STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JACK MOORE & COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-2748BID

)

OKALOOSA-WALTON COMMUNITY )

COLLEGE, )

)

Respondent, )

)

SHARPE, INC., )

)

Intervenor/Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter came on for hearing in Niceville, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on May 17, 1990.

APPEARANCES

The parties are represented as follows:

For Petitioner: Edward P. Fleming, Esquire

700 South Palafox Street Pensacola, Florida 32501

For Respondent: Joseph D. Lorenz, Esquire

501 Mary Esther Cutoff, Suite 6 Fort Walton Beach, Florida 32548

For Intervenor: Jesse W. Rigby, Esquire

Suite 800, First Florida Bldg.

125 W. Ramona Street Pensacola, Florida 32501

STATEMENT OF THE ISSUES

The issue addressed in this proceeding is whether Petitioner or Intervenor submitted the lowest and best bid.

PRELIMINARY STATEMENT

This case concerns the Okaloosa-Walton Community College's attempt to secure a contractor to build several buildings in Fort Walton Beach, Florida, for its joint use campus with the University of West Florida. The Board of Trustees issued an Invitation to Bid for the project on March 26, 1990.

Petitioner and Intervenor submitted their bids. On April 11, 1990, the Board

opened the bids. The contract was awarded to Intervenor. On April 23, 1990, Petitioner filed a Formal Written Protest of the bid award. An opportunity to resolve the protest by mutual agreement between the parties was provided by Respondent, but the protest was not resolved. Failing to reach a mutual agreement, the protest was forwarded to the Division of Administrative Hearings.

At the hearing, Petitioner presented seven witnesses and offered one exhibit into evidence. Respondent presented one witness and did not offer any exhibits into evidence. Intervenor did not call any witnesses and did not offer any exhibits into evidence. Additionally, eight joint exhibits were stipulated to by the parties and admitted into evidence.

Petitioner, Respondent and Intervenor filed their Proposed Recommended Orders on June 1, 1990, May 31, 1990 and May 30, 1990, respectively. The parties' 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 parties' proposals are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On December 20, 1989, the District Board of Trustees, Okaloosa-Walton Community College, issued an Invitation to Bid (ITB) for Phase I Construction of the OWCC-WUF Joint Use Campus. The total project was estimated to cost about

   $5,000,000.00. The funds for the project would come in large part from the Public Education Capital Outlay Funds appropriated by the legislature and passed into law in the State's budget and to a limited extent from the college's renovation fund. Up to the time of hearing, the legislature had appropriated

   $3,000,000.00 for the project. The college's renovation fund contained approximately $70,000.00. The board hopes that the additional funding needed for the project (approximately $2,000,000.00) will be appropriated by the legislature this summer. However, until the additional funds are appropriated, the Board, by statute, is prohibited from contracting for projects in excess of the amount of money which has been appropriated for such projects. See Section 235.42, Florida Statutes.

   
   

2. Michael Richardson, of Bullock-Tice Associates Architects, Inc., was the architectural project manager.

   
   

3. Each bidder was asked to provide a base bid and a separate bid on each of ten alternatives.

   
   

4. Eight bids were submitted in response to the original solicitation.

   
   

5. All eight bids were rejected. The bids were rejected because all eight bids for the base bid without the addition of any alternates exceeded the funds available for the project. The Board decided to rebid the project. The second ITB was issued on March 26, 1990.

   
   

6. The second ITB was restructured in an effort to obtain a base bid within the amount of money which had been appropriated for the project. Alternates could then be added to the base bid until the funds ran out.

   
   

7. Specifically, the project was revised to provide for a base bid and separate bids on six alternates. The base bid essentially provided for construction of a classroom (Building No. 3) and a utility plant. Alternates 1

   and 2 provided for outside civil, electrical, and landscaping work related principally to the buildings covered by the base bid. Alternates 3 and 4 related principally to the construction of two additional buildings and landscaping related to those buildings. Alternates 1-4 added work to the project. Alternates 5 and 6 deleted certain work from the project.

   
   

8. Paragraph 1A of the Instructions to Bidders required that:

   
   

   To receive full consideration, all bids must be executed and submitted in strict accordance with the "INSTRUCTIONS TO BIDDERS.

   
   

9. Paragraphs 7C and 7D of the Instructions to Bidders required that:

   
   

   1. Unit Prices:

      
      

      1. Each bidder shall state in the schedule provided on the Form of Proposal the amount he proposes for each applicable Unit Price requested. Unit price amounts shall include all costs of material, labor, equipment, insurance, bonds, taxes, overhead and profit and shall be used for determining amounts to be paid for all additional work on the project. Credits for any work omitted shall be determined by Unit Price at the amount scheduled.

         
         

      2. The Owner reserves the right to reject any Unit Price if considered excessive or unreasonable, or to accept any and all such Unit Prices which may be considered fair and reasonable.

         
         

   2. Alternates:

      
      

      1. In order that the Owner may discern an alternative use or type of material, or an increase or decrease in the scope of the Project, such items will be defined as Alternates and will be specifically described by the Drawings and/or Specifications. Alternates will be listed in the Form of Proposal in such a manner that the bidder will be able to clearly indicate the sums that will be added to or deducted from the Base Bid.

         
         

      2. Alternates shall include all costs of materials, taxes, bonds, handling, overhead, and profits and the acceptance of any alternate shall be in strict accordance with applicable Specification Sections.

10. At some point after the initial bid instructions were sent out, and prior to the bid opening, the project architect drafted and sent to bidders a document entitled "Clarification to All Bidders." This document stated:

    
    

    It is the intention of the Owner to award all add Alternates upon receipt of additional funding this Summer. Due to this circumstance, the determination of Low Bidder will most likely be based upon the Base Bid plus Alternate 1 through 4 and 5 & 6 if so desired. This procedure is in accordance with rules of the Florida State Board of Education for Educational Facilities. (emphasis supplied)

    
    

11. No bidder challenged the clarification's inclusion in the specifications for the project. Bidders generally interpreted this "Clarification" to mean that the Board of Trustees intended to award a contract for the total project, and thus would make its determination of low bid based on the total sum of the bids for base bid and alternates 1-4. However, bidders were not uniform in their application of that language to developing their specific bids and were not uniform in their interpretation of whether the Board's method of award of the bid as set out in the clarification was guaranteed by the clarification's language. In other words, some bidders realized that the use of the words "most likely" in the clarification meant exactly what it said and was not a guarantee that the project would be awarded according to the method established in the clarification. Petitioner, on the other hand, at its peril ignored the words "most likely" and altered its normal method of calculating its bid. In any event, no bidder received any advantage over another bidder due to the clarification's issuance and no bidder was favored or discriminated against because of the clarification. All bidders received the clarification and reacted to it in the normal course of their businesses and prepared their bids according to those dictates.

    
    

12. Six bids were received on the second ITB, including Jack Moore & Company, Inc. and Sharpe, Inc. The bids on the base bid and the various alternates were as follows:

    
    

    CONTRACTOR BASE BID TOTAL SEE ATTACHED EXHIBIT 1

13. Under the method of determining low bidder set out in the clarification, Jack Moore & Company was the low bidder. However, the Petitioner's bid, as well as all other bidders' bids, exceeded the amount of money that the Board had on hand for construction of the project. Therefore, the Board of Trustees felt that it could not award the contract according to the method set out in the clarification and examined the bids to determine the amount of construction which could be accomplished for the amount of money it had on hand ($3,000,000.00 from the legislature and $70,000.00 from the renovation fund). By using only the $3,000,000.00 from the legislature, Opus South would have been the low bidder on the base bid. However, by adding approximately $25,000.00 from the renovation fund, the college had enough money to award the base bid plus alternates 1 and 2. Money for alternates 3 and 4 was not available. The Board decided to award the base bid plus alternates 1 and 2.

    Sharpe, Inc. was the low bidder on the base bid plus alternates 1 and 2. The Board awarded the contract to Sharpe. Petitioner was approximately $100,000 over the amount bid by Sharpe on the base bid plus alternates 1 and 2.

    
    

14. The Board's reasoning was not arbitrary or capricious in the award of the bid to Sharpe. Since the language of the clarification was not binding on the Board, the method used by the Board was within the specifications.

    
    

15. Finally, there was no substantial evidence of fraud or collusion on the part of the Board in its award of the bid to Sharpe and no evidence was submitted that Sharpe was not responsive to the ITB. In fact, all the bidders responded to the exact same specifications, thereby affording the Board an exact comparison between the various bids submitted to it for the project. The only difference in the bids was in how each individual bidder calculated its bid to arrive at it's price. Such differences occur in all bid situations and do not serve to lessen the exact comparison of the bids on the specifications. Therefore, Sharpe, having presented the lowest and best bid, should be awarded the contract on the base bid plus alternates 1 and 2.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

17. The system of competitive bidding protects against collusion, favoritism and fraud in the award of public contracts. Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982). A public body has wide discretion in soliciting and accepting bids for public improvements and its decision, when based on an honest exercise of its discretion, will not be overturned by a Court even if it may appear erroneous and even if reasonable persons do not agree. Id.

    
    

18. The scope of the administrative hearing, in a challenge to the Agency's decision to award or reject bids, is limited to whether the purpose of competitive bidding has been subverted. The Hearing Officer's responsibility is to ascertain whether the Agency acted fraudulently, arbitrarily, illegally, or dishonestly. Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). The burden is on the Petitioner to show by a preponderance of the evidence that the action of the District Board of Trustees of Okaloosa-Walton Community College, in determining that Sharpe, Inc. was the lowest responsible bidder, was fraudulent, arbitrary, illegal or dishonest.

    
    

19. There is absolutely no evidence in the record that the Board of Trustees acted fraudulently, illegally, or dishonestly, or in any fashion other than with due consideration for the best interest of the State of Florida and the Okaloosa- Walton Community College. The conclusion reached by the District Board of Trustees that Sharpe, Inc. offered the lowest and best bid is amply supported by the record.

    
    

20. Chapter 235.42 Florida Statutes provides that:

    
    

    (5) No Board shall, during any fiscal year, expend any money, incur any liability, or enter into any contract which, by its terms, involves expenditure of money in excess of the

    amounts appropriated and budgeted or in excess of the cash that will be available to meet the disbursement requirements.

    
    

    Clearly, the Agency had no authority to determine that a bidder who bid in excess of the funds available to the College for this project was the lowest bidder. The Agency had $3,000,000.00 available for this project through the appropriation by the Legislature and approximately $70,000.00 through existing College renovation funds.

    
    

21. Those funds only covered the base bid plus Alternates 1 and 2. F.A.C. 6A-2.016(6) provides that the Board of Trustees may either reject all bids or award the contract to the lowest bidder for the actual amount bid considering base bid and accepted alternates as listed in the bidding documents. Clearly, given the facts of this case and the fiscal limitations on the Board, the Board's decision and method in the award of the bid to Sharpe was not arbitrary, capricious, dishonest or fraudulent.

    
    

22. The language in the "Clarification to All Bidders" does not change the character of the Board's action. The words "most likely" are not ambiguous, vague or misleading. The language left the method of bid selection open to the Board so that it could act in a fiscally responsible manner. The clarification did not destroy the competitive nature of the bidding process since all bidders were subject to it. Petitioner's arguments, in this case, are arguments based on the specifications involved in the ITB. No challenge to the clarification was raised at the appropriate time and Petitioner cannot raise such an issue in this proceeding.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Board enter a final order finding Sharpe, Inc.,

submitted the lowest and best bid and awarding the bid on the base bid plus

alternates 1 and 2 to Sharpe, Inc.

DONE and ENTERED this 13th day of July, 1990 in Tallahassee, Leon County, Florida.

DIANE CLEAVINGER

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 13th day of July, 1990.

ENDNOTE

1/ The fact that the Board did not utilize all of the renovation money available is immaterial under these facts since the amount of money in that account ($70,000.00) was not enough to enable the Board to award Alternate 3 which alternate by itself was $2,000,000.00.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2748BID

The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 15 and 17 of Petitioner's Proposed Findings of Fact are adopted in substance, insofaras material.

The facts contained in paragraphs 11, 12, 13, 14 and 16 of Petitioner's Proposed Findings of Fact are subordinate.

The facts contained in paragraphs 18 and 19 are a statement of the law or legal argument, respectively.

The facts contained in paragraph 20 of Petitioner's Proposed Findings of Fact were not shown by the evidence.

The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of Respondent's Proposed Findings of Fact adopted in substance, insofaras material.

The facts contained in paragraph 11 of Respondent's Proposed Findings of Fact are subordinate.

The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,

13, 14, 16, 17 and 26 of Intervenor's Proposed Findings of Fact are adopted in substance, insofaras material.

The facts contained in paragraphs 15, 18, 20, 21, 22, 23, 23, 24 and 25 of Intervenor's Proposed Findings of Fact are subordinate.

The facts contained in paragraph 19 of Intervenor's Proposed Findings of Fact are immaterial.

COPIES FURNISHED:

Edward P. Fleming, Esquire 700 South Palafox Street Pensacola, Florida 32501

Joseph D. Lorenz, Esquire

501 Mary Esther Cutoff, Suite 6 Fort Walton Beach, Florida 32548

Jesse W. Rigby, Esquire

Suite 800, First Florida Bldg. 1

25 W. Ramona Street Pensacola, Florida 32501

Docket for Case No: 90-002748BID

Orders for Case No: 90-002748BID