STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HENDRY CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 86-1174

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, an administrative hearing was held before Diane D. Tremor, Hearing Officer with the Division of Administrative Hearings, on May 30, 1986, in Tallahassee, Florida. The issue for determination in this proceeding is whether petitioner Hendry Corporation is entitled to approval of its application for qualification to bid on projects for the year 1986.

APPEARANCES

For Petitioner: J. C. Miller, Comptroller

Hendry Corporation Post Office Box 13228 Tampa, Florida 33681

Larry Levy, Esquire Post Office Box 82

Tallahassee, Florida 32302

For Respondent: Brant Hargrove

605 Suwanee Street

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32301

INTRODUCTION

At the commencement of the hearing, the petitioner, through its Comptroller, stipulated to all facts relevant to the issue for determination in this proceeding, and presented no witnesses or exhibits. Counsel for the respondent moved to dismiss the proceeding on the ground that there were no disputed issues of material fact and therefore the Division of Administrative Hearings had no jurisdiction. That motion was taken under advisement, and the parties were given the opportunity to file legal memoranda and/or proposed recommended orders. The petitioner, through counsel, filed a legal memorandum and the respondent, through counsel, filed a proposed recommended order. The respondent's proposed findings of fact are accepted.

FINDINGS OF FACT

1. Based upon the stipulations of the parties, the following relevant facts are found:

   
   

2. On March 5, 1986, the Hendry Corporation filed with the Department of Transportation (DOT) its application for qualification to bid on DOT projects for the year 1986. The audited financial statement submitted with the application was dated 125 days prior to March 5, 1986.

3. By letter dated March 6, 1986, the DOT advised the petitioner that ". . . we are unable to act favorably on the

   qualification of your corporation with the

   Department. The audited financial statements submitted are of a date of more that [sic]

   120 days prior to the application; therefore, they are unacceptable per Rule Chapter 14-22 and Florida Statutes 337.14."

   
   

   Petitioner was further notified of his right to request an administrative hearing within ten days.

   
   

4. Petitioner timely requested a hearing, and the Department of Transportation requested the Division of Administrative Hearings to conduct the proceedings.

   
   

   CONCLUSIONS OF LAW

   
   

5. Bidders on DOT construction contracts in excess of $150,000.00 must first be certified as qualified by the Department. Each person seeking certification must submit an application accompanied by the latest annual financial statement completed within the last twelve (12) months. If that statement reflects the financial condition of the applicant more than 120 days prior to the application date, then an interim financial statement reflecting conditions no more than 120ays prior to the application date must also be submitted. Section 337.14(1), Florida Statutes (1985). When the Department receives an application for certification, its duty is to examine it, verify its statements when necessary, and determine, within 30 days, whether the applicant is competent, responsible and possesses the necessary financial resources to perform the desired work. Section 337.14(3) and (1), Florida Statutes (1985).

   
   

6. Here, the petitioner's application was accompanied by a financial statement which was five days older than that required by statute, and no interim financial statement was submitted. Thus, the DOT could not properly determine whether petitioner possessed the necessary financial resources for certification as a qualified bidder on projects exceeding $150,000.00, and accordingly could not grant petitioner a certificate of qualification

   
   

7. Petitioner contends in this proceeding that the 120-day time period is simply directory and does not mandate denial of an application for certification. It is urged that the DOT has no legal authority to deny the application for failure to file within 120 days from the date of the financial statement and that the DOT's only authority in this regard was to request additional information pursuant to Section 337.14(4), Florida Statutes. In relevant part, that subsection provides

   ". . . In the event the department finds that an application is incomplete or contains inadequate information or information which cannot be verified, the department may request in writing that the applicant provide the necessary information to complete the application or provide the source from which any information in the application may be verified. If the applicant fails to comply with the initial written request within a reasonable period of time as specified therein, the department shall request the information a second time. If the applicant fails to comply with the second request within a reasonable period of time as specified therein, the application shall be denied."

   
   

8. The Legislature has stated its intent to award contract work only to the lowest responsible bidders and has declared that bidding and qualification procedures exist to secure both the public benefits of free and open competition and the quality of public works. Sections 337.11(3) and 337.164, Florida Statutes. Obviously, the purpose of requiring a prior qualification of bidders on large contracts is to assure the Department that the bidder is "responsible" so that any bids which the contractor may be awarded will be properly performed. The Legislature has determined that in order to be deemed financially responsible a recent financial statement must be reviewed and that an appropriate proximity of time to review is no longer than 120 days prior to the application, or the submission of an interim statement reflecting financial conditions within that period. This requirement is one of substance and is mandatory to enable the Department to render a determination regarding the applicant's financial responsibility and resources to perform the desired work. The 120-day requirement is not an immaterial matter, designed simply to further the orderly conduct of business by the Department, as were the time requirements involved in the cases cited by petitioner.

   
   

9. Whether the 120-day time requirement is jurisdictional is not the issue here. Clearly, the Department would have been in violation of Section 337.14 had it granted petiiioner's application for certification in the absence of a 120-day old financial statement or an interim statement prepared 120 days prior to the application. The Department may only grant an application if the applicant is found to possess the prescribed qualifications for certification. Section 337.14(4), Florida Statutes. The necessary corollary is that the Department may deny an applicant found not to possess the necessary qualifications for approval. A prescribed qualification is that the applicant be determined responsible by possessing the necessary financial resources within a period of time not exceeding 120 days prior to the application. Such a determination could not be made in this instance and thus denial of the petitioner's application for certification was proper.

   
   

10. Admittedly, the Department, in the exercise of its discretion, could have elected to request from the petitioner a more recent interim financial statement and withheld acting on the application for a reasonable period of time pending receipt of that additional information. Such a request is authorized by both Section 337.14(4), Florida Statutes, and Rule 14-22.041, Florida Administrative Code, but is not mandated by either provision. An applicant for a permit or a license always bears the burden of demonstrating compliance with

    the statutory and regulatory requirements for licensure and, where there is room for the exercise of discretion by the licensing authority, demonstrating that there has been an abuse of that discretion. Here, the petitioner has failed to sustain both burdens.

    
    

11. Finally, with respect to the respondent's motion to dismiss this proceeding, it is concluded that the motion to dismiss is denied. Petitioner was advised of the right to an administrative hearing by the March 6, 1986, letter denying its application. Its request for a hearing was filed with the DOT on March 14, 1986. The DOT referred the request for hearing to the Division of Administrative Hearings by letter dated April 7, 1986. The petitioner filed a summary of its position by letter dated April 29, 1986, and by Notice of Hearing dated May 7, 1986, the hearing was scheduled for May 28, 1986, and was subsequently rescheduled, with the concurrence of counsel for the DOT, to May 30, 1986. It was not until the final hearing, after petitioner's opening statement, that respondent moved to dismiss on the ground that there was no disputed issue of fact. The fact that a party stipulates to the material facts of a case does not divest the Division of Administrative Hearings of jurisdiction, nor does it deprive a party of his rights to an administrative proceeding under Section 120.57. While this matter may well have been the subject of an informal proceeding pursuant to Section 120.57(2), Florida Statutes, it appears that the parties agreed, at least up until the time for presentation of the respondent's case, to proceed under Section 120.57(1), Florida Statutes. There may be some instances where it would be appropriate for the Division of Administrative Hearings to remand a matter to the agency for informal proceedings when there are no disputed issues of material fact. However, dismissal of the action is not appropriate on those grounds, and it would serve no useful purpose in this proceeding to further delay a resolution of this dispute by remanding the matter to the DOT for informal proceedings.

RECOMMENDED ORDER

Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the petitioner's application for certification as a qualified bidder be DENIED, without prejudice to the petitioner to resubmit an application containing the information required by statute.

Respectfully submitted and entered this 18th day of June, 1986, in Tallahassee, Florida.

DIANE D. TREMOR

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 18th day of June, 1986.

COPIES FURNISHED:

J. C. Miller, Comptroller Hendry Corporation

P. O. Box 13228 Tampa, Florida 33681

Brant Hargrove, Esquire Department of Transportation Haydon Burns Building, M.S. 58 Tallahassee, Florida 32301-8064

Larry Levy, Esquire

P. O. Box 82

Tallahassee, Florida 32302

Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301-8064

Docket for Case No: 86-001174

Orders for Case No: 86-001174