Petitioner: FLORIDA MECHANICAL, INC.
Respondent: ORANGE COUNTY SCHOOL BOARD
Judges: ROBERT E. MEALE
Agency: County School Boards
Locations: Orlando, Florida
Filed: Dec. 15, 1989
Status: Closed
Recommended Order on Thursday, February 15, 1990.
Latest Update: Feb. 15, 1990
Summary: The issue in this case is whether the bid specifications, together with other applicable authority, require that a bid, in order to be responsive, contain any written list of subcontractors.Protestor's bid properly rejected for failure to list major subcontractors.
89-6872STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA MECHANICAL, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 89-6872BID
)
SCHOOL BOARD OF ORANGE )
COUNTY, )
)
Respondent. )
) B & I CONTRACTORS, INC., )
)
Petitioner, )
)
vs. ) CASE NO. 89-6873BID
)
SCHOOL BOARD OF ORANGE )
COUNTY, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, final hearing in the above-styled consolidated cases was held in Orlando, Florida, on December 26, 1989, before Robert D. Meale, Hearing Officer of the, Division of Administrative Hearings.
APPEARANCES
The parties were represented at the hearing as follows: For Florida Mechanical, Inc.:
Charles Robinson Fawsett, P. A. Shutts & Bowen
20 North Orange Avenue, Suite 1000 Orlando, Florida 32801
For B & I Contractors, Inc.:
James F. Butler, III Smith, Currie & Hancock 2600 Peachtree Center Harris Tower
233 Peachtree Street, Northeast Atlanta, Georgia 30043-6601
For Orange County School Board:
William M. Rowland, Jr., Esquire Rowland, Thomas & Jacobs, P.A.
1786 North Mills Avenue Post Office Box 305 Orlando, Florida 32803
STATEMENT OF THE ISSUES
The issue in this case is whether the bid specifications, together with other applicable authority, require that a bid, in order to be responsive, contain any written list of subcontractors.
PRELIMINARY STATEMENT
Each Petitioner submitted a bid in response to an invitation to bid issued by Respondent. For the relevant alternate, the bids, although in excess of 1.4 million, were only 1000 apart. The bid of Florida Mechanical, Inc. listed major subcontractors, and the bid of B & I Contractors, Inc. did not.
At the beginning of the hearing, the parties filed a stipulation stating:
the only issue for determination is which Petitioner should be awarded the contract and not whether Respondent should seek further bids or award the contract to another bidder and 2) the parties would abide by the recommendation contained in the Recommended Order. Subsequently, the parties stipulated further that the issue for determination is as stated in the preceding section.
At the hearing, two witnesses testified briefly, and the parties jointly offered 12 exhibits, all of which were admitted. B & I Contractors, Inc. offered an additional exhibit, which was rejected.
FINDINGS OF FACT
On September 26, 1989, Respondent issued a document entitled, Specifications for Replacement of Air Conditioning, West Orange High School, Winter Garden, Florida, Engineers Project No. 89-016. As amended by three addenda, the above-described specifications shall be referred to as the "ITB."
Respondent duly advertised for bids ore September 26, October 3, and October 10, 1989. The advertisement did not state that Respondent reserved the right to waive minor irregularities.
In response to the ITB, Florida Mechanical, Inc. ("FMI") and B & I Contractors, Inc. ("B & I") timely submitted bids.
For the base work and alternate 1, which Respondent ultimately decided to select, FMI bid $1,439,000, B & I bid $1,438,000, and a third bidder, S. I. Goldman, Company bid $1,621,000. These bids are recorded on a Bid Tabulation Sheet prepared by the engineer retained by Respondent for the project.
The Bid Tabulation Sheet contains eight columns. Four columns record bid amounts for the base work and various alternates. The remaining columns are entitled, "Bidder," "Bid Bond," "Addenda," and "Subs." Each of the three bidders were named in one of the rows beneath the "Bidder," column. Each bidder had one "X" in its "Bid Bond" column and three "X"s in its "Addenda" column. However, only FMI and S. I. Goldman Company had "X"'s in their "Subs" columns.
By resolution adopted on November 29, 1989, Respondent directed that all bids were rejected and that the Superintendent would correct any ambiguities and uncertainties in the ITB and solicit new bids. The resolution noted that Respondents staff had recommended that, if any bid were accepted, it should be that of B & I. However,
[FMI] submitted with its bid a list of Major Sub-contractors of the form displayed in the [ITB], and B & I did not submit wish its aid a list of Major Sub-contractors[.]
The resolution concluded that Respondent based on advice of staff and counsel, found
that the [ITB is) ambiguous and/or uncertain as to whether or not a bidder must submit along with his bid a list of Major Sub-contractors, (b) that because of such ambiguity and/or uncertainty, it would be unfair and/or improper for [Respondent] to
accept either of the bids received by it, and
(c) that as a result thereof [Respondent] should reject all bids received by it for ,the Project and should solicit new bids for the Project as soon as is reasonably feasible after correction by [Respondents] staff of
any ambiguity and uncertainty as aforesaid in the [ITB].
FMI and B & I each timely filed a notice of intent to protest and formal written protest of Respondent's decision to reject each company's respective bid. S. I. Goldman did not protest the decision and is not a party to the subject case.
At a meeting on December 12, 1989, Respondent elected to refer the bid protests to the Division of Administrative Hearings for a formal hearing., At the beginning of the hearing, the parties filed a written stipulation, which stated that the only issue for determination was which Petitioner should be awarded the contract and not whether Respondent should seek further bids or award the contract to another bidder. The stipulation also stated that the Petitioners and Respondent agreed to abide by the recommendation of the hearing officer.
At the hearing, the parties further stipulated that the sole issue for determination is whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors. In addition, the parties stipulated that both Petitioners had standing and the protests were timely and sufficient.
The ITB requires that each bidder familiarize itself with all federal, state, and "Local Laws, ordinances, rules, and regulations that in any manner affect the work."
Under the section entitled, "Preparation and Submission of Bids," the ITB states: "Each bidder shall use the Bid Form that is inserted herein, and may copy or reproduce the form on this own letterhead."
Among other requirements, the ITB requires two bonds. The first is a "bid guarantee" of at, least five percent of the amount of the bid. The form of this guarantee may be cash or a Bid Bond."
The other bond described in the ITB a 100% public construction bond. The surety on this bond must have been admitted to do business in Florida, must have been in business and have a record of successful continuous operation for at least five years, and must have at least a Bests Financial Rating of "Class VI" and a Bests Policyholder Ration of "A."
The Bid Form contained in the ITB is two pages. Among other things, the Bid Form requires that the bidder receiving written notice of acceptance of its bid must provide the prescribed payment and performance bond and execute the contract within ten days after notification.
The next document in the ITB is a single page entitled, "Form of Bid Bond." The provisions on this page identify the A.I.A. document to use and state that the Bid Bond "shall be submitted with the Bid Proposal Form."
The next document in the ITB is a single page entitled, "List of Major Subcontractors." The List of Major Subcontractors states:
Bidders shall list all major subcontractors that will be used if a contract is awarded. Additionally, bidders shall identify in the appropriate box whether or not that trade specialty is minority owned.
Another paragraph defines minority ownership. The remainder of the form consists of ten rows for the "bidder" and nine major subcontractors, such as concrete, electrical, HVAC, and controls, and blanks where the bidder can indicate which of these entities are minority owned.
The next document in the ITB is the Owner-Contractor Agreement, which is followed by tie Form of Construction Bond, General Conditions, and Supplementary General Conditions.
Section 7.11 of the Supplementary General Conditions establishes certain requirements to be performed after the submission of bids. This section provides:
Pre-Award Submittals: Before the Contract is awarded the apparent low bidder shall provide the following information to the owner.
A copy of the Contractors current State of Florida General Contractor's or Mechanical Contractors License.
Pre-Construction Meeting. After the Notice to Proceed and within eight (8) business days of the Owner [sic], the Contractor shall meet with the Owner, Engineer and Subcontractors that the Owner may designate... The Contractor shall provide the following to the Owner.
* * *
2. A written list of all Subcontractors, material men and suppliers with such information as requested by the Owner or Engineer.
* * *
The remaining documents in the ITB are the technical specifications for the job. The three addenda supply additional technical information not relevant to this case.
Respondent has promulgated rules with respect to the bidding process ("Rules"). The ITB does not refer to the Rules, which define and use many terms that are found in the ITB. For instance, Rule 1.1.25 defines the phrases, "Performance and Payment Bond," which is the same phrase used in the Bid Form in the ITB. The Rules define several other capitalized terms that are also used in the ITB, such as Bid Bond, Bid Guarantee, Bidder, and Contractor. Rule 4.1 similarly states that the bidder is familiar with federal, state, and "Local Laws, Ordinances, Rules and Regulations that in any manner affect the Work."
Rule 6.1 describes the process by which a bidder is to prepare and submit bids and the Bid Guarantee in language similar to that contained in the ITB.
Rule 6.2 discusses the listing of subcontractors. Rules 6.2.1 and
6.2.2 state:
General Contractor shall include as an integral part of his bid a List of Subcontractors he proposes to use. The Bidder shall enclose this list in a 4" x 9" envelope, sealed and marked "List of Subcontractors" and identified ... The Bidder shall enclose said envelope with his bid proposal in the mailing envelope.
The List of Subcontractors enclosed with tee Proposal of each Bidder will be examined by the ... Engineer before the Proposal is opened and read. In the event that the form is not properly executed and signed, the Proposal of that Bidder will be returned to him unopened...
Rule 6.3 requires a Statement of Surety as another "integral part" of each bid. Rule 6.3.3 states:
The Statement of Surety will be opened examined by the ... Engineer prior to the opening of the Proposal....
Although similar to Rule 6.2, Rule 6.3 lacks the warming that if the Statement of Surety is not "properly executed and signed, the Proposal of that Bidder will be returned to him unopened."
Rule 19.1 sets forth the requirements, for the surety. These requirements are different than those set forth in the ITB. Rules 19.1.1 and
19.1.2 require, as does the ITB, that the surety be admitted to do business in the State of Florida and shall have been in business and have a record of
successful continuous operations for at least five years. However, Rule 19.1.1 requires that the surety be represented by a reputable and responsible surety bond agency licensed to do, business in the State of Florida and have a local representative in the Orlando area. Rule 19.1.3 requires minimum Bests ratings of "A" in "management," and, as to "strength and surplus," "AAA+" in financial rating and $12,500,000 minimum surplus. Rule 19.1.3.3 also requires that the surety be listed on the U.S. Treasury Departments Circular 570.
The bids of FMI and S. I. Goldman Company contained a completed List of Major Subcontractors. The bid of B & I did not. No bidder included a Statement of Surety with its bid.
CONCLUSIONS OF LAW
The Division of Administrative Hearing has jurisdiction over the subject matter and the parties, pursuant to Sections 120.53(5)(d)2. and 120.57(1), Florida Statutes. Pursuant to stipulation, the standing of the Petitioners and the sufficiency and timeliness of the protests are not at issue.
Rule 6A-2.016, Florida Administrative Code, provides:
No bid shall be considered if the bidder fails to comply with the terms and
of the bid form, or the procedure for submitting bids as authorized in the official advertisement and other documents pertaining to the bidding as authorized by the board.
The board may reserve the right to waive minor irregularities if so stated in the bid advertisement.
Although the Bid Form and preceding provisions of the ITB fail to mention the List of Major Subcontractors, the list itself clearly indicates that bidders, as distinguished from the contractor that has been awarded the bid, "shall list all major subcontractors that will be used if a contract is awarded." This straightforward requirement is clearly part of the ITB.
The requirement that each bid proposal contain a list of subcontractors is underscored by the Bid Tabulation Sheet, which records information concerning only to subcontractors, the bid amounts, Bid Bond, the addenda, and the listing of subcontractors.
The Rules are inapplicable to this case. Nothing in the ITB refers to the Rules. The ITB requirement of familiarity with federal, state, and local rules pertains to work, not bidding. The work begins after the bidding has been completed. Moreover, various discrepancies exist between the Rules and the ITB. The Statement of Surety, ,require( by Rule 6.3, appears to be routinely ignored. The Rules also impose additional prerequisites for an acceptable Surety.
Without regard to the Rules, however, the ITB clearly required that the bid be accompanied by a List of Major Subcontractors. This requirement is not rebutted by the requirements in the Supplementary Conditions that the Contractor, prior to construction: a) meet with the Owner, Engineer, and Subcontractors that the Owner designates and b) provide the Owner with a written list of all subcontractors, materialmen, and suppliers, and additional information requested by the Owner or its engineer. This meeting involves the
bidder to which the contract has already been awarded, i.e., the Contractor. The information to be provided at this time may expand upon that provided with the List of Major Subcontractors that accompanied the bid proposal. The post- award list may contain subcontractors, as well as material men and suppliers, not previously listed. Even if not, the post-award list may contain additional information about the previously listed subcontractors beyond whether they are minority owned.
The materiality of the requirement that a bidder list its major subcontractors has been discussed in E. M. Watkins & Company v. Board of Regents, 414 So.2d 583 (Fla. 1st DCA 1982). In that case, the court addressed the policy reasons supporting a requirement that a bidder include in its bid proposal a list of major subcontractors. The main effect of such a requirement is to discourage post-award bid shopping by a contractor among subcontractors. The court's reasoning is applicable here. The absence from B & I's bid proposal of the List of Major Subcontractors was therefore materials. As a material requirement, it could not be waived, even assuming, for the sake of argument, that Respondent could waive minor irregularities after failing to include such a right in its advertisements.
RECOMMENDATION
Based on the foregoing, it is hereby
RECOMMENDED that the School Board of Orange County enter a Final Order awarding the subject contract to Florida Mechanical, Inc.
ENTERED this 15th day of February, 1990, in Tallahassee, Florida.
ROBERT E. MEALE
Hearing Officer
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, FL 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1990.
APPENDIX
Treatment Accorded Proposed Findings of FMI
All of FMI's proposed findings have been adopted or adopted in substance. Treatment Accorded Proposed Findings of B & I
1-4: adopted or adopted in substance.
5: adopted, except that the staff recommended that, if the bid was to be awarded, that it be awarded to B & I.
6: adopted in substance.
7: rejected as conclusion of law and, to the extent fact, subordinate.
8-12: rejected as subordinate.
13-16: adopted or adopted in substance. 17: rejected as subordinate.
18: rejected as unsupported by the greater height of the evidence. 19-21: rejected as subordinate.
22: rejected as beyond the scope of the issues and irrelevant in view of the stipulation. In the stipulation, the parties agreed that the issue to be addressed would not be whether the intended agency action of Respondent was lawful (i.e., not arbitrary, fraudulent, dishonest, or otherwise improper), but rather whether the ITB, together with other applicable authority, required that the responsive bid contain any written list of subcontractors.
COPIES FURNISHED:
James L. Schott, Superintendent
The School Board of Orange County, Florida
P.O. Box 271 Orlando, FL 32802
Charles Robinson Fawsett, P. A. Shutts & Bowen
20 North Orange Avenue Suite 1000
Orlando, FL 32801
James F. Butler, III Smith, Currie & Hancock 2600 Peachtree Center Harris Tower
233 Peachtree Street, N.E. Atlanta, GA 30043-6601
William M. Rowland, Jr., Esq. Rowland, Thomas & Jacobs, P.A. 1786 North Mills Avenue
P.O. Box 305 Orlando, FL 32803
Docket for Case No: 89-006872BID
Orders for Case No: 89-006872BID
