STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE HARTER GROUP, d/b/a )

KNOLL SOURCE, )

)

Petitioner, )

vs. ) CASE NO. 90-3261BID

)

PINELLAS COUNTY SCHOOL ) BOARD, and HAWORTH, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica E. Donnelly, held a formal hearing on June 7, 1990, in Clearwater, Florida.

APPEARANCES

For Petitioner: Sue Olinger, Qualified Representative

1284 West Fairbanks Avenue Winter Park, Florida 32789

For Respondent: Bruce P. Taylor, Esquire School Board 1960 East Druid Road

Clearwater, Florida 34618-4688

For Respondent: George Plumb, Qualified Representative Haworth, Inc. 3339 West Kennedy Boulevard

Tampa, Florida 33609 STATEMENT OF THE ISSUES

Whether the Petitioner was the lowest responsive bidder for clerical, professional task, guest and conference chairs for the new district administration building.

PRELIMINARY STATEMENT

On May 9, 1990, the Petitioner, The Harter Group, d/b/a Knoll Source (Knoll Source), filed a notice of protest with the Respondent, The School Board of Pinellas County, Florida (School Board), to protest the proposed award of the contract for the purchase of clerical, professional task, guest and conference chairs for the new district administration building to another bidder, Respondent Haworth, Inc. (Haworth). The School Board referred the protest to the Division of Administrative Hearings on May 25, 1990.

Originally, Knoll Source sought to have the project re-bid due to misunderstandings and discrepancies generated by several sections of the bidding documents. The remedy sought by Knoll Source in its notice of protest was later

amended by letter dated May 29, 1990. By the amendment, Knoll source withdraws its request that all bids be rejected and seeks the award of the contract as the lowest responsive bidder. The amendment was stipulated to by the parties and accepted by the Hearing Officer because the original notice of protest placed all parties on notice that Knoll Source believed its bid was the lowest responsive bid under the specifications.

During the hearing, Knoll Source called one witness and filed one exhibit. The School Board presented two witnesses and submitted five exhibits. Haworth was represented at hearing, and adopted the exhibits filed by the School board as its exhibits. All of the exhibits were admitted into evidence.

No transcript of the hearing was filed, and the parties waived the requirement that the Division of Administrative hearings render a Recommended Order within thirty days of hearing. The waiver was made to allow the parties time to prepare proposed recommended orders under their current appointment schedules. Knoll Source and the School Board timely filed proposed recommended orders on the deadline of June 22, 1990, imposed by the Hearing Officer.

Rulings on the proposed findings of fact are in the Appendix of the Recommended Order.

FINDINGS OF FACT

1. In order to meet its need for new equipment in the new district administration building, the School Board advertised for competitive bid proposals for clerical, professional task, guest and conference chairs (task seating). Five bids were timely received by the School Board, two of which were determined to be responsive.

   
   

2. The bid opening occurred on April 17 1990, and the Knoll Source was determined to be the lowest responsive bidder. In spite of this determination, the bid was rejected by the Director of Purchasing or the appointed designee because sales tax was not included in the bid. The Notice of Award was issued to Haworth, who submitted its bid showing the price it was willing to accept for the sale of the task seating, with and without sales tax.

   
   

3. The initial decision to reject the Knoll Source bid, which was

   $10,393.72 less than Haworth in Sequence I; $12,231.94 less in Sequence II; and

   $994.17 less in Sequence III, was based upon Section 9.2.2.a in the "Instructions to Interior Bidders". This section of the bid documents provided that the contract for purchase of the task seating would not be exempt from sales tax. This bid specification is incorrect because the School Board does not pay sales tax on acquisitions of furnishings for the Pinellas County School System.

   
   

4. Knoll Source was aware of the School Board's sales tax exemption prior to its bid submission. As Section 9.2.2.a of the instructions was inappropriate, the vendor relied on Section 9.2.2.c, and excluded sales tax from the bid because the cost of such tax was not applicable. Section 9.2.2.c instructed bidders to exclude inapplicable taxes from their bids.

   
   

5. Pursuant to Section 5.3.1 of the bid instructions, the School Board has the right to waive any irregularity in any bid received and to accept the bid which, in the Board's judgment, is in its own best interest.

6. The Knoll Source and Haworth bids can be comparatively reviewed, and Knoll Source is the lowest responsive bidder if the failure to include sales tax in the bid amount is waived by the School Board.

   
   

7. It is in the Board's best interest to waive Knoll Source's failure to include a sales tax in the bid because sales tax does not apply to this purchase.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Sections 120.53(5) and 120.57(1), Florida Statutes.

   
   

9. An agency has wide discretion in awarding contracts to responsive bidders, and its exercise of that discretion will not be overturned unless it is arbitrary or capricious, or evidences the agency's bad faith. Department of Transportation v. Groves-Watkins Contractors, 530 So.2d 912, 914 (Fla. 1988); Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d 1284 (Fla. 1st DCA 1985); Capelletti Brothers v. Department of General Services,

   432 So.2d 1359 (Fla. 1st DCA 1983); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982); Wood-Hopkins Contracting Co. v. Roger

   J. Au and Son, Inc., 354 So.2d 446 (Fla. 1st DCA 1978). Agencies do not have unbridled discretion, however, and must act in a reasonable manner in the award of contracts. Couch Construction Co. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978).

   
   

10. In this case, a review of the bidding documents demonstrates that an error was made regarding the issue of whether the School Board has to pay sales tax on the acquisition of the task seating. Once it was determined that sales tax did not have to be paid by the School Board, and that the Knoll Source and Haworth bids could be comparatively reviewed, the irregularity in the Knoll Source bid concerning the exclusion of sales tax should have been waived under Section 5.31 in the bid instructions. Once the requirement to include the sales tax in the bid is waived, Knoll Source becomes the lowest responsive bidder on this project according to the certified bid tabulation of the bids opened on April 17, 1990.

Based upon the foregoing, it is RECOMMENDED:

1. That the Respondent enter a Final Order awarding the contract for task seating for the new district administration building to Knoll Source.

DONE and ENTERED this 17th day of July, 1990, in Tallahassee, Florida.

VERONICA D. DONNELLY

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 17th day of July, 1990.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-3261BID

Petitioner's proposed findings of fact are addressed as follows:

1. Accepted. See H.O. #1.

2. Accepted.

3. Accepted.

4. Accepted. See H.O. #2.

5. Accepted.

6. Accepted.

7. Accepted. See H.O. #2.

8. Rejected. Contrary to fact. The attorney stipulated at hearing that the School Board does not pay sales tax on the contract.

9. Rejected. Contrary to fact. See H.O. #3.

Respondent's proposed findings of fact are addressed as follows:

1. Accepted. See H.O. #1.

2. Accepted.

3. Accepted.

4. Accepted. See H.O. #2.

5. Accepted.

6. Accepted.

7. Accepted.

8. Accepted. See H.O. #2.

COPIES FURNISHED:

Ms. Sue Olinger

1284 West Fairbanks Avenue Winter Park, FL 32789

Bruce P. Taylor, Esquire 1960 East Druid Road Clearwater, FL 34618-4688

Mr. George Plumb

3339 West Kennedy Boulevard Tampa, FL 33609

Dr. Scott N. Rose Superintendent

Pinellas County School Board Post Office Box 4688 Clearwater, FL 34618-4688

Honorable Betty Castor Commissioner of Education The Capitol

Tallahassee, FL 32399-0400

Docket for Case No: 90-003261BID

Orders for Case No: 90-003261BID