STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

KOBLAR CONSTRUCTORS AND ) ENGINEERS, )

)

Petitioner, )

)

vs. ) CASE NO. 90-8120BID

) DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

)

and )

) ELKINS CONSTRUCTORS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice this cause came on for formal hearing before P. Michael Ruff duly designated hearing officer of the Division of Administrative Hearings on January 18, and 22, 1991, in Tallahassee, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: Andrew Koblar, Pro Se

2009 Northwest 67th Place Gainesville, Florida 32606

For Respondent: Deanna Efotda, Esquire

Assistant General Counsel Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

For Intervenor: B. Thomas Whitefield, Esquire

Ulmer, Murchison, Ashby & Taylor 1600 First Union Building

Post Office Box 479 Jacksonville, Florida 32201

STATEMENT OF THE ISSUES

The issue to be resolved in this proceeding concerns whether the Petitioner is the lowest responsive bidder with regard to an invitation to bid for Project Number KD-05/NG-05 (The ITB). Specifically the issues involve whether the Petitioner adequately complied with specifications regarding submission of a check list with the bid and whether the site plan submitted by the Petitioner was sufficient in accordance with the bid specifications.

PRELIMINARY STATEMENT

This dispute relates to a finding by the U.S. Environmental Protection Agency "EPA", by Order dated November 26, 1990, that the Department's Starke Prison Waste Water Treatment Facility was in violation of Section 301(a) of the Clean Water Act, as amended, 33 U.S.C. ss. 1311(a) et seq. Accordingly the Department issued Invitation To Bid, Project Number KD-05/NG-05 on September 30, 1990, seeking to correct its failure to meet the final effluent limitations stipulated in its NPDES Permit. The upgrade requested by the ITB included installation of new aeration tanks, final clarifiers, final filters, and appurtenances. Prior to issuance of the ITB, the Department selected William M. Bishop, Consulting Engineer Inc. as a consulting engineer on the upgrade project. Bishop's duties included drafting of ITB conditions and specifications, evaluating proposals submitted in response to the ITB and recommending to the Department to whom to award the contract. Bishop also prepared four addendums to the ITB.

The ITB stated that the contract would be awarded to the lowest responsive bidder. Responses to the ITB and the four addenda issued in furtherance of it during October 1990, were to be responded to by October 26, 1990 at 4:00 0 p.m., local time. Koblar and Elkins, the Petitioner and Intervenor respectively, timely submitted their bids. A total of five bids were received by the Department. Bishop's representative evaluated each bid individually and found Koblar's bid to be nonresponsive and rejected the bid. It was deemed nonresponsive because of an alleged failure to include the required information on the submittal checklist and for an insufficient site plan. Bishop thereupon recommended awarding the bid to Elkins as the lowest responsive bidder, although Koblar was the lowest bidder as to price. On December 5, 1990 the bid results were posted, a protest was timely filed by Koblar, and this proceeding in due course ensued.

The cause came for hearing as noticed. The Petitioner presented the testimony of Drew Koblar, Michael Murphy, Lynn Mueller and ten exhibits which were admitted into evidence. The Respondent agency presented the testimony of David Scott and Michael Murphy. The Intervenor presented the testimony of Michael L. McMurray. The Respondent's exhibits A, B, C, D, J, K, and L were admitted into evidence.

The Department's stated position in this proceeding was that Koblar's Bid contained omissions or irregularities which were not minor irregularities and thus could not be cured or waived by the agency. Specifically the Respondent had two objections to the Petitioner's Bid: (1) That the Petitioner had not filled in blank spaces on the submittal check list with the calculations contained in the "Smith and Lovelace information"; and (2) The Department's bid evaluator felt that the site plan submitted was insufficient. The above testimony and evidence was taken and at the conclusion of the hearing a transcript of the proceeding was ordered. The parties were accorded the right to file Proposed Findings of Fact and Conclusions of Law and timely submitted these in the form of Proposed Recommended Orders. Those Proposed Findings of Fact have been treated in this Recommended Order and are specifically ruled on in the Appendix attached hereto and incorporated by reference herein.

FINDINGS OF FACT

1. The Petitioner, Koblar Constructors and Engineers (Koblar) is a sole proprietorship owned by Andrew Koblar of Gainesville, Florida. The Respondent (Department) is an agency of the State of Florida charged with the operation of the Florida prison system including the installation and maintenance of sanitation systems for Florida Prisons. The Intervenor is Elkins Constructors, Incorporated, a Florida corporation, (Elkins) which in the initial intended agency action was recommended to be awarded the contract involved in this proceeding.

   
   

2. The United States Environmental Protection Agency (EPA) issued an Order on November 26, 1990 finding that the Waste Water Treatment Facility at the Starke Prison operated by the Department violated Section 301(a) of the so called "Clean Water Act" as amended at 33 U.S.C. Subsection 1311(a). The violation allegedly related to the system's failure to meet final effluent limitations concerning BOD, suspended solids and nutrients, as stipulated in the NPDES permit Number FL0038245 issued by the EPA to the Department with regard to that Waste Water System at the Starke Prison. Being aware of the EPA Order and the need for corrective action in order to avoid severe civil penalties, the Department issued Invitation to Bid Project Number KD-05/NG-05 (ITB) on September 30, 1990, in order to install a facility and equipment which would correct the violation of the sewage effluent limitations as stipulated in the Department's NPDES Permit.

   
   

3. The upgrading of the Waste Water Plant involved in the ITB included installation of new aeration tanks, final clarifiers, final filters, and appurtenant equipment and facilities. In order to prepare the ITB and then to evaluate the bid responses to it, the Department selected William M. Bishop, Consulting Engineers, Inc. (Bishop) as the consulting engineer on this project. Bishop's duties included the drafting of the ITB specifications and conditions, evaluating the proposals submitted in response to it and recommending the award of the contract. At various times after the preparation of the initial ITB Bishop also prepared four addendums to it. The ITB stated that the contract would be awarded to the lowest, responsive bidder. The proposals were to include bid quotations, used to determine lowest price and other documents and data to determine the responsiveness of the proposals.

   
   

4. Koblar timely submitted a base bid of $1,390,000.00 with additional costs for Alternative No. 1 involving a "Traveling Bridge Filter" for

   $328,400.00; for additive Alternative No. 2: "Emergency Generator" for $65,223; and additive Alternative No. 3: "Communinutor" for $38,584.00. Elkins submitted a base bid of $1,520,000.00, with additional costs for additive Alternative No. 1: The Traveling Bridge Filter, for $375,000.00; additive Alternative No. 2: The Emergency Generator, for $53,000.00; and additive Alternative No. 3: The Communinutor for $20,000.00.

   
   

5. Five bids were received by the Department, including Koblar's and Elkins' Bids. The bids were evaluated by Mr. Murphy of Bishop Engineering. The Bishop representative found Koblar's bid nonresponsive and rejected it. It was deemed nonresponsive because it allegedly failed to include the required information on the submittal check list as well as an adequate site plan. Mr. Michael Murphy, the Engineer evaluating the bids maintained he was unable to evaluate Koblar's bid because it lacked that information. After evaluation of the bids, Bishop recommended awarding the bid to Elkins as the lowest responsive bidder. On December 5, 1990, the bid results were posted with Elkins as the announced winner.

6. The ITB consisted of a package containing instructions to prospective bidders and specifications for the construction of the project which primarily consisted of a Waste Water Treatment Plant. The ITB required a pre-engineered package Waste Water Treatment Plant which would meet the Performance Criteria set out in the Specifications. Bidders were required to submit a base bid for the plant itself and prices for three additive alternatives as delineated above.

   
   

7. After the Department issued the ITB on September 30, 1990, the engineer met with representatives of Smith and Lovelace, Inc., a Wastewater Treatment Plant Manufacturer. These representatives provided to the Engineer, Mr. Murphy, calculations for the performance of the Waste Water Treatment Plant it wished to make available for bidders. As a result of that meeting, the Engineer approved Smith and Lovelace's Plant as a manufacturer of the Waste Water Treatment Plant sought. The Engineer then issued an addendum to the ITB notifying bidders that the Smith and Lovelace plant was approved for the project. The Engineer issued the addendum because he determined that the Smith and Lovelace equipment and materials could meet the project specifications.

   
   

8. Section 11395 paragraph 1.5.1 provided that bidders submit the following materials:

   
   

   1. Site plan showing arrangement of treatment units and yard piping and any modifications required to match the piping arrangements shown on the plans.

   2. The performance and operating characteristics for the plant including the electrical load requirements and the oxygen transfer efficiency of the diffusers proposed for the aeration tanks.

   3. A listing of tank volumes and surface areas.

   4. A list of names, addresses, and telephone numbers of at least five (5) owners of plants using the proposed treatment arrangement and equipment for verification of operation and maintenance considerations.

      
      

9. The calculations submitted to the consulting engineer by the Smith and Lovelace firm and the proposal provided him contained all the information requested by paragraph 1.5.1. Addendum 2 to the ITB included a "submittal check list" form. The submittal check list form listed the categories of technical information and provided a space for inserting the results of calculations which were requested by paragraph 1.5.1. In response to this, Koblar wrote the following notation on its check list form: "See enclosure or prequalification on file with engineer." The enclosure consisted of a technical scale drawing of the Smith and Lovelace plant reflecting a directional north arrow. This was Koblar's site plan pursuant to Item 1 on the submittal check list. The prequalification information referred to by Koblar consisted of the design and calculations submitted by Smith and Lovelace which had induced the consulting engineer, Mr. Murphy, to approve that company as a manufacturer and issue the addendum to Paragraph 1.4.4. Engineer Murphy knew that the notation on the check list form referred to that same information, accordingly to his testimony. Nothing in the instructions to bidders with the ITB precluded bidders from referencing information already in the consulting engineer and bid evaluator's possession, which was done by Koblar in this case.

10. On December 5, 1990, the Department posted the bid results which reflected that the Respondent rejected Koblar's bid as nonresponsive. That posting announced the intent to award the contract to Elkins. Koblar timely filed a notice of intent to protest and a formal written protest pursuant to Section 120.53 of the Florida Statutes and the case was ultimately transferred to the undersigned hearing officer and tried on January 18 and 22, 1991.

    
    

11. The Department's position was that the Koblar bid contained certain omissions which constituted material major irregularities such that they could not be cured or waived in the view of the Department. The two objections to Koblar's bid involved Koblar's failure to fill in all blank spaces on the submittal check list with the calculations contained in the Smith and Lovelace presubmitted information and its position that the Koblar's site plan submitted was insufficient to comply with its view of the bid specification.

    
    

12. Mr. Michael Murphy of Bishop Consulting Engineers, the Engineer assigned to prepare the Invitation to Bid, evaluate bids and recommend selection of a bidder, acknowledged in his testimony that the information previously submitted by Smith and Lovelace of the Department contained all of the information required by the checklist and that that information met the specifications contained in the ITB. Mr. Murphy had notified Smith and Lovelace that its design calculation's meet the specifications prior to the date bids were submitted. He was of the opinion, however, that he could not properly refer to the Smith and Lovelace information to which his attention had been directed by Koblar in its bid submittal. According to the Department that would have provided Koblar a competitive advantage over other bidders. The evidence showed that if Koblar had transcribed the information onto the check list from the Smith and Lovelace data and provided a site plan which precisely met the consulting engineer's view of what the site plan should depict, particularly with regard to location of and connection of yard piping and relationship to existing infrastructure (buried pipes), the Department would have found its bid responsive and awarded the contract to Koblar since it was the lowest bidder by a significant amount (approximately $146,000).

    
    

13. There were certain irregularities in the bid of Elkins as well, as shown by the testimony of Mr. Murphy. Mr. Murphy opined that these irregularities were not material because they were obvious ones and easily correctable. There was evidence that certain information provided by Elkins on its check list did not meet the minimum specifications for the contract but that those deficiencies could be corrected by adjusting certain calculations.

    Because Mr. Murphy concluded that Elkins' bid could meet specifications, depending on how the calculations were done, Elkins' bid was considered to be responsive. There was also testimony that perhaps one of the criteria on the check list, Item 2b, was not met by the calculations submitted by Smith and Lovelace. This testimony is inconsistent with the extensive testimony and evidence to the contrary and is rejected. However, if any such deficiency had existed, it could be cured or eliminated by applying the same standards or differing calculation procedures which the engineer applied to make Elkins' submittals acceptable.

    
    

14. The Elkins' bid did not meet the minimal standard for the aerobic digester. The minimal requirement was a 207,000 gallon capacity tank. Elkins' bid reflected a 180,000 gallon tank. This also rendered its bid proposal more than $18,000 cheaper than the Koblar bid as to this particular item. During the first day of the hearing, Engineer Murphy testified that he considered this to be a minor error and that Elkins could be required to provide a 207,000 tank and

    would not be entitled to a change order and (more money) for doing so. Four days later in his testimony, the Engineer testified that the bid was not necessarily in error at all because the minimum design criteria were flexible. According to Mr. Murphy, the specifications minimums as originally issued were firm ones, but as a result of changes of Addendum 2, the minimum requirements were only guidelines. Therefore, if Elkins' 180,000 gallon tank proposed was based on calculations using an industry standard, rather than the minimum requirement called for in the specification its calculation for the tank capacity would have been acceptable. In other words, with a smaller capacity tank, if Elkins proposal made provision for enhancing the oxygen feed rate, then the same performance standard could be achieved possibly even with the smaller capacity tank.

    
    

15. Similarly, on the first day of the hearing Mr. Murphy testified that he rejected Koblar's bid because he did not feel it was appropriate to incorporate by reference the design calculations previously submitted by Smith and Lovelace, but that those calculations did meet the specifications. On the second day of the hearing, he indicated that Koblar's calculations did not meet the specification for oxygen transfer with regard to the aerobic digester. However, if the calculations testified to by the engineer as establishing acceptability of the Elkins' Bid were applied to Koblar's Bid, Koblar's bid would also be acceptable. Under Elkins' calculations using 20 MG/L effluent BOD (instead of the 5 MG/L specified), the minimum required oxygen rate would be 361 pounds. Koblar's bid provided for 398 pounds oxygen feed rate per hour and therefore would exceed the minimum requirements. In summary, if the justification for allowing Elkins to disregard the specifications in arriving at the tank capacity requirement held true, then the specifications relating to the requirements on the check list were not rigid requirements were performance related and were nothing more than guide lines and therefore cannot serve as a basis for rejecting either bid.

    
    

16. The testimony of Mr. Murphy taken in its totality establishes that Koblar's bid would have been accepted as responsive if it had transferred the calculations from the Smith and Lovelace pre-submitted information onto its actual physical check list and if Koblar had submitted a site plan which the engineer felt met his own expectations. The engineer testified that Koblar site plan was nonresponsive and unacceptable because he himself contemplated a plan which would show precisely where the plant would be located, oriented and how its piping would connect or relate exactly to the piping of the existing facility. Koblar's site plan indeed provided a directional arrow showing how the plant would be placed on the site, direction-wise, and the specification plans themselves in the ITB provided only a limited area for its location so it could not be placed in any other location. Therefore, because of the directional arrow, it was clear how the plant would be placed and connect to the existing facility, in reality. The plant could only be moved a few feet in any direction within the geographically limited area or location contained in the ITB plan depiction part of the specifications. Because the limited area for location provided in the specification plans precludes placement of the plant at any other location on the entire site, and because the directional arrow provided in Koblar's site plan shows how the plant would be oriented, it becomes obvious how the connections to existing piping and the existing facility would be made. The fact that the site plan submitted by Koblar does not show the final precise location or the actual "foot print" of the plant to be installed is, at most, a minor irregularity. It is obvious how the connections would be made. They could only be made one way.

17. In fact, the engineer testified that if Koblar had submitted a drawing showing the precise location anywhere in the specified area in the ITB plans it would have been acceptable. Yet the engineer also testified that he felt the site plan was insufficient because he feared Koblar would request a "change order." He feared Koblar would request a change order if he ordered Koblar to place the plant somewhere different in the specification area from where originally contemplated, possibly because of additional piping, etc. The engineer's stated fear that a change order might result in additional costs under these circumstances is not acceptable. The same result would occur if Koblar had submitted a drawing showing the location of the plant closer than that which the engineer ultimately ordered. Yet he acknowledged that if Koblar had done so its submittal would have been acceptable. The Department's own engineer, Mr. Scott, testified that it was clear how Koblar intended to connect the two facilities, that is, the existing one and the new one proposed and that the arrangement would work. Therefore, the supposed fear of a change order was not shown to well-founded.

    
    

18. The asserted fear of a change order request from Koblar is inconsistent with the engineer's own discussion and evaluation of Elkins' Bid. The Elkins' submittal showed an intent to use a 180,000 gallon aerobic digester. The engineer intended to require Elkins to provide a 207,000 gallon aerobic digester (the so called "muffin monster"). When a bidder places the owner or his engineer on notice that he has based his bid on a specific assumption and the engineer demands something different, it is logical to anticipate a change order dispute. It is not logical to anticipate a change order dispute when the bid order provides that the project will be constructed within the limitations provided in the plans. Therefore, the asserted fear that Koblar would request a change order does not justify rejection of its bid when considered in the light of the engineer's rationale regarding the Elkins' Bid. If the possibility of a change order dispute could be considered in determining irregularity of a bid, it would be considerably more of a factor in the Elkins' Bid Evaluation, which was actually deemed responsive by the engineer, Mr. Murphy.

    
    

19. Mr. Murphy's rejection of the Koblar's site plan was based on a subjective expectation of what the site plans should look like rather than what the specifications actually required. The specifications in fact included a drawing showing the limits in which the new plant would be located. Both Mr. Murphy and Mr. Scott, the Department's own engineer acknowledged that Koblar's drawing of the new plant which was submitted with the bid could be fitted into the limits shown on the specification drawings and the north directional arrow showed the manner in which the plant would be oriented, at which point the manner in which the piping had to be connected became obvious. That was what was required by Paragraph 1.3.1 of the specifications and Koblar's submittal complied with that. Further, Koblar's testimony shows that the he has bound himself to submit no additional costs as change orders based on the final precise placement of the plant in the relation to existing infrastructure and the ultimate connection to the existing facilities.

    
    

20. The Department did not present evidence or explanation to justify its assertion that Koblar had actually gained unfair competitive advantage by the manner in which it submitted its bid. Both engineers testifying for the Department were repeatedly asked to explain the advantage which Koblar received. Initially Mr. Murphy responded that Koblar would have been advantaged if the bid had been accepted because the other bidders did not incorporate by reference the pre-submitted information. Mr. Scott, the Department's own engineer, acknowledged that there would have been no economic advantage to Koblar by incorporating the pre-submitted information by reference in its bid, although,

    conceivably, time savings to Koblar in bid preparation might have been helpful. On the last day of the hearing, however Mr. Murphy elaborated on Mr. Scott's theme in testifying that he felt that there might be a certain amount of time involved in filling out the bid form which could have been saved by Koblar by relying on the pre-submitted information, which might have allowed Koblar to take advantage of a last minute, lowest price from his supplier before making the bid submittal. This conjectural, competitive, economic advantage has not been established however and has been shown to be incorrect. Even Mr. McMurray, the President of Elkins, acknowledged in his testimony that any bidder can change its bid up to the very last minute as to any item. His testimony about the ability to change a bid or a bid item up to the last minute before bid opening shows that ability to make last minute changes in bids is not affected by the amount of time the contractor had already put in the bid preparation prior to bid opening. There was no showing that Koblar gained any last minute price knowledge from any manufacturer or other source or any other advantage which he could put in his bid at the last minute and make use of any purported time gained by submitting a bid which incorporated pre-submitted information by reference rather than a more time consuming preparation of the bid "from scratch." Moreover, any bidder involved could have referred to the pre- submitted information on file with the consulting engineer in lieu of preparation, from "scratch," of all the calculations and other information referenced in the above bid specification paragraphs at issue, including the fact that any bidder could have submitted a site plan similar to the one submitted by Koblar because that was all the specifications required.

    
    

21. In summary, it was not established that Koblar received any unfair economic advantage over other bidders by merely incorporating by reference design calculations which had been pre-approved and were in the possession of the engineer. The information was such that any engineer could look at it and insert the numbers and calculations onto the submittal list at issue with no room for variation in the result. The numbers say what the numbers say and there is no opportunity for a variation such that Koblar would gain a competitive advantage over other bidders thereby. The same consideration is true of the site plan controversy. The information required by the relevant specification regarding the location of the new plant and its connection to the old plant could be derived from the drawings submitted by Koblar. There was no opportunity for Koblar to change the results of that information. Therefore, the assertions by the Respondent's witnesses that allowing Koblar to rely on the pre-submitted Smith and Lovelace information, and accepting its drawing as responsive to the site plan specification somehow provided Koblar an extra opportunity at responsiveness and "lowest best bid," to the competitive disadvantage of the other bidders, is simply inaccurate and not supported by the evidence of record.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

23. A request for formal administrative proceeding such as the instant one commences a de novo proceeding which is intended to formulate final agency action and not to review the agency's preliminary action or decision. Because this is a de novo proceeding initiated by a formal hearing request, the hearing officer's function is to formulate what the agency's final action shall be and not merely to review whether the agency's preliminary action or initial decision is arbitrary, capricious or departs from the requirements of law. In a de novo

    proceeding such as this, the hearing officer formulates agency action by considering all the evidence presented, resolving conflicts therein, drawing permissible inferences from the evidence and reaching ultimate findings of fact and recommending legal conclusions to be drawn therefrom. See: Beverly Enterprises-Florida Inc. v. Department of Health and Rehabilitative Services, 15 FLW 30, 41 (Fla. 1st DCA December 14, 1990); Heifetz v. Department of Business Regulation, 475 So.2d 1277 (Fla. 1st DCA 1985). The hearing officer does not function as a reviewing tribunal which considers an agency's preliminary decision in a review capacity, while according that preliminary decision a presumption of correctness. McDonald v. Department of Banking and Finance, 346 So.2d 569 (Fla. 1st DCA 1977). The hearing officer is mindful of the decision in Groves-Watkins v. Department of Transportation, 530 So.2d 912 (Fla. 1988), which seems to indicate that an agency's decision could only be overturned when found to be arbitrary, capricious or illegal. Although that decision seems to speak of a hearing officer's authority to "review" an agency decision as only encompassing those three named parameters, in reality the Groves-Watkins decision can only be interpreted and applied logically as being a review standard. That is, it must apply only to review of an agency's final decision, in order to make the determination of whether it is arbitrary, capricious or illegal. Obviously, hearing officers do not review agency's final decisions.

    If the Groves-Watkins opinion were held to apply to a hearing officer's function and to require that a hearing officer merely review an agency's initial decision with those three perameters in mind, it would reduce the hearing officer's fact- finding function and recommended final agency decision function to the level of absurdity by obviating the obvious applicability of Section 120.57, Florida Statutes, and the McDonald decision and its progeny. Although the Groves- Watkins decision does appear to apply a limited standard for review of an agency decision, the limitation on review of agency action is not applicable in a proceeding such as this because agency action is not being reviewed. This is a de novo proceeding intended to formulate what the agency's action shall be and not to review a mere preliminary decision.

    
    

24. In this case, the dispositive issue of material fact concerns whether Koblar gained an unfair economic advantage by submitting its bid in the manner in which it submitted it. Resolution of this issue is susceptible to ordinary methods of proof, and is therefore properly determined by a hearing officer after weighing and considering all evidence, resolving conflicts therein and drawing all permissible inferences from the evidence and reaching findings of fact based thereon. Issues subject to determination by ordinary methods of proof are properly the function of a hearing officer and do not involve the exercise of agency expertise or policy-making prerogatives. See: McDonald, 346 So.2d at 579 and Marshall Barker v. Department of Professional Regulation, Board of Medical Examiners (428 So.2d 720 (Fla. App. 1st District 1983).

    
    

25. The site plans submitted by Koblar complied with the requirements contained in the specifications in the ITB. Although the site plan Koblar submitted may not have satisfied the expectations of the consulting engineer charged with evaluating the bids and recommending award, the pertinent inquiry is, however, not what he subjectively expected, but what the specifications required bidders to submit. The specifications in the ITB did not state that the site plan would show precisely the location of the waste water treatment plant and precisely how and exactly at what point it would be connected to the existing facilities and piping. The term "site plan" is not defined in the ITB. In any event, the information sought from the site plan requested to be submitted in the specification, could be ascertained by comparing the drawing submitted by Koblar in response to the specification, to the drawing provided in the ITB plans prepared and provided by consulting engineer, Mr. Murphy. Thus,

    to the extent that the need for that information was the basis for the site plan requirement in the ITB, it was provided by Koblar, and any irregularity in the site plan concerning the precise location of the piping connections or the relationship of the plant to the existing infrastructure was an immaterial irregularity, especially because the space for the plant was delineated in the engineer's specification plans, and the plant could only go in that space, as the project was proposed in the ITB. Therefore the bidders were left no choice about such matters as location of infrastructure, pipes and other existing items or parts of the existing facility. It is concluded that the site plan met the specification concerning it in the ITB and that there was no irregularity. Even if there was one it would not be material because it afforded no competitive advantage to Koblar by submitting the site plan in that fashion, and was shown to incur no additional cost to the purchasing agency. Indeed Koblar's testimony shows tht he is bound to insure that proper connections are made and that existing infrastructure is taken into account in assuming performance, without assessing any "change order" costs to the agency.

    
    

26. Irregularities in a bid do not render it non-responsive, if the bidder receives no palpable economic advantage over other bidders. Liberty County v. Baxter's Asphalt and Concrete, 421 So.2d 505, 507 (Fla. 1982). Absent an economic advantage, irregularities in a bid are nonmaterial and may be waived. Id.; Wood-Hopkins Contracting Company v. Roger J. Au and Son, 354 So.2d 446 (Fla. 1st DCA 1978).

    
    

27. The Department maintained that the Petitioner's bid was materially nonresponsive because to have allowed it in the bid in the form it was submitted would have afforded Koblar a competitive economic advantage over the over bidders. The Department was not able to establish any evidence to show how Koblar would have received an advantage however. The testimony only established that the Department assumed that Koblar might conceivably have gained an advantage not enjoyed by other bidders in terms of a time advantage in preparation of its bid as that might speculatively relate, in the mind of the Department's representative, to a chance to insert a last minute cost- advantageous price in the bid. In Baxter's Asphalt, the Supreme Court expressly rejected this type of speculative, unspecified assumption of an unidentified economic advantage as a basis for rejecting a bid.

    
    

28. In Baxter's the Supreme Court reversed a determination by the First District Court (Baxter's Asphalt and Concrete v. Liberty County, 406 So.2d 461 (Fla. 1st DCA 1981) that a bidder's failure to follow the bidding instructions was a material deviation. The bid solicitation there required contractors to bid on two alternative proposals, "A" and "B". However, Gulf Asphalt, one of the contending bidders, bid only on alternate "B". Seven other contracts in that situation bid both alternatives as required by the bid solicitation documents. Gulf Asphalt's bid on alternate "B" was lower than any of the contractors' bids for either alternate, and, accordingly, the county therein awarded the contract to Gulf Asphalt. Baxter protested that award on the ground that Gulf Asphalt's bid was not responsive because it did not submit bids for each alternate as required by the instructions to bidders. The First District Court reversed the county's finding that the deviation from the bid solicitation was immaterial. The court recognized that the test for measuring whether a deviation is material is whether the amount of the bid was affected by giving the winning contractor an advantage over other bidders. The court went on to find that because Gulf Asphalt "conceivably could have gained an unfair bidding advantage by failing to bid on alternate 'A', the deviation was material." 406 So.2d at 464.

29. Upon review, the Supreme Court emphasized the public protection purpose of public bidding statutes. The Supreme Court found no economic benefit accrued to Gulf Asphalt because of its failure to bid on alternate "A". Therefore, it reversed the District Court's decision and reinstated the county's decision to award the contract to the lowest bidder.

    
    

30. The two Baxter's opinions demonstrate that in Florida, a deviation from the bid solicitation is material only if the low bidder enjoyed an economic advantage over other bidders. Although the District Court found that Gulf Asphalt "conceivably could have gained an unfair bidding advantage," the Supreme Court required a showing that the contractor receiving the award incurred a palpable identifiable economic advantage.

    
    

31. Here, Koblar received no identifiable economic advantage. The only identifiable theory ever raised by the Department, other than pure conclusory statements, had to do with an alleged time saving enjoyed by Koblar in preparing its bid in the manner in which it did. However, this theory is only speculative and is contrary to the holding in Baxter's. There non-low bidders prepared bids for two separate sets of specifications. As mentioned above, the low bidder in that case only prepared one bid for one of the two alternatives. Obviously, it takes less time to prepare one bid than it would take to prepare two bids. But here, as in Baxter's it cannot be presumed that saving time or exerting less effort results in an unfair advantage versus other bidders. There was no proof that any time saving by Koblar in preparing its bid by incorporating the pre- filed information by reference resulted in any competitive advantage. Accordingly, the Koblar bid should be found responsive, and because it was responsive and is the lowest responsible bid, it should be the recipient of the contract award for this project.

    
    

32. Counsel for Elkins objected to testimony and evidence relating to irregularities in the Elkins bid on grounds of relevance. That testimony was relevant, however, in order to show that concerns asserted by the Department about potential change order disputes after contract award did not justify rejection of Koblar's bid. The engineer testifying stated that Elkins would be permitted to change "minor" irregularities in its bid. Therefore, there was no reason to refuse the same opportunity to Koblar. This testimony belied the assertions by the Department's witness at the hearing to the effect that acceptance of Koblar's bid would expose the Department to additional costs through change orders and change order-related disputes, which would not be potentially suffered if the award were made to Elkins, because the engineer testified that Elkins would be permitted to change minor irregularities in its bid as well. If Elkins could be permitted to change minor irregularities in its bid, there would be no reason to refuse the same opportunity to Koblar. The testimony concerning irregularities in the Elkins bid was also relevant to show that the calculations provided by Smith and Loveless in fact met the specifications. Therefore, the objections by Elkins on grounds of relevancy to this testimony were overruled. In summary, because the Koblar bid met the material requirements of the invitation to bid specifications and because, to the extent that there were any irregularities, it gained no unfair competitive economic advantage thereby, and because its bid was some $146,000 lower than the next low bidder, Elkins, Koblar is entitled to the award of the contract at issue.

RECOMMENDATION

Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore

RECOMMENDED that a Final Order be entered awarding the contract for construction of Project No. KD/5-ND/5 to Koblar Constructors and Engineers.

ENTERED this 27th day of March, 1991, in Tallahassee, Florida.

P. MICHAEL RUFF 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 28th day of March, 1991.

APPENDIX TO RECOMMENDED ORDER

Petitioner's Proposed Findings of Fact:

1-28 Accepted.

Respondent's Proposed Findings of Fact:

1-10 Accepted.

11 Rejected as subordinate to the hearing officer's findings of fact on this subject matter.

12-19 Accepted.

1. Rejected as immaterial to the dispositive material issues presented and subordinate to the hearing officer's findings of fact on this subject matter.

   
   

2. Accepted.

   
   

3. Accepted generally speaking, but subordinate to the hearing officer's findings of fact on this subject matter as to the specific dispositive material issues presented.

   
   

4. Accepted.

24-29 Accepted.

30-34 Accepted.

1. Rejected as subordinate to the hearing officer's findings of fact on this subject matter and not entirely supported by the preponderant weight of the evidence.

   
   

2. Rejected for the same reason as number 35.

37-38 Accepted.

39-43 Rejected as subordinate to the hearing officer's findings of fact on this subject matter and as not being in accordance with the preponderant evidence of record.

44-48 Rejected (same reason).

1. Accepted only to the extent that it demonstrates the Department's position in this proceeding and not accepted for the truth of the reason for the initial award decision.

   
   

2. Rejected as not in accordance with the preponderant weight of the evidence and as subordinate to the hearing officer's findings of fact on this subject matter.

   
   

3. Accepted.

52-54 Rejected as subordinate to the hearing officer's findings of fact on this subject matter. 54 is rejected addi- tionally as being not in accordance with the preponderant weight of the evidence.

55-57 Rejected as subordinate to the hearing officer's findings of fact on this subject matter and as not in accordance with the preponderant weight of the evidence.

1. Rejected as subordinate to the hearing officer's findings of fact on this subject matter and as not supported by the preponderant evidence of record.

   
   

2. Rejected as subordinate to the hearing officer's findings of fact on this subject matter.

Intervenor's Proposed Findings of Fact:

1. Accepted.

   
   

2. Accepted.

   
   

3. Accepted.

   
   

4. Accepted.

   
   

5. Accepted.

   
   

6. Accepted.

7. Accepted.

   
   

8. Rejected as subordinate to the hearing officer's findings of fact on this subject matter and not entirely in accordance with the preponderant weight of the evidence.

   
   

9. Accepted.

   
   

10. Accepted.

    
    

11. Rejected as subordinate to the hearing officer's findings of fact on this subject matter.

12-13 Accepted, except as to paragraph (b) which is rejected as subordinate to the hearing officer's findings of fact on this subject matter and as contrary to the preponderant weight of the evidence.

14-15 Accepted, but not necessarily dispositive of material issues presented.

COPIES FURNISHED:

Drew Koblar

2009 Northwest 67th Place Gainesville, Florida 32606

Deanna Eftoda, Esquire Assistant General Counsel Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

B. Thomas Whitefield, Esquire Ulmer, Murchison, Ashby & Taylor 1600 First Union Building

Post Office Box 479 Jacksonville, Florida 32201

Richard L. Dugger, Secretary Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

Louis A. Vargas General Counsel

Department of Corrections 2601 Blairstone Road

Tallahassee, Florida 32399-2500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

Docket for Case No: 90-008120BID

Orders for Case No: 90-008120BID