STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE CONE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3121BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled case on June 7, 1990, in Tallahassee, Florida.

APPEARANCES

For Petitioner: W. Crit Smith, Esquire

SMITH AND THOMPSON, P.A.

1530 Metropolitan Blvd.

Tallahassee, Florida 32308

John H. Beck, Esquire 1020 East Park Avenue

Tallahassee, Florida 32301

For Respondent: Paul J. Martin, Esquire

and

Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, MS 58 605 Suwannee Street

Tallahassee, Florida 32399-0450 STATEMENT OF THE ISSUES

The issue for disposition is whether the Department of Transportation properly rejected Petitioner's bid for State Project Number 02000-3608 for failure to meet disadvantaged business enterprise (DBE) goals and failure to include information regarding good faith efforts to meet the goals.

PRELIMINARY STATEMENT

On May 17, 1990, the Cone Corporation filed its formal protest of the Department of Transportation's notice of intent to award a bid in State Project Number 02000-3608, to Cone Constructors, Inc., the second lowest bidder.

The case was referred to the Division of Administrative Hearings on May 24, 1990, and pursuant to Section 120.53(5)(e), F.S., the hearing was scheduled for a date within fifteen days of receipt of the referral.

On June 6, 1990, Petitioner filed a motion to stay administrative proceedings, stating that it had filed a constitutional challenge to the disadvantaged business enterprise and minority hiring goals. Petitioner argued that allowing the project to proceed would deprive the party of a substantial remedy in the event that it later prevailed on its challenge in federal court.

The motion was considered at the commencement of the hearing on June 7, 1990, and denied. The accelerated hearing schedule in Section 120.53(5)(e),

F.S. contemplates more than simply convening a hearing and recessing to allow a party to pursue remedies in another forum. The hearing officer's order in these cases is a recommended order, with the final order entered by the agency. The agency might choose to stay its decision, or it might be restrained from taking final action, but when it refers a bid dispute for an evidentiary hearing, it is entitled to a prompt recommendation. A stay or continuance by the hearing officer under these circumstances would be an abuse of discretion. See Department of Professional Regulation v. Stern, 522 So.2d 77 (Fla. 1st DCA 1988).

At the hearing, Petitioner presented the testimony of its Vice-President, Bob Graham; and Juanita Moore, DOT's Manager of Minority Programs. Petitioner's exhibits #1-3 were received into evidence, including the deposition of James W. Lundy, an estimator with Cone Constructors, the firm to whom DOT intends to award the bid. DOT objected to portions of this exhibit, Petitioner's #3, as irrelevant, as it addresses hiring goals as well as disadvantaged business enterprise goals.

The agency presented Ms. Moore's testimony and that of Wallace Giddons, a Production Manager with DOT.

The parties' joint exhibit #1, the agency's good faith evaluation form, was admitted by stipulation.

A transcript of hearing was filed on June 21, 1990. Both parties submitted proposed recommended orders on July 2, 1990. Respondent's proposed findings of fact are substantially adopted herein, as well as Petitioner's proposed findings #1-4, 8, 9, and 11. Petitioner's proposed findings #5, 6, 7, 10, and 12-14, are rejected as immaterial and irrelevant.

FINDINGS OF FACT

1. Department of Transportation (DOT) Project #02000-3608 is a federal aid highway project requiring the replacement of a bridge on Kings Bay Drive over a canal near the Crystal River in Citrus County, Florida. The bridge is currently closed due to hurricane damage.

   
   

2. The bid specifications were published, and a bid submittal deadline of March 28, 1990, was established.

   
   

   The bid specifications included a disadvantaged business enterprise (DBE) goal of 10%, and hiring goals of 6.9% female and 17.1% minority.

   
   

   The bid specifications also included the following special provisions related to DBE:

   1. PREPARATION OF PROPOSALS

      * * *

      2-5.3.2 Submittals for Contracts with Goals:

      For all contracts for which DBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted with the Contractor's bid proposal. Award of the Contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals.

      The Contractor's bid submission shall include the following information (Submitted on Forms Nos. 275-020-002-DBE Utilization Affirmative Action Certification, 275-020-003-DBE Utilization Summary and 275-020-004-DBE Utilization Form):

      1. The names and addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time the bid is submitted may be counted toward DBE goals.

      2. A description of the work each named DBE firm will perform.

      3. The dollar amount of participation by each named DBE firm.

      4. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals.

         * * *

   2. DISQUALIFICATION OF BIDDERS ARTICLE 2-11 (Page 11) is expanded as follows:

      (h) Failure to satisfy the requirements of 2-5.3.

      * * * (Petitioner's exhibit #2,

      emphasis added)

      
      

   3. DBE goals for projects to be bid are established at DOT by a committee which includes a representative from the agency's Bureau of Minority Programs. From a list of individual bid items, the committee determines which items are

      normally subcontracted. Those items are totalled to achieve a percentage of the job. The Bureau of Minority Programs then reviews the list to determine the number of DBEs, from the agency directory, which would be available to perform the subcontracted work in the relevant geographical area. The Bureau of Minority Programs then makes its recommendation to the goals-setting committee. For example, if 40% of the job would normally be subcontracted and DBEs were available to perform 50% of that work, the goal could be set at 20%. In practice, the goals are not set so high, and the most common goal is 10%, as that is the overall goal of the DOT. Goals vary, depending on the type of work, the location and the availability of DBEs.

      
      

   4. Hiring goals are also established for each project, but in contrast to the DBE goals, they are not considered in the award of a bid.

      
      

   5. Four firms responded to the bid advertisement for Project Number 02000- 3608. The Cone Corporation was the low bidder at $588,793.45. Cone Constructors, Inc. bid $629,736.85. Piling and Structures, Inc. bid

      $700,436.53; and Leware Construction Company bid $733,333.33.

      
      

   6. The Cone Corporation bid included DBE utilization forms indicating that

      $56,000.00 would be subcontracted to H.S. Thompson Construction Company for concrete and rebar work. This amounts to approximately 9.5% of its bid.

      
      

      The Cone Corporation did not submit any statement with its bid package as to how good faith efforts were made to comply with the DBE goal.

      
      

      A good faith effort committee of the department met to review the bids, and determined that it could not evaluate the Cone Corporation's good faith efforts because no information was provided.

      
      

   7. Cone Constructor, Inc., the next lowest bidder, provided a $70,000.00 subcontract with a DBE firm, D.A.B. Constructors, Inc., for various work items related to the project. This amounts to approximately 11% of its bid, and meets the specified 10% goal.

      
      

   8. Piling and Structures, Inc., provided for six DBE subcontractors for a total of $56,000.00, or approximately 8% of its bid; and Leware Construction Company, the highest bidder, provided for four DBE subcontractors, for a total of $76,887.45, or approximately 10.5% of its bid.

      
      

      Thus, two bidders met the specified DBE goal, and two did not.

      
      

   9. The good faith efforts committee recommended that Cone Corporation's bid be declared nonresponsive because the DBE goal was not achieved and documentation of good faith effort was not submitted. The committee noted that DBE utilization forms submitted by other bidders indicated that there were other DBE subcontractors available for work on the project.

      
      

   10. Bob Graham is vice-president of the Cone Corporation and has worked for the firm for ten years. He is responsible for the day to day management of the firm, and he prepared the project bid.

       
       

       Bob Graham concedes that the DBE subcontract in his bid does not meet the 10% goal. He solicited and received other DBE subcontract quotations, but rejected them as being higher than non-DBE quotations. Only one DBE subcontractor responded lowest in an area of work and Graham submitted that firm, H.S. Thompson, as part of his bid.

   11. Bob Graham also admits that he did not submit any good faith documentation with his bid to demonstrate that an effort was made to meet the DBE goal.

       
       

       Bids are commonly compiled at the last minute, with the bidders assembling various quotations and putting together final numbers to meet the bid deadline. Graham simply did not have time to add the good faith effort documentation. He made a considered business decision to reject all but one DBE subcontractor, in favor of being able to submit a lower bid. He knew at the time that his bid was submitted that the DBE goal was not met. His bid was approximately $41,000.00 lower than the next lowest bid. For an additional $2,800.00 he could have met the 10% goal. This, of course, was apparent only after the bids were opened.

       
       

       CONCLUSIONS OF LAW

       
       

   12. The Division of Administrative Hearings has jurisdiction over the subject matters and parties in this proceeding pursuant to subsection 120.53(4)(d)2., F.S., and Section 120.57(1), F.S.

   13. Section 339.0805, F.S., provides, in pertinent part: 339.0805 State Transportation

       Trust Fund; specified percentage to

       be expended with small businesses owned by socially and economically disadvantaged persons; construction management development program; bond guarantee program. --

       (1)(a) Except to the extent that the head of the department determines otherwise, not less than 10 percent of the amounts expended from the State Transportation Trust Fund shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals as defined by the Surface Transportation and Uniform Relocation Assistance Act of 1987.

       (b) In fulfilling this mandate, the department shall utilize every means available to it, including, but not limited to, goals and set-asides for competitive bidding and contracting only by, between, and among those firms which are certified by the department as socially and economically disadvantaged business enterprises and which are prequalified as may be appropriate. It is the policy of the state to meaningfully assist socially and economically disadvantaged business enterprises through a program that will provide for the development of

       skills through business management training, as well as financial assistance in the form of bond guarantees, to primarily remedy the effects of past economic disparity. Such competitive bids may be the result of joint ventures between small business concerns which are owned and controlled by socially and economically disadvantaged individuals and other subcontractors.

       * * *

       1. The department shall

       promulgate rules for implementing the directives contained in this Section.

   14. Rule 14-78.003, F.A.C., provides, in pertinent part: 14-78.003 General Responsibilities

       * * *

       (2) To implement its DBE goal program the Department may:

       * * *

       (b) establish contract goals on each contract with subcontracting opportunities for certified DBEs.

       1. In setting contract goals, the Department shall consider the following factors:

          1. the type of work required by the contract to be let;

          2. the subcontracting opportunities in the contract to be let;

          3. the estimated total dollar amount of the contract to be let; and

          4. the number of certified DBEs

       2. For contracts with an estimated total dollar amount of

          $1,000,000 or less, the contract goals shall not exceed 50 percent of the identified potential for DBE participation. For contracts with an estimated total dollar amount of

          $1,000,000, the contract goals shall not exceed 75 percent of the identified potential for DBE participation.

       3. For all contracts for which DBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good

       faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted with the contractor's bid

       proposal. Award of the contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected.

       a. The contractor's bid submission shall include the following information:

       1. The current names, telephone numbers, and addresses of certified DBE firms that will participate in the contract;

       2. A description of the work each named DBE firm will perform;

       3. The dollar amount of participation by each named DBE firm;

       4. Any documentation required by the contract or applicable rules as evidence of DBE participation.

       5. If the DBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goals.

       (emphasis added)

       
       

   15. The rule, cited above, and the bid specifications cited in finding of fact, paragraph 2, are unambiguous: a bid submission must include evidence that the DBE goal is met or evidence of good faith effort to meet the goal; otherwise, the bid will be rejected.

Lacking either, Petitioner's bid was defective and was properly rejected.

C.H. Barco Contracting Co. v. Florida Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986).

The defect was material as it affected the amount of the bid, giving the bidder an advantage not enjoyed by other bidders. Harry Pepper and Assoc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2nd DCA 1978).

RECOMMENDATION

Based on the foregoing, it is hereby, RECOMMENDED

That a Final Order be entered, dismissing the protest of Petitioner, the Cone Corporation.

DONE AND RECOMMENDED this 9th day of July, 1990, in Tallahassee, Leon County, Florida.

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 July, 1990.

COPIES FURNISHED:

W. Crit Smith, Esquire SMITH AND THOMPSON, P.A. 1530 Metropolitan Blvd. Tallahassee, FL 32308

John H. Beck, Esquire 1020 East Park Avenue Tallahassee, FL 32301

Paul J. Martin, Esquire and

Susan P. Stephens, Esquire Department of Transportation Haydon Burns Building, M.S. #58 605 Suwannee Street

Tallahassee, FL 32399-0450

Ben G. Watts, Secretary

Attn: Eleanor F. Turner, M.S. #58 Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, FL 32399-0450

Thornton J. Williams, General Counsel Department of Transportation

562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0450

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION

THE CONE CORPORATION,

Petitioner,

vs. CASE NO. 90-3121BID

DEPARTMENT OF TRANSPORTATION,

Respondent

/

AMENDED FINAL ORDER

On May 8, 1990, THE CONE CORPORATION, file a notice of protest with the DEPARTMENT OF TRANSPORTATION (DEPARTMENT) protesting the intent of the DEPARTMENT to award State Job No. 02000-3608 to Cone Constructors, Inc. THE CONE CORPORATION filed a formal protest on May 17, 1990. The DEPARTMENT reef erred the matter to the Division of Administrative Hearings for an administrative hearing.

A hearing was held in this matter on June 7, 1990. The Hearing Officer entered a Recommended Order July 9, 1990. No exceptions were filed to the Recommended Order. The Hearing Officer's Recommended Order, copy attached, was considered correct in law and fact and was adopted by the DEPARTMENT in its Final Order entered August 29, 1990.

However, the DEPARTMENT's August 29, 1990, Order erroneously awarded State Project No. 02000-3608 to CONE CONSTRUCTORS, INC. Testimony adduced at hearing conclusively showed that due to the delay in awarding this job, occassioned by the instant bid protest, the DEPARTMENT is unable to go forward with State Job No. 02000-3608. (Trans. p. 71, 1.23, p. 76, 1.6)

The primary impediment to making an award of this job is the time constraint placed on the project by the duration of the in-water construction permit. The advertised bid required completion of in-water construction work by September 30, 1990. (Bid contract, Amendment 12-Limitations of Operations, Special Provisions, Article 8-4, pg. 10)

At the time the DEPARTMENT entered its Final Order on August 29, 1990, it was not possible for a contractor to comply with the above-cited contract provision. As a matter of law, the DEPARTMENT was and is unable to award State Job No. 02000-3608 pursuant to its August 29, 1990, Final Order. This Amended Final Order is entered to correct the previously entered Final Order to make the DEPARTMENT's final agency action not inconsistent with the contract requirements, specifications, and posting of intent to award.

It is therefore ORDERED that the protest o THE CONE CORPORATION on State Job No. 02000-3608 is DISMISSED, and all remaining responsive bids on this job are rejected.

Upon entry of the Final Order, the protest bond was returned to Petitioner by the Clerk of Agency Proceedings.

DONE AND ORDERED this 11th day of September, 1990.

BEN G. WATTS, P.E.

Secretary

Florida Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399

The following information is required by law to be included in all Final Orders:

Judicial review of agency final orders may be pursued in accordance with Section 120.68, Florida Statutes, and Florida Rules of Appellate Procedure 9.030(b)(1)(c) and 9.110. To initiate an appeal, a Notice of Appeal must be filed with the Department's Clerk of Agency Proceedings, Haydon Burns Building, MS 58, 605 Suwannee Street, Tallahassee, Florida 32399-0458, and with the appropriate District Court of Appeal within thirty (30) days of the filing of this Final Order with the Department's Clerk of Agency Proceedings. The Notice of Appeal filed with the District Court of Appeal should be accompanied by the filing fee specified in Section 35.22(3), Florida Statutes.

Copies furnished:

Mary Clark Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

W. Crit Smith, Esquire Smith and Thompson, P.A. 1530 Metropolitan Boulevard Tallahassee, Florida 32308

John H. Beck, Esquire 1026 Park Avenue East

Tallahassee, Florida 32301

Cone Constructors, Inc.

P. O. Box 22869

Tampa, Florida 33622-2869

Paul J. Martin, Esquire Susan P. Stephens, Esquire

Florida Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399-0458

J. Ted Barefield, Manager Contracts Administration Office

Florida Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399

Docket for Case No: 90-003121BID

Orders for Case No: 90-003121BID