STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VICK GRIFFIN CONSTRUCTION )

COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 82-654BID

) LONG CONTRACTORS, INC., and ) NORTH FLORIDA JUNIOR COLLEGE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, R. L. Caleen, Jr., held a formal hearing in this case on April 2, 1982, in Madison, Florida.

APPEARANCES

For Petitioner: Robert L. Hinkle, Esquire

Post Office Box 10448 Tallahassee, Florida 32302

For Respondents Ernest M. Page, Esquire North Florida Post Office Drawer 90 Junior College: Madison, Florida 32340

Long Contractors, Mary Lee Sweet, Esquire Inc.: Post Office Drawer 1170

Tallahassee, Florida 32302 ISSUE

Whether respondent North Florida Junior College should: (1) reject petitioner's apparent low bid on two construction projects for failure to include the license registration, certificate, and corporate charter numbers of its listed subcontractors, and (2) award the construction contract to respondent Long Contractors, Inc., the next apparent low bidder.

BACKGROUND

On February 18, 1982, petitioner Vick Griffin Construction Company ("Griffin Construction") filed a petition for formal Section 120.57(1) proceedings, disputing rejection of its apparent low bid by respondent North Florida Junior College ("College"). The petition designated as a corespondent Long Contractors, Inc. ("Long Contractors"), the successful second lowest bidder. On March 4, 1982, the College forwarded this case to the Division of Administrative Hearings and requested assignment of a hearing officer to conduct the requested proceedings.

Hearing was promptly set for April 2, 1982, a date agreed upon by the parties. Griffin Construction called as its witnesses: Vick Griffin, Jack Koons, Dr. Gary P. Sims, and William Rutherford; it offered 33 exhibits into evidence, 27 of which were received. Long Contractors called Danny Long, William Rutherford, Tom McClanahan, and Dr. Gary P. Sims as its witnesses and introduced six exhibits into evidence. 1/

The parties filed proposed findings of fact and conclusions of law by the agreed-upon date--April 20, 1982. No written transcript of the hearing has been prepared.

Based on the evidence presented at hearing, the following evidentiary and ultimate facts are determined:

FINDINGS OF FACT

1. On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.)

   
   

2. Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.)

   
   

3. After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.)

   
   

4. At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.)

   
   

5. The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide:

   
   

   The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the

   subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted.

   
   

6. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.)

   
   

7. The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors.

   
   

   The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed.

   
   

   (P-1, P-2.)

   
   

8. The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.)

   
   

9. No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form.

   
   

   1. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers.

   2. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for

      roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical,

      and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its

      painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc.

   3. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford;

      P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.)

      
      

10. The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.)

    
    

11. Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.)

    
    

12. The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.)

    
    

13. Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.)

    
    

14. The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.)

    
    

15. Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect

    the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)

    
    

    CONCLUSIONS OF LAW

    
    

16. The Division of Administrative Hearings has jurisdiction over the parties and subject matter of this proceeding. 120.57(1), Fla. Stat. (1981).

    
    

17. Florida statutes and rules require junior colleges to award construction contracts through the competitive bidding process. Section 235.31(1), Florida Statutes (1981), prescribes that the contract be awarded "to the lowest responsible bidder." The State Board of Education has adopted specific implementary rules:

    
    

    6A-2.16 Advertising and awarding contract for facilities or improvements of education plant.

    1. The board, at a regular or special meeting shall consider all bids received and within the time limit listed in the specification either reject all bids or award the contract to the lowest responsible bidder for the actual amount bid considering base bid and accepted alternates as listed in the bidding documents.

    2. No bid shall be considered if the bidder fails to comply with the terms and conditions of the bid form, or the procedure for submitting bids as authorized in the official advertisement and other documents pertaining to the bidding as authorized by the board. The board may reserve the right to waive minor informalities if so stated in bid form.

    
    

    6A-2.17 Awarding contract to other than the lowest bidder.

    (1) In all cases where bids for new construction or for remodeling, renovation, or additions to educational plants are required by law or rules, and when capital outlay funds derived from state or local sources are to be used for payment either directly or for interest and principal on bond issues or loans under Section 237.161, Florida Statutes, the board shall award the contract to the lowest responsible bidder who makes a legal bond and otherwise complies with conditions of bidding document and with terms of law and rules.

18. In Wester v. Belote, 138 So.2d 721, 724 (Fla. 1931), the Florida Supreme Court declared that competitive bidding statutes:

    
    

    serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers' expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated.

    
    

19. The central issue here is whether Griffin Construction's failure to list the license and charter numbers of its subcontractors deviates from the bid specifications sufficiently to warrant its rejection, and the awarding of the contract to the second lowest bidder.

    
    

20. The rule governing variations is found in 64 Am. Jur.2d, Public Works and Contracts, Section 59, at p. 913:

    
    

    Generally, before a variation from the specifications will be deemed to destroy the competitive character of a bid for a public contract, the variation must be substantial, that is, it must affect the amount of the bid. It is sufficient if the bid conforms substantially to the advertisement. A slight or immaterial variance from the specifications and advertisements for bids for a public contract does not destroy the competitive character of the bid so as to require its rejection. A variation from the advertised specifications does not destroy the competitive character of a bid unless it affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by other bidders.

    
    

21. Florida courts have adopted this test for deciding whether a deviation is sufficient to destroy the competitive character and require rejection of a bid:

    
    

    The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by

    giving the bidder an advantage or benefit not enjoyed by other bidders.

    
    

    Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977); Baxter's Asphalt & Concrete, Inc. v. Liberty County, 406 So.2d 461, 463 (Fla. 1st DCA 1981).

22. The public agency may--as the College did here--reserve the right to reject any or all bids and waive informalities. However, only minor irregularities may be cured by bidders after bid opening. If bidders were able to qualify or change their bids after bid opening, it would open the door to abuses and favoritism which the competitive bidding law is intended to prevent. Harry Pepper & Associates, supra at 1193.

    
    

23. The decision to waive minor irregularities in bids is discretionary. But, this discretion is not unbridled. As with all other discretionary functions, it must be exercised evenhandedly and be based on facts; it may not be exercised arbitrarily or capriciously. See, Wood-Hopkins Contracting Company

    v. Roger J. Au & Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA 1978).

    
    

24. Measured by these standards, it is concluded that Griffin Construction's failure to list subcontractor "numbers" is not sufficiently material to destroy the competitive character of its bid: it does not affect the amount of the bid by giving Griffin Construction a benefit or advantage not enjoyed by other bidders; it is a minor irregularity 7/ which has since been cured. It follows that Griffin Construction, as the lowest responsible bidder, must be awarded the construction contract.

    
    

25. The College cannot allow Long Contractors to cure irregularities in its subcontractor "numbers" without allowing Griffin Construction an equal opportunity. The irregularities of each may be corrected after bid opening by simply referring to public records. This does not allow either an opportunity to change their bids or decide, after bid opening, whether they want the job badly enough to supply the missing or correct information. See, Harry Pepper & Associates, supra at 1193.

    
    

26. Neither can the College reject Griffin Construction's low bid for failure to comply with a bid specification which it now characterizes as "mandatory." Every bid deviation or variation, by definition, fails to comply with a bid specification. The test is, instead, whether the variation is sufficiently material to destroy the competitive character of the bid. Id.

    
    

27. Respondents argue that the Board's decision to reject the low bid of Griffin Construction should receive deference because it was made at a public meeting after hearing arguments from both sides; that the Board was entitled to rely on the advice of its architect and attorney. This contention overlooks the fundamental purpose of Section 120.57 proceedings; they are de novo proceedings which are intended to formulate final agency action, not to review action taken earlier and preliminarily. See, McDonald v. Department of Banking and Finance,

    346 So.2d 569, 584 (Fla. 1st DCA 1977); Florida Department of Transportation v.

    J.W.C. Company, Inc., 396 So.2d 778, 785 (Fla. 1st DCA 1981). No presumption of correctness attaches to agency action taken earlier or preliminarily. J.W.C. Company, supra at 789.

    
    

28. Finally, the question of whether the omission of subcontractor license and charter numbers constitutes an omission sufficiently material to justify rejection of a bid was considered by the Governor and Cabinet, 8/ sitting as head of the Department of General Services, in In re West Palm Beach Branch Laboratory, 3 FALR 147-A (1981). (There, the requirement to list subcontractor license numbers was inadvertently included in the bidding documents.) The Governor and Cabinet concluded:

    In consideration of the fact that this requirement [the requirement to list subcontractor license numbers] is deleted from the Department's specifications prior to publication of the bidding documents and that the information requested is easily ascertainable and verifiable, omission of this information does not impact the interests of the Department or impair the competitive character of the bidding. (e.s.)

    
    

    While here, the listing of "numbers" was intentionally part of the bidding documents, the materiality of the bid variation should not turn on the intentions of the agency. Such a standard could be difficult to determine and potentially lead to abuses of the bidding process. The more useful and meaningful standard is whether, as here, the omitted information is "easily ascertainable and verifiable" after bid opening.

    
    

29. The proposed findings of fact submitted by the parties have been considered and are adopted to the extent they are incorporated in this recommended order. Otherwise, they are rejected as unnecessary to resolution of the issues presented or unsupported by the evidence.

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder.

DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida.

R. L. CALEEN, JR. Hearing Officer

Division of Administrative Hearings 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.

ENDNOTES

1/ Petitioner's and Respondent's Exhibits will be referred to as "P- ," and "R- ," respectively.

2/ Earlier in the day, McClanahan had telephoned the project architect to ask whether it was necessary to include subcontractor license and charter numbers; the architect answered that the numbers were required. (Testimony of Rutherford, McClanahan.)

3/ Griffin Construction's ability or willingness to perform the construction work pursuant to its bid is not in question.

4/ The College's project architect acknowledges that, in the future, he will include a separate blank for the list of subcontractor "numbers."

5/ See, e.g., Kelley v. Kinsey, 362 So.2d 402, 404 (Fla. 1st DCA 1978)(opinion of witness worth no more than the reasons on which it is based); accord, LeFevre v. Bear, 113 So.2d 390 (Fla. 2d DCA 1959).

6/ Respondent Long Contractor concedes as much in its proposed findings of fact and conclusions of law, p. 12.

7/ This conclusion is buttressed by the bidders' perception of the requirement to list subcontractor "numbers." Griffin did not consider the "numbers" essential so did not supply them; Long was unsure enough to call the architect to see if the "numbers" were really "necessary;" no bidder completely and accurately supplied all the required numbers.

8/ The Governor and Cabinet also constitute the State Board of Education which adopted the competitive bidding rules applicable to junior colleges. See, 20.15, 235.01, 235.31(2), Fla. Stat. (1981).

COPIES FURNISHED:

Robert L. Hinkle, Esquire Post Office Box 10448 Tallahassee, Florida 32302

Ernest M. Page, Esquire Post Office Drawer 90 Madison, Florida 32340

Mary Lee Sweet, Esquire Post Office Drawer 1170 Tallahassee, Florida 32302

Gary P. Sims, President North Florida Junior College Madison, Florida 32340

Docket for Case No: 82-000654

Orders for Case No: 82-000654