STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JAMES P. MORAN, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 89-6940BID

) DEPARTMENT OF GENERAL SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on January 12, 1990, at Tallahassee, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances for the parties at the hearing were as follows:

APPEARANCES

For Petitioner: Mr. James P. Moran

Vice President

James P. Moran, Inc. 11465 S.W. 96th Terrace Miami, Florida 33176

For Respondent: O. Earl Blacks Jr., Esquire

Department of General Services Office of General Counsel Knight Building, Suite 309 Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0955 STATEMENT OF THE ISSUE

This is a bid protest proceeding pursuant to Section 120.53, Florida Statutes. The basic issues in this case are: (a) whether the Petitioners bid was responsive and (b) whether, in any event, the Department should reject all bids and readvertise for bids on a modified project.

PRELIMINARY STATEMENT

At the final hearing in this case, both parties presented the testimony of witnesses and also offered numerous exhibits, most of which were received in evidence. Subsequent to the hearing a transcript of the proceedings was filed with the Hearing Officer on January 24, 1990, and the parties were allowed until February 5, 1990, within which to file Proposed Recommended Orders. The Petitioner elected not to file a Proposed Recommended Order. The Respondent filed a timely Proposed Recommended Order containing proposed findings of fact

and conclusions of law. The Appendix to this Recommended Order contains specific rulings on all proposed findings of fact as required by Section 120.59(2), Florida Statutes.

FINDINGS OF FACT

1. The Department of General Services, (hereinafter "DGS") is a state agency, the responsibilities of which include the management of state construction project. It accomplishes such management through its Division of Building Construction. The Divisions responsibilities include, negotiation of architect/engineer contracts, review of plans and specifications, contract administration, and contract management.

   
   

2. One such project is Project No. MA-87080010, the subject matter of which involves repairs and alterations to the National Guard Armory in Fort Lauderdale, Florida, hereinafter referred to as the Armory Project. Certain portions of the bid specification for the Armory Project were prepared by the project architect, Mr. William D. Tschumy, Jr. Other portions, specifically the portions dealing with bidding conditions and contractual conditions, were provisions provided by DGS for inclusion in the specifications. The project architect was not familiar with all of the bid specification provisions provided by DGS.

   
   

3. Prior to submitting its bid on the Armory Project, James P. Moran, Inc., had been prequalified for bidding on the project. Such prequalification did not obviate the need for James P. Moran, Inc., to meet the experience requirements in the bid specifications and in Rule 13D-11.904(2)(a)(8), Florida Administrative Code.

   
   

4. The bid specifications for the Armory Project include the following provisions: 1/

   
   

   Section B-2, page 9:

   
   

   8. Firm experience - must have successfully completed no less than two project of similar size and complexity within the

   last three years. and;

   
   

   Section B-22, page 16:

   
   

   The owner reserves the right to reject any and all bids when such rejection is in the best interest of the State of Florida and to reject the proposal of a bidder who the owner determines is not in a position to perform the contract and to negotiate the contract in accordance with its Rule 13- D11.08 if the low qualified bid exceeds the project construction budget.

   
   

5. James P. Moran, Inc., timely submitted its bid on the Armory Project and was subsequently notified that it had been recommended for contract award by the Director of the Division of Building Construction. This recommendation was made on the basis of a recommendation by the project architect that the bid be awarded to James P. Moran, Inc. At the time of making his recommendation, the

   project architect was not aware of the firm experience provision in either the bid specifications or the applicable rules. A timely protest was filed by another bidder on the Armory Project, in which the protesting bidder raised the issue of the firm experience of James P. Moran Inc. DGS concluded that the protest was valid and after further deliberation made the determination to reject all bids.

   
   

6. All the bids other than the bid submitted by James P. Moran, Inc., exceeded the funds available for construction of the Armory Project. Because the other bids all exceeded the available funds, DGS decided that the best course of action would be to modify the scope and nature of the work involved in the project and then re-bid the project. It is reasonable to expect that the proposed modifications to the project will result in lower bids, because the modifications would permit the work to be done quicker and at less cost to the contractor.

   
   

7. James P. Moran, Inc., was incorporated in 1981. However, prior to the summer of 1988, it had submitted no bids acquired no permits, and had neither started nor completed any jobs. The qualifying contractor for James P. Moran, Inc., is Mr. James P. Moran who, for many years prior to the summer of 1988, was an employee, officer, and shareholder of Frank J. Moran, Inc. Mr. James P. Moran holds a State of Florida building contractors license, a State of Florida electrical contractors license, a Dade County electrical masters license, a Broward County electrical masters license, and a State of Maine electrical contractors license.

   
   

8. While employed by Frank J. Moran, Inc., Mr. James P. Moran was also the qualifying contractor for that corporation. While so employed, Mr. James P. Moran's primary duties were those of project director and estimator. He was also a corporate officer of Frank J. Moran, Inc. During his employment with Frank J. Moran, Inc., Mr. James P. Moran was the project manager on projects of similar size and complexity to the Armory Project.

   
   

9. The construction budget for the Armory Project is approximately 250,000. The dollar values of construction jobs are valid indicators of the comparative sizes of construction jobs. The dollar values of the two largest construction jobs completed by James P. Moran, Inc., are approximately $161,000 and $112,000, respectively. The two largest construction jobs completed by James P. Moran, Inc., are not of similar size to the Armory Project.

   
   

10. While DGS is concerned about the qualifications of the personnel employed by a contracting firm, DGS is also concerned about the track record of the firm itself, and, therefore, requires that a firm have completed projects in its own name in order to qualify for a bid award. In other words, a new firm cannot "take credit" for work performed by one of its employees at a time when the employee was working for another firm. Also, DGS does not allow "stacking" of the dollar value of several small jobs in order to demonstrate completion of a job of similar size to the job that is the subject of a bid. The purpose of the experience rule is to require a contracting firm to have completed at least two jobs of similar dollar size to the dollar size of the job being contracted. Among, the reasons stacking is not allowed is that completion of a job of any given size is a more complicated and complex undertaking than completion of a series of smaller jobs that total up to the same dollar value as the job of given size.

11. DGS has now modified the scope of the project and has amended the plans and specifications in such a fashion that it will take less time to complete the modified Armory project and may reasonably be expected to result in lower bids closer to or below the construction budget. The modified Armory project may reasonably be expected to result in a savings of both time and money.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of this proceeding. Section 120.53, Florida Statutes, (1987).

    
    

13. Pursuant to Section 255.29, Florida Statutes (1989), the Department of General Services is charged with establishing rules for determining the qualifications and responsibility of bidders for construction projects, for procedures for awarding state agency construction projects to the lowest qualified bidder, and procedures governing negotiation of contracts.

    
    

14. Pursuant thereto, DGS promulgated Chapter 13D-11 Florida Administrative Code. This Chapter provides in pertinent part as follows:

    
    

    A. Section 13D-11.004(2)(a)(8) states:

    
    

    (2) Prequalification for Award of the Contract

    
    

    (a) Requirements: Any bidder who has submitted a bid must satisfy the following requirements as judged by the Division of Building Construction in order to be eligible for award of the contract for construction.

    
    

    (8) Firm experience - Must have successfully completed no less than two projects of similar size and complexity within the last three years.

    
    

    B. 13D-11.0071 provides as follows:

    
    

    The Department reserves the right to reject the bid or portion thereof off any bidder under any of the following circumstances

    (1) When DGS determines such rejection is in the best interest of the State of Florida.

    (3) When the base bid or the base bid menus all deductive alternates exceed the funds available for construction.

    
    

15. James P. Moran, Inc., does not meet the firm experience requirements of the foregoing rule because it has not completed two project of similar size to the Armory Project. Those requirements are incorporated in the subject bid specifications. Because James P. Moran, Inc., fails to meet those requirements, it is not eligible for an award of the contract and its petition should be dismissed.

16. Further, even if it were to be concluded that James P. Moran, Inc., was an eligible bidder, the, DGS would still be justified in rejecting all bids. The courts have made it clear that in cases of this nature, government agencies have wide discretion in soliciting and accepting bids for public improvements and where the agencies are authorized to reject all bids, "judicial intervention to prevent the rejection should occur only when the propose or effect of the rejection is to defeat the object and integrity of competitive bidding." D.O.T.

v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). See also Liberty County v. Baxters Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982). The Groves-Watkins decision supra, also notes that an agency decision to reject all bids should seldom be set aside absent a showing that the agency "acted fraudulently, arbitrarily, illegally, or dishonestly." There is no such showing here. To the contrary, the evidence here reveals a rational and logical basis for rejecting all bids and proposing to rebid a project of reduced scope.

RECOMMENDATION

For all of the foregoing reasons it is RECOMMENDED that the Department of General Services issue a final order in this case rejecting the bid of James P. Moran, Inc., as being non-responsive, and rejecting all other bids, in order to modify the scope of the project and rebid it.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of March 1990.

MICHAEL M. PARRISH

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 2nd day of March, 1990.

ENDNOTE

1/ As set forth more fully in the conclusions of law, similar provisions are also contained in Chapter 13-11, Florida Administrative Code.

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-6940BID

The following are my specific rulings on all proposed findings of fact submitted by all parties.

Proposed findings submitted by Petitioner: (None submitted)

Proposed findings submitted by Respondent: Paragraph 1: Accepted

Paragraph 2: First 12 lines adopted in substance; quoted portion accepted; last two lines rejected as irrelevant.

Paragraphs 3, 4, and 5: Accepted.

Paragraph 6: Accepted in substance, with the exception of the first five and a half lines, which are rejected as unnecessary discussion of what DGS proposed to do.

Paragraphs 7 and 8: Accepted.

Paragraph 9: Rejected as constituting subordinate and unnecessary details. Paragraph 10: Accepted in substance.

Paragraph 11: Rejected as constituting subordinate and unnecessary details.

Paragraph 12: Rejected as subordinate and unnecessary details. Also rejected because on the basis of the, testimony of Mr. James P. Moran and other evidence in the record, it is found that Moran Exhibit 15 is inaccurate and no findings have been based on information contained in that exhibit.

Paragraph 13: Accepted in substance.

Paragraph 14: Rejected as constituting a summary of testimony, rather than proposed findings of fact. (And, in any event, the summarized testimony comprises conclusions which are contrary to the greater weight of the evidence).

Paragraph 15: First twelve lines accepted in substance. Lines 13 and 14 rejected as subordinate and unnecessary detail. Last five lines rejected as constituting argument, rather than proposed findings.

Paragraph 16: Rejected a constituting a summary of testimony, rather than proposed findings of fact. Also rejected as constituting subordinate and unnecessary details, and as incorporating conclusions contrary to the greater height of the evidence.

Paragraphs 17, 18, and 19: Accepted in substance, with some argumentative portions omitted.

COPIES FURNISHED:

Mr. James P. Moran James P. Moran, Inc. 8306 Mills Drive

Suite 259

Miami, Florida 33183

O. Earl Black, Jr., Esquire Office of General Counsel Department of General Services Koger Executive Center

Suite 309, Knight Building 2737 Centerview Drive

Tallahassee, Florida 32399-0950

Ronald W. Thomas Executive Director

Department of General Services Knight Building

2737 Centerview Drive

Tallahassee, Florida 32399-0950

Docket for Case No: 89-006940BID

Orders for Case No: 89-006940BID