STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BAXTER'S ASPHALT & CONCRETE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 84-3151BID

) STATE OF FLORIDA, DEPARTMENT OF ) TRANSPORTATION, )

)

Respondent. )

) WHITE CONSTRUCTION COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 84-3152BID

) STATE OF FLORIDA, DEPARTMENT OF ) TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was given and a formal Section 120.57(1), Florida Statutes, hearing was held on November 1, 1984, in Tallahassee, Florida. Charles C. Adams was the hearing officer. All parties to this action, in the person of counsel, have offered proposed recommended orders. Those recommended orders have been considered. To some extent, the recommended orders have been utilized.

Otherwise, the proposals have been rejected based upon lack of relevance, or materiality, due to the cumulative nature of the proposal, or for reason that the facts proposed are subordinate.

APPEARANCES

For Petitioner: Frank A. Baker, Esquire (BAXTER) 204 Market Street

Marianna, Florida 32446

For Petitioner: F. Alan Cummings, Esquire (WHITE) Holland & Knight

Post Office Drawer 810 Tallahassee, Florida 32301

For Respondent: Robert I. Scanlan, Esquire (DOT) Department of Transportation

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32301

ISSUES

The issues to be considered in the course of this Recommended Order concern the question of whether Baxter's Asphalt & Concrete, Inc. or White Construction Company, Inc. should be accepted as a successful bidder on State Project No.

53050-3514, Jackson County, Florida, as advertised by the State of Florida, Department of Transportation.

FINDINGS OF FACT

1. The State of Florida, Department of Transportation, (DOT), advertised for bids on State Project No. 53050-3514, Jackson County, Florida. This was a project in which DOT had determined that 10 percent of the funding within the State Department of Transportation Trust Fund, as allotted for the project, would be devoted to economically disadvantaged individuals, also referred to as Disadvantaged Business Enterprises (DBE). This decision was in keeping with Section 339.081, Florida Statutes. Consequently, interested bidders were called upon to submit bids reflecting a DBE participation of a minimum of 10 percent of the bid submitted.

   
   

2. Baxter's Asphalt & Concrete, Inc. (Baxter) and White Construction Company, Inc. (White) responded to the bid opportunity. The bids were opened on July 25, 1984, and Baxter's bid was the apparent low bid. The bid amount was

   $882,641.25. White was the second low bidder offering a bid of $928,353. Both bids were within the DOT estimate of construction costs.

   
   

3. When the bids were reviewed, Baxter's bid was rejected by DOT based upon the belief that the bid failed to meet the DBE 10 percent requirement or to offer explanation of good faith attempts by Baxter to comply with the DBE contract requirement amount. See Section 14-78.03(2)(b)4., Florida Administrative Code. No other claim of error was made by DOT on the subject of the acceptability of the Baxter bid. The White bid is conforming.

   
   

4. In preparing the bid, bidders are required to use DBE Utilization Form No. 1 to reflect the amount of DBE participation as a percentage of the overall bid estimate. In submitting its form as part of its bid blank, Baxter indicated that the total project cost was $884,000, and indicated that Ozark Striping, a DBE subcontractor, would be given $20,000 of that work or 3 percent, and that Glenn Powell, DBE subcontractor, would be afforded 7 percent of the total contract in the amount of $55,000. The total percentage according to Baxter is

   10 percent, thus meeting the required DBE participation. This form is found as part of the joint Exhibit No. 1 offered by the parties. In fact, the Ozark Striping participation was 2.26 percent, and the Glenn Powell participation was

   6.22 percent, for a total of 8.48 percent of the estimate reflected in the Form No. 1. Contrasted against the actual estimate of $882,641.25, these projections constitute 8.49 percent of that estimate. Thus, they are less than the 10 percent required. Given the fact that this DBE projection is less than the 10 percent, and in the absence of any attempt to offer a good faith explanation why Baxter failed to comply with the requirement, the bid was rejected for this irregularity.

   
   

5. The Contract Awards Committee of DOT, when confronted with the irregularity of the Baxter bid, then determined to recommend the rejection of all bids. This was in keeping with the fact that the difference between the unsuccessful apparent low bid, with irregularities, and the second low bid exceeded 1 percent of the contract amount. At the time of this decision to reject all bids, DOT felt that the difference would justify re-advertising the

   bids. That policy position had been abandoned at the point of final hearing in this cause, wherein DOT expressed the opinion that it would be better served to accept the bid of White, and not re-advertise, again for cost reasons.

   
   

6. In the face of the initial action to reject all bids and in accordance with Section 120.53, Florida Statutes, Baxter and White appealed that decision and by that appeal requested recognition as a successful bidder. This led to the present Section 120.57(1), Florida Statutes hearing.

   
   

7. Baxter has never attempted to offer a good faith explanation of its non-compliance. It chooses to proceed on the theory that the mistake in computation can be rectified by allowing Baxter to submit a supplemental Form No. 1, bringing its total above the DBE requirement. In its contention, Baxter indicates that Glenn Powell could have provided $126,000 of the DBE goal, which is in excess of the 10 percent requirement. Baxter also alludes to the fact that it had contacted other DBE enterprises, such as Oglesby and Hogg, Michael Grassing, and J.E. Hill. All told, Baxter indicates that if given the

   opportunity, it would allow $146,000 of DBE participation to include $126,000 by Glenn Powell, and $20,000 by Ozark. This comment is suspect, given the lack of compliance in the initial bid response, and the realization that within that bid response on the item related to Glenn Powell, the original amount of work attributed to Glenn Powell was $100,000, and was struck through in favor of the

   $55,000, leaving a fair inference that Baxter was attempting to meet the DBE goal with a projection as close to the 10 percent as could be achieved. They fell short because in adding the $20,000 for Ozark, and the $55,000 for Glenn Powell, the addition in the Form No. 1 showed $85,000, which is more than 10 percent of the $884,000 shown on the form, when in fact the two amounts were

   $75,000, and less than the 10 percent required.

   
   

8. Baxter characterizes its mistake in computation as a technical error, which can be remedied without harm to the bid process. The Baxter position must be examined in the context of action by DOT relating to compliance with DBE requirements. Prior to June 1984, a time before the subject July 25, 1984 bid opening, bidders had been allowed to amend the Form No. 1 to show compliance with the DBE requirements or demonstrate good faith efforts of compliance. That amendment as to compliance through listing of the DBE subcontractors or submission of good faith effort documentation had to be offered within 10 days per former Section 14-78.03, Florida Administrative Code. Beginning with the June 1984 bid-lettings, all documentation had to be submitted with the bid, reflecting compliance or describing good faith efforts at compliance per Section 14-78.03(2)(b), Florida Administrative Code, effective May 1984. This change was brought about to prevent the apparent low bidder, as indicated at the point of bid-letting, from shopping the quotations by the DBE's found in its original quote against other quotes from DBE's not listed in the bid documents initially submitted, and by amendment to the DBE statement prejudicing the former DBE group. The change was also made to avoid the possibility that the apparent low bidder could evade his bid by rendering it non-conforming, in the sense of refusing to submit the required documentation of compliance with DBE requirements or to the offer of a good faith explanation of non-compliance after the bid-letting. The change of May 1984, removed the possibility of bid shopping and bid avoidance.

   
   

9. Both versions of Section 14-78.03, Florida Administrative Code, pre and post May 1984, indicate that failure to satisfy the DBE requirements or offer a showing of a good faith attempt at compliance, would result in the contractor's bid being deemed non-responsive, and cause its rejection.

10. Baxter has been able to comply with the DBE goals of DOT in its bidding prior to the present controversy.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action, pursuant to Section 120.57(1), Florida Statutes.

    
    

12. Section 339.001, Florida Statutes, requires the State of Florida, Department of Transportation, to spend at least 10 percent of the amount of monies expended from the State Department of Transportation Trust Fund for the benefit of socially and economically disadvantaged individuals, unless the Secretary of the Department of Transportation decides otherwise. In this instance, it was determined that the 10 percent requirement should be met in the project at issue. To effectuate the purposes of this requirement, DOT enacted Section 14-78.03, Florida Administrative Code, to insure participation by the aforementioned individuals, who by the rule, are referred to as women and socially and economically disadvantaged individuals. The present case deals with the participation of disadvantaged individuals, who are referred to as Disadvantaged Business Enterprises (DBE).

    
    

13. Section 14-78.03(2)(b)4., Florida Administrative Code, applicable to this case, states in part:

    
    

    4. For all contracts for which DBE and WBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE and WBE participation shall be submitted with the contractors bid proposal. Award of the contract shall be

    conditioned upon submission of the DBE and WBE participation information with the bid proposal, and upon satisfaction of the contract goals, or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed non-responsive, and the bid being rejected.

    
    

    Baxter failed to meet the 10 percent requirement, or in the alternative, to demonstrate that the good faith effort was made to meet that requirement, and the effort was met with no success. By the terms of the rule, that failure was sufficient reason to reject the bid of Baxter as being non-responsive.

    Moreover, the rejection of the bid is in keeping with DOT's policy choice to reject bids that do not meet the DBE requirements or show good faith efforts at achieving those requirements. Underlying the policy choice is protecting DBE sub-contractors against bid shopping in those occasions where the bidder is allowed to submit an amendment or supplement to its bid and by that amendment, change the response related to the DBE portion of the bid which was the situation in the former version of Section 14-78.03, Florida Administrative Code, not applicable to this case. (Even that opportunity for amendment had a 10-day deadline beyond the bid-letting date.)

14. While the error made by Baxter may be described as a mistake in computation, it is nonetheless a material error, and when considered in the face of the language of the rule's provision and agency policy, constitutes grounds for rejecting the bid of Baxter as being non-responsive. Baxter sought minimal compliance with the requirements for DBE goals, and having miscalculated, cannot now be heard to complain. Its past compliance does not excuse the error. See

    E.M. Watkins & Company, Inc. v. Board of Regents, 414 So. 2d 583 (Fla. 1st DCA 1982) and Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190 (Fla. 4th DCA 1977).

    
    

15. When confronted with the non-conforming bid of Baxter, DOT had the discretion to accept the bid of White or to reject all bids and re-advertise for bids. These choices are envisioned by Section 337.11(3), Florida Statutes. Ultimately, the choice was to accept the White bid, which was conforming. Because Baxter has submitted a non-conforming bid, it may not question this decision and White obviously acquiesces in the choice. If Baxter could challenge the choice, when examined on its merits, the decision to accept the White bid was not an arbitrary decision.

Upon consideration of the facts found and conclusions of law reached, it is recommended:

That a final order be entered which rejects the bid of Baxter's Asphalt & Concrete Company, Inc., and awards the contract to White Construction Company, for State Project No. 53050-3514, Jackson County, Florida.

DONE and ORDERED this 21st day of January, 1985, in Tallahassee, Florida.

CHARLES C. ADAMS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of January, 1985.

COPIES FURNISHED:

Frank A. Baker, Esquire

204 Market Street Marianna, Florida 32446

F. Alan Cummings, Esquire Holland & Knight

P.O. Drawer 810 Tallahassee, Florida 32301

Robert I. Scanlan, Esquire Department of Transportation Haydon Burns Building, M.S. 58 Tallahassee, Florida 32301

Paul A. Pappas Secretary

Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Docket for Case No: 84-003151

Orders for Case No: 84-003151