STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PROFESSIONAL PAINTING )

SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-5745B1D

) DEPARTMENT OF GENERAL SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice a formal hearing was held in this case before Larry J. Sartin, a duly designated Hearing Officer of the Division of Administrative Hearings, on December 6, 1988, in Tallahassee, Florida.

APPEARANCES

For Petitioner: John A. Tennant

Professional Services, Inc. Post Office Box 20803 Tallahassee, Florida 32316

For Respondent: Robert D. Stinson, Esquire

Office of General Counsel Department of General Services Room 452, Larson Building

200 East Gaines Street Tallahassee, Florida 32399-0955

INTRODUCTION

The Respondent, the Department of General Services (hereinafter referred to as the "Department"), issued an Invitation to Bid, Bid No. DGS 88/89-027, titled "Exterior Repairs & Painting/Elliot Building/Tallahassee, FL." After evaluating bid responses to this Invitation to Bid the Department proposed to award the contract to General Maintenance Corporation of Northwest Florida, Inc., and to deny the bid of the Petitioner, Professional Painting Services, Inc. The Petitioner challenged the proposed award of the contract and the Department's rejection of its bid.

At the formal hearing the Petitioner presented the testimony of John A. Tennant. The Petitioner also offered seven exhibits. Petitioner's exhibit's 1 and 4-6 were accepted into evidence. Petitioner's exhibit 7 was rejected. A ruling was reserved on Petitioner's exhibits 2 and 3. Exhibit 2 is hereby accepted. Exhibit 3 is hereby rejected.

The Department presented the testimony of Carolyn Johnson and George Banks.

Mr. Banks was accepted as an expert in purchasing. The Department also

presented the deposition testimony of Jerry Lauzon and John A. Tennant. The deposition of Jerry Lauzon was marked as DGS exhibit 1 and the deposition of John A. Tennant was marked as DGS exhibit 9. The depositions and DGS exhibits 2-8 were accepted Into evidence.

The parties have filed proposed recommended orders containing proposed findings of fact. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order or the proposed finding of fact has been accepted or rejected in the Appendix which is attached hereto.

ISSUE

Whether the bid response of the Petitioner and/or the bid response of General Maintenance Corporation of Northwest Florida, Inc., was responsive to Invitation to Bid No. 88/89-027?

FINDINGS OF FACT

1. The Department issued Invitation to Bid No. DGS 88/89-027, titled "Exterior Repairs & Painting/Elliot Building/Tallahassee, Fl." (hereinafter referred to as the on September 9, 1988.

   
   

2. No challenge to the specifications contained in the ITB was filed.

   
   

3. Bids in response to the ITB were filed by the Petitioner, Professional Painting Services, Inc., and by General Maintenance Corporation of Northwest Florida, Inc. (hereinafter referred to as "General"), and others.

   
   

4. When a bid response is received by the Department it stamps the time and date of receipt on the bid response. The time and date are used to determine whether a bid has been filed within the time specified in an invitation to bid. The time that a bid response is opened does not determine whether the bid response was filed within the time specified in an Invitation to bid.

   
   

5. The bid responses in this case were to be opened at 2:00 p.m., October 26, 1988. Therefore, bid responses were required to be received by the Department before that time.

   
   

6. The bid responses of the Petitioner and General were received by the Department before 2:00 p.m., October 26, 1988.

   
   

7. The envelope in which the bid response filed by General was filed identified the Department and the Department's address, the title of the bid, the date the bid responses were to be opened and the time of the opening. The number of the ITB was not included on the envelope in which General's bid response was filed.

   
   

8. Bid responses are generally filed by the Department by bid number, title and date. The bid responses to the ITB were filed in this manner.

   
   

9. The Department does not consider the failure to include the number of a bid on a bid response to affect the responsiveness of the bid response.

   
   

10. The bid response of General was misfiled by the Department.

11 The bid responses were opened by the Department on October 26, 1988, at 2:00 p.m. The bid response of General was not opened, however, because the Department had misfiled General's bid response.

1. General's bid response was discovered later in the day on October 26, 1988. It was then opened by the Department.

   
   

2. The Petitioner was notified by telephone that General's bid response had been misfiled and that it had been opened after the Department discovered its mistake.

   
   

3. The winner of the bid on the ITB was not determined at the time when the bid responses were opened. The bid responses were evaluated first to determine who the winner was.

   
   

4. The failure of the Department to open General's bid at 2:00 p.m. did not have any affect on the price bid by General. General was not able to modify or supplement its bid response as a result of the Department's error.

   
   

5. Based upon the Department's evaluation of the bid responses it received on the ITB, the Department rejected the Petitioner's response as nonresponsive. The Petitioner's response was determined to be nonresponsive because the Petitioner had not submitted proof of automobile insurance as required by the ITB.

   
   

6. Bidders were informed that General was the intended awardee of the ITB on November 2, 1988, by posting of a bid tabulation sheet.

   
   

7. The ITB provided the following with regard to certain information to be provided concerning insurance (hereinafter referred to as the "Insurance Requirements"):

   
   

   NOTE

   
   

   BIDDER MUST SUBMIT WITH BID PACKAGE EVIDENCE OF THE FOLLOWING INSURANCE IN EFFECT, EQUAL TO OR EXCEEDING THE LIMITS REQUIRED BY THE BIDDING DOCUMENTS.

   PROOF OF INSURANCE TO BE ON STANDARD ACCORD FORM, AND IN THE CANCELLATION CLAUSE THE WORD ENDEAVOR MUST BE CHANGED TO SHALL:

   
   

   WORKER'S COMPENSATION INSURANCE

   
   

   CONTRACTOR'S COMPREHENSIVE GENERAL LIABILITY COVERAGES, BODILY INJURY AND PROPERTY DAMAGE

   
   

   $300,000.00 Each Occurrence, Combined Single Limit

   AUTOMOBILE LIABILITY COVERAGES, BODILY INJURY AND PROPERTY DAMAGE

   
   

   $100,000.00 Each Occurrence Combined Single Limit

   
   

   PLEASE READY [sic] CAREFULLY AND MAKE SURE TO COMPLY WITH ALL THE INSURANCE REQUIREMENTS OF BID DOCUMENTS.

   
   

   FAILURE TO COMPLY WITH THESE BID REQUIREMENTS WILL BE CAUSE FOR REJECTION OF YOUR BID.

   
   

8. The Petitioner's bid response did not include proof of automobile insurance as specified in the Insurance Requirements.

   
   

9. Subsequent to the date the bid was awarded, the Petitioner has attempted to provide proof of automobile insurance as specified in the Insurance Requirements. The information provided from the Petitioner indicates that insurance coverage was effective beginning on November 21, 1988, after the bid was awarded. The Petitioner has not provided proof that insurance in compliance with the Insurance Requirement was in effect as of time bid responses were due.

   
   

10. The Department has rejected bid responses in other cases where bid responses did not comply with insurance requirements similar to the Insurance Requirements.

    
    

11. Failing to provide proof of required insurance can affect the price of a bid and can give one bidder an advantage not enjoyed by other bidders. For example, a bidder that does not have insurance can wait until the bid responses are opened and, if the bidder does not want its bid accepted, for whatever reason, the bidder can refuse to acquire the required insurance. Or, if a bidder determines that it should go forward with its bid response, it can provide proof of insurance or even acquire the insurance. The Department will not be able to verify when insurance was required with an independent source.

    
    

12. The ITB included an information questionnaire. Among other things not relevant to this proceeding, the information questionnaire requested the number of each bidder's current county occupational license number. The ITB did not require that a bidder have a current Leon County occupational license even though the job was to be performed in Leon County.

    
    

13. General did not include its current county occupational license on the information questionnaire submitted with its bid response.

    
    

14. The Department determined that General had a current county occupational license at the time it submitted its bid response by contacting the Okaloosa County Tax Collector's Office.

    
    

15. The Department considers the failure to list a current county occupational license number to be a minor irregularity because the Department can verify whether a bidder has a county occupational license by checking with a Tax Collector's Office, a public entity. The Department has not rejected other bid responses for omission of a current county occupational license number.

16. The ITB also required that the bid price submitted by any bidder was to be guaranteed for a period of sixty days.

    
    

17. The ITB allowed the winning contractor forty-five days after the date stipulated in the purchase order to complete the contract. No credit was authorized by the ITB for bidders who indicated they would complete the contract in less than forty-five days.

    
    

18. The Petitioner's bid response was not responsive to the ITB.

    
    

19. General's bid response was responsive to the ITB. CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has jurisdiction of the parties to and the subject matter of this proceeding. Section 120.57(1), Florida Statutes (1987).

    
    

21. Based upon the terms of the ITB involved in this proceeding, the Petitioner's bid response was not responsive. The ITB specifically requires that bid responses include evidence that the Insurance Requirements have been met. Bidders are warned that "[f]ailure to comply with [the insurance requirements] will be cause for rejection of your bid.

    
    

22. Section 120.53(5), Florida Statutes, and Rule 13A- 1.006, Florida Administrative Code, provide the manner in which bid specifications may be challenged. The Petitioner has provided no evidence that it challenged the bid specifications quoted in finding of fact 18. The Petitioner has, therefore, waived any right it may have had to challenge the Insurance Requirements. Section 120.53(5), Florida Statutes; and Capeletti Bros., Inc. v. Department of Transportation, 499 So. 2d 855 (Fla. 1st DCA 1986).

    
    

23. The Petitioner's failure to comply with the Insurance Requirements by the very terms of the ITB require that the Petitioner's bid response be rejected.

    
    

24. Subsequent to the proposed award of a contract pursuant to the ITB, the Petitioner attempted to comply with the Insurance Requirements by providing additional information. Rule 13A- 1.001(13), Florida Administrative Code, provides the following definition of a "valid bid/proposal":

    
    

    A responsive offer in full compliance with the invitation to bid . . . by a responsible person or firm. The responsiveness of a bid . . . shall be determined based on the documents submitted with the bid . . .

    
    

    In order for the Petitioner's bid response to be considered a valid bid pursuant to Rule 13A-1.001(13), Florida Administrative Code, the response was required to be "in full compliance with the invitation to bid" based upon the "documents submitted with the bid." Since the Petitioner's bid response was not in full compliance with the ITB based upon the documents it submitted with its bid response, the Petitioner's bid response was not a valid bid. Because the determination of whether a bid response is valid is based upon documentation provided at the time a bid response is tiled, the Petitioner's bid response cannot be made a valid bid by filing required documentation after the deadline

    for filing bid responses. This conclusion is consistent with Rule 13A- 1.002(11), Florida Administrative Code, which specifically prohibits the modification of a bid response once bid responses have been opened.

    
    

25. The rationale for not allowing modifications of bid responses was explained in Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190, 1192 (Fla. 2d DCA 1978):

    
    

    [I]t is apparent that the entire scheme of bidding on public projects is to insure the sanctity of the competitive atmosphere prior to and after the actual letting of the contract. In order to insure this desired competitiveness, a bidder cannot be permitted to change his bid after the bids have been opened, except to cure minor irregularities.

    
    

    See also, Saxon Business Products, Inc. v. Department of General Services, 4 FALR 1102-A (1982); Mercedes Lighting and Electrical Supply, Inc. v. Department of General Services, DOAH Case No. 88- 2211BID (June 28, 1988); and Tel Plus Florida, Inc. v. Department of General Services, DOAH Case No. 86-4701BID (May 6, 1987).

    
    

26. The Petitioner's failure to meet the Insurance Requirements is not a minor irregularity which can be cured after the bid responses were opened. Nor is the Petitioner's failure to comply an irregularity which can be waived by the Department. Rule 13A-1.002(10), Florida Administrative Code, provides the following with regard to minor irregularities:

    
    

    The agency shall reserve the right to waive any minor irregularities in an otherwise valid bid . . . . A minor irregularity is a variation from the invitation to bid . . . which does not affect the price of the bid . . . or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.

    Variations which are not minor cannot be waived.

    
    

    The court in Harry Pepper & Associates, discussed the waiver of minor irregularities:

    
    

    The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by other bidders.

    352 So. 2d at 1193.

    
    

27. The Petitioner's failure to meet the Insurance Requirements in this case is not a minor irregularity. The Petitioner's failure to meet the Insurance Requirements conceivably could have given it an unfair bidding advantage. If a bidder does not submit proof of insurance as required by an invitation to bid and is allowed to provide such proof after the bids are open, the bidder can decline to do so if the bidder determines that his or its bid is too low based upon the bids submitted by other bidders. Additionally, if a bidder decides to proceed with a bid, proof of insurance could then be provided or even obtained and the Department would not be able to verify with an independent source that the bidder had the insurance at the time bid responses were submitted. These possible situations would give a bidder an unfair competitive advantage. Although the Petitioner has not attempted to obtain such an advantage in this case, the potential for such an abuse was present when the aids were open.

    
    

28. Based upon the foregoing, it is concluded that the Petitioner's failure to comply with the Insurance Requirements is not a minor irregularity. The Department cannot, therefore, waive the irregularity or allow the Petitioner to now supplement its bid response by providing proof that it meets the Insurance Requirements. Finally, even if the Petitioner's failure to meet the Insurance Requirements was a minor irregularity which could be corrected, the Petitioner has failed to meet its burden of proving at the formal hearing that it meets the Insurance Requirements.

    
    

29. The failure of General to provide its county occupational license number does not render General's bid response nonresponsive. General's failure is a minor irregularity which can be waived by the Department. Unlike the Insurance Requirements, the Department can verify the existence of a County occupational license with a public entity, a tax collector's office. Bidder's are not able to obtain an occupational license after bid responses are open. Therefore, bidders who fail to provide a county occupational license number with their bid responses cannot gain a competitive advantage. While General may have a problem with Leon County because it may not have a Leon County occupational license, General's bid response was responsive to the ITB.

    
    

30. Finally, the failure to open General's bid response at the same time other bids were opened should not affect General's right to an award of the contract for the ITB. Although General did not Include the number of the ITB on the envelope in which it submitted its bid response, it included sufficient information on the envelope for the Department to determine that the response was filed on the ITB at issue in this proceeding. The error in filing General's bid response was therefore the responsibility of the Department. General should not be disqualified for the Department's error. More importantly, the failure to open General's bid response when the other bid responses were opened did not give General any advantage over the other bidders. Therefore General's failure is a minor irregularity.

    
    

31. Based upon the foregoing, it is concluded that the Petitioner's bid response was not response to the ITB and was properly rejected by the Department. It is also concluded that the Petitioner has failed to prove that the bid response of General should be rejected.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a final order be entered dismissing the formal protest filed by the Petitioner.

DONE and ENTERED this 9th day of February, 1989, in Tallahassee, Florida.

LARRY J. SARTIN, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of February, 1989.

APPENDIX

The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

The Petitioner failed to number the paragraph's of his proposed recommended order as instructed at the formal hearing. The "Proposed Finding of Fact Numbers" of the Petitioner referred to below correspond generally with the order in which each paragraph of the Petitioner's proposed recommended order appear.

The Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

Page 1

1 See 7-9.

1. See 23-24. The portion of this paragraph dealing with Leon County requirements is not relevant to this proceeding.

2. Argument and quotation of testimony.

4 See 18-22.

Page 2

1-2 Argument and quotation of testimony.

1. Not supported by the weight of the evidence.

2. Argument and quotation of testimony.

Page 3 Continues with quotation of testimony.

1-2 Argument.

The Department's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection

RONALD W. THOMAS, EXECUTIVE DIRECTOR DEPARTMENT OF GENERAL SERVICES

133 LARSON BUILDING

200 EAST GAINES STREET TALLAHASSEE, FL 32399-0955

JOHN A. TENNANT, PRESIDENT PROFESSIONAL SERVICES, INC. POST OFFICE BOX 20803 TALLAHASSEE, FLORIDA 32316

ROBERT D. STINSON, ESQUIRE OFFICE OF GENERAL COUNSEL DEPARTMENT OF GENERAL SERVICES ROOM 452, LARSON BUILDING

200 EAST GAINES STREET TALLAHASSEE, FLORIDA 32399-0955

Docket for Case No: 88-005745BID

Orders for Case No: 88-005745BID