O”) services for the Delaware Child Support System.  Protech sought injunctive relief by way of a preliminary injunction motion.

Vice Chancellor Montgomery-Reeves denied the motion, finding that Protech “fail[ed] to demonstrate reasonable probability of success on the merits of any of [its] claims”, and Protech’s arguments were based upon a misunderstanding of Delaware procurement law.

In so holding, the Court relied on sections of the Delaware Procurement Code governing professional services contracts, rather than case law involving challenges to public works contracts under the Delaware Procurement Act, as requested by Protech.  The Court noted that  “the professional services negotiation subchapter establishes only general guidelines for the procurement process”, and that “agencies are granted great discretion to shape the process to meet their needs.”

As a result, given the more general guidelines established under the Act pertaining to professional services contracts, the Court found that Protech failed to meet the elements of a preliminary injunction motion.

Carl D. Neff is a partner with the law firm of Fox Rothschild LLP.  Carl is admitted in the State of Delaware and regularly practices before the Delaware Court of Chancery, with an emphasis on shareholder disputes. You can reach Carl at (302) 622-4272 or at cneff@foxrothschild.com.