STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WESTON INSTRUMENTS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 75-2110BID

) STATE OF FLORIDA, DEPARTMENT OF ) GENERAL SERVICES, HARRIS )

CORPORATION, and HATHAWAY )

INSTRUMENTS, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

This cause came on for final hearing pursuant to proper notice on September 28, 1976. Mitchell Haigler, Esquire, and Elliot Messer, Esquire, appeared on behalf of Petitioner, Weston Instruments, Inc. Joseph W. Lawrence, Esquire, appeared on behalf of Respondent, Department of General Services. Robert A. Collins, Esquire, appeared on behalf of Respondent, Harris Corporation.

Hathaway Instruments, Inc., did not appear.

On December 19, 1975, Weston Instruments, Inc. filed a Petition for formal proceedings concerning Respondent, Department of General Services' proposed action to reject Petitioners' bid to furnish supervisory equipment and revenue metering equipment for Phase II, Expansion of Primary Electric Utilities, State of Florida, Capitol Center, Tallahassee, State Project No. DGS 6026/6424: AEP Project No. 74288-003.

Having heard the testimony and received evidence and oral argument of counsel the undersigned Hearing Officer enters the following:

FINDINGS OF FACT

1. In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills.

2. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows:

   
   

   CONTRACTOR	BASE BID	ALTERNATE NO. 1-ADD	TOTAL
   Harris	332,000.00	28,649.00	360,649.00
   Weston	338,991.00	20,965.00	359,996.00
   Hathaway	343,429.00	33,224.00	376,653.00

   
   

3. Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation.

   
   

4. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states:

   
   

   "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners."

   
   

   Weston did not submit that information with its bid but did submit that information on October 9, 1975.

   
   

5. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows:

   
   

   1. Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00.

      
      

   2. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid.

      
      

   3. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature.

   4. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute.

      
      

   5. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract.

      
      

   6. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris.

      
      

   7. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting.

      
      

6. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add

   $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an

   $11,635 advantage in the bidding.

   
   

7. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively.

   
   

8. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet

   the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified."

   
   

9. Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders.

   
   

10. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975.

    
    

11. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein.

    
    

12. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above.

    
    

13. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston.

    
    

14. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative hearings has jurisdiction over this case. Notice as required by law was given to all parties to this proceeding.

16. The supervisory control equipment and revenue metering equipment which is the subject of this proceeding are a "commodity" as that term is defined by Subsection 287.012(2), F. S. Section 287.062, F. S., states that:

    
    

    "No purchase of commodities may be made when the purchase price thereof is in excess of $1000 unless made upon competitive bids received... "

    
    

    There are several exceptions to the foregoing none of which are germane to this proceeding. The Division of Purchasing, Department of General Services is given the power and duty of prescribing the methods of securing bids or negotiating and awarding contracts. Section 287.042, F.S.

    
    

17. The general regulations and administrative rules adopted by the Division of Purchasing, Department of General Services, prescribing the methods of securing bids or negotiating and awarding contracts are set forth in Chapter 13A-1, F.A.C.

18. Rule 13A-1.01(10), F.A.C., states:

"Competitive bids shall mean two or more valid responses to a bid invitation."

19. Subsection (11) of the same rule defines a "valid bid" as:

"A responsible offer in full compliance with the bid specifications and conditions." (Emphasis added).

Upon the application of that definition to the bid submitted by Harris it must be concluded that under the rules of the Department the bid submitted by Harris was not a valid bid because it was not in full compliance with the bid specifications and conditions. Thus there remained for consideration at the close of bidding only those bids submitted by Weston and Hathaway.

20 . Rule 13A-1.02(9), F.A.C., states:

"It shall be the responsibility of the agency [in this case the Department] to determine the lowest responsible bidder meeting specifications and conditions of a bid invitation. In any

case where an agency [in this case the Department] makes a determination it wishes to accept a bid other than the low bid meeting specifications,

it shall first submit to the Division of Purchasing its complete file containing all information available to that agency including reasons for recommending a bid other than the low bid."

In this case the Department recommended Harris even though Harris' bid did not meet the specifications and conditions of the bid invitation. It does not appear from the evidence that the Department, though it wishes to accept a bid other than the low bid meeting specifications, submitted its complete file on the matter, including reasons for recommending a bid other than the low bid meeting specifications to the Division of Purchasing as required by the Department's rule.

1. By allowing Harris to conform its bid several weeks after the close of bidding to the specifications and conditions of the bid invitation the Department allowed Harris to modify its bid. Paragraph B-18 of the Specifications and Contract Documents states that:

   
   

   "No bid modification will be accepted after the close of bidding has been announced."

   
   

   Therefore, the modification by Harris of its bid cannot be deemed to make valid an otherwise invalid bid. As set forth in the Findings of Fact the deviation from the specifications found in the Harris bid gave Harris, in the estimation of the Department's architect/engineers an advantage over the other bidders worth more than $11,000. Those deviations were obviously material in character as shown by the concern of the Department that Harris conform its bid to the specifications before it could be considered for award. To allow Harris to substantially change its bid after it has had an opportunity to see the bids of its competitors bestows upon Harris an unfair advantage contrary to the purpose of competitive bidding which is designed to secure fair competition on equal terms to all bidders and to remove temptation for collusion and opportunity for gain at public expense. 26 Fla. Jur. Public Works and Contracts, Section 14.

   
   

2. Paragraph B-24 of the Specifications and Contract Documents states that:

   
   

   "The Owner reserves the right to waive any informality in bids received when such waiver is in the

   interest of the Owner."

   
   

   Weston failed to attach to its bid a list of similar work as required by paragraph B-2 of the Specifications and Contract Documents. This requirements may properly be considered an informality in that a bidder's failure to provide such a list affords no advantage to the bidder nor disadvantage to any other bidder. The facts which would be set forth in such a list cannot be changed by any knowledge gained from competitors' bids once viewed. The owner [Department] appears to have waived this informality by requesting the bidders to address themselves to paragraph B-2 of the Specifications and Contract Documents at the meeting requesting the bidders, Reynolds and the Department held on October 9, 1975. At that meeting Weston furnished the Department and the Department accepted through its agent, Reynolds, a list substantially complying with the requirements of paragraph B-2.

   
   

3. Paragraph B-24 of the Specifications and Contract Document states that the contract will be awarded " . . . to the lowest qualified Bidder provided his bid is reasonable and it is in the best interest of the Owner [Department] to accept it." Paragraph B-9 of the same document states that ". . . if the Owner [Department] wishes to make award on only the base bid, then contract award will be made to that responsible bidder submitting the low base bid." All three bidders appear to be responsible and qualified. However, as set forth above, Harris failed to submit a valid bid and therefore, its bid cannot be considered. Weston, of the two remaining bidders, submitted the lowest base bid. Weston's bid appeared to be reasonable and in the best interest of the Department.

RECOMMENDED ORDER

The Department has stated its position that it will submit the Recommended Order to the Cabinet for appropriate action and will not exercise its right to

reject all bids. Therefore, it is RECOMMENDED that the subject contract be awarded to Petitioner, Weston Instruments, Inc. as the lowest responsible bidder submitting a valid bid.

DONE and ENTERED this 28th day of December, 1976, in Tallahassee, Florida.

CHRIS H. BENTLEY, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Joe Lawrence, Esquire Department of Legal Affairs Civil Division

725 South Calhoun Street Tallahassee, Florida 32304

Mitchell B. Haigler, Esquire Thompson, Wadsworth, Messer,

Turner & Rhodes

P.O. Box 1876

Tallahassee, Florida 32302

Robert Collins, Esquire Harris Corporation Controls Division

Post Office Box 430 Melbourne, Florida 32901

E. E. Prince, President Hathaway Instruments, Inc. 5250 East Evans Avenue Denver, Colorado

Docket for Case No: 75-002110BID

Orders for Case No: 75-002110BID