STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAKEVIEW 436 ASSOCIATES, LTD )

)

Petitioner, )

)

vs. ) CASE NO. 88-1327BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES, )

)

Respondent. )

and )

)

THE KOGER COMPANY, )

)

Intervenor )

)

RECOMMENDED ORDER

Pursuant to notice, final hearing in the above-styled case was held on March 30, 1988, in Orlando, Florida, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.

The representatives of the parties were as follows: For Petitioner: Usher L. Brown, Esquire

Litchford, Christopher & Milbrath, P.A.

One South Orange Avenue, Suite 500 Orlando, Florida 32801

For Respondent: Robert L. Powell, Sr., Esquire

Assistant General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407

Tallahassee, Florida 32399-0700

For Intervenor: Stephen D. Lobrano, Esquire

Lobrano & Kincaid, P.A.

121 West Forsyth Street, Suite 810 Jacksonville, Florida 32202

BACKGROUND

Petitioner presented five witnesses, plus the testimony of a sixth witness, Mary Goodman, by deposition. Respondent and Intervenor presented a total of three witnesses. Petitioner offered into evidence 13 exhibits. Respondent offered into evidence three exhibits. Intervenor offered into evidence four exhibits. All exhibits were admitted into evidence. Respondent was given 21 days from the date of the hearing to file the floorplan drawing that accompanied

Intervenor' s bid. The drawing was filed with the undersigned directly by the State Fire Marshal's office, which possessed the drawing at the time of the hearing.

By Invitation to Bid, Respondent notified interested parties that it intended to lease office space in the Orlando area. After reviewing the three bids that it received, Respondent awarded the lease to Intervenor. Petitioner's bid was deemed nonresponsive because its office building was outside of the geographic area specified in the Invitation to Bid. Petitioner protested the award and requested a hearing on disputed issues of material fact.

Prior to the hearing, Intervenor filed a Motion to Intervene, which was granted without objection. Respondent filed a Motion to Dismiss on the grounds that Petitioner's notice of intent to protest was untimely because it was not filed within 72 hours of receipt of the subject Invitation to Bid. Ruling on Respondent's motion was reserved at the hearing.

A transcript of the hearing was filed on April 15, 1988. Each party filed a proposed recommended order. Treatment accorded the proposed findings of fact is detailed in the Appendix. Petitioner filed a Motion to Strike or, in the Alternative, for the Hearing Officer to Take Judicial Notice on April 27, 1988. The matters raised had already been considered by the undersigned, so the motion is treated as moot.

FINDINGS OF FACT

1. By Invitation to Bid for Lease NO. 590:1944, Respondent invited lease proposals for approximately 15,206 square feet of office space "located within the following boundaries: On the North, Aloma Avenue/Fairbanks Avenue the East, Semoran Boulevard the South, Colonial Drive, and on the West, Mills Avenue." The geographic area includes as many as 100 office buildings, although the invitation only generated three bids.

   
   

2. The Invitation to Bid announced a Pre-Bid Conference on December 22, 1987. Interested parties were directed to contact Linda N. Treml, whose telephone number was provided, for "bid specifications and information regarding the space." The Invitation to Bid stated that "[a]ny questions concerning this project are to be directed to [Ms. Treml]" and "prospective bidders are encouraged to consult with [Ms. Treml] beforehand in an attempt to enable as correct a bid submittal as possible."

   
   

3. The Invitation to Bid required that certain attachments accompany the bid proposal and referred the prospective bidder to paragraph 9 of the Bid submittal Form. The required attachments included a scaled floorplan "showing present configurations with measurements," net rentable square footage calculations using floorplan measurements, and a preliminary site layout.

   
   

4. The Invitation to Bid stated that Respondent reserved the right to waive any minor informalities or technicality and seek clarification" of bids received, when such is in the best interest of the state.

   
   

5. Responding to Respondent's newspaper advertisement and direct-mail solicitation for bids, James W. Boyle, who is a real estate broker active in leasing and property management, requested from Ms. Treml an Invitation to Bid and Bid Submittal Form.

6. Mr. Boyle regularly reviews announcements of forthcoming leasing activity by state agencies. If he is aware of a building that appears to meet the agency's requirements, he contacts the building's owner or manager and informs him or her that he may have a prospective tenant.

   
   

7. After receiving the bid materials for Lease No. 590:1944, Mr. Boyle contacted Kathryn Doyle, who is the leasing manager of Petitioner, and learned that Petitioner could accommodate Respondent's space needs for the term sought in the Lakeview 436 office building.

   
   

8. Mr. Boyle assisted Ms. Doyle in the preparation of the Bid Submittal Form for Petitioner. In his first conversation with Ms. Doyle, Mr. Boyle ascertained that Petitioner's building carried a Semoran Boulevard street address and in fact had direct access to Semoran Boulevard. Petitioner's building lies on the east side of Semoran Boulevard, which serves as the eastern boundary of the geographic area described in the Invitation to Bid.

   
   

9. Three bids were submitted in response to the subject Invitation to Bid. When they were opened, Ms. Treml and her supervisor, George A. Smith, determined that bids of Petitioner and a third party were nonresponsive because their office buildings were outside the geographic area specified in the Invitation to Bid. These bids were not considered further.

   
   

10. Mr. Boyle had previously represented the owners of the FARE building several months earlier in a bid for Lease No. 590:1895. The Invitation to Bid in that case, which was issued by Respondent and named Ms. Treml as the contact person, provided that the proposed office space must be located within the following boundaries: Beginning at the intersection of US 17-92 and Colonial Drive, then west on Colonial Drive to the intersection of Edgewater Drive, then north on Edgewater Drive to the intersection of Kennedy Blvd. . ., then east on Kennedy Blvd. . . . to the intersection of US 17-92, then south on US 17- 92 to the point of beginning."

    
    

11. Although Mr. Boyle's client was not awarded Lease NO. 590:1895 for reasons not relevant here, his client's bid, as well as the bid of another unsuccessful bidder owning a building on the east side of the highway serving as the east boundary of the geographic area, were considered responsive and thus within the specified geographic area.

    
    

12. Ms. Treml interpreted the boundary description in Lease NO. 590:1944 differently from the boundary description in Lease NO. 590:1895. The description for Lease NO. 590:1895 defined the boundaries by "beginning" at a certain intersection, then proceeding "on" a highway, and so on. The description for Lease NO. 590:1944 defined the boundaries by identifying landmarks "on the north," then the "east," and so on.

    
    

13. At the time of assisting in the preparation of Petitioner's bid, Mr. Boyle was also aware of an Invitation to Bid issued by Respondent for Lease NO. 590:1875. In this case, Respondent specified office space "in the following area of Brevard County, Florida: Beginning at the intersection of U.S. Highway

    1 and State Road 50, then West on SR-50 to the intersection of 1-95, then North on 1-95 to the intersection of SR-406 . . . then East on SR-406 to the intersection of U.S. 1, then South on U.S. 1 to the point of beginning."

    
    

14. In the case of Lease NO. 590:1875, the bid contact person, Lynn Mobley, issued a clarification letter stating that any building located on either side of the boundary road with an address on the boundary road would be

    considered to be within the boundary. Ms. Mobley and her supervisor, Ernest Wilson, who are Respondent's District 7 Facilities Services Assistant Manager and Manager, respectively, have consistently advised potential bidders that a building located on a boundary highway is included in the geographic area even though it would be outside the area if the dividing line were the centerline of the highway.

    
    

15. Mary Goodman, Chief, Bureau of Property Management of the Department of General Services, testified that, in the course of her review of leasing activities by various state agencies, she has historically guided agencies that, if a building abuts a boundary highway but is not, strictly speaking, within it, the agency "could waive that as a minor technicality and consider it a responsive bid." Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner spoke to Ms. Goodman prior to submitting the subject bid proposal.

    
    

16. Ms. Treml customarily waives minor irregularities in bid submittals. However, she does not treat the location of a building outside the geographic area as a minor irregularity. To do so would be unfair to owners of other buildings outside the geographic area who took the geographic description at its face value and never submitted bids.

    
    

17. Ms. Doyle received the bid materials from Mr. Boyle after the Pre-Bid Conference had taken place. However, Mr. Boyle elected not to attend the Pre- Bid Conference at which Ms. Treml explained, among other things, her interpretation of the specific geographic area. He chose not to attend because he felt that he would not learn anything relevant at the conference, which was attended by a representative of Intervenor. Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner contacted Ms. Treml prior to submitting Petitioner's bid.

    
    

18. Mr. Boyle, whose compensation in this case is entirely contingent upon a successful bid, estimates that he spent about 20 hours working on Petitioner's bid. Ms. Doyle estimates that she spent about 40 hours working on the bid. Petitioner also spent $800 in obtaining an "as-built" drawing of the space that accompanied its proposal.

    
    

19. By letter dated February 22, 1988, Respondent notified the bidders of its decision to award the lease contract to Intervenor. Petitioner filed a notice of intent to protest the award by letter dated February 24, 1988. Ms. Treml met Mr. Boyle and Ms. Doyle on March 1, 1988, and cited the location of Petitioner's building as the only reason for the determination of nonresponsiveness. The attempt at mediation having failed, Petitioner filed a formal written protest of the award by letter dated March 3, 1988.

    
    

20. Petitioner attached to its bid proposal an "as-built" drawing. Although drawn to scale, the drawing did not bear the measurements of the then- present interior tenant improvements, mostly walls, nor did it disclose on its face any calculations showing how the rentable area was computed from the gross area. These omissions were due to Mr. Boyle's advice to Ms. Doyle that such information would be unnecessary in this case.

    
    

21. The omissions from Petitioner's "as-built" drawing were rendered less critical by the fact that Respondent would have the right under the lease to require the landlord, at its expense, to remove the present improvements and re- configure the space to Respondent's demands. However, one purpose of the floorplan is to show where the space is located within the building. Another purpose is to verify the rentable area calculation by showing the measurements

    of items, such as restrooms, that should not be included in the rentable area for which Respondent is charged rent. The drawing is supposed to show the rentable area computation. Additionally, even though Respondent could insist on a total renovation of the premises, Respondent might wish to evaluate whether it could use a portion of the existing space in order to reduce the possibility of construction delays.

    
    

22. George A. Smith, the Senior Management Analyst for Respondent who reviewed Ms. Treml's determination of nonresponsiveness prior to the award of the subject lease, testified that the deficiencies in Petitioner's "as-built" drawing were not a "minor irregularity."

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties. Section120.57(1), Florida Statutes.

    
    

24. Petitioner's protest was timely filed. Section 120.53(5)(b), Florida Statutes, and Rule 10-13.011(1), Florida Administrative Code, provide that the

    72 hour period commences upon the receipt of notice of the agency decision. In the present case, the agency decision of which Petitioner complains is the decision not to consider buildings on both sides of the boundary highway as within the boundary. This decision was first communicated in an indisputably unequivocal way at the Pre-Bid Conference. However, at that time, Respondent did not provide Petitioner with notice of the "decision," as required by Section 120.53(5)(a), or the statutorily required warning that the failure to file a timely protest waived Chapter 120 proceedings. Respondent's first communication with Petitioner in compliance with these statutory requirements was when it informed Petitioner of the award to Intervenor. Respondent's Motion to Dismiss is therefore denied.

    
    

25. As required by law, Respondent duly solicited bid proposals for Lease NO. 590:1944. Section 255.25(3)(a), Florida Statutes, and Rule 13M-1.015, Florida Administrative Code. Rule 13M-1.015(3)(c)(2) provides that the prospective lessor must agree to "[p]rovide a scaled floor plan showing present configurations and measurements that equate to net rentable square footage offered."

    
    

26. The key question in this case is whether Respondent is estopped from interpreting the geographic' description in the Invitation to Bid for Lease No. 59O:1944 so as to exclude Petitioner's building on the east side of the east boundary highway.

    
    

27. Estoppel may be applied against the state only in exceptional circumstances when the following elements are shown: 1) a representation as to a material fact that is contrary to a later-asserted position; 2) reliance on that representation; and 3) a change in position detrimental to Petitioner caused by the representation and its reliance thereon. See, e.q., Tri-State Systems, Inc. v. Department of Transportation, 500 So.2d 212 (Fla. 1st DCA 1986)

    
    

28. Although unstated in recent decisions regarding estoppel, the reliance must also be justified. See, e.q., Greenhut Construction Company, Inc. v. Knott, 247 So.2d 517, 524 (Fla. 1st DCA 1971).

    
    

29. Ms. Treml's interpretations of geographic areas constitute representations of a material fact, but the interpretation of the language describing the geographic area in Lease NO. 590:1895 is not contrary to the

    interpretation of the language describing the geographic area in Lease NO. 590:1944. The highways used as boundaries in the present case are used as one would use a county line, section line, or voting precinct line to describe an area. If the boundary on the east were a county line, section line, or precinct line, the result would be clear, just as it is when the boundary happens to be a highway. What is east of the boundary is outside, not within, the geographic area.

    
    

30. The highways used as boundaries in Lease NO. 590:1895 are described in a way as to suggest that one would be driving an automobile along them. One begins at an intersection and proceeds north "on" the highway to another intersection and so on. It is more reasonable to treat properties on both sides of the highway as included in a geographic area described in this manner. In this light, the boundary interpretation offered by Ms. Mobley and Mr. Wilson, at least with respect to Lease No. 590:1875 whose language they identified, is not inconsistent with that of Ms. Treml in the present case.

    
    

31. However, the boundary interpretation of Ms. Goodman is irrelevant. There is no evidence in the record that Ms. Goodman communicated with any representative of Petitioner until after the bid proposal had been determined to be nonresponsive. Ms. Goodman's inter-agency communications do not provide the basis for an estoppel claim. Fiorentino v. Department of Administration, 463 So.2d 338, 341 (Fla. 1st DCA 1985).

    
    

32. In addition, Petitioner cannot satisfy the requirement of justifiable reliance on the representations of Mr. Wilson and Ms. Mobley. The Invitation to Bid in this case clearly informed potential bidders that Ms. Treml was the contact person. Barring exceptional circumstances, such as Ms. Treml's unavailability, reliance upon the boundary interpretation offered by Ms. Mobley or Mr. Wilson in this or an unrelated bid case is inherently unreasonable.

    
    

33. Even if Ms. Treml's two interpretations were inconsistent, Petitioner's reliance upon Ms. Treml's earlier interpretation of the geographic area would have been unjustified. In such were the case, it would appear that Ms. Treml erred in her interpretation of the boundary language in Lease NO. 590:1895, which language less readily suggests Ms. Treml's interpretation than does the boundary language in Lease NO. 590:1944. However, estoppel may not be predicated upon an earlier error by omission, such as Ms. Treml's failure to determine that two bids were nonresponsive. Lawrence Nali Construction Company, Inc. v. Department of Revenue, 366 So.2d 27, 29 (Fla. 1st DCA 1988).

    
    

34. Moreover, the facts of the present case make Petitioner's reliance on Ms. Treml's earlier interpretation unjustified. A literal reading of the present geographic description excludes Petitioner's building. Notwithstanding the importance of this fact, Petitioner's representative chose not to attend the Pre-Bid Conference at which Ms. Treml explained that the centerline of the boundary highways constituted the effective boundary. Petitioner's representatives chose not even to telephone Ms. Treml to confirm their understanding that the boundary description would not be interpreted literally. On top of all this, Ms. Treml's explanation for not waiving this requirement is compelling: if another potential bidder reads the boundary description literally so as to exclude its building on, say, the north side of the north highway boundary, and thus does not bother to bid, it is manifestly unfair to that property owner to waive the geographic requirement for another similarly situated property owner that proceeds to submit a bid anyway.

35. Petitioner also fails to satisfy the requirement that it changed its position to its detriment. Mr. Boyle and Ms. Doyle expend considerable efforts in marketing rental property and obviously cannot be successful in all of their efforts. The expenditure of several hundred dollars for the "as-built" drawing does not satisfy this requirement either. In Greenhut Construction Company, Inc. v. Knott, supra, the court held that a contractor had not shown a sufficient change in position even though it had, in reliance upon misinformation that it had received, prepared and submitted a bid proposal on a

    $10 million dollar contract. The court added that, in any event, the frustrated bidder could not have done anything to prevent its disqualification between the date of the misrepresentation and the date that the bidding was closed--a fact also true in the present case. 247 So.2d at 524.

    
    

36. Petitioner urges that Respondent has created "incipient policy" as a result of its past interpretations of bid boundary language. If so, it would follow that Petitioner would be entitled to a hearing under Section 120.57, at which Respondent would have to defend its policy and provide a basis for it. See, e.q., International Medical Centers H.M.O. v. Department of Health and Rehabilitative Services, 417 So.2d 734 (Fla. 1st DCA 1982). These requirements have been satisfied.

    
    

37. No issue has been raised as to whether Respondent may properly have drawn the boundary down the centerline of Semoran Boulevard. Rather, the question is whether the subject boundary language effectively achieved this objective. Respondent has adequately defended its interpretation of the two types of boundary language for the reasons set forth above, especially in Paragraph 7 of the Conclusions of Law. Respondent's determination that the location of Petitioner's building was not a minor irregularity was entirely proper based on Ms. Treml's explanation. See, e.g., Harry Pepper & Assoc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977).

    
    

38. Petitioner's bid was also nonresponsive for its failure to provide a floorplan showing the measurements of existing interior improvements and the calculations by which the rentable area was measured. Without such information, it was difficult to locate precisely where Petitioner proposed to locate Respondent in the space depicted in the "as-built" drawing that accompanied Petitioner's bid submittal, although with some calculations it would appear that Respondent would occupy all, or nearly all, of the floor shown. More importantly, Respondent could not quickly check Petitioner's rentable area calculations.

    
    

39. Petitioner's claim of surprise as to the floorplan issue must be rejected. The expedited nature of a bid protest proceeding prevents expansive framing of the issues through elaborate pleading. In essence, Petitioner protested the decision of Respondent to award the lease to Intervenor.

    
    

40. In its Prehearing Statement, Respondent outlined its position that Petitioner's bid was deficient in that certain mandatory items were not submitted. In the Prehearing Statement of Intervenor The Koger Company, Intervenor stated the issue of fact as whether Petitioner's bid submittal was nonresponsive in any respect. Recognizing that time did not permit service of any of the prehearing compliances until the morning of the hearing, Petitioner was nevertheless adequately notified that the responsiveness of its bid submittal would be litigated.

    
    

41. However, it is not clear that Respondent's failure to provide the proper floorplan was such a material variance that it could not and should not

have been waived. Under the circumstances, it is not necessary to reach this issue.

Based on the foregoing, it is hereby

RECOMMENDED that a Final Order be entered denying Petitioner's bid protest. DONE AND ORDERED this 2nd day of April, 1988, in Tallahassee, Florida.

ROBERT E. MEALE

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 2nd day of April, 1988.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-1327BID

Treatment Accorded Petitioner's Proposed Findings

1, 3-4, and 6-8: Adopted, except that the geographic area in Paragraph 1 adds two extra commas on the third line.

2: Adopted in substance.

5 and 9-12: Rejected as unnecessary.

13: First two sentences: rejected as legal argument. Third sentence: rejected as unsupported by the evidence. Fourth and fifth sentences: adopted. Sixth sentence: rejected as legal argument. Seventh and eighth sentences: rejected as unsupported by the evidence.

14 (first paragraph): Adopted.

14 (second paragraph): Rejected as unsupported by the evidence, except that the first sentence is adopted and the second is adopted in substance.

Treatment Accorded Respondent's Proposed Findings

1: Rejected as unsupported by the evidence and unnecessary. 2-3 and 5-6: Adopted.

4 and 7: Rejected as unnecessary.

8-9: Adopted, except that the second sentence of Paragraph 8 is rejected as legal argument.

10-11 and 14-18: Rejected as unnecessary.

12-13: Adopted.

19-22 and 26: Adopted, except that the third sentence of Paragraph 20 is unsupported by the evidence.

23-25: Adopted in substance. 27: Rejected as legal argument. 28-29: Adopted-in substance.

30-33: Rejected as unnecessary. 34-35 and 39: Adopted.

36-38: Adopted in substance.

COPIES FURNISHED:

Usher L. Brown, Esquire Litchfield, Christopher

& Milbrath, P.A.

One South Orange Avenue Suite 500

Orlando, Florida 32801

Robert L. Powell, Sr., Esquire Assistant General Counsel Department of Health and Rehabilitative Services

1323 Winewood Boulevard Building One

Room 407

Tallahassee, Florida 32399-0700

Stephen D. Lobrano, Esquire Lobrano & Kincaid, P.A. Suite 810

121 West Forsyth Street Jacksonville, Florida 32202

John Miller General Counsel

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Gregory L. Coler Secretary

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Sam Power Clerk

Department of Health and Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Docket for Case No: 88-001327BID

Orders for Case No: 88-001327BID