vs. ) CASE NO. 79-2410BID
Respondent. )
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on February 5, 1980, in Tallahassee, Florida.
For Petitioner: Gary M. Ketchum, Esquire
For Respondent: George L. Waas, Esquire
Solar Energy Control, Inc. ("Petitioner") requested an administrative hearing concerning a dispute with the State of Florida, Department of Health and Rehabilitative Services ("Respondent" or "HRS") arising from Respondent's rejection of all bids received in connection with its Bid No. 80-497WR, WINDOW FILM INSTALLATION. Petitioner contends that Respondent arbitrarily and capriciously rejected all bids received in connection with that bid, and that Petitioner should be awarded the contract pursuant to its bid. HRS contends that irregularities existed in Petitioner's bid, as well as in bids submitted by other organizations seeking award of a contract, and that these irregularities, taken together, justify rejection of all bids.
At the final hearing, Petitioner called Joseph R. Bess, Dr. Homer A. Ooten, and William F. Cox as its witnesses. Petitioner offered Petitioner's exhibits Nos. 1, 2, 6, 7, 8, 9, 11, 13, 16 and 18, each of which was received into evidence. Respondent called John J. Hittinger as its only witness. Respondent offered Respondent's exhibits 1 and 2, both of which were received into evidence.
On or about August 10, 1979, HRS caused a legal advertisement to be published concerning its Purchase Order No. 52579, requesting bids for window film installation pursuant to HRS Bid No. 30-497WR. The Invitation to Bid provided, in part, that:
As the best interests of the State may require, the right is reserved to make award(s) by individual item, group of items, all or none
or a combination thereof; to reject any and all bids or waive any minor irregularity or technicality in bids received. When it is determined there is competition to the lowest responsive bidder, then other bids may not be evaluated. Bidders are cautioned to make no assumptions unless their bid has been evaluated as being responsive.
Among the special conditions of the Invitation to Bid was the following:
The successful bidder will furnish and install window insulation film on all glass exposures of buildings designated as one through eight with the exception of these [sic] windows now having film installed. These buildings are commonly known as the Winewood Complex which is located at One Winewood Blvd., Tallahassee, Florida 32301. Subleased or other occupied space will be an addition to the basic glass square footage of buildings five, six, seven and eight now occupied by the Department of Corrections, Winewood Office Park Lmtd. and the Parole and Probation Commission.
Prospective bidders will be provided these applicable locations by the project manager. The bid will contain a diagram and listing of these square footages. The computations of total square footages of applicable glass areas will be separated by buildings. This is necessary so that after the installation of the film on each building is completed and accepted by the project manager, an invoice
can be submitted for payment. [Emphasis added].
In addition, tee following clause was also contained in the Special Conditions of the Invitation to Bid:
All work performed by the Contractor in completing the subject project shall be guaranteed by the Contractor against all defect resulting from the use of materials, equipment and workmanship for a period of five years from the date of final completion of the subject project.
If, within any guarantee period, repairs or changes are required in connection with the guarantee work, which in the opinion of the Owner is rendered necessary as a result of the use of materials, equipment or workmanship which are defective or inferior or not in accordance with the terms of the Contract, the Contractor shall, promptly upon receipt of notice from the Owner and without expense to the Owner, proceed to:
Place in satisfactory condition in very [sic] particular all of such guaranteed work, correct all defects therein; and make good all damages to the structure or contents thereof, which in the opinion of the Owner, is the result of the use of materials, equipment, or workmanship which are inferior, defective, or not in accordance with the terms of the Contract; and made [sic] good any work or materials or the equipment and contects [sic] of structures or site disturbed in fulfilling any such guarantee. [Emphasis added].
The Special Conditions also provided that:
No interpretation of the meaning of the Drawings, specifications, or other Bidding Documents, no correction of any apparent ambitquity [sic], inconsistency or error therein, will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Project Manager. All such interpretations and supplemental instruction will be in the form of written addenda to the Bidding Documents.
Only the interpretation or correction so given by the Project Manager in writing, shall be binding and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret the Bidding Documents.
Finally, the Invitation to Bid also provided for modification of bids if received in writing prior to bid opening.
HRS distributed more than 25 bid invitations pursuant to the aforementioned bid, and in response thereto received four bids, one of which was a "no bid". Of the three remaining bidders, Solar-X of Tallahassee submitted a total bid of $34,624.88, based upon a measurement of 29,096 square feet at a price of $1.19 per square foot; Florida Solar Power, Inc. submitted a total bid of $30,079.14, based upon 30,693 square feet at $.98 per square foot; and, finally, Petitioner submitted a total bid of $43,555.10 based upon a calculation of 37,874 square feet at $1.15 per square foot.
The bids of Solar-X of Tallahassee and Florida Solar Power, Inc. were determined to be unresponsive to the Invitation to Bid for reasons not here pertinent.
Although Petitioner's bid contained a total square footage on which it proposed to install window film, the bid did not break down the area of glass on a per-building basis as required by the conditions of the Invitation to Bid. In addition, the conditions of the Invitation to Bid required that building space occupied by sublessors be separately computed in bid responses in order to attempt to pass on to those sublessors their pro-rata share of the cost. Petitioner did not separate this space in its bid as required. Petitioner also failed to furnish with its bid a diagram of exposed glass area in each building as required in the special conditions. Finally, Petitioner's bid response contained the following warranty provision:
. . .3M Company and the [Petitioner] warrants [sic] "SCOTCHING" Brand Solar Control films against peeling, cracking, crazing, or loosening for a period of five (5) years after installation in the event the product is found to be defective under this warranty. [Petitioner] will replace such quantity of the film proved to be defective with the [Petitioner] additionally providing the reapplication labor free of charge for the first two (2) years of the warranty. The customer shall pay for any reapplication labor charges during the last three (3) years of the warranty. . .[Emphasis added].
At final hearing, a representative of Petitioner testified that this warranty was the manufacturer's warranty, and that Petitioner, as the seller of the product, intended that full warranty protection in accordance with the conditions of the Invitation to Bid be part of Petitioner's bid. However, nothing to this affect appears in Petitioner's bid, nor did Petitioner attempt to modify its bid in writing before bid opening to make HRS aware of its intentions in this regard.
Although bid opening was initially scheduled for August 24, 1979, the opening date was extended to September 4, 1979, by addendum to the Invitation to Bid. After opening, bids ware reviewed by the staff of the Director of the Office of General Service in HRS for technical compliance with the Invitation to Bid. As a result of this review, it was determined that Petitioner's bid was the only bid submitted which complied with all provisions of the bid specifications, and the staff, therefore, recommended award of the contract to Petitioner.
At this point the question of the award of the contract came to the attention of the Purchasing Director of HRS's Central General Services, whose office is responsible for evaluation of bids for compliance with the terms and conditions of an Invitation to Bid, state purchasing law and administrative rules relating to state commodity purchases. During the course of this review, it was determined that Petitioner's bid did not comply with the conditions of the Invitation to Bid in that it failed to break down its bid on a per-building basis and, additionally, improperly qualified the five-year warranty requirement contained in the Invitation to Bid and its conditions.
At the Federal hearing in this cause the Purchasing Director for Central General Services also testified that he had received oral communications from other vendors, some of whom submitted bids and some who did not, to the effect that the technical specifications of the Invitation to Bid were tailored to the products sold by Petitioner to such an extent as to effectively close the bidding process to competition. None of these vendors protested the content of the specifications as required in the Invitation to Bid, nor was any direct testimony adduced at final hearing in this cause from these vendors. Although the Division of Purchasing of the Department of General Services also concluded that the bid specifications were too restrictive, there is insufficient evidence in the record in this proceeding upon which to base a conclusion that the specifications contained in the Invitation to Bid were either tailored to Petitioner's product, or were so restrictive as to limit competitive bidding. Indeed, one of the actual bidders, Solar-X of Tallahassee, submitted a bid which complied with the technical specifications, but was rejected because it included an unacceptable contingency clause for late delivery.
After extensive in-house review by various HRS employees, a letter dated October 4, 1979, was forwarded to all vendors advising that HRS, after ".
. .an extensive analysis of the bid responses. . ." had decided to reject all bids and issue a second call for bids. This letter also indicated that ". .
.areas of concern which were expressed relative to the initial invitation will be addressed in the second call." The letter did not attempt to further identify the "areas of concern."
The facts of record in this proceeding clearly establish that Petitioner's bid was not responsive to the Invitation to Bid. Petitioner did not include in its bid a diagram of each building on which window film was to be installed, nor did the bid indicate the number of square feet contained in each building. The two vendors whose bids were rejected apparently had no difficulty complying with this requirement. As a result, HRS was precluded from comparing the per-building cost of the competing bids, and, had the contract been awarded to Petitioner, HRS could not have determined the proper amount of periodic progress segments without performing independent measurement.
Most importantly, however, Petitioner improperly qualified the five- year warranty provision contained in the Special Conditions. Petitioner's bid, on its face, limited its responsibility to replacement of defective window film during the five-year warranty period, and required that HRS be responsible for payment of labor charges for reinstallation during the last three years of the warranty period. This warranty qualification was clearly contrary to the requirement that any product replacement or reinstallation be without expense to HRS for a period of five years from the date of final completion of the project.
There was extensive testimony at final hearing concerning allegations by Petitioner of improper conduct on the part of the HRS Purchasing Director for Central General Services which allegedly resulted in the decision to reject all bids and submit a second call for bids. Testimony on this issue involved Petitioner's assertion that the HRS employee's relationship by marriage to one of the unsuccessful bidders led to his conclusion that the technical specifications were so narrowly drawn as to preclude a consideration of his relative's product, and that the specifications should be redrafted so as to allow consideration of products other than Petitioner's. In light of the fact that Petitioner's bid was not responsive to the Invitation to Bid, in that it improperly qualified the warranty required, and did not contain square footage computations on a per-building basis, it is unnecessary to reach the question of the propriety of any conduct on the part of the HRS employee. The propriety of
the rejection of Petitioner's bid was determined by Petitioner's failure to comply with the Special Conditions of the Invitation to Bid, and could not have been affected by the alleged misconduct on the part of an employee of HRS.
Both Petitioner and Respondent have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that such proposed findings of fact have not been adopted in this Recommended Order, they have been specifically rejected as being irrelevant to the issues in this cause, or as not having been supported by the evidence.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the subject matter and the parties to this action. Section 120.57(1), Florida Statutes.
Section 287.062(1), Florida Statutes, provides that no purchase of commodities, such as the window film involved in this proceeding, may be made when the purchase price is in excess of $2,500 unless that purchase is made after receipt of competitive bids.
Although there are no statutory or rule provisions which enumerate circumstances under which a state agency may reject all competitive bids, HRS, under the facts of this case, has ". . .wide discretion to reject all bids and to call for new bids for public contracts. . ." so long as it does so ". .
.rationally within the bounds of its discretion and not arbitrarily." Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 172, 175 Fla. 1st DCA 1978). Since the facts of record in this proceeding clearly establish that Petitioner failed to comply with the conditions of the Invitation to Bid in submitting its bid to HRS, HRS's decision to reject all bids and call for new bids was within the proper exercise of its administrative discretion.
That a Final Order be entered by the State of Florida, Department of Health and Rehabilitative Services, denying the relief requested by Petitioner.
RECOMMENDED this 3rd day of April, 1980, in Tallahassee, Florida.
WILLIAM E. WILLIAMS
Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301
Gary M. Ketchum, Esquire
George L. Waas, Esquire Assistant General Counsel Department of Health and
