STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILLIAM J. SMITH, )

)

Petitioner, )

)

vs. ) CASE NO. 86-0801BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William B. Thomas, held a formal hearing in this case on March 24, 1986, in Tallahassee, Florida. The transcript was received on April 7, 1986. Thereafter the parties submitted proposed findings of fact and conclusions of law which have been considered. A ruling has been made on each proposed finding of fact in the Appendix to this Recommended Order.

APPEARANCES

FOR PETITIONER: Mr. W. J. Smith, in pro per

302 Royal Palm Way Tampa, Florida 33609

FOR RESPONDENT: Claudia Isom-Rickert, Esquire

HRS District Legal Counsel 4000 West Buffalo Avenue Tampa, Florida 33614

By notice dated January 22, 1986, the Department advised the Petitioner that the bid award that had been made to the Petitioner relative to Lease 590:8033 for the Ruskin Service Center was withdrawn for noncompliance with item 11(g) of the bid package, in accordance with Rule 10-13.12, Florida Administrative Code. Accordingly the issue presented for determination is the propriety of the Department's withdrawal of the bid award previously made to the Petitioner.

FINDINGS OF FACT

1. The Petitioner, William J. Smith, was the bid awardee of a Request for Proposals issued by the Department for a Turnkey Construction Project to be located in Ruskin, Florida.

   
   

2. The Request for Proposals was incorporated into a submittal form. The bidder's responses and acknowledgement of the requirements were verified by the bidder's initials on each page, and by a notarized statement on the last page.

3. Pursuant to this submittal form, the successful bidder was required to furnish within 60 days after the bid award was delivered, an irrevocable bank letter of credit to the Department for an amount equal to two percent of the construction costs, as determined by the successful bidder, or $10,000, whichever was less, in a form satisfactory to the Department.

   
   

4. When the Petitioner submitted his bid proposal he estimated the cost of construction to be $40.00 per square foot for 7,000 gross square feet, or a total construction cost of $280,000. Accordingly, the required letter of credit should have been in the amount of $5,600.

   
   

5. A contract for lease for the Turnkey project was to be entered into upon completion of three items: submission of the letter of credit in the required amount, approval of a draft set of construction plans with sign-off by the State Fire Marshal, and finalization of the ownership of the proposed site.

   
   

6. The Petitioner submitted a bank letter of credit for $2,520.00. This was less than one percent of the estimated cost of construction reflected on the Petitioner's bid proposal.

   
   

7. The purpose of the requirement for an irrevocable bank letter of credit is to serve as a performance bond to motivate the successful bidder to perform. The Turnkey Construction Program concept includes a performance bond pursuant to Rule 13D-7.10(2), Florida Administrative Code.

   
   

8. After receipt of the letter of credit, the Department notified the Petitioner by mail of its withdrawal of the bid award to him because of noncompliance with the requirement of the irrevocable letter of credit. The Petitioner was also notified of the award to the next lowest bidder, Elizabethan Development, Inc.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this case, pursuant to Sections 120.53(5)(d)2. and 120.57(1), Florida Statutes.

   
   

10. Rule Chapter 10-13, Florida Administrative Code, governs the resolution of contract bid and award protests relative to the Department of Health and Rehabilitative Services.

    
    

11. Rule 10-13.12, Florida Administrative Code, provides in part:

    
    

    The Department shall reserve the right to reject any and all bids and proposals.

    The Department shall reserve the right to waive minor irregularities in an otherwise valid bid or proposal. A minor Irregularity is a variation from the bid

    invitation or proposal terms and conditions which does not affect the price of the

    bid, or give the bidder an advantage or benefit not enjoyed by other bidders, or does not adversely impact the interests

    of the Department. Variations which are not minor cannot be waived. A bidder may not modify its bid or proposal after bid opening. . .

    
    

12. Rule 13D-7.10, Florida Administrative Code, defines the Turnkey (Lease) Construction Program as used by Florida state agencies, and specifies the guidelines to be applied in soliciting bid proposals for Turnkey projects. The requirement for a performance bond is contained in Rule 13D-7.10(2). c

    
    

13. The Department's Request for Proposals and Submittal Form requires the bidder to agree to the following in Section A, paragraph 11:

    
    

    11. (g) If successful, bidder shall furnish, within 60 days after the bid award is delivered, an irrevocable Bank Letter of Credit to the Department of Health and Rehabilitative Services for an amount equal to 2 percent of the construction costs7 as determined by

    the successful bidder, or $10,000 which- ever is less, in a form satisfactory to the Department. .

    
    

14. The Request for Proposals further provides in Section D, paragraph 3:

    
    

    All bids are subject to the conditions specified herein. Those which do not comply with these conditions are subject to rejection.

    
    

15. The Request for Proposals, in Section D, at paragraph 6, also reserves to the Department the right to reject any and all bids, and to accept the bid deemed to be the lowest and best.

    
    

16. In applying the above provisions to the factual situation as outlined, the Department was justified in withdrawing the award of the Ruskin Turnkey lease project, based on the Petitioner's noncompliance with Section A, paragraph 11(g), of the Request for Proposals and Submittal Form. This Request for Proposals further gives to the Department the authority to reject the Petitioner's bid, and to accept the next lowest and best bid received.

    
    

17. The Petitioner contends that after he submitted his bid proposal he recomputed the construction costs for the project, and that the letter of credit submitted was for two percent of the recomputed costs. However, Rule 10-13.12 prohibits a bidder from modifying a bid after the bid-opening. Thus, the letter of credit submitted must be based on the construction costs as submitted.

RECOMMENDATION:

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter

its Final Order withdrawing the bid award to the Petitioner, and reawarding the

bid to Elizabethan Development, Inc.

THIS RECOMMENDED ORDER entered this 24th of April, 1986 in Tallahassee, Leon County, Florida.

WILLIAM B. THOMAS

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 24th day of April, 1986.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 86-0801BID

Petitioner's Proposed Findings of Fact:

1. Rejected, as irrelevant.

2. Rejected, as contrary to the weight of the evidence and contrary to the Request for Proposals in that the 2 percent is required to be applied to the estimated construction costs as contained in the Request for Proposals.

Respondent's Proposed Findings of Fact: 1-19. Accepted.

COPIES FURNISHED:

Mr. W. J. Smith

302 Royal Palm Way Tampa, Florida 33609

Claudia Isom-Rickert, Esquire HRS District Legal Counsel 4000 W. Buffalo Avenue Tampa, Florida 33614

Mr. Alan Taylor

Elizabethan Development, Inc.

P. O. Box 7077

Winter Haven, Florida 33883

William "Pete" Page, Jr. Secretary

Department of Health and Rehabilitative Services

1323 Winewood Blvd.

Tallahassee, Florida 32301

Steve Huss, Esquire General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Blvd.

Tallahassee, Florida 32301

Docket for Case No: 86-000801BID

Orders for Case No: 86-000801BID