STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

COUCH CONSTRUCTION COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 78-391BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

) WHITE CONSTRUCTION COMPANY, INC., )

)

Respondent/Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on March

24 and 27, 1978, in Room 103 of the Collins Building, Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert R. Feagin, III

F. Alan Cummings Holland and Knight Post Office Drawer 810

Tallahassee, Florida 32302

For Respondent H. Reynolds Sampson, General Counsel Department of Haydon Burns Building Transportation: Tallahassee, Florida 32304

For Respondent/ Elaine N. Duggar Intervenor White: John S. Rawls

Richardson Law Offices, P.A. 1910 Capital Circle, Southwest Tallahassee, Florida 32302

ISSUE

The issues presented for determination at the hearing are as follows: 1/

1. Whether respondent Department of Transportation (D.O.T.) abused its discretion or acted in bad faith, arbitrarily, capriciously, or under a misconception of law in rejecting all bids received on the subject project on December 21, 1977.

   
   

2. Whether the decision of the respondent D.O.T. to reject all bids was made in violation of Florida's Government in the Sunshine Law, F.S. s286.011.

FINDINGS OF FACT

Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found:

1. By a "notice to contractors" dated November 24, 1977, the respondent

   D.O.T. advertised that it would receive bids on December 21, 1977, from qualified contractors for various construction and maintenance programs. The project which is the subject of this proceeding was contained in this notice, identified as "Gadsden County: Federal Aid Project No. I-10-3(31)157 Contract II (Job No. 50001-3423) SR 8 (I-10)." This project involved the paving of a certain stretch of Interstate Highway 10 in Gadsden County, which stretch was the last remaining unopen portion of I-10. In addition to a short summary of the contents of the project the notice on this project contained the following language which was underlined and capitalized in the notice:

   
   

   NOTE: A PRE-BID CONFERENCE ON THIS PROJECT WILL BE HELD ON WEDNESDAY, DECEMBER 14, 1977, AT 10:00 A.M. IN ROOM 301 OF THE HAYDON BURNS BUILDING, 605 SUWANNEE STREET, TALLAHASSEE, FLORIDA. ALL POTENTIAL BIDDERS WILL BE RE- QUIRED TO ATTEND. NOTE: ON-THE-JOB TRAINING WILL BE REQUIRED FOR THIS PROJECT.

   
   

2. Mr. Henry Eugene Cowger, deputy state construction engineer for the D.O.T., made the initial decision to require attendance at a prebid conference for this project, although he himself did not draft the language used in the notice. Cowger felt that a prebid conference would be valuable to bidders and the Department due to the uniqueness of this particular project with regard to the requirements concerning maintenance of traffic and work progress. More specifically, the contract called for a close working relationship and cooperation with the first stage contractor on this stretch of road. The first stage contractor is respondent/intervenor White. Also, it was anticipated that the project would be opened in sections with unusual traffic requirements so that the entire project could be utilized in a limited fashion.

   
   

3. Mr. Cowger instructed William F. Ray, the Department's area construction engineer, to arrange for and conduct the prebid conference. No specific instructions were given to Mr. Ray as to which provisions of the contract were to be discussed at the conference. Cowger felt that Ray was knowledgeable with the project and therefore that he needed no instructions.

   
   

4. The prebid conference was held as scheduled on December 14, 1977. Representatives of six different construction companies attended, including a representative from respondent White Construction Company. Through neglect or oversight, petitioner Couch did not attend the conference. A memorandum to the file from Mr. Ray indicates that the following occurred at the conference:

   
   

   A statement was made at the beginning of the meeting by W. F. Ray that nothing said by any person at the meeting would change or modify any part of the contract documents.

   
   

   Certain portions of the special Provisions per- taining to maintenance of traffic and limitations of work areas were read and discussed.

   It was agreed by those present that the intent

   of these Specials Provisions was clear and under- standable.

   
   

   Mr. McRae of H.D.W. stated that the unknown delay times built into this project would result in

   much higher than normal bids and his company would probably not enter a bid.

   
   

   After a short discussion of the terms of the contract, the meeting was adjourned.

   
   

   The conference lasted from thirty to forty-five minutes. At the hearing, Mr. Ray related the questions he could remember which were asked by the contractors. It was admitted that virtually all of the provisions and expectations, unique or otherwise, were fully spelled out in the contract documents. Most of the inquiries at the conference related to the absorption of certain maintenance and traffic costs and responsibilities between the contractor and the D.O.T. In each instance, it was disclosed that the D.O.T. would be responsible for these unless the contract specifically provided otherwise. Questions regarding the sequence of operations and the phasing of the work with the first stage contractor were not specifically answered by D.O.T. representatives.

   
   

5. Of the three contractors who submitted bids on the subject project on December 21, 1977, only respondent/intervenor White had attended the December 14th rebid conference. Joseph F. Villadsen, petitioner's engineering division vice president, had visited the site of the project and had studied the contract provisions, which appeared clear to him. In numerical order, the bids submitted on December 21, 1977, were as follows:

   
   

   $1,410,730.72 - - petitioner Couch

   $1,514,272.63 - - respondent/intervenor White

   $1,579,168.72 - - Contee Sand and Gravel Company, Inc.

   
   

6. The respondent has an Awards Committee composed of five executives from the D.O.T. This Committee generally meets once a month to review bids and make a recommendation to respondent's Secretary on the award of contracts for some thirty-five to fifty projects per month. Although Secretary Webb has the authority to make an independent decision and/or to reject the recommendations of the Awards Committee with regard to the acceptance of bids, he could not recall ever having done so.

   
   

7. On the afternoon of December 21, 1977, the same day as the bids were received, Mr. Jay Brown, respondent's director of road operations and chairman of the Awards Committee, learned from two representatives of White that the apparent low bidder, petitioner Couch, had not attended the prebid conference. He thereupon called together those members of the Awards Committee who were in the building at that time to discuss what should be done. Brown also counseled with P.E. Carpenter, the division administrator for the Federal Highway Administration, to determine the extent of the federal participation in funding if a bid other than the low bid were accepted.

   
   

8. Awards Committee members Brown, Sill Ekey, Peter J. White and Willis Armstrong met on December 21 and 22, 1977. In reaching a determination as to their recommendation to the Secretary, the committee members considered three alternatives -- awarding the contract to Couch as the apparent low bidder, awarding the contract to White as the next lowest bidder and as the only bidder

   who attended the prebid conference or rejecting all bids received and readvertising for new bids. Each alternative was considered a viable one by the committee members. Although the members felt that the requirement of attendance at a prebid conference was a reasonable requirement due to the uniqueness of the project, no inquiry was made as to what actually transpired at the conference.

   Nor was any inquiry made as to a reason for petitioner's nonattendance.

   
   

9. It was the unanimous decision of those Committee members present that it would best serve the interests of the State to reject all bids and proceed to readvertise. This decision to recommend rejection and readvertisement was based upon several reasons. The prime consideration was that this project involved the last remaining unopen link in Interstate Highway 10 and time was of the essence. It was felt that if the contract were awarded to Couch or to White, there would be litigation causing delay to the completion of Interstate 10. The Committee members were also concerned with the significant amount of difference between the bids of Couch and White. Rejecting all bids appeared to the Committee members to be the "cleaner" way to go. Mr. Brown testified that the

   D.O.T. does not generally accept the bid where only one bid is received. Here the apparent low bidder and the highest bidder were considered irregular for failure to attend the prebid conference. Thus, the Department was left with only one bid.

   
   

10. Through Mr. Brown, Secretary Thomas Webb, Jr., was telephonically notified of the recommendation of the Awards Committee. Mr. Webb concurred with the Committee's recommendation because he was concerned with a possible delay to the project due to litigation were the bid to be awarded to either Couch or to White.

    
    

11. Thereafter, the bidders were notified by telegram that all bids on the project had been rejected due to the failure of the low bidder to attend the prebid conference, and that the project would be readvertised.

    
    

12. On December 29, 1977, Couch filed a "complaint" with the D.O.T. requesting a hearing pursuant to F.S. s120.57 on the issue of whether the D.O.T. lawfully rejected Couch's bid on the subject project. By Order dated January 9, 1978, Secretary Webb denied Couch's request for a hearing. This denial was appealed by Couch to the District Court of Appeal, First District, and White Construction Company was made a party to that proceeding. After numerous motions were filed and oral argument was had, the District Court, by Order dated February 24, 1978, relinquished jurisdiction for a period of sixty days and remanded the case to the D.O.T. for the purpose of providing Couch a s120.57(1) hearing. The District Court stayed the D.O.T. from awarding the contract for the subject project.

    
    

13. Prior to the Orders of the District Court, the D.O.T. readvertised the project, calling for a prebid conference on January 11, 1978, and the receipt of bids on January 12, 1978. This time, attendance at the conference was announced to be "expected," rather than "required." At the hearing, the

    D.O.T. divulged that attendance at prebid conferences would no longer be required or mandatory in order to avoid the problem inherent in the instant proceeding. Both Couch and White attended the January 11th prebid conference and submitted bids on January 12th. Couch's bid was identical to its December 21, 1977, bid. White submitted a bid approximately $40,000.00 below the bid of Couch.

    
    

14. The D.O.T. receives bids on approximately 420 to 550 construction projects a year. During the past ten years, only seven other prebid conferences

    with required attendance have been held. In those instances, the language contained in the notice was different from the language used in the subject notice. On three occasions the language used was: "ALL PROSPECTIVE BIDDERS MUST ATTEND THIS PRE-BID CONFERENCE AS BIDDING DOCUMENTS WILL NOT BE ISSUED TO CONTRACTORS WHO HAVE NOT BEEN PROPERLY REPRESENTED AT THIS MEETING." On three

    occasions the language was: "ATTENDANCE WILL BE MANDATORY FOR THOSE INTENDING TO BID ON THIS PROJECT.? On one occasion the language was: "ATTENDANCE WILL BE MANDATORY FOR THOSE INTENDING TO SUBMIT A BID ON THIS PROJECT." The situation

    where the apparent low bidder has not attended a required prebid conference has never before arisen.

    
    

    CONCLUSIONS OF LAW

    
    

15. The first issue presented for decision is whether, under the facts of this case, the D.O.T. abused its discretion or acted in bad faith, arbitrarily, capriciously or under a misconception of law in rejecting all bids received on December 21, 177.

    
    

    F.S. Section 337.11(3) provides as follows:

    "The department may, at its discretion, award the proposed work to the lowest responsible bidder, or it may reject all bids and proceed to readvertise or perform the work with convict labor or free labor.

    
    

    We are not here concerned with that portion of the quoted statute which permits the D.O.T. to award the work to the lowest responsible bidder. The D.O.T. made no determination that petitioner Couch or the other bidders were not responsible bidders. The evidence is clear that the members of the Awards Committee and the Secretary considered that awarding the contract to Couch was a viable alternative. Rather, the relevant inquiry is whether the D.O.T. improperly exercised its discretion in determining to reject all bids and proceed to readvertise. The statute does not mandate that the work be awarded to the lowest responsible bidder. It merely requires that the D.O.T. properly exercise its discretion in either awarding the contract or rejecting all bids or performing the work with convict or free labor. The issue is thus one of whether the Department's decision to reject all bids was a reasonable exercise of its discretion. In order to determine this issue, it is necessary to examine the rationale behind such a decision and to weigh such rationale against the petitioner's claims of arbitrariness or capriciousness.

    
    

16. Here, the evidence is clear that those persons involved in the decision making process both at the recommendation level and at the final level, were primarily concerned with a possible delay to the completion of this last link in Interstate Highway 10. This fear of delay from possible litigation was not unjustified. The D.O.T. had received complaints from White's employees that petitioner had not attended the prebid conference. The construction industry bidding process being a very competitive one, and one of the bidders having failed to comply with the notice requirement of attendance, it was reasonable to assume that if the contract were awarded to Couch or to White, impending litigation would ensue, thus delaying construction on the project. While the decision-makers did not inquire as to what transpired at the conference, they were aware of the unique provisions of the contract and each felt that the attendance requirement was a reasonable one. They were also concerned that the second lowest bid was considerably higher than the bid of petitioner. Their decision to reject all bids and readvertise was based upon a determination that

    such a course of action would be the most fair to all concerned and in the best interests of the State.

    
    

17. Such rationale cannot be characterized as action taken in bad faith, arbitrarily, capriciously, or under a misconception of law. Nor can it be said that the decision was made in ignorance or through lack of inquiry or through improper in fluence. Petitioner did not attend the required prebid conference. Whether this failure to attend would have been sufficient to declare petitioner to be irresponsible or disqualified as a bidder need not be determined herein, for that is not what the D.O.T. did. It rejected all bids, and not just the petitioner's bid, as it had the authority to do pursuant to F.S. s337.11(3). Its rationale for doing so was certainly within the boundaries of reasonableness. In conclusion, petitioner has failed to illustrate an improper exercise of discretion on the part of the D.O.T.

    
    

18. Petitioner further contends that the D.O.T.`s decision to reject all bids was made in violation of Florida's Government in the Sunshine Law. F.S. s286.011(1) provides as follows:

All meetings of any board or commission of

any state agency or authority or of any agency or authority of any county, municipal corporation or any political subdivision, except as otherwise provided in the Constitution, at which official acts are to be taken are declared to be public meetings open to the public at all times, and no resolution, rule, regulation, or formal action shall be considered binding except as taken or made at such meeting.

The undersigned does not feel that this statute is pertinent to the facts in this case. It is clear from the evidence that though the chief executive officer of the D.O.T., Secretary Webb, relied upon the recommendation of the Awards Committee in reaching his decision, it was he who rendered and had the responsibility for rendering the final decision in this matter. The Awards Committee is composed of executives and staff employees of the D.O.T. who make recommendations within the areas of their expertise. As stated in footnote 10 of the case of Occidental Chemical Co. v. Mayo, 351 So 2d 336 (Fla. 1977)

"The members of a collegial administrative body are not obliged to avoid their staff during evaluation and consideration stages of their deliberations. Were this so, the value of staff expertise would be lost and the intelligent use of employees would be crippled."

And, in Bennett v. Warden, 333 So 2d 97 (Fla. App. 2nd, 1976), the Court stated ". . . frequent and unpublicized meetings

between an executive officer and advisors, consultants, staff or personnel under his direction, for the purpose of 'fact-finding'

to assist him in the execution of those duties, are not meetings within the contemplation of

the Sunshine Law. Any other conclusion, carried to its logical extension, would in our view un-

duly hamper the efficient operation of modern government the administration of which is more

and more being placed in the hands of professional administrators. It would be unrealistic, indeed intolerable, to require of such professionals that every meeting, every contact, and every discussion with anyone from whom they would seek counsel or consultation to assist in acquiring the necessary information, data or intelligence needed to advise or guide the authority by whom they are employed, be a public meeting within the disciplines of the Sunshine Law. Neither the letter nor the spirit of the law require it.

It is concluded that the deliberations within the Awards Committee and the communication between that Committee and Secretary Webb were not subject to the Sunshine Law.

RECOMMENDATION

Based upon the findings of fact and conclusions of law recited above, it is recommended that the D.O.T.`s decision to reject all bids and readvertise the subject project be affirmed and upheld.

Respectfully submitted and entered this 24th of April, 1978, in Tallahassee, Florida.

DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

ENDNOTE

1/ In connection with the first issue listed below, petitioner attempted to inject another issue regarding the failure of the D.O.T. to disqualify respondent/intervenor White Construction Co. from bidding on the subject project. The undersigned Hearing Officer sustained objections to all evidence bearing on this issue for two reasons. First, the issue of White's qualification to submit bids was the subject of a separate petition assigned to the Division of Administrative Hearings as Case No. 78-487T. Said proceeding before the undersigned resulted in a recommended order of dismissal, dated March 31, 1978, for failure to state a cause of action for relief. Second, all bids received on December 21, 1977, were rejected, and not just the bid of petitioner Couch. Had the D.O.T. rejected only Couch's bid and awarded the contract to White, the issue of White's qualification may have been relevant in determining whether the D.O.T. abused its discretion or acted in bad faith, arbitrarily, capriciously or under a misconception of law. Petitioner was permitted to proffer into evidence Exhibit 11.

COPIES FURNISHED:

Robert R. Feagin, III

F. Alan Cummings Holland and Knight Post Office Drawer 810

Tallahassee, Florida 32302

H. Reynolds Sampson General Counsel Haydon Burns Building

Tallahassee, Florida 32304

Elaine N. Duggar John S. Rawls

Richardson Law Offices, P.A. 1910 Capital Circle, S.W. Tallahassee, Florida 32302

Tom B. Webb, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32304

Docket for Case No: 78-000391

Orders for Case No: 78-000391