STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

Intervenor. )

)

RECOMMENDED ORDER

Notice was given and on March 29, 1985, a formal Section 120.57(1), Florida Statutes (1984) hearing was held in this cause. The location of the hearing was the Office of the Division of Administrative Hearings, The Oakland Building, Tallahassee, Florida. This recommended order is being entered following the receipt and review of the transcript of proceedings. In addition, the proposed recommended orders of the parties have been considered.

Some of the facts presented in the proposals have been incorporated in the recommended order. Otherwise, those proposed facts are rejected as being irrelevant, immaterial, subordinate, unnecessary, or for reason that the proposed facts are contrary to those facts found in the recommended order.

APPEARANCES

For Petitioner: F. Allan Cummings, Esquire

Holland & Knight

Post Office Drawer 810 Tallahassee, Florida 32301

For Respondent: Larry O. Scott, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301

For Intervenor: David T. Knight, Esquire

Schackleford, Farrior, Stallings and

Evans

Post Office Box 3324 Tampa, Florida 33601

ISSUES

The issues to be resolved on this occasion concern the question of whether the Petitioner or Intervenor is the lowest responsible bidder in several State of Florida, Department of Transportation road projects in which the private parties offered competing bid proposals.

FINDINGS OF FACTS

1. The State of Florida, Department of Transportation advertised for competitive bids related to state road building projects, Nos. 72220-3510, 72220-3511, and 72220- 3512, Duval County, Florida, which will be subsequently referred to as Projects 3510, 3511, and 3512, or together as the "Projects." In response to the advertisement, bids were received effective December 5, 1984. Petitioner Barco, was the apparent low bidder on all projects and the Intervenor was the second low bidder. Through its review process, the Department of Transportation determined that the Barco bid was "non-responsive" and notified Barco of the department's intent to deny contract awards to Barco. The department also made known its intention to grant the contracts for the subject projects to Wiley N. Jackson Company. In view of this proposed agency action, Petition sought timely consideration of this adverse decision by requesting a Section 120.57(1), Florida Statutes (1984) hearing. The Intervenor Jackson was allowed to participate in the case as a substantially affected party. The Jackson petition for intervention was timely filed.

   
   

2. Related to the projects at issue, and in furtherance of the requirements of Section 339.0805, Florida Statutes (1984), the Department of Transportation enacted rules which were designed to assist women and socially and economically disadvantaged persons to receive part of the work identified in the job specifications. The rules are found in Chapter 14-78, Florida Administrative Code (1984). The aforementioned statutory provision and rules chapter contemplate that job participation by the Disadvantaged Business Enterprises, known as "DBEs," shall

   be based upon assigning a percentage of each project for the benefit of the DBEs. In essence it is a percentage of the dollar volume of the contract amount which is set aside for the benefit of the DBEs. In the cases under consideration, those goals were as follows:

   
   

   PROJECT PERCENTAGE OF DOLLAR VOLUME TO BE ASSIGNED TO DBEs

   3510 10 percent

   3511 12 percent

   3512 15 percent

   
   

3. As envisioned by Chapter 14-78, Florida Administrative Code (1984), it was incumbent upon the bidders in the projects in dispute, to either comply with the goals established for DBEs or in the alternative to demonstrate that a good faith attempt had been made at gaining such compliance. Good faith compliance is measured in view of specific criteria and the basic impression of the department on the question of whether the quality, quantity and intensity of the efforts at gaining compliance were sufficient to allow a finding that the efforts were in fact in good faith. See Rule 14-78.03(2)(b)4.b., Florida Administrative Code (1984), infra.

   
   

4. In these projects four companies offered bids. The dollar amount of those bids were as follows:

   
   

   PROJECT 3510:

   Barco		$1,566,284.66
   Jackson		$1,794,878.40
   Dickerson Florida Inc.		$2,375,747.66
   Anderson Contracting Co.,	Inc.	$2,485,576.79

   
   

   PROJECT 3511:

   Barco		$1,721,294.99
   Jackson		$2,090,431.29
   Anderson Contracting Co.,	Inc.	$2,708,632.27
   Dickerson Florida, Inc.		$2,958,909.03

   
   

   PROJECT 3512:

   Barco	$1,956,065.94
   Jackson	$2,320,418.03
   Anderson Contracting Co.	$2,852,238.85
   Dickerson Florida, Inc.	$3,110,336.75

5. Through their bids, each of the bidders offered to comply with the DBE participation goals to the following extent:

   
   

   PROJECT 3510: PERCENT	BIDDER	ANTICIPATED DBE UTILIZATION BY
   DBE goal 10 percent	Barco Jackson Dickerson Anderson	0 percent 10.2 percent 10 percent 4.6 percent
   PROJECT 3511: DBE goal 12 percent	Barco	0 percent
   	Jackson Dickerson	12.5 percent 12

   Anderson 6.59 percent

   
   

   PROJECT 3512:

   DBE goal 15 percent Barco 0 percent

   Jackson 15.1 percent

   Dickerson 15 percent

   Anderson 12.65 percent

   
   

6. This depiction demonstrates that Jackson and Dickerson complied with the DBE goals in each contract, whereas Anderson offered partial compliance with the goals and Barco offered no compliance with those goals. Consequently, if Barco were to be successful in gaining a contract to construct theme projects, it must demonstrate that its attempts at achieving the DBE participation goals were in good faith within the meaning of Rule 14- 78.03(2)(b)4., Florida Administrative Code (1984), which states in pertinent part:

   
   

   . . . 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.

   
   

7. Measurement of the attempt at compliance and the decision on the adequacy of that attempt is pursuant to Rule 14- 78.03(a)(b)4.b., Florida Administrative Code (1984), which states:

   
   

   b. In evaluating a contractor's good faith efforts, the Department will consider:

   1. Whether the contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt requested, or hand delivery, with receipt, to all certified DBEs and WBEs which perform

      the type of work which the contractor intends to subcontract, advising the DBEs and WBEs

      1. of the specific work the contractor intends to subcontract; 2) that their interest in the

         contract is being solicited; and 3) how to obtain information about and review and inspect the contract plans and specifications.

   2. Whether the contractor selected

      economically

      feasible portions of the work to be performed by DBEs or WBEs, including where appropriate,

      breaking down contracts or combining elements of work into economically feasible units. The ability of a contractor to perform the work

      with its own work force will not in itself excuse a contractor's failure to meet contract goals.

   3. Whether the contractor provided

      interested

      
      

      DBEs or WBEs assistance in reviewing the contract plans and specifications.

   4. Whether the DBE or WBE goal was met by other bidders.

   5. Whether the contractor submits all quotations received from DBEs or WBEs, and

      for those quotations not accepted, an explana- tion of why the DBE or WBE will not be used during the course of the contract. Receipt

      of a lower quotation from a non-DBE or non- WBE will not in itself excuse a contractor's failure to meet contract goals; provided however, a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE which exceeds the lowest quotation received from any subcontractor by more than 1 percent.

   6. Whether the contractor assisted interested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance.

      
      

      efforts.

   7. Whether the contractor elected to sub- contract types of work that match the capabi- lities of solicited DBEs or WBEs.

   8. Whether the contractor's efforts were merely pro forma and given all relevant circum- stances, could not reasonably be expected to produce sufficient DBE and WBE participation to meet the goals.

   9. Whether the contractor has on other contracts within the past six months utilized DBEs and WBEs. This list is not intended to be exclusive or exhaustive and the Department

   will look not only at the different kinds of efforts that the contractor has made but also the quality, quantity and intensity of these

   
   

8. The requirements of Rule 14-78.03(2)(b), Florida Administrative Code (1984), pertaining to achievement of DBE goals and the necessity to establish good faith efforts in the absence of that compliance, were provided to Barco with the bid packages for the several projects.

   
   

9. In preparing its bid submission, Barco solicited quotations from a number of subcontractors, associations and clearing houses, through the use of a solicitation letter. The date of that letter is November 20, 1984. By this correspondence reference is made to the several job numbers and a description is given of the general classes of work sought for quotation. A replica of this correspondence was attached with each of the bid blanks for the three projects in question. Forty-three companies were solicited through the letter, with twenty-seven of those being certified DBEs, eight certified WBEs, and eight non- DBEs. All solicitations were through certified mail return receipt requested. Evidence of the solicitations, as shown in the bid blanks related to the three projects, was in the way of summary sheets which listed each of the companies solicited, identifying that those companies were solicited through return receipt mail. These sheets also indicate that four companies did not and further those other quotations are listed as being the prices used in preparing the bid submission on the part of Barco. That form does not designate the names of those companies from whom Barco indicates it received the lower quotes.

10. In the bid blank for Project 3511, which is Petitioner's exhibit number 2, a similar Barco quotation form for DBE subcontractors may be found. In this instance, in addition to the several DBEs who gave quotations in the Project 3510, a quotation was also received from J. E. Hill, DBE. Those quotations are listed together with the specific categories of work and then additional prices are quoted related to unidentified contractors, which additional quotations are lower than the quotations received from the DBE subcontractors and were used in preparing the bid submission.

    
    

11. The bid blank related to Project 3512 also contains a quotation from DBEs on a form by the Petitioner. This lists quotations from the same four DBEs as are set forth in the form for Project 3511. As in the instance of that prior project, Project 3512, sets forth prices received from unidentified subcontractors which are lower than the prices quoted by the DBE subcontractors. Again Barco utilized the quotes announced by those unidentified subcontractors when establishing its bid submission.

    
    

12. None of Barco's bid blanks for the several projects at issue contained actual written quotations or recorded telephone quotations made by the aforementioned DBEs, non-DBEs, WBE subcontractor, materialmen or suppliers who offered quotations on those projects. BARCO did not submit any of the quotations received from DBEs with its bid blanks, notwithstanding the availability of some of those DBE quotations at the time of the submission of the bid blanks. In response to a request by the Department of Transportation subsequent to the submission of its bid blanks, Barco provided that information. Those materials may acknowledge receipt of this mail. Contrary to this representation, only three companies failed to acknowledge receipt of the mail. The summary sheets also indicated whether Barco received written or phone contact from those companies solicited. On the summary sheets Barco indicates whether the solicitation letters had been responded to in writing or by phone by placing a check mark in a column denoting a written or telephonic response. Copies of the bid blanks related to the several projects beginning with 3510 through 3512 in series may be found as Petitioner's exhibits numbers 1 through 3 admitted. Petitioner's exhibit number 12 is the return receipt information for the several projects as bid by Barco. Although this exhibit was not submitted with the bid blanks for the projects in

    question, it clarifies concerns which the Department of Transportation has about the information set forth in the summary sheets referred to in this paragraph. In effect, it vouches for the prima facia information set forth in those summary sheets.

    
    

13. All told, as it relates to each of the projects, four DBEs offered quotes on some or all of the projects. Of these only one DBE was offering its quotation in response to the solicitation letter as described before. In Petitioner's exhibit number 1 pertaining to Project 3510, there is a form utilized by the Petitioner which indicates the general category, name of the DBE or WBE subcontractor and the price quoted by those subcontractors

    for the selected categories of work. Princess Construction was the WBE who gave the quotation. The other three named subcontractors are DBE subcontractors. Princess Construction's quotations were also depicted on that form as being the lowest price received and as a consequence, Barco points to this quotation in its satisfaction of WBE goals for this project. On the same form opposite the names of the DBE subcontractors, that is E. Thompson, B. Griffith, and Oglesby and Hug, other prices are quoted as being the lowest prices received be found as Petitioner's exhibit number 11, containing quotations which predate the bid opening and postdate the bid opening. The quotations set forth in the several bid blanks as discussed in the previous paragraphs are found in those materials.

    Petitioner's exhibit number 11 verifies the amount of quotations of the four DBEs set forth in the bid blanks and identifies those companies whose quotations Barco used in preparing its bid responses. The companies used were non- DBEs, with the exception of Princess Construction. Those responses as set forth in Petitioner's exhibit number 11 do not contain quotations which are the product of additional solicitations which might have occurred subsequent to the time of the bid opening.

    
    

14. While Barco fails to specifically mention the fact, there is greater than a 1 percent differential between the DBE quotations and the non-DBE quotations which were used in the several bid submissions. The quotations by the non-DBEs were lower by more than 1 percent. In view of that circumstance, Barco felt that it was appropriate to use the non-DBEs quotations as envisioned by Rule 14- 78.03(2)(b)4.b.v., Florida Administrative Code (1984).

    This perception by the Petitioner relates to that portion of the rule which says:

    
    

    . . . a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE

    which exceeds the lowest quotation received from any subcontractor by more than 1 percent.

    
    

    Had Barco chosen not to avail itself of the opportunity set forth in that rule, it had received sufficient DBE quotes to comply with all of the goals set forth in the several projects.

    
    

15. In making solicitations Barco did not solicit all available DBEs set forth in the Department of Transportation's Directory of certified DBEs and WBEs. See Petitioner's exhibit number 10. Availability refers to the type of work and the geographical area where those DBEs would be willing to do their work. An example of the lack of solicitation would be the concrete work in these jobs in which thirty-three DBEs were listed in the directory and only twelve were solicited by Petitioner. Having examined the nature of the projects, Barco, through its management, determined to limit its solicitations to a portion of the available DBEs. This decision can be described as a business judgment on the part of Barco based upon prior experience with DBEs, their location and anticipated costs of mobilization for DBEs.

    
    

16. In making decisions on the award of the contract, such as contemplated in the projects in dispute, the Department of Transportation conducts a review of the bid blanks at various levels within the department. One of those reviews is conducted by the Good Faith Efforts Review Committee. Its function is to ascertain whether the bids submitted comply with the requirements of Chapter 14-78, Florida Administrative Code (1984). This committee makes a recommendation to the department's Technical Review Committee. Specifically, the recommendation made to that next level of review is one which comments on whether the bidders have complied with the requirements of Chapter 14- 78, Florida Administrative Code (1984). The Technical Review Committee is not bound by the finding of the Good Faith Efforts Review Committee. In turn the Technical Review Committee makes known its recommendation on the contract award to the department's Awards Committee. The

    Awards Committee, being a higher level in the hierarchy, can reject the recommendation of both the Good Faith Efforts Review Committee and the Technical Review Committee on the topic of compliance with requirements of Chapter 14-

    78 Florida Administrative Code (1984). Finally, the Awards Committee makes its recommendation to the Department of Transportation Secretary, who as agency head has the power to accept or reject the recommendation of all subordinate levels of review on the topic of compliance with Chapter

    14-78, Florida Administrative Code (1984). Ordinarily the recommendations as to compliance with Chapter 14-78, Florida Administrative Code (1984) as it is passed from one level of review to another is not disturbed.

    
    

17. In due course, following the bid letting or opening on December 5, 1984, the Good Faith Efforts Review Committee examined the bid submissions related to the three projects as provided by Barco. As may be seen in the Petitioner's composite exhibit number 5, the recorded findings of the Good Faith Efforts Review Committee, related to the Barco bids, the initial recommendation was to award Barco contracts on all projects. In the comments sections, reference is made to the fact that Barco submitted a copy of the solicitation letter which included the classes of work and enclosed copies of the appropriate quantity sheets. The comments sections also reference the fact that Barco had solicited forty-three addressees, including the twenty-seven DBEs and the fact that Barco indicated if a return receipt was received. The comments sections note that Barco did not provide copies of the certified mail receipts. The comments sections relate that the contractor only received three DBE bids in Project 3510 and four DBE bids in the other projects and the related fact that the contractor indicates receiving lower bids from non-DBE subcontractors in those categories of work.

    In the comments sections it is noted, parenthetically, that those non- DBE subcontractors were not specified. Finally, the comments sections indicate that the DBE bids, i.e. quotes, exceeded the lower bids/quotes by more than 1 percent.

    
    

18. The Good Faith Efforts Review Committee in its initial recommendation favoring the award of the contracts to Barco, was giving a liberal interpretation to the nine criteria for review of the good faith efforts at compliance with DBE contract goals. See Rule 14-78.03(2)(b)4.b., Florida Administrative Code (1984), supra. This

    recommendation was then forwarded to the Chairman of the Technical Review Committee. Given the fact that other bidders on the projects had met the department's goals related to utilization of DBE subcontractors, Mr. Potts, Chairman of the Technical Review Committee discussed this circumstance with Mr. Hilliard, a member of the Awards Committee. Hilliard in turn requested a meeting with members of the Good Faith Efforts Review Committee. That meeting took place and two of the three members of the Good Faith Efforts Review Committee were in attendance, to include the chairman, a Mr. Pitchford. In the course of this meeting, at which "executive guidance" was given to the Good Faith Efforts Review Committee attendees, Hilliard and Potts made known their desire to give a more stringent or literal interpretation to the underlying rules dealing with the question of good faith efforts at compliance with the DBE contract goals. Following this consultation, the Good Faith Efforts Review Committee met for a second time to consider the question of Barco's good faith efforts at compliance with the DBE contract goals.

    
    

19. The summarization of the final findings of the Good Faith Efforts Review Committee pertaining to Barco and other bidders may be found in the Petitioner's composite exhibit number 6. On this occasion Barco was recommended for rejection as to all three projects, based upon alleged failure to show good faith efforts at compliance with DBE goals. In these findings reference is again made to the fact that Barco provided a copy of its solicitation letter in all projects, which included the classes of work and enclosed with those letters copies of the appropriate quantity sheets for the projects. The comments note that the addressees log was provided to include the twenty-seven DBEs and a column indicating if return receipts were received; however, it notes that copies of the certified mail receipts were not provided with the bids. It again notes the names of the DBE bidders from whom quotes were received and the fact of rejection of those bidders in favor of nonDBE bidders, in view of the fact that the DBE bids exceeded the lower bids by more than 1 percent. Finally, in the comments sections, the Good Faith Efforts Committee expresses what they describe as their primary concern, that is, based upon the performance of other bidders, and the availability of DBE bids/quotes as provided to Barco, Petitioner could have easily supported the program and the objective of achieving DBE participation. Under the circumstances the committee did

    not feel that Barco had supported the spirit and intent of the program. The Barco bids were ultimately rejected for reason of failure to demonstrate a good faith effort in attempts at achieving the DBE goals.

    
    

20. In making known its position on the Barco bids in the second review, the Good Faith Efforts Review Committee was acting in accordance with the "executive guidance" given it by Mr. Hilliard in his expression of concern about the fact that other bidders were able to achieve the department's DBE participation goals, while Barco failed to meet those goals in any of the three projects.

    
    

21. Having rejected Barco's bid, Wiley N. Jackson Company was deemed to be the lowest responsible bidder for the three projects in question.

    
    

22. Beginning with the bid letting in December, 1984, related to the Barco matter, the Department of Transportation has decided that solicitation would be in the form of certified mail, return receipt requested, or hand-delivery with appropriate receipt and that bidders would provide copies of the certified mail receipts or other receipts with the bid blank. The claim on the part of the bidder that the solicitations were made by certified mail, naming the persons who were solicited would not suffice even if those assertions could be proven by evidence submitted after the bid opening, which evidence tended to verify the claims as set forth in the summary letter. Moreover, the department decided that contrary to its prior interpretation of its rules, a substantial number of solicitations to available DBEs and WBEs listed in the department's directory would not be sufficient. Beginning with the Barco situation it would be necessary to solicit all available DBEs and WBEs, without regard for perceptions by the bidders on whether responses would be forthcoming from all available DBEs and WBEs. The department also determined that all quotations already received from DBEs or WBEs should be provided with the bid blank. A written summarization or itemization of those quotations would not be sufficient. The department takes the point of view in its decision to reject the Barco bids that it would not allow Barco to rely exclusively on the 1 percent differential between the quotations between non-DBEs and the DBEs from whom it received quotations, given what the department deemed to be unacceptable efforts in compliance with other review criteria as discussed. Finally, in the

    overview, the department rejected the Barco bids because of the impression that the efforts made by Barco at good faith compliance with DBE goals were not of the quality, quantity and intensity that was necessary.

    
    

23. The bidder, which the department found to be responsive, namely Wiley N. Jackson, had used the DBE quotation of H. S. Thompson Construction Co. in complying with the requirements of the DBE goals. This Thompson was not solicited by the Petitioner and no quotation was used from that subcontractor in preparing the Barco bid responses. Nonetheless, the quotations from Thompson to Jackson exceeded by more than 1 percent the quotations from non-DBEs which were used by Barco in its bid responses in the projects. Another bidder of these projects had used Mikel L. Grassing, Inc., for that aspect of the project and Barco did not solicit Mikel Grassing, Inc.

    
    

24. Obviously, no one is certain of the outcome had Barco solicited all available DBEs; however, the possibility existed that some of those DBEs would have offered a quotation which was no more than 1 percent above the non-DBE quotations that Barco used in preparing its bid responses in the projects.

    
    

25. In July, 1984, Barco bid on a Department of Transportation project in which the DBE goal was 12 percent and that goal was achieved. Barco on one other occasion had submitted a bid in which it did not meet the DBE participation goal, based upon the fact that the non-DBE quotes were more than 1 percent lower than the quotations from DBE subcontractors and had been awarded the contract on that occasion.

    
    

    CONCLUSIONS OF LAW

    
    

26. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in keeping with Sections 120.53 and .57, Florida Statutes (1984).

    
    

27. Section 337.11, Florida Statutes (1984), authorizes the Department of Transportation to advertise for bids and to enter into contracts such as those envisioned in the three projects at issue. In some contracts, the Department of Transportation, unless otherwise determined, shall set aside not less than 10

    percent of the amounts expended from the State Transportation Trust Fund to be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals. This latter requirement is set forth in Section 339.0805(1), Florida Statutes (1984), is in accordance with the definition of socially and economically disadvantaged individuals as defined in s. 8(d) of the Small Business Act (15 U.S.C. S.637(d)). This requirement pertains to the projects at issue.

    
    

28. In furtherance of its mandate, the Department of Transportation has enacted Chapter 14-78, Florida Administrative Code (1984), in which the categories of socially and economically disadvantaged individuals are classified as Disadvantaged Business Enterprises or DBEs, and Woman Business Enterprises, known as WBEs. These classifications are more specifically described in Rule 14- 78.02, Florida Administrative Code (1984).

    
    

29. Rule 14-78.03, Florida Administrative Code (1984), establishes general goals for the department in developing a program for the benefit of the DBEs and WBEs and identifies what must be done by the bidder to comply with the goals of participation to benefit DBEs and WBEs. Should a bidder be unsuccessful in realizing those goals, it is incumbent upon the bidder to provide ". . . sufficient information to demonstrate that the contractor made good faith efforts to meet the goals." See Rule 14- 8.03(2)(b)4.a.iv., Florida Administrative Code (1984). Per the rule, that information shall be included with the bid blank or bid submission.

    
    

30. The body of information submitted with the bid response which goes to describe the efforts made by the bidder in attempting to achieve the participation goals for DBEs, when those goals are not met, is then measured against criteria set forth in Rule 14-78.03(2)(b)4.b., Florida Administrative Code (1984). For convenience this rule is restated:

    
    

    b. In evaluating a contractor's good faith efforts, the Department will consider:

    1. Whether the contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt requested, or hand delivery, with receipt,

       to all certified DBEs and WBEs which perform the type of work which the contractor intends to subcontract, advising the DBEs and WBEs

       1. of the specific work the contractor intends to subcontract; 2) that their interest in the contract is being solicited; and 3) how to

          obtain information about and review and inspect the contract plans and specifications.

    2. Whether the contractor selected

       economically

       feasible portions of the work to be performed by DBEs or WBEs, including where appropriate,

       breaking

       
       

       interested

       
       

       other

       
       

       received

       
       

       down contracts or combining elements of work into economically feasible units. The ability of a contractor to perform the work with its own work force will not in itself excuse a contractor's failure to meet contract goals.

    3. Whether the contractor provided

       
       

       DBEs or WBEs assistance in reviewing the contract plans and specifications.

    4. Whether the DBE or WBE goal was met by

       
       

       bidders.

    5. Whether the contractor submits all quota- tions received from DBEs or WBEs, and for those quotations not accepted, an explanation of why the DBE or WBE will not be used during the course of the contract. Receipt of a lower quotation from a non-DBE or non-WBE will not

       in itself excuse a contractor's failure to meet contract goals; provided however, a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE

       or WBE which exceeds the lowest quotation

       
       

       from any subcontractor by more than 1 percent.

    6. Whether the contractor assisted interested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance.

    7. Whether the contractor elected to subcontract types of work that match the capabilities of solicited DBEs or WBEs.

    8. Whether the contractor's efforts were merely pro forma and given all relevant circumstances, could not reasonably be expected

       to produce sufficient DBE and WBE participation

       to

       meet the goals.

    9. Whether the contractor has on other contracts within the past six months utilized DBEs and WBEs. This list is not intended

    to be exclusive or exhaustive and the Department will look not only at the different kinds of efforts that the contractor has made but also the quality, quantity and intensity of these efforts.

    
    

31. When measured against these requirements,

    Petitioner is found to have provided sufficient information to identify its request for quotations from the limited number of DBE subcontractors solicited through certified mail, return receipt requested. On the other hand, contrary to that subsection of the rule, at b.i., Petitioner has failed to notify all certified DBEs who perform the type of work which the contractor intends to subcontract, referred to in the Findings of Fact as all available DBEs. In addition, the Petitioner's failure to achieve DBE goals is considered in the face of success in achieving those goals on the part of other bidders to include the second lowest bidder, Wiley N. Jackson Company. This speaks to that criteria found at subsection b.iv. in the above cited rule. Petitioner received quotations from DBEs related to the three projects in question, but failed to provide those quotations with its bid responses, contrary to subsection b.v. of the above cited rule. This conclusion pertains to those quotations which had been received prior to Barco's submission of its bid responses.

    
    

32. Within Rule 14-78.03(2)(b)4.b.v., Florida Administrative Code (1984), is found the language, "Receipt of a lower quotation from a non-DBE or non-WBE, will not in itself excuse a contractor's failure to meet contract goals; provided, however, a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE which exceeds the lowest quotation received from any subcontractor by more than 1 percent." At first blush it would appear that when a contractor submits its bid response, in which it includes all quotations from DBEs which it received, and the lowest of those quotations exceeds the lowest quotation received from any subcontractor who is not a DBE by more than 1 percent, then the contractor may utilize the non-DBE

    quotation in making its bid response. Contrary to this initial impression, a contractor may not exclusively rely upon this one criterion in claiming that it has successfully explained it good faith efforts at achieving the DBE goals. There are other criteria and as already pointed out in this discussion, Petitioner has failed to satisfactorily address some of those criteria. More importantly, if the Petitioner seeks to avail himself of the 1 percent exception to using DBE quotes in preference to non-DBE quotes, that is to say the 1 percent provision, it must advise all available DBEs who perform the type of work, in the area of the project, sought by the Petitioners to maximize the possibility of receiving a quotation from a DBE which does not exceed by more than 1 percent the quotation by a non-DBE.

    
    

33. Finally, through the overview envisioned by Rule 14- 78.03(2)(b)4.b., Florida Administrative Code (1984), the quality, quantity and intensity of the efforts by Barco to achieve DBE goals was not sufficient.

    
    

34. Petitioner in its proposed recommended order argues that the Department of Transportation, prior to the present case, has consistently used a liberal and flexible interpretation of its rule related to measurement of the good faith efforts of a bidder. Petitioner states that this former interpretation is consistent with the language of the rule. According to Petitioner, it had come to rely upon this liberal interpretation, especially the ability to be successful in a bid response where use of the 1 percent provision was employed. Given what Barco considers to be a new interpretation of the existing rule which was not adopted through a formal rulemaking proceeding, Barco characterizes this change in interpretation as an "incipient non- rule policy" of the department. This speaks of the change in position from one of a liberal interpretation of the various criteria to a strict or literal interpretation. Reference in this argument is generally made to MacDonald vs. Department of Banking and Finance, 346 So. 2d 569 (Fla. 1st DCA 1977). Further citation is made to cases such as Perkins v. Department of Health and Rehabilitative Services, 452 So. 2d 1007 (Fla. 1st DCA 1984) calling upon an agency to explicate its non- rule policy decisions in the adjudicative setting. As counsel explains, the agency's burden in this regard is more taxing when non-rule policy is being adopted without prior notice, which policy represents a reversal of past

    trends or policy choices, which prior policy position had been widely advanced and relied upon by affected parties. See Walker v. State Department of Transportation, 366 So.2d

    96 (Fla. 1st DCA 1979). Petitioner also speaks to the holding in Best Western Tivoli Inn v. Department of Transportation, 448 So.2d 1052 (Fla. 1st DCA 1984), in which the court called into question an agency's new interpretation of its own rule that conflicted with the plain meaning of that rule.

    
    

35. Without further explanation of the arguments of Petitioner, which are set forth at pages 19 and 20 of the proposed recommended order of the Petitioner, it is concluded that this line of reasoning by the Petitioner is without merit. The Department of Transportation in this instance is not creating a non-rule policy. What has occurred on this occasion is that the Department of Transportation de novo is required to interpret its duly promulgated Rule 14-78.03, Florida Administrative Code (1984). While the Petitioner and others have been allowed to profit from a less strenuous interpretation of that rule in the past, a literal interpretation was always available to the department and that interpretation has been made in these conclusions of law. That interpretation is not outside the framework of the rule and the Petitioner was not entitled to rely upon a flexible interpretation of the rule in perpetuity. In this connection, contrary to Petitioner's assertion, the agency can honor its substantive rule with the interpretation given in these conclusions of law. In fact the present interpretation is more true to the language set forth in the rule than the interpretation given in the past. Finally, it is not inherently unfair for the agency through the proceeding de novo, and by the interpretation presently given, to afford an exact reading to the language of the subject rule.

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

RECOMMENDED:

That the bids by C. H. Barco Contracting Company, pertaining to Projects 72220-3510; 72220-3511 and 72220- 3512 be rejected and that Wiley N. Jackson Company be found to be the successful bidder in those projects.

DONE and ENTERED this 7th day of June 1985, at Tallahassee, Florida.

Hearings

Hearings

CHARLES C. ADAMS

Hearing Officer

Division of Administrative

The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

FILED with the Clerk of the Division of Administrative

this 7th day of June 1985.

COPIES FURNISHED:

F. Alan Cummings, Esquire Holland & Knight

Post Office Drawer 810 Tallahassee, Florida 32301

Larry O. Scott, Esquire Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301

David T. Knight, Esquire Schakleford, Farrior, Stallings

& Evans

Post Office Box 3324 Tampa, Florida 33601

Paul Pappas, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301

Docket for Case No: 85-000569

Orders for Case No: 85-000569