STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WAYNE BLACKWELL AND COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 91-3454BID

)

UNIVERSITY OF FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on July 18, 1991 in Tallahassee, Florida, before Ella Jane P. Davis, a duly assigned Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Marshall R. Cassedy, Esquire

Frank P. Rainer, Esquire

600 First Florida Bank Building Post Office Box 2174 Tallahassee, Florida 32316-2174

For Respondent: Joseph T. Barron

Associate General Counsel University of Florida

207 Tigert Hall Gainesville, Florida 32611

STATEMENT OF THE ISSUES

1. Did the University receive Merit's qualification data during the "bidding period," or failing same, was the time and manner in which it was received such a material variance as to render it nonwaiveable and nonresponsive?

   
   

2. Were the data provided by Merit responsive to the ITB?

   
   

3. Did the University use the proper quantities for Task 150, Disposal in Landfill, in the third iteration (analysis)?

PRELIMINARY STATEMENT

The University of Florida (Respondent) prepared specifications and on December 17, 1990 issued Invitation to Bid (ITB) P91S-79YC for its annual open- end contract for asbestos abatement. Among the bids submitted were bids from Petitioner Wayne Blackwell & Co., Inc. (Petitioner) and Merit Insulation, Inc. (Merit). Bids were opened on January 10, 1991 at 1:30 p.m. Following an evaluation of the bids, a Notice of Intended Award was posted on January 14,

1991, showing an intended award to Merit. On January 16, 1991, Petitioner filed its Notice of Protest and on January 25, 1991 Petitioner filed its Formal Written Protest. By letter dated June 14, 1991, Respondent notified all other bidders of Blackwell's protest and advised bidders that each could join as a party of record by filing a Petition for Leave to Intervene. There were no intervenors.

Petitioner presented the oral testimony of Emily Jean Hamby, Remus E. Acosta, Gerald William Clauss, and Nicholas Denning Langston, Jr. and had twenty-one exhibits admitted in evidence. Respondent presented the oral testimony of Kevin Gara, A.J. Sontag, Brian James DuChene, Emily Jean Hamby, and

V. Douglas Browning, and had seven exhibits admitted in evidence.

A transcript was filed and all timely-filed proposed findings of fact have been ruled upon in the appendix to this Recommended Order pursuant to Section 120.59(2) F.S.

FINDINGS OF FACT

1. On December 17, 1990, Respondent University, Physical Plant Division, mailed ITB No. P91S-79YC for a yearly contract for asbestos abatement. The ITB was for on-call, small-job asbestos abatement projects with Respondent. As with previous such annual contracts, the idea was to have an open-end contract with a contractor on call as-needed for projects that fit within a specific budget limitation, $15,000. The number of jobs and exact amount of asbestos abatement are indeterminate at the time of entering into the contract.

   
   

2. Section 00100, paragraph 6, Qualifications of Bidders (page 00100-2 of the ITB) states:

   
   

   1. This bid will be awarded only to a respon- sible bidder, qualified by experience and in a financial position to perform the work speci- fied.

      
      

   2. The bidder shall submit during the bidding period the following evidence of eligibility:

      1. Experience record showing bidder's training and experience in similar work.

      2. Experience that the bidder is qualified for licensing under Florida Statute 455.302. (Emphasis supplied)

         
         

      3. Section 00100, paragraph 9, Award or Rejection of Bids (page 00100-2 of the ITB) states:

         
         

         The Contract, if awarded, will be to the responsible bidder who has proposed the lowest Contract Sum, according to the evaluation criteria described in Section 00311, subject to the Owner's right to reject any or all bids and waive informality and irregularity in the bids and in the bidding.

      4. General Condition 9, Awards, states:

         
         

         As the best interest of the University of Florida may require, the right is reserved to make award(s) by individual item, group of items, all or none, or a combination thereof; to reject any and all bids or waive any minor irregularity or technicality in bids received. When it is determined there is competition to the lowest responsive bidder, then other bids may not be evaluated. Bidders are cautioned to make no assumptions unless their bids has been evaluated as being responsive.

         
         

      5. Section 00311, Bid Evaluation, states:

         
         

         Contractor's bids will be evaluated by the Physical Plant Division Representative (PPDR). The proposals will be evaluated in a three-step process.

         
         

         1. Step one will consist of the verification that all mandatory requirements delineated in the Bid document have been met i.e., met the bid opening date, answered all inquiries in Proposal Forms, and that All Items Are Filled Out in the unit Price Proposal Form. All bids meeting the criteria of step one will then be subject to step two - Contractor Evaluation. Bids which do not meet the requirement of step one will be rejected and not be considered for step two or three.

            
            

         2. Step two will be an analysis of the Contractor's ability to perform work for the University of Florida. Each of the following items will be rated on a scale of 0-20. Zero would be unsatisfactory while 20 would be outstanding.

            
            

            1. Professional qualifications, licenses, and proper insurance coverage required.

               
               

            2. Ability of Contractors to respond in a timely manner. Include information regarding communication capabilities between office and staff, between staff, and between PPDR and the bidder (e.g. pagers, cellular phones, etc.).

               
               

            3. Experience and ability of all staff proposed for the project teams and the apparent ability of the applicant as it related to pro- ject requirements.

               
               

            4. Past performance on University of Florida projects. If no past experience is available, an average rating of 10 will be assigned.

            Any Contractor who receives 0 on Item 2 (Ability to respond in a timely manner) or a total score under 40 points will not be con- sidered for step three.

            
            

         3. Step three will consist of evaluating each bidder's unit prices. Three "typical" standard jobs have been developed. Each task identified on the bid form is used at least once in these standard jobs. The unit price of each bidder will be multiplied by the quantity on the work sheet for each standard job. The sum of each job will then be multi- plied by the factor indicated below.

            
            

            The lowest aggregate total will be considered the low bidder. The standard jobs are:

            
            

            1. Standard Job A - Remove asbestos from a boiler room using the Isolated Work Area. Special Job Conditions Multiplier will be used on a portion of this job. The job has a weighted factor of 50%.

               
               

            2. Standard Job B - Remove asbestos from various pipes and valves in a utility room using the Glove Bag Method. This job was a weighted factor of 30%.

               
               

            3. Standard Job C - Remove asbestos from an office area ceiling using the Isolated Work Area. This job has a weighted factor of 20%.

      6. Section 00700, Contract Documents (page 00700-1 of the ITB) states: The Contract Documents consist of the Purchase

         Order, the Drawings, the Specifications, all

         Addenda issued prior to issued after execution of the Contract, and the University of Florida Invitation to Bid.

         
         

      7. The clear language of the ITB shows that the evaluation of the ITB was intended to be a three-step sequential procedure. If Respondent's evaluation did not determine a bidder to be qualified at step one, it would not avail that bidder to be qualified as to step two, and if not qualified as to steps one and two, the bidder could not prevail just by being in compliance with step three. All bidders were passed by Respondent for step two to be considered for step three. Petitioner has challenged whether or not Respondent has appropriately evaluated and passed Merit (the apparent low bidder) as "responsive" at step two.

         
         

      8. On the bid opening date for the ITB, the sealed envelope containing Merit's bid (prices, etc.) in response to the ITB did not contain the information required by Section 00100, paragraph 6.B. (page 00100-2) of the ITB. The only written evidence of eligibility reviewed by Respondent with respect to Merit is the document known as the "Black Book." (Respondent's Exhibit 1)

         Merit's Black Book was in the possession of Respondent prior to the issuance of the present ITB, remained in its possession during the entire bid evaluation process for the present ITB, and was never amended after the bid opening.

         Respondent's Physical Plant Division employee, Remus E. Acosta, found it in or on his desk on the same day the present ITB was opened, January 10, 1991, before he began to evaluate the bids and utilized it in evaluating/passing Merit as a responsive bidder under step two.

         
         

      9. The Black Book was initially received by Respondent in September 1990. It contains qualifying data of Merit for asbestos abatement and Merit's certified Florida asbestos contractor's license dated March 8, 1989, plus many other materials concerning Merit's past performance and current licensing of Merit and its employees. The Black Book was submitted in connection with a prior asbestos abatement job undertaken by Merit for Respondent, was generic with regard to many types of bids/contracts let by the Respondent including asbestos abatement, and does not bear any markings which identify it as connected with the present ITB.

         
         

      10. The Black Book bears two stamped dates. The date of September 15, 1990 stamped on the Black Book signifies that as of that date, Merit needed to revise the Book to meet Respondent's standards for qualification on the prior bid. The date of September 28, 1990 stamped on the Black Book signifies that as of that date Merit had met the Respondent's standards or qualifications for the prior bid. The September 28, 1990 stamp on the front of the Black Book by Environmental Science and Engineering, Inc. (ESE), a consultant to Respondent on the prior bid, also indicates that Merit was an approved asbestos contract vendor on that date. Like all other licenses, Merit's license is valid until revoked.

          
          

      11. On January 10, 1991, Merit was working on existing asbestos abatement jobs for Respondent, monitored by State of Florida licensing agencies. Respondent works with these agencies on nearly a daily basis and has never been notified that Merit's licenses from them were in question. On January 10, 1991 Respondent reasonably assumed, on the basis of the Black Book, that Merit continued to be licensed.

          
          

      12. There is no evidence in this record that Merit's licenses ever have been revoked.

          
          

      13. Mr. Acosta did not "go behind" the contents of Merit's Black Book to verify that each item contained therein was true and accurate as of January 10, 1991. Respondent did not verify the contents of any other bidder's qualifications, either.

          
          

      14. The ITB does not require that Respondent "go behind" or verify facially acceptable qualifications submitted by a bidder. The ITB does permit Respondent to consider a bidder's past performance with Respondent. If a bidder is not known to Respondent or Respondent is unaware of a bidder's qualifications, paragraph 6.B. of the ITB would allow Respondent to make further inquiry as permitted by paragraph 4 (page 00100-1) which is merely permissive and provides as follows:

          
          

          4. PROOF OF COMPETENCY OF BIDDER

          A bidder may be required to furnish evidence satisfactory to the owner that he has suffi- cient means and experience in the types of work called for to assure completion of the

          Contract in a satisfactory manner. (Emphasis supplied)

          
          

      15. On the basis of the Black Book, Mr. Acosta evaluated Merit as a responsive bidder and passed Merit for step two of the evaluation process.

          
          

      16. Had the same information as that contained in Merit's Black Book been submitted simultaneously with Merit's sealed bid on January 10, 1991, Respondent would have followed exactly the same procedure as was actually applied by Mr. Acosta when he found the Black Book in his office that same day. In either situation, Respondent would have presumed the Black Book to be still true and accurate absent some red flag of information that it was not still true and accurate and would have considered its contents to be complete and responsive for purposes of step two.

          
          

      17. By using the Black Book in his evaluation, Mr. Acosta determined to his satisfaction that Respondent had received Merit's step two qualifications contained in the Black Book within the "bidding period" as required by the ITB. Mr. Acosta and several other witnesses interpreted the term "bidding period," as contained in ITB paragraph 6, Qualifications of Bidders, to encompass the period of time from the date of mailing or advertising the ITB through the date a purchase order is finally issued by Respondent. However, the term "bidding period" as used in paragraph 6 of the present ITB has never been defined by a duly promulgated rule of Respondent University.

          
          

      18. The ITB itself also does not specifically define "bidding period." Several witnesses acknowledged that "bidding period" as used in paragraph 6 is not normal terminology used by Respondent in its competitive bidding process, but was a term selected by an outside consultant who drafted the present ITB for Respondent without any clear explanation of its meaning and without any explanation that the term "bidding period" was being introduced to vary the standard assumption that sealed bids must be complete as of the date scheduled for their opening and the equally common assumption that the "finish line" for proving-up a bidder's qualifications is the date that sealed bids are opened, and without any explanation as to how such an extended definition as understood by Mr. Acosta could be consistent or compatible with the three step evaluation process specifically contained in the ITB.

          
          

      19. Although the instant ITB does not define the term, "bidding period," it does contain the following two "boiler plate" paragraphs which discuss the "bid period," a term roughly analogous to "bidding period" and a term which apparently is standard in Respondent's ITBs:

          
          

          8. BID PERIOD

          No bidder may withdraw his bid for a period of 30 calendar days after the date set for opening thereof, and bids shall be subject

          to acceptance by the Owner during this period.

          
          

          13. DEPOSIT

          
          

          E. Forfeiture of Deposit: If the selected Bidder withdraws his Bid within 30 days after closing date for the receipt of Bids or within such period as the time of acceptance may be extended by the Owner; or if the Bidder fails to withdraw his bid and refuses to provide the

          documentation required for Notice of Award, Bidder will forfeit Bid deposit and waive any right to make claim thereto.

          
          

      20. Historically, Respondent has permitted contractors to submit clarifying information, financial information, work load information, and scheduling information until a purchase order is issued but has not permitted a bidder to supplement or amend the prices contained in its bid. Respondent considers an attempt to change a price to be a material alteration or amendment of a bid but historically has viewed all other information as merely clarifying or supplemental and not as a material amendment. There are prior instances in which a bidder has submitted a bid which did not include certain technical data otherwise required to evaluate the bid, and where the Respondent already was in possession of such data, the bid was evaluated on the data already in Respondent's possession.

          
          

      21. Herein, Respondent University was familiar with Merit's qualifications and performance because Merit was already a vendor on a similar open-end asbestos contract for the past two years and had completed work on specific jobs. Each time a contractor under an open-end asbestos contract gets a job from Respondent, Respondent requires that the contractor update his qualifications only to the extent that his previous submittals would be inaccurate or incomplete. Merit's Black Book contained qualifying data for asbestos abatement and its certified asbestos contractor's license showing Merit to be a licensed asbestos contractor in the state of Florida. It was received and approved by Respondent's consultant on such a job in September 1990, and Respondent was thereafter continuously aware that Merit's license extended past the bid opening date for the instant ITB. Based on this information, Respondent has effectively treated Merit's Black Book herein as a qualification package or pre-job submittal, even though the Respondent's usual practice and this specific ITB did not require pre-qualification of contractors for the new annual ITB.

          
          

      22. According to Remus Acosta, he treated Merit's prior submittal of qualifying data in exactly the same way as those other bidders' submittals received on January 10, 1991 when he evaluated the January 10, 1991 bids. Because all the required information for the step two evaluation was already in the possession of Respondent before Mr. Acosta began his evaluation of all the bids and because Petitioner did not demonstrate how any bidder was prejudiced by Respondent's relying on Merit's Black Book already in Respondent's possession prior to the date it was due (bid opening day) or how Merit received any advantage from submitting that part of its bid package early, Merit's failure to simultaneously submit the Black Book with Merit's sealed bid on January 10, 1991 constituted a minor technicality. Under the circumstances of this case, Mr. Acosta's action of waiving simultaneous filing of qualifications for a bidder who had previously filed them constituted an acceptable waiver by Respondent of an insubstantial or immaterial variance or irregularity. Section 00100 paragraph 9 specifically reserved to Respondent the "right to waive informality and irregularity in the bids and bidding."

          
          

          Evaluation Process (The Three Iterations)

          
          

      23. The ITB initially required all bidders to bid on different components of three types of asbestos abatement projects which Respondent's prior experience had demonstrated would be typical of those projects yet to be encountered during the new contract period. The ITB set forth that the "Standard Jobs," designated as "A," "B," and "C," were weighted 50, 30, and 20%, respectively, based on the Respondent's experience with the spread of such

          similar or typical jobs. The ITB did not set forth or articulate the quantity criteria for the standard jobs, including but not limited to the disposal quantity. Bidders were not required to price based on any set quantities. They were just to price standard elements to make up the jobs. Calculation of quantities based on the three standard jobs was for step three evaluation purposes.

          
          

      24. Remus Acosta did the initial step three evaluation, taking the component costs provided by each bidder on January 10, 1991 and tabulating the total costs anticipated for each job. After adjusting the totals for weighting, he determined a single total bid price by each bidder. That tabulation listed Merit as low bidder.

          
          

      25. Petitioner filed its notice of protest on January 16, 1991. On January 25, 1991, Petitioner filed its formal written protest. It was then determined that Mr. Acosta's total costs calculated for each bidder in the January 14, 1991 posting were in error. Thereafter, Respondent attempted another tabulation of bid results, correcting the mathematical errors of the first tabulation. The corrections were entered into the computer spread sheet and rerun as the "first iteration." As a result of that calculation, Merit was again listed as low bidder.

          
          

      26. There was also a "second iteration" done for all bidders which was posted on February 7, 1991. The second iteration and the job sample therefor were not prepared by Mr. Acosta, but was prepared at his request by Kevin Gara, an Industrial Hygiene and Asbestos Program Manager for Respondent's Environmental Health and Safety Division. Mr. Gara was highly qualified by education, training, and experience to perform the tasks assigned him by Mr. Acosta, but Mr. Acosta had given Mr. Gara a tally sheet that had an incorrect description that included both mobilization and decontamination (decon) functions as one unit. Therefore, the tally sheet given to Mr. Gara did not accommodate the format of the present ITB bid form. As a result of that "second iteration," Merit remained the low bidder. Petitioner contended that the second iteration was flawed and contained errors because of mislabelling and transcription problems and that if the second iteration had been done correctly, Petitioner's, not Merit's, would have been the lowest bid. Respondent did not necessarily agree with that representation, but the parties to the protest concurred that the second iteration was so significantly flawed that a "third iteration" was required.

          
          

      27. Respondent went on to conduct a third iteration of the bid tabulation as it applied only to Merit and Petitioner. The third iteration was dated February 27, 1991. There were no changes to the ITB specifications as the Respondent went through the three iterations.

          
          

      28. The third iteration was put together by Brian DuChene, a staff engineer for Law Engineering, one of Respondent's outside consultants. Mr. DuChene works directly under the supervision of a qualifying agent of that company who is a professional engineer and a Florida licensed asbestos consultant. The third time, the format matched the bid form but three new job samples were created based on actual jobs Mr. DuChene had previously overseen or supervised for Respondent.

          
          

      29. Mr. DuChene's goal in creating the third set of samples to conform to the A, B, C scenarios set out in the original ITB was to effectively answer all questions and problems either posed by the Petitioner/protestant or discovered by Respondent in the course of the first two iterations. He reviewed 70 to 80

          prior actual projects to develop as objective as possible a scenario that met the description of the ITB and contract documents for the A, B, and C jobs based on Law Engineering's preliminary cost estimates for the unit quantities from Respondent's similar completed asbestos abatement jobs. Although at least one of Mr. DuChene's preliminary cost estimates came from a job completed by Merit under the prior contract, he did not use any former contractor's actual proposal or any bidder's pricing. This eliminated any skewing in favor of any contractor. Essentially, all Mr. DuChene did in the third iteration was to calculate effectively realistic quantities for situations devised to reasonably fit the A, B, and C scenarios already set forth in the ITB. He also applied the weighting factor already set out in the ITB. His situation methodology and his evaluation/tabulation on behalf of Respondent resulted in Merit's still having the lowest total cost and thus being the lowest bidder as between Merit and Petitioner on the third iteration.

          
          

      30. Gerald W. Clauss, Petitioner's project administrator, also calculated what the quantities of materials removed from each job would be. He based his calculations on disposal quantities from Petitioner's own limited prior experience and used a method of assessing disposal quantities that did not account for much more than absolute volume of disposal amounts.

          
          

      31. If Mr. Clauss' estimate as to quantity in cubic yards of asbestos, waste plastic, and other refuse is used, Petitioner's total cost as set forth in the third iteration would be lower than Merit's. Upon Mr. DuChene's tabulation of the third iteration, Merit still prevailed as lowest bidder due to Respondent's applying its calculations to each bidder's respective unit prices ($75 bid by Petitioner and $10 bid by Merit).

          
          

      32. Respondent established that its calculations in the third iteration based on wide experience and scenarios conforming to the present ITB represent a more practical approach to calculating disposal amounts than do the calculations of Petitioner. Petitioner attempted to show that Mr. DuChene used the wrong quantities in item 150, disposal in landfill, especially in Standard Job A. Since Petitioner's disposal in landfill cost is $75.00 per cubic yard and Merit's is $10.00 per cubic yard, by lowering the disposal quantity in Standard Job A to numbers of Petitioner's choosing, Petitioner caused its bid to become lower than Merit's bid. Although Mr. Clauss' disposal in landfill quantities are mathematically correct for the actual asbestos removal, they do not include the large quantities of plastic required to seal the work area or anticipate a reasonable error factor based on the uncomfortable and hazardous conditions under which this type of contract must be performed. Mr. DuChene's disposal in landfill quantities are more realistic because they include these items.

          
          

      33. Although every contractor has a different way of establishing the disposal quantity and there is no right number because estimating disposal quantities can never be specifically quantified with no dispute, the greater weight of the credible expert testimony established that Mr. DuChene's methodology and calculations on the third iteration comply with the ITB and further establish that his method is one rapidly gaining favor in the industry due to its accuracy and fairness. Respondent's calculations were considered unreasonable by Petitioner's expert, Mr. Langston. However, each of the experts' calculations, including Mr. Langston's, were significantly higher than those of Mr. Clauss for all disposal quantities. Using Mr. Langston's calculations, Merit's weighted total bid would be higher than Petitioner's; however, Mr. Langston's calculations are mathematically flawed and his assumptions of disposal amounts are not as credible in light of all of the testimony than are those of Mr. DuChene for Respondent. It is significant that even Mr. Langston

          did not concur with Mr. Clauss' assessment of disposal quantity and Mr. Browning, based on his extensive experience, developed disposal quantities very close to Mr. DuChene's for two of the scenarios, Standard Jobs A and C.

          
          

      34. Respondent's methodology and its calculations for bid evaluation as contained in the third iteration are reasonable and do not go outside the ITB.

          
          

          CONCLUSIONS OF LAW

          
          

      35. The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause. See, Sections 120.57(1) and 120.53(5) F.S.

          
          

      36. Petitioner bases its protest/petition upon the following allegations:

          
          

          1. Merit was unresponsive due to failure to comply with Paragraph 6.B.

          2. The quantity amounts used by Respondent in constructing its Standard Job scenarios A,

          B, and C for the third iteration are in error.

          
          

      37. The issue of Merit's alleged lack of responsiveness must be determined in light of the Black Book not being received by Respondent simultaneously and in the same package with Merit's sealed bid, opened January 10, 1991, but having been received by Respondent before the final date for receiving the sealed bids.

          
          

      38. Respondent's employees' reliance on a concept/definition that the "bidding period" remains open until a purchase order is finalized is contrary to the universally understood concept that the bidding period for an ITB ends when the time for submittal of bids ends. That definition is also inconsistent with the sequential three-step evaluation procedure specifically mandated by this ITB. It is axiomatic that submission of basic qualifying data after the bid opening would violate the sanctity of the competitive bidding process.

          
          

      39. Although the definition of "bid period" within the general boiler plate paragraphs of the ITB supports Respondent's witnesses' definition of "bidding period," their definition is not compatible with the ITB's specific requirement of a sequential three-step evaluation process as defined in this ITB. If the boiler plate language were applied, it would make the three-step process of evaluation impossible.

          
          

      40. It is not inappropriate either under the specific terms of this ITB or under competitive bidding as generally understood for the Respondent to request supplementations of bidder qualifications after a bid opening, but a significant amendment, such as showing oneself to be licensed to actually do the job applied for, cannot be left until after bid opening or award. If one bidder could wait to achieve its basic qualifications (i.e., licensing, etc.) at will after the bid opening, that bidder would have a competitive advantage over other bidders and if all bidders were permitted to submit basic qualifications after the bid opening, awards might never be made. Absent a rule, case law, or a clear definition within the ITB itself, Respondent's witnesses' interpretation of the term "bidding period" cannot be persuasive.

          
          

      41. On the other hand, Merit's Black Book was complete, satisfied all requirements of steps one and two of the evaluation process, and was in the evaluator's hands before the opening of bids. It was not supplemented or amended by Merit after the opening of bids, and Petitioner did not demonstrate

          any way in which the sanctity of the bidding process could be subverted by Respondent's relying on, and Merit being bound by, the qualifications contained in materials already in Respondent's possession prior to the opening of the bids. Petitioner did not demonstrate that Respondent would have done anything differently with regard to evaluating any bidder's qualifications if the Black Book had arrived simultaneously with Merit's sealed bid instead of before its sealed bid. Therefore, it is concluded that Respondent's waiver of simultaneous filing of the Black Book and its treatment of same as if it were a pre- qualification submittal was actually a waiver of an insubstantial, immaterial, nonprejudicial technicality, which Respondent was permitted to waive under the terms of the ITB.

          
          

      42. A variance is material only when it gives the bidder a substantial advantage over other bidders and restricts or stifles competition. See, Tropabest Foods, Inc. v. State of Florida, Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986). A bid containing a material variance is unacceptable. The courts have applied two criteria to determine whether a variance is substantial and hence cannot be waived:

          
          

          [F]irst, whether the affect of a waiver would be to deprive the municipality of its assurance that the contract would be entered into, per- formed and guaranteed according to its speci- fied requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition.

          
          

          See, Robinson Electrical Company, Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3rd DCA 1982) and Harry Pepper and Associates v. The City of Cape Coral,

          352 So.2d 1190 (Fla. 1977). The variance here was immaterial, and therefore, it is concluded that Merit was responsive and appropriately cleared the step two evaluation hurdle as did all other bidders.

          
          

      43. Respondent conceded that it had not accurately assessed any of the bidders in the initial evaluation or the first iteration, but no other bidder having timely complied with Section 120.53(5) F.S., any prejudice to them arising from this bidding process is not at issue here. Respondent likewise conceded that the second iteration did not accurately assess any of the bidders. Therefore, only the third iteration is subject to address here and the parties have stipulated to that effect.

          
          

      44. The methodology of selecting representative jobs and Respondent's calculations with regard to disposal amounts used in the third iteration were reasonable and rational and were not contrary to any methodology established by statute or rule or binding policy. Respondent is required to use a reasonable method of bid evaluation but its method is not unreasonable or arbitrary just because it does not utilize Petitioner's concept of highest and best methodology.

          
          

      45. In the third iteration, Petitioner used its own limited actual prior experience to arrive at its disposal amounts and asserted that Respondent's evaluation was flawed because Respondent did not use "typical jobs," because Respondent selected quantities from single previous jobs using estimates made at that time instead of from a statistical or other averaging technique, because

          the Respondent's calculation of disposal quantities was based on historical estimates instead of upon actual amounts used on the jobs selected, and because one or more Merit jobs were selected. Some of these arguments are contrary to one another, but having determined that Respondent's third iteration methodology and calculations were reasonable, it is not necessary to further discuss any of the methods Petitioner thinks would have been better.

          
          

      46. In conducting an ITB evaluation, the agency has wide discretion in soliciting and accepting bids, and its decision when based on an honest exercise of its discretion will not be overturned by a court, even if it appears erroneous and even if reasonable persons may disagree. Department of Transportation v. Grove-Watkins Constructors, 530 So.2d 912 (Fla. 1988); Eccelstron Properties, Ltd. v. HRS, FALR 1184, 1195 (1989); Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982). An agency abuses its discretion when the agency does not use the standards contained in the invitation to bid in evaluating the various bid submittals; and the agency's decision would be arbitrary and capricious under those circumstances. Aurora Pump Division of General Signal Company v. Gould Pumps, Inc., 424 So.2d 70 (Fla. 1st DCA 1982); Eccelstron Properties, 11 FALR at 1195-1196; Wharton Investment Group, Inc. v. HRS, 12 FALR 5001, 5008 (1990). Generally, it is required that the specifications and instructions governing the competitive selection process be concise and accurate. ERM-South v. DER, 10 FALR 3151, 3154 (1988). Using improper award factors, incorrect weighting of criteria, and erroneous or inaccurate information in its evaluation constitutes arbitrary and capricious action. Dr. D.C. Courtnay v. HRS, 12 FALR 2226, 236 (1988). However, the third iteration was reasonable and conducted within the terms and specifications of the original ITB.

          
          

      47. Absent a finding that the agency has acted fraudulently, arbitrarily, illegally, or dishonestly to subvert the competitive bidding process, its decision based on an honest exercise of its discretion cannot be overturned. Department of Transportation v. Groves-Watkins Constructors, supra.

          
          

      48. As the party asserting an affirmative issue in an administrative hearing, the burden of proof is on Petitioner to prove the truth of its allegations. Florida Dept. of Transp. v. J.W.C. Company, Inc., 396 So.2d 778 (1st DCA Fla. 1981). The challenging party has the burden to establish that the agency's award resulted from illegality, fraud, oppression, or misconduct and was not the result of a fair, full and honest exercise of the agency's discretion. Liberty County v. Baxter's Asphalt and Concrete, Inc., supra. Petitioner herein has not met its burden.

          
          

      49. Accordingly, Petitioner has failed to demonstrate fraud, manipulation, or arbitrariness in Respondent's evaluation of any of the three jobs in the third iteration and Respondent has demonstrated that its evaluation of the jobs were clearly within reasonable parameters. Petitioner should not prevail.

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the University of Florida enter a Final Order dismissing Blackwell's protest and ratifying award of ITB P91S-79YC to Merit.

RECOMMENDED this 11th day of October, 1991, at Tallahassee, Florida.

ELLA JANE P. DAVIS, 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 11th day of October, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-3454BID

The following constitute specific rulings pursuant to Section 120.59(2)

F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF:

1-7 Accepted.

8 Accepted to the degree utilized, the remainder is subordinate. 9-10 Accepted.

1. Rejected as legal argument, as unproven, and as subordinate, but subject matter is covered in RO.

2. Accepted.

13-14 Accepted but subordinate. This expert opinion was neither accurate or persuasive nor unilaterally dispositive of any material issue. Covered in RO.

1. Accepted.

2. The first sentence is accepted. The second is not proven as to all three jobs, but whether it was one or three, the proposal is subordinate to the facts as found and not determinative or dispositive of any material issue.

3. Accepted.

4. Rejected as stated as contrary to the greater weight of the evidence. The appropriateness and reasonableness of the selection was at issue and is covered in the RO.

19(i-vi) Rejected as legal argument, as selective use of verbatim, unreconciled testimony, and as stated, these proposals are contrary to the greater weight of the credible and probative evidence.

20-24 Accepted.

1. Rejected as legal argument or a conclusion of law but covered in the RO.

2. Accepted.

27-29 Rejected because not proven as stated. Covered in the RO that Respondent accepted as current the Black Book's contents without further formal verification and covered in the RO as to when and how Merit's evidence of eligibility was received and considered and what was the duration and nature of the evaluation process.

30-31 Accepted.

32-34 Rejected as legal argument and subordinate and cumulative to the facts as found. That the Black Book was not in Merit's timely filed sealed bid envelope is covered in the RO.

35 Sentences 1 and 2 are rejected as mere legal argument. Sentence 3 is accepted.

36-37 Accepted but edited to cull mere legal argument. Respondent's PFOF:

1-13, 16-17, 19, 22, 26, 30-31, 38 Accepted except to the degree they are unnecessary or subordinate or cumulative to the facts as found.

14-15, 18 Accepted in part and rejected in part as legal argument or mere recitation of unreconciled testimony. Cumulative or unnecessary material has also been eliminated. The subject matter is covered in the RO.

20-21 Rejected because it is legal argument or a conclusion of law but covered in the RO.

23-25, 27-29, 32-37, 39-41 Accepted but not utilized in toto to the degree they are mere recitation of unreconciled testimony, unnecessary or subordinate, or cumulative to the facts as found. Covered in the RO.

COPIES FURNISHED:

Joseph T. Barron Associate General Counsel Barbara C. Wingo

Deputy General Counsel University of Florida

207 Tigert Hall Gainesville, FL 32611

Marshall Cassedy, Esquire McFarlain Law Firm

P. O. Box 2174 Tallahassee, FL 32301

Pam Bernard, General Counsel University of Florida

207 Tigert Hall Gainesville, FL 32611

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 consult with 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: 91-003454BID

Orders for Case No: 91-003454BID