STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
NORTHROP BUILDING PARTNERSHIP, )
)
Petitioner, )
)
vs. ) CASE NO. 88-4079BID
)
DEPARTMENT OF CORRECTIONS, )
)
Respondent. )
)
RECOMMENDED ORDER
This matter came on for hearing in Milton, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on October 12, 1988. The parties were represented as follows:
For Petitioner: T. A. Leonard, Esquire
LINDSEY, ANDREWS & LEONARD, P.A.
124 Willing Street, Southeast Milton, Florida 32570
For Respondent: Drucilla E. Bell, Esquire
Florida Department of Corrections 1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
The Issue addressed in this proceeding is whether Petitioner submitted the lowest and best bid for lease number 700:0378.
At the hearing, Petitioner called two witnesses and introduced seven exhibits. Respondent called two witnesses and introduced the deposition testimony of Mary V. Goodman.
Petitioner and Respondent filed their proposed recommended orders on November 18, 1988, and November 7, 1988, respectively. Petitioner's and Respondent's proposed findings of fact have been considered and utilized in the preparation of this Recommended Order except where such proposals were not supported by the weight of the evidence or were immaterial, cumulative or subordinate. Specific rulings on the Petitioner's and Respondent's proposed findings of fact are contained in the Appendix to this Recommended Order.
FINDINGS OF FACT
Prior to April 1987, the Department of Corrections (DOC) determined that it needed 2,300 square feet of office space for its parole and probation office in Santa Rosa County, Milton, Florida. Since the desired square footage of the office was more than 2,000 square feet, DOC was required to seek competitive bids for the proposed office. Towards that end, Wendell Beall, Region I Budget Manager for the Department, prepared a Request for Proposal and Bid Proposal Submittal Form package on lease number 700:0378. This package
contained various specifications for the type building DOC wished to lease, as well as weighted, bid evaluation criteria and the numerical points given to each of those criteria. The desired initial term of the lease was five years with an option to renew the lease at the end of the primary term for three years.
On April 2, 1987, DOC held a pre-proposal conference for lease number 700:0378 in the Probation and Parole Office in Milton, Florida. The purpose of the meeting was to hand out the Request for Proposal and Bid Proposal Submittal Form package and to answer any questions interested parties may have regarding the bid and bid package. Both Petitioner and Jay Mortgage Co. (the ultimate successful bidder) were present through their representatives.
At the pre-proposal conference, the area within which the leased premises must be located was questioned. Specification A.3 defined the area for the leased premises by referring to a map of Santa Rosa County. Normally, such a map would have the acceptable area delineated by a circle or a boundary line drawn on the map. No such delineation was on the Santa Rosa map. Therefore, a more precise definition of the mandatory acceptable area was sought by the potential bidders. Mr. Beall explained that the meaning to be attributed to specification A.3 was that any building within five to ten minutes of the courthouse would be acceptable, i.e., responsive. At this time, no mention of the relative points to be given a location closer to the Courthouse vis. a location farther away was discussed. The enumerated bid evaluation criteria allowed ten points for "location as to clients served" and zero points for "location as to other Department activities."
Also at the preproposal conference Mr. Beall reminded those present of the importance of complying with the handicapped requirements. Handicap compliance was stressed because the present landlord could not meet those requirements. He also cautioned all bidders to initial all applicable spaces on the bid submittal form. He further explained that the weighted evaluation criteria in the bid submittal form were the means of ranking the proposals on a point system for purposes of comparison of the respective bids to be submitted. Mr. Beall described the ranking system he preferred as an example of how the individual bid committee members might evaluate the bids. That system was to take the total number of points for a given evaluation criteria, divide by the number of proposals submitted to yield the deduction to be given a building of lesser quality under that criteria. The bids submitted were to be reviewed and graded by a lease committee. The lease committee was not bound by Mr. Beall's preference in awarding or deducting points under a given bid criteria. The individual members could develop their own ranking system based on their best judgment.
On April 16, 1987, three bids were received by DOC. The bids were opened at the Probation and Parole Office in Milton, Florida. At that time, Mr. Beall checked the last page of each of the three bids timely submitted, read the first year rental rate per square foot, checked for the bidder's signature and the required attachments on each. The bids were submitted by Jay Mortgage Co., the apparent low bidder, Northrup Building Partnership, the apparent second lowest bidder, and D & C Partners, the apparent third lowest bidder. Mr. Beall accepted the three bids and stated that they appeared to be in order and that he would present them to the lease committee who would then make the final award.
On May 14, 1987, the Region I lease committee met. The committee consisted of T. H. Young, Dura Williams, and W. E. Beall. Prior to said meeting, Wendell Beall reviewed all of the bids and transferred appropriate information to a Bid Synopsis sheet. On the synopsis sheet he proposed
preliminary point assignments for the three bids under the evaluation criteria set forth in the bid package. Further, Mr. Beall reflected on the synopsis sheet that Petitioner had failed to initial Specification A.12(a), acknowledging the requirement that the leased premises comply wish the State's requirements for Handicapped Facilities.
At the lease committee meeting, each of the bid packages were reviewed. The committee decided that the Petitioner's bid and the D & C Partners bid were non-responsive because of the bidders failure to acknowledge (initial) certain bid specifications. Beyond a rudimentary discussion of the rejected bids they were not considered further by the lease committee. The point awards proposed by Mr. Beall were not utilized. Only the Jay Mortgage bid was determined responsive by the committee. Jay Mortgage, therefore, was deemed to be the lowest and best responsive bid by default and was awarded the lease.
Petitioner's bid was found to be nonresponsive because Petitioner had inadvertently failed to initial Item A.12(a). The committee felt that Petitioner's failure to initial Specification A.12(a) was material and could not be waived as a non-material item even though some of the committee members were aware that Petitioner's proposed building already had handicap facilities in place at the time the members inspected Petitioner's property. The evidence demonstrated that it was the lack of the initials and not the actual compliance with the specification that the committee found material. The committee felt it could not look to outside evidence or promises of compliance from Petitioner.
However, the committee did accept such promises from Petitioner regarding the floor to ceiling walls which did not exist at the time of inspection, but were promised by Petitioner. It is difficult to see how the committee may look behind the bid proposal in one instance and refuse to look behind the bid proposal in another instance. Such inconsistency can be nothing but arbitrary on the part of DOC. This is especially true since the lack of initials was an oversight on Petitioner's part, and the absent floors and ceilings were promised but not present and the handicap facilities were a concrete reality.
Moreover, petitioner had initialed in no less than two other places in the bid package specifications requiring compliance with all federal and state requirements and any space requirements of DOC. 1/ The redundancy of the bid package in this regard renders the lack of initials on specification A.12(a) immaterial. In essence, the department was assured at least twice that continuing compliance with the State's handicap requirements would occur. To refuse to waive such a minor deficiency on these facts is arbitrary and capricious. Such an immaterial item should have been waived by DOC and the Petitioner's bid should have been considered and compared to the Jay Mortgage bid. Since the bids submitted by Petitioner and Jay Mortgage, Co., were not compared by the lease committee, but were challenged as to who submitted the lowest and best bid, that comparison is now ripe for decision in this de novo review of DOC's action.
The first relevant bid evaluation criterion deals with the comparative rental value for the initial term of the lease on the two bidders' properties, reduced to present value. Seventy points were awardable for this criteria. In this case, Petitioner was the lowest bidder on the initial lease term by 78 cents per square foot. The victory in the primary term was only achieved by Petitioner in the first three years of that term. In the last two years of the primary term, Jay Mortgage Co. was lower, but not by enough to offset Petitioner's lead. Petitioner was, therefore, lower by at least a minimal
amount and to that extent would be the better bid. The difference, however, should only be reflected in a minimum deduction of two points from Jay Mortgage Co. /2 The awarded points should, therefore, be seventy points for Petitioner and 68 points for Jay.
The second relevant criterion was the conformance of the building space to efficient utilization and layout. Two points were awarded for this criterion. Both bidders adequately met this criterion. Therefore, the maximum of two points should be awarded to each bidder.
The third relevant criterion was for street level parking space. Ten points were awardable under this criterion. In this instance, a minimum of fifteen off-street parking spaces were required by DOC. Both bidders met this minimum requirement. However, the evidence demonstrated that Petitioner offered considerably more parking space at its location. The evidence further demonstrated that DOC experienced periods when it conducted an unusual amount of business with its clients, requiring more parking than usual. In that respect, Petitioner offered the better property. However, the probation offices unusual requirements occurred about once a month for only two or three days. Therefore, a minimum difference of one point should be deducted from Jay Mortgage. The awarded points should, therefore, be ten points for Petitioner and nine points for Jay.
The fourth relevant criterion was the proximity of the lease site to the clients served by the parole and probation office. In this regard, the evidence clearly demonstrated that Petitioner had the better location for the county-wide area serviced by Petitioner. Respondent's main business was the supervision of probationers and community controllees. Most of this "service" is conducted by DOC at its office or county-wide in the field. Petitioner clearly has easier and better access to its location than the downtown location offered by Jay Mortgage, Co. Therefore, Petitioner's location would be far more proximate and convenient to the probation offices clients than would the downtown location offered by Jay Mortgage.
At the hearing, DOC felt that the preferential location under the fourth criterion was the location closest to the courthouse because some of the probation officer's work must be done at the courthouse and an officer may be summoned to the courthouse at any time by a judge. Therefore, a building within walking distance of the courthouse such as Jay Mortgage's building was more convenient for the probation office's personnel as compared to one which requires driving to the courthouse, such as Petitioner's building. The reasons given by DOC for their selection of Jay Mortgage under the fourth criterion at the hearing do not fall within a reasonable interpretation of "proximity to clients served by the Department." DOC's reasons would fall under another separate evaluation criterion. The criterion which would approximately cover DOC's reasons deal with the proximity of the offered space to the other activities of the Department. These "other" activities would include attendance at court for probation revocation hearings or for sentencing of offenders. "Convenience for the personnel" is relevant under these other activities and there is no question that "convenience for the office personnel" is a valid reason for distinguishing between bidders. However, the evaluation criterion which covers these reasons was assigned zero points. DOC cannot go outside its bid criteria. Therefore, no distinction can be made between the bids based on the above grounds.
The only points awardable are the ten points assigned under the fourth relevant criterion outlined in paragraph 14 above. DOC's reasons do not fall
within the fourth criterion. No other evidence was presented by Respondent to support a preference for Jay Mortgage Co. over Petitioner under the fourth criterion proximity to clients. Petitioner presented evidence which clearly demonstrated that it was the better bid under the fourth criterion. The difference between the bids is significant since client service is the DOC's main business. The only formula available for rating the value of the difference is Mr. Beall's. Therefore, utilizing Mr. Beall's methodology, the points awardable for the fourth relevant criterion should be ten points for Petitioner and seven points for Jay.
The fifth relevant criterion was for moving costs. No evidence was submitted by Petitioner or Respondent as to this criterion. Therefore, no conclusions can be drawn about the effect of such costs. No points should be awarded under this criteria.
The sixth relevant criterion dealt with the option period rental rate. Six points were awarded for this criterion. Jay Mortgage Co. was the lower of the two bids. The actual difference between the two bids was approximately 25 cents a square foot. That difference appears in the last year of the option term. 3/ In the first two years of the option term the bidders reflect the same rental rate. Since 25 cents is a minimal difference only a minimum deduction of one point should be made. 4/ Therefore, the points awardable for the sixth relevant criterion should be six points for Jay and five points for Petitioner.
The overall result would be as follows:
CRITERIA PETITIONER | JAY | MORTGAGE CO. |
1. Basement 70 | 68 | |
2. Space 2 | 2 | |
3. Parking 10 | 9 | |
4. Clients 10 | 7 | |
5. Moving Costs 0 | 0 | |
6. Option Rent 5 | 6 | |
TOTAL 97 | 92 |
As can be seen from the above table, Petitioner submitted the lowest and best responsive bid under a consideration of all the weighted evaluation criteria established by DOC. Petitioner should, therefore, be awarded the bid.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sections 120.53 and 120.57(1), Florida Statutes.
Pursuant to Section 255.249, Florida Statutes, and Chapter 13M-1, Florida Administrative Code, DOC is required to utilize the competitive bidding process for leased space of 2,000 square feet or more in privately owned buildings. DOC was clearly required to utilize the competitive bidding process for Bid No. 700:0378 since the bid specification required a minimum of 2,300 square feet.
In Hotel China and Glassware Co. v. Board of Public Instruction of Alachua County, 130 So.2d 78 (Fla. 1st DCA 1961) , the First District Court of Appeal explained the benefits and obligations in the use of the competitive bidding system in Florida as follows:
The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer and is guaranteed the contract if his is the lowest and best bid received. The principal benefit flowing to the public authority is the opportunity
of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference.
See, also Department of Transportation v. Grove-Watkins Constructors,
13 FLW 462 (Fla. August 19, 1988) and Liberty County v. Baxter's Asphalt & Concrete, Inc., 1421 So.2d 505 (Fla. 1981)
Part of the reciprocity achieved under the competitive bidding process is achieved in the bid specifications and weighted bid evaluation criteria. Potential bidders are advised in advance of the requirements to be met in order to receive the contract award, as well as the standards by which each bid will be evaluated by the agency and each standard's relative importance to the agency. In essence, this advance notice enables a potential bidder to gauge the agency's notions of the type bid best suited to its purpose for the money involved. A potential bidder can then determine whether he can meet the bid specifications and criteria and thereby determine whether he wishes to go to the time, expense and trouble of preparing and submitting a fairly lengthy and detailed bid proposal. Therefore, central to the integrity and reciprocity of the competitive bidding process is the requirement that an agency's action on a bid be expressed within the bid specifications and evaluation criteria which it created. In other words, should an agency reject a bid for reasons not given weight in the bid evaluation criteria, that action would go to the integrity of the competitive bidding process and would be arbitrary and capricious. Grove- Watkins, supra.
There is sufficient evidence before the Hearing Officer to conclude that the rejection of Petitioner's bid as nonresponsive was arbitrary and capricious. DOC without reason failed to consistently review the bids and also without reason failed to waive a very minor and immaterial technical requirement. This action was arbitrary and capricious. The result was that no real review of the bids was conducted by DOC's lease committee. However DOC's action on this lease was challenged. A hearing was held on the issue of whether Petitioner had submitted the lowest and best bid. The evidence clearly demonstrated that Petitioner submitted the lowest and best bid. The primary reason given by Respondent for preferring Jay Mortgage Co.'s bid over Petitioner's bid was not given any weight under the bid evaluation criteria. Therefore, those reasons may not be utilized by DOC in evaluating and weighing the bids. To do so would be an arbitrary and capricious act on the part of DOC.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:
That Petitioner be awarded the lease contract as the lowest and best responsive bid.
DONE and ORDERED this 21st day of December 1988, in Tallahassee, Florida.
DIANE CLEAVINGER
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 21st day of December 1988.
ENDNOTES
1/ The space requirements contained in the bid package referred specifically to the state handicap requirements.
2/ The actual percentage difference in the rental value is approximately 2.06 percent. 2.06 percent of seventy points is approximately two points, following the usual rounding off rules.
3/ Jay Mortgage Co. actually appears to be higher, but in actuality is lower because Jay Mortgage Co. offered more square footage. However, no clear evidence was presented as to the net square footage of either building.
Therefore, only the total square footage figures as established by Mr. Beall are being used.
4/ 25 cents is approximately 2.31 percent of the average rental value. 2.31% of six points is approximately 1/10 of a point, yielding a minimum deduction of one point.
APPENDIX
CASE NO. 88-4079BID
The facts contained in paragraphs 1, 4, 5, 6, 7 and 10 of Petitioner's Proposed Finding of Fact are adopted in substance, in so far as material.
The facts contained in paragraphs 2 and 3 of Petitioner's Proposed Findings of Fact are subordinate.
The facts contained in paragraph 8 of Petitioner's Proposed Findings of Fact were not shown by the evidence.
The facts contained in paragraph 9 of Petitioner's Proposed Findings of Fact are irrelevant.
The facts contained in paragraphs 1, 2, 4, 5 and 6 of
Respondent's Proposed Findings of Fact are adopted in substance, in so far as material.
The facts contained in paragraph 3 of Respondent's Proposed Findings of Fact were not shown by the evidence except for the duties of the probation officers and the convenience of being close to the courthouse for those officers.
The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact are adopted except those relating the materiality of the initials.
The facts contained in paragraph 8 of Respondent's Proposed Findings of Fact are rejected.
The facts contained in paragraphs 9 and 10 (misnumbered 8 and 9) of Respondent's Proposed Findings of Fact are subordinate.
COPIES FURNISHED:
T. A. Leonard, Esquire
LINDSEY, ANDREWS & LEONARD, P.A.
124 Willing Street, S.E. Milton, Florida 32570
Drucilla E. Bell, Esquire Florida Department of
Corrections
1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
Richard Dugger, Secretary Florida Department of
Corrections
1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
Louis A. Vargas, Esquire General Counsel
Florida Department of Correct ions
1311 Winewood Boulevard
Tallahassee, Florida 32399-2500
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA DEPARTMENT OF CORRECTIONS
NORTHROP BUILDING PARTNERSHIP,
Petitioner,
vs. DC Case No. 89-04
DOAH Case No. 88-4079BID
DEPARTMENT OF CORRECTIONS,
Respondent.
/
FINAL ORDER
This matter came before the Secretary of the Department of Corrections, pursuant to s. 120.59, F.S., on March 20, 1989, in Tallahassee, Florida, for consideration of a Motion to Intervene filed by Jay Mortgage Company and the Recommended Order from the Division of Administrative Hearings entered on December 26, 1988 (Attached as Exhibit A), and exceptions filed thereto by Department of Corrections (Attached as Exhibit B). Based upon the Department's review of the case, it is hereby ordered that:
The Motion to Intervene is denied. Pursuant to Rule 28-5.111, F.A.C., the motion is untimely and furthermore, by its own admission, Jay Mortgage Company knew two weeks before the Final Hearing that this matter was to be heard, was present at the hearing and failed to request intervention at that time.
The Department adopts and incorporates in this Order Findings of Fact Numbers 1 through 7, except that the lease number is modified to lease number 700:0379.
Finding of Fact No. 8 is modified to show that the committee members had only checked the building to make sure that it was dry and measurable. The record contained no competent substantial evidence that the committee members had inspected and verified that the building met the handicapped requirements, as required of the agency by Section 255.21, Florida Statutes.
The Department modifies Finding of Fact No. 9 to reflect that the committee accepted Petitioner's promise regarding the floor to ceiling walls because that provision of the bid specifications was individually initialed. The record does not contain any competent substantial evidence that the Department had verified that the handicapped requirements were satisfied, as required by Section 255.21, Florida Statutes, and furthermore, Item A.12(a) was not initialed by Petitioner, to indicate his promise of existing and continuing compliance. The only inspection of Petitioner's premises was to determine that the space was "dry and measurable" as required by the bid specifications. The Department rejects the conclusion that its actions were arbitrary.
The Department adopts and incorporates into this Order Finding of Fact No. 10 although whether the Department acted arbitrarily or capriciously is more appropriately a conclusion of law. The hearing officer's finding of Petitioner's bid to be responsive is accepted and incorporated herein.
The Department adopts and incorporates in this Order the Findings of Fact No. 11 and 12.
The Department adopts and incorporates in this Order the Finding of Fact No. 13 in that the point award would also reflect the accessibility by probationers from all over the area to the office location.
The Department adopts and incorporates in this Order Findings of Fact Nos. 14, 15 and 16.
The Department adopts and incorporates in this Order Findings of Fact Nos. 17, 18 and 19.
The Department adopts and incorporates in this Order Finding of Fact No. 20 and awards the bid to Petitioner.
The Department adopts and incorporates in this Order the Conclusions of Law set out in paragraphs 1-5.
The Department specifically rejects the Conclusions of Law contained in paragraph 6. The rejection of Petitioner's bid was not shown to be arbitrary and capricious. The Department did not waive Petitioner's failure to initial the handicapped requirement, based on advice from the author of the bid documents in the Department of General Services, where such failure was not felt to be immaterial and minor. The primary reason for preferring Jay Mortgage Co. was inadvertently assigned zero points in the bid evaluation criteria.
The Recommendation of the Hearing Officer is accepted and the lease contract is awarded to Petitioner.
RULING ON EXCEPTIONS TO RECOMMENDED ORDER BY RESPONDENT DEPARTMENT
Respondent's first exception to the Findings of Fact is accepted and incorporated in paragraph No. 2.
Respondent's second exception to the Findings of Fact is also accepted in part and incorporated in paragraph No. 3.
Respondent's third exception to the Findings of Fact is accepted and incorporated in paragraph No. 4.
Respondents's fourth exception to the Findings of Fact is rejected because the hearing officer's finding of fact is supported by competent substantial evidence.
Respondent's remaining exceptions to the Findings of Fact are rejected.
Respondent's ninth exception to the Conclusions of Law is accepted in part as incorporated in paragraph No. 12. The rest of the exception is rejected.
DONE AND ORDERED at Tallahassee, Leon County, Florida, this 20th day of March, 1989.
Richard L. Dugger, Secretary Department of Corrections 1311 Winewood Blvd.
Tallahassee, Florida
A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL REVIEW WHICH SHALL BE INSTITUTED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF DEPARTMENT OF CORRECTIONS, AND A SECOND COPY ALONG WITH FILING FEE AS PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE AGENCY MAINTAINS ITS HEADQUARTERS OR WHERE A PARTY RESIDES. REVIEW PROCEEDINGS SHALL BE CONDUCTED IN ACCORDANCE WITH THE FLORIDA APPELLATE RULES.
Filed with the Clerk of the Department of Corrections this 20th day of March, 1989.
NONA BROWN, Clerk
COPIES FURNISHED TO:
T. A. Leonard, Esquire
LINDSEY, ANDREWS & LEONARD, P.A.
124 Willing Street, S. E. Milton, Florida 32570
Drucilla E. Bell, Esquire Department of Corrections 1311 Winewood Blvd.
Tallahassee, Florida 32399-2500
James H. Reddick, Esq.p GARRETSON & REDDICK, P.A.
1101 Gulf Breeze Pkwy. Gulf Breeze, Florida 32561
| Issue Date | Proceedings |
|---|---|
| Dec. 22, 1988 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Mar. 20, 1989 | Agency Final Order | |
| Dec. 22, 1988 | Recommended Order | DOC's reason for rejecting Petitioner's bid was not weighted under evalua- tion criteria. DOC's award of bid was arbitrary/capricious. |
