STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JONES FLOOR COVERING, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF GENERAL )

SERVICES, )

)

Respondent, ) CASE NO. 90-5032BID

)

and )

)

ALL FLORIDA CONTRACT )

CARPETS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on August 29, 1990. The Division of Administrative Hearings received the hearing transcript on September 12, 1990.

The parties filed proposed recommended orders on September 26, 1990. The attached appendix addresses proposed findings of fact by number.

APPEARANCES

For Petitioner: Bruce A. Leinback, Esquire

Cummings, Lawrence & Vezina, P.A. Post Office Box 589

Tallahassee, Florida 32302-0589

For Respondent: Susan B. Kirkland, Esquire and

Jim Bennett, Esquire

Suite 309, Knight Building 2737 Centerview Drive

Tallahassee, Florida 32399-0950

For Intervenor: Keith J. Kinderman, Esquire

Post Office Box 647 Tallahassee, Florida 32302

STATEMENT OF THE ISSUES

Whether respondent Department of General Services should award a contract for carpet installation, in accordance with invitation to bid number 69-360-240- F, to petitioner, to intervenor, or to neither?

PRELIMINARY STATEMENT

After petitioner Jones Floor Covering, Inc. was advised that its low bid on certain items listed in respondent's invitation to bid, number 69-360-240-F carpet installed, had been rejected as unresponsive, it filed a timely notice of protest and subsequently a formal written protest, all in accordance with Section 120.53(5), Florida Statutes (1989), which gave rise to the present bid dispute proceedings.

In due course, the Department of General Services forwarded the matter here. After it was docketed, petitioner filed a rule challenge under Section 120.56, Florida Statutes (1989), directly with the Division of Administrative Hearings. Jones Floor Covering, Inc. v. Department of General Services, Case No. 90-5224R. The present case and Case No. 90-5224R were consolidated for hearing. A final order dismissing the rule challenge petition was entered on September 28, 1990.

FINDINGS OF FACT

1. The parties stipulated in their prehearing stipulation as follows: "1. Respondent's Division of Purchasing advertised for competitive

   bidding for [a term contract for] carpet installed, bid number 69-360-240-F.

   "2. On or about April 19, 1990, the Division of Purchasing sent to prospective bidders a revised invitation to bid. [The invitation to bid contained the following language:

   7. INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten

   (10) days prior to the bid opening inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision.

   Any actual or prospective bidder who disputes the reasonableness, necessity or competitiveness of the terms and conditions of the invitation to Bid, bid selection or contract award recommendation, shall file such protest in form of a petition in compliance with Rule 13A-1.006, Florida Administrative Code. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes.

   Petitioner's Exhibit number 5.

   "3. The petitioner did not protest any of the terms and conditions of the invitation to bid within 72 hours of its receipt of the invitation to bid.

   "4. The petitioner timely submitted its bid pursuant to the above- referenced bid solicitation.

   "5. The bids were opened on May 16, 1990 and on July 23, 1990 the Division of Purchasing posted the official bid tabulation document. [Petitioner's bid was low.]

   "6. The Division of Purchasing determined that the petitioner's bid was non-responsive. The stated basis for said rejection was 'PUR 7068 not completed in full.' A check mark had not been placed in the appropriate box in paragraph

   8 of said form.

   "7. Within 72 hours of the posting of the bid tabulation document, the petitioner delivered another PUR Form 7068 to the respondent with the appropriate box in paragraph 8 checked.

   "8. On July 25, 1990, the petitioner timely filed its Notice of Intent of Protest with the respondent.

   "9. On August 3, 1990, the petitioner timely filed its Notice of Formal Written Protest and Petition for Formal Hearing.

   "10. On August 21, 1990, the petitioner filed a Petition of Administrative Determination of the Validity of Unpromulgated Rule challenging the special condition entitled 'Public Entity Crimes' on page four of the invitation to bid.

   "11. On August 23, 1990, the petitioner's Motion to Consolidate Proceedings was granted."

   
   

   Filling Out Forms

   
   

2. The invitation to bid required bidders to submit completed forms PUR 7068 as part of their bids. Joint Exhibit No. 1, p. 4 ("must execute . . . form PUR 7068 . . . and enclose it with your bid") A checklist in the invitation to bid entitled "REQUIRED SUBMISSIONS" listed "PUBLIC ENTITY CRIMES FORM # PUR 7068," and stated:

   
   

   FAILURE TO SUBMIT EACH AND EVERY FORM AND ARTICLE OF INFORMATION REQUESTED ABOVE . . . SHALL RESULT IN DISQUALIFICATION OF THE BID.

   
   

   Joint Exhibit No. 1, p. 2B. The purpose of Form PUR 7068 and bid specifications pertaining to the form was to assure compliance with Section 287.133(3)(a), Florida Statutes (1989). The form PUR 7068 that Jones Floor Covering, Inc. submitted with its bid reads, in its entirety, as follows:

   
   

   THIS FORM MUST BE SIGNED IN THE PRESENCE OF A NOTARY PUBLIC OR OTHER OFFICER AUTHORIZED TO ADMINISTER OATHS.

   
   

   1. This sworn statement is submitted with Bid, Proposal or Contract No. 69-360-240-F for Carpet Installed.

      
      

   2. This sworn statement is submitted by Jones Floor Covering, Inc. whose business address is P.O. Box 18430 Pensacola, FL 32523-8430 and (if applicable) its Federal Employer Identification Number (FEIN) is

      59-0864814 (If the entity has no FEIN, include the Social Security Number of the individual signing this sworn statement: .)

      
      

   3. My name is R. W. Jones and my relationship to the entity named above is Vice-President.

      
      

   4. I understand that a "public entity crime" as defined in Paragraph 287.133(1)(g), Florida Statutes, means a violation of any state or federal law by a person with respect to and directly related to the transaction of business with any public entity or with an agency or political subdivision of any other state or with the United States, including, but not limited to, any bid or contract for goods or services to be

      provided to any public entity or an agency or political subdivision of any other state or of the United States and involving antitrust, fraud, theft, bribery, collusion, racketeering, conspiracy, or material misrepresentation.

      
      

   5. I understand that "convicted" or "conviction" as defined in Paragraph 287.133(1)(b), Florida Statutes, means a finding of guilty or a conviction of a public entity crime, with or without an adjudication of guilt, in any federal or state trial court of record relating to charges brought by indictment or information after July 1, 1989, as a result of a jury verdict, nonjury trial, or entity of a plea of guilty or nolo contendere.

      
      

   6. I understand that an "affiliate" as defined in Paragraph 287.133(1)(a), Florida Statutes, means

1. A predecessor or successor of a person convicted of a public entity crime: or

2. An entity under the control of any natural person who is active in the management of the entity and who has been convicted of a public entity crime. The term "affiliate" includes those officers, directors, executives, partners, shareholders, employees, members, and agents who are active in the management of an affiliate. The ownership by one person of shares constituting a controlling interest in another person, or a pooling of equipment or income among persons when not for fair market value under an arm's length agreement, shall be a prima facie case that one person controls another person. A person who knowingly enters into a joint venture with a person who has been convicted of a public entity crime in Florida during the preceding 36 months shall be considered an affiliate.

   
   

   1. I understand that a "person" as defined in Paragraph 287.133(1)(e), Florida Statutes, means any natural person or entity organized under the laws of any state or of the Untied States with the legal power to enter into a binding contract and which bids or applies to bid on contracts for the provision of goods or services let by a public entity, or which otherwise transacts or applies to transact business with a public entity. The term "person" includes those officers, directors, executives, partners, shareholders, employees, members, and agents who are active in management of an entity.

      
      

   2. Based on information and belief, the statement which I have marked below is true in relation to the entity submitting this sworn statement. [Please indicate which statement applies.]

   Neither the entity submitting this sworn statement nor any officers, directors,

   executives, partners, shareholders, employees, members, or agents who are active in management of the entity, nor any affiliate of the entity have been charged with and convicted of a public entity crime subsequent to July 1, 1989.

   
   

   The entity submitting this sworn statement, or one or more of the officers, directors, executives,

   partners, shareholders, employees, members, or agents who are active in management of the entity or an affiliate of the entity has been charged with and convicted of a public entity crime subsequent to July 1, 1989 AND [Please indicate which additional statement applies.]

   
   

   There has been a proceeding concerning the conviction before a hearing officer of the State of Florida, Division of Administrative Hearings. The final order entered by the hearing officer did not place the person or affiliate on the convicted vendor list. [Please attach a copy of the final order.]

   
   

   The person or affiliate was placed on the convicted vendor list. There has been a subsequent proceeding before a hearing officer of the State of Florida, Division of Administrative Hearings. The final order entered by the hearing officer determined

   that it was in the public interest to remove the person or affiliate from the convicted vendor list. [Please attach a copy of the final order.]

   
   

   The person or affiliate has not been placed on

   the convicted vendor list. [Please describe any action taken by or pending with the Department of General Services.]

   
   

   /s/ R.W. Jones

   R. W. Jones, Vice President Date: May 16, 1990

   
   

   STATE OF Florida COUNTY OF Escambia

   
   

   PERSONALLY APPEARED BEFORE ME, the under-signed authority,

   R. W. Jones who, after first being sworn by me, affixed his/her signature in the space provided above on this 16th day of May, 1990."

   
   

   Petitioner's Exhibit No. 3. As the parties stipulated, no check mark, "x" or other symbol had been placed in any blank in paragraph 8. Mr. Jones' testimony that a typist, working from a draft correctly filled out in ink, neglected to copy the crucial "x" went unrebutted.

3. In fact, neither Jones Floor nor any of its officers, directors, managing employees or affiliates have been convicted of a public entity crime since July 1, 1989. Submitted along with Jones Floor's bid was a bid bond in the amount of $5,000 conditioned on Jones Floor's failure to enter into a contract with respondent in accordance with the terms of its bid. Joint Exhibit No. 2, p.5.

   
   

4. When R. W. Jones learned that the form PUR 7068 submitted with Jones Floor's bid did not indicate that neither the company, its officers, directors, managing employees nor affiliates had been convicted of a public entity crime since July 1, 1989, he directed that another form be filled out so indicating. On July 25, 1989, this "corrected" form was filled out. Except for the addition of the omitted "X" it was identical in every respect to the first form PUR 7068, including the date: May 16, 1989. Mr. Jones was not placed under oath before executing either form.

   
   

5. On October 14, 1989, petitioner had submitted an earlier version of the public entity crime form as part of its bid in response to invitation to Bid No. DGS 89/90-052 issued by respondent's Departmental Purchasing Office, which contracts separately (for departmental needs) from respondent's Division of Purchasing which contracts, as here, in order to establish terms on which all state agencies can procure certain commodities.

   
   

6. Until shortly before the bids received in response to invitation to bid No. 69-360-240-F were opened, respondent's Division of Purchasing had allowed bidders for other contracts to cure irregularities in the execution of Forms PUR 7068 (or predecessor forms) after bids were opened. On the "dozen or two dozen" (T.163) occasions when low bidders were afforded the opportunity to correct duly notarized but otherwise irregular forms, after bids had been opened, they availed themselves of the opportunity, except in some four instances. T. 163. Perhaps the policy change disallowing corrections (inspired by a bid protest on the point) did not take place until after May 16, 1990.

   
   

   Branching Out

   
   

7. A purpose of the invitation to bid was "to require the bidders to be located in . . . proximity to the locations that would be procuring and installing." T.139. Among the special conditions in invitation to bid No. 69- 360-240-F is one entitled "QUALIFICATIONS," which provides:

   
   

   By signing the Bidder Acknowledgment Form, the bidder certifies that his company is a viable business selling and installing carpet . . . .

   
   

   Joint Exhibit No. 1. A second special condition, entitled "SECTION BIDDING," states:

   
   

   Bidder may condition bid for award in one or more geographic sections depicted on the attached map. Bidder may bid on the section in which his business is located, and the adjacent section(s) only. . . .

   
   

   Joint Exhibit No. 1. On the "attached map," one section (No. 2) intervenes between the westernmost section (No. 1), which includes Pensacola, and the section involved in the present dispute (No. 3), in which Tallahassee is located. Petitioner's Exhibit No. 9.

8. Having "discovered that . . . [he] was limited to two sections [he] could bid in," (T.54), R. W. Jones called Tallahassee and spoke to Vicky Chambers, one of respondent's employees, who told him that a bidder's branch office could meet the location requirement. She did not say "that all you had to do was set up a branch office." T.94.

   
   

9. Two days before bids were opened, Jones Floor Covering, Inc. (Jones Floor) leased an office in Tallahassee with "a couple of hundred square feet" (T.107), and furnished it with "a desk . . . a filing cabinet and a few other odds and ends, [perhaps] a typewriter . . ." T.58. The office lacked "a per se telephone," id., and there was no reason to check Jones Floor's Tallahassee voice mailbox on a regular basis. After it was furnished, the office remained locked.

   
   

10. A family-owned commercial flooring contractor head-quartered in Pensacola, Florida, petitioner Jones Floor does business not only elsewhere in Florida but also in several other states. "[A] battery of superintendents . .

    . go to these job sites." T.38. Sometimes superintendents hire locally; otherwise they take crews with them. Outside Pensacola the company "may have a trailer on the jobsite, or a mini-warehouse," id., but Jones Floor has no offices with telephones, other than the main office in Pensacola.

    
    

11. On May 1, 1990, Florida State University (FSU) awarded petitioner an

    $18,848 contract for carpet installation. Petitioner's Exhibit No. 6. Work began on the FSU contract in Tallahassee only after Jones Floor had submitted the bid at issue here. A crew from Pensacola did the work in two discrete two- to-three week stints, finishing on or before August 17, 1990, without using the space petitioner had rented in its attempt to qualify as a bidder for the contract at issue here.

    
    

12. Jones Floor has never made any use of its Tallahassee office. Nobody keeps office hours. No employees work out of the office. The office does not have electricity. Jones Floor has never solicited, accepted or conducted any business at the office, and has not advertised it as a business location.

    
    

    Willing and Able

    
    

13. Intervenor All Florida Contract Carpets, Inc. filed the second low bid, a responsive bid complete with the requisite forms and accompanying submissions. All Florida Contract Carpets, Inc. has its headquarters in Tallahassee.

    
    

    CONCLUSIONS OF LAW

    
    

14. Since the Department of General Services referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.53(5)(d)2., Florida Statutes (1989), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1989).

    
    

    Specifications Unchallenged

    
    

15. Like the disappointed bidder in Capeletti Bros. Inc. v. Department of Transportation, 499 So.2d 855 (Fla. 1st DCA 1986) (reh. den. 1987), Jones Floor failed to file a timely protest when bids were solicited, and raised no question about the specifications with which it did not comply, until after the bids were opened and the agency's intention to award to another bidder was

    announced. Because no bidder followed "[t]he proper procedure for contesting [a

    bid specification] . . . by filing a bid solicitation protest within seventy- two hours of receipt of the project plans and specifications," Capeletti Bros. Inc. v. Department of Transportation, 499 So.2d 855, 857 (Fla. 1st DCA 1986) (reh. den. 1987), questions about the propriety and wisdom of particular specifications are no longer open.

    
    

16. It is now too late to argue, as petitioner has, that it should not have been required to submit form PUR 7068 with the bid, on grounds the statute only requires that a sworn statement be filed before the contract is let. It is also too late to argue, as petitioner seems to argue, that the specification requiring bidders to be located in or adjacent to each section for which they are bidding unnecessarily stifles competition, since response times set out elsewhere in the invitation to bid can be met by contractors located farther away. Because the requirements appear in the specifications and because no timely protest was made to the specifications, they are conclusively established as criteria for evaluating the bids.

    
    

    Invitation Controls

    
    

17. The invitation to bid as a whole comprises the standard against which bids must be measured to determine whether they are eligible for consideration. An invitation to bid sets out specifications which bids filed in response must meet in substance, in order for the bidder to qualify as a competitor for the contract to be let. Specifications in invitations to bid, like "[w]ords in [almost] an[y] instrument should be given their natural or most commonly understood meaning." Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 51-2 (Fla. 1st DCA 1986).

    
    

18. "Although a bid containing a material variance is unacceptable . . . not every deviation from the invitation is material." Robinson Electrical Co.

    v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc.,

    v. State Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986); Glatstein v. Miami, 399 So.2d 1005 (Fla. 3rd DCA) rev. den. 407 So.2d 1102 (Fla. 1981). "It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc., v. State Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986); Harry Pepper & Associates, Inc., v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977).

    
    

    Material Deviation

    
    

19. Petitioner contends that failure to complete form PUR 7068 did not amount to a material deviation from what the invitation to bid required, and points to respondent's past practice of allowing emendation as proof. But the Department's experience under its prior practice showed that a low bidder who had furnished a form PUR 7068, incompletely filled out, could excuse itself from performance simply by declining to fill the form out properly. On some four separate occasions, the evidence established, the low bidder took a second look, after getting the nod, and decided, for its own reasons, not to enter into the contract.

    
    

20. The Department was powerless to waive the bidder's failure to execute a public entity crimes form properly, by virtue of Section 287.133(3)(a), Florida Statutes (1989). But the bidder was free to consider the spread between its bid and the second low bid, changes in costs of material and labor, if any, and all other pertinent factors, before making a final decision whether it would execute

    a form PUR 7068 and go forward under the contract. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids.

    
    

21. Petitioner argues that the bid bond it filed was respondent's guarantee that it would fill out the form correctly, if permitted to do so. But respondent could only go against petitioner's bid bond if it awarded petitioner the contract, which Section 287.133(3)(a), Florida Statutes (1989) precludes, unless the form is filled out. It is not the invitation to bid, but the bid itself which, if accepted, forms the contract.

    
    

22. Although the decision in Department of Transportation v. Groves- Watkins Contractors, 530 So.2d 912 (Fla. 1988) might be read to authorize respondent to decide the question of the form's materiality one way in one case and another way in another case, so long as its decision could not be shown to be "arbitrary and capricious" in a particular case, such an interpretation should be rejected in administrative bid dispute proceedings. It would leave an unwholesome amount of play in the system, and invite abuse.

    
    

23. This does not mean, however, that a contracting agency can never change its mind, as it develops its policy on a point. Just as the Administrative Procedure Act contemplates flexibility with regard to incipient policy in other areas, see C.H. Barco Contracting Co. v. Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986) and McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977), so here respondent is free to refine and improve its policy on a principled basis, supported by evidence of record.

    
    

24. Because petitioner's bid was not accompanied by a properly executed form PUR 7068, it is unnecessary to address petitioner's contention that its not having a bona fide business location in sections two, three or four did not constitute material noncompliance with the invitation to bid, because of petitioner's proven ability to perform at a distance from its Pensacola headquarters.

    
    

    Costs and Charges

    
    

25. By motion for costs and charges, respondent seeks to recover all costs and charges incurred in these proceedings, citing Section 287.042(2)(c), Florida Statutes (1989). Affidavits attached to the motion show costs and charges amounting to $651.50, of which $372.50 was incurred in connection with deposing witnesses before hearing and securing deposition transcripts. In its response to motion for costs and charges, petitioner contends that respondent has failed to show that it was reasonably necessary to incur the deposition costs.

    
    

26. The thoroughness, organization and general excellence of respondent's counsel's presentation at hearing bore eloquent witness to conscientious preparation, but did not in itself establish the necessity of deposing Mr. Jones or of obtaining deposition transcripts. No affidavit attests to reasonable necessity, and respondent did not use depositions to impeach. Properly construed, Section 287.042(2)(c), Florida Statutes (1989) authorizes the award only of costs and charges shown to have been reasonably incurred by the prevailing party.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

1. That respondent award the contract, No. 69-360-240-F, to All Florida Contract Carpets, Inc.

2. That respondent be awarded $279 as reimbursement for the court reporter's fees for appearance at final hearing and preparation of the hearing transcript.

3. That, upon payment of $279, any and all procurement protest bonds posted by petitioner and it sureties be discharged.

DONE and ENTERED this 11th day of October, 1990, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 11th day of September, 1990.

APPENDIX

Petitioner's proposed findings of fact Nos. 1 through 8, 10, 12, 13, 14, 16

through 20, 22, 23, 24, 25, 27, 28, 29, 31, 34, 35 and 38 have been adopted, in substance, insofar as material.

Petitioner's proposed findings of fact Nos. 9, 36 and 37 pertain to immaterial matters.

With respect to petitioner's proposed finding of fact No. 15, a duly promulgated rule requires that the form be part of the solicitation. The form itself indicates it is to be submitted with the bid.

With respect to petitioner's proposed finding of fact No. 21, the Department is statutorily precluded from awarding a contract to a bidder who has not executed a sworn statement.

With respect to petitioner's finding of fact No. 26, he was not sworn when he signed the form. It is immaterial who typed the form.

With respect to petitioner's proposed finding of fact No. 30, rejection of the bid did not render it unresponsive or make the bidder irresponsible.

With respect to petitioner's proposed findings of fact Nos. 32 and 33, he was not sworn before signing the form.

With respect to petitioner's proposed findings of fact Nos. 36 and 37, nothing in the evidence suggested that petitioner relied on respondent's past practice or policy, whatever it was.

Respondent's proposed findings of fact Nos. 1 through 23, 28, 31 through

45, 47, 48 and 49 have been adopted, in substance, insofar as material.

With respect to respondent's proposed findings of fact Nos. 24, 25, 26 and 27, nothing in the evidence suggested that petitioner relied on respondent's past practice or policy, whatever it was.

Respondent's proposed findings of fact Nos. 29 and 30 pertain to immaterial matters.

With respect to respondent's proposed finding of fact No. 46, the evidence showed that Jones Floor did not have a viable business location in Section 3 at the time the bids were opened.

Copies furnished to:

Bruce A. Leinback, Esquire Cummings, Lawrence & Bezina, P.A. 1004 DeSoto Park Drive Tallahassee, FL 32302-0589

Susan B. Kirkland, Esquire and Jim Bennett, Esquire

Office of the General Counsel Department of General Services Koger Executive Center

Suite 309, Knight Building 2737 Centerview Drive

Tallahassee, FL 32399-0950

Keith J. Kinderman, Esquire Post Office Box 647 Tallahassee, FL 32302

Ronald W. Thomas, Executive Director Department of General Services

Knight Building, Koger Executive Center 2737 Centerview Drive

Tallahassee, FL 32399-0950

Docket for Case No: 90-005032BID

Orders for Case No: 90-005032BID