North Carolina court ends 5-year dispute over electronic titling software contract with DOT

A North Carolina court ruled against an appeal from the state’s Department of Transportation this week, bringing an end to a five-year dispute between two software vendors over a contract with the department.

North Carolina’s Court of Appeals ruled unanimously in an opinion filed Tuesday to uphold a decision issued at the trial level in 2023, which favored eDealer Services, a lien and titling software vendor that “had implemented and operated the [electronic lien and titling] system since its initial implementation.”

In 2019, the state transportation department and the North Carolina Department of Information Technology issued a request for proposals for an ELT system, with only two vendors submitting proposals: eDealer Services and Vanguard Direct.

In June of 2020, the transportation department awarded the system’s contract to Vanguard Direct, and shortly thereafter, eDealer challenged that decision by filing a bid protest with the transportation and IT departments, arguing the committee responsible for evaluating the competing proposals did so improperly, according to the opinion.

The following year, the case was heard by an administrative law judge in the state, who recommended the state chief information officer — who heads NCDIT — cancel the contract award to Vanguard and award the contract to eDealer. Thomas Parrish was serving as North Carolina’s interim state CIO after Tracy Doaks stepped down in the summer of 2020.

“In its proposed decision, the [administrative law judge] concluded that the Committee failed to use proper procedures, and Vanguard failed to meet ‘multiple’ RFP requirements, rendering its proposal incomplete,” the appeals court’s decision read.

In June of 2022, however, the state CIO rejected the ALJ’s recommendation, and instead awarded the contract to Vanguard, concluding eDealer failed to meet its burden of showing the award to Vanguard was an error. Following that, eDealer filed a petition for review with Wake County Superior Court, according to a report from the Triangle Business Journal.

After reviewing the case, the court ruled in favor of eDealer, awarded it the contract and canceled Vanguard’s award, concluding the CIO’s decision “contained procedural errors,” the Triangle Business Journal’s report said.

“We conclude the superior court applied the correct standards of review and did not make independent findings of fact, but rather utilized information contained in the official record to conclude the State CIO contract award to Vanguard was erroneous,” North Carolina Court of Appeals Judge Julee Flood wrote in the opinion.

The ruling could still be appealed by the state’s transportation department or Vanguard.