STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KELLY BROTHERS, INC., )

)

Petitioner, )

vs. )

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and ) CASE NO. 91-5337BID

) HUBBARD CONSTRUCTION COMPANY, )

)

Intervenor, )

vs. )

)

TOM QUINN COMPANY, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal administrative hearing was conducted on September 4, 1991, in Tallahassee, Florida, before Veronica E. Donnelly, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael F. Kayusa, Esquire

TITUS & KAYUSA

1922 Victoria Avenue, Suite A Fort Myers, Florida 33922

For Respondent: Susan P. Stevens, Esquire

Assistant General Counsel Department of Transportation 605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

For Intervenor

Hubbard: Bruce Leinback, Esquire CUMMINGS LAWRENCE & VEZINA, P.A.

1004 DeSoto Park Drive Tallahassee, Florida 32301

For Intervenor

Tom Quinn: Thomas P. Parks, Qualified

Representative

Tom Quinn Company, Inc. 1321 77th Street East Palmetto, Florida 34221

STATEMENT OF THE ISSUES

Whether the Department arbitrarily evaluated the bids submitted for State Job No. 10120-3522, or reviewed the bids in any manner that was fraudulent, illegal or dishonest.

Whether the Department should set aside its notice of intent to award and rebid the contract.

Whether Petitioner Kelly Brothers or Intervenor Tom Quinn was the lowest responsive bidder instead of Intervenor Hubbard, the prime contractor named in the notice of intent to award.

PRELIMINARY STATEMENT

By letter dated August 10, 1991, Kelly Brothers, Inc. (Kelly Brothers) protested the determination by the Department of Transportation (the Department) that its bid for State Job No. 10120-3522 was nonresponsive. The bid protest was forwarded to the Division of Administrative Hearings and a hearing was promptly scheduled. Prior to hearing, Tom Quinn Construction Company, Inc. (Tom Quinn) and Hubbard Construction Company (Hubbard) were allowed to intervene in the proceedings. The intervention of Tom Quinn was based upon its assertion that its bid was responsive and lower than the bid submitted by Hubbard the intended awardee. Hubbard intervened to assert that the bids were properly evaluated and to demonstrate that Hubbard was the lowest responsive bidder.

At the beginning of the hearing, Kelly Brothers and the Department filed two joint exhibits. Kelly Brothers then submitted one exhibit and presented the testimony of two witnesses. One of the witnesses was presented via deposition in lieu of live testimony. The Department called one witness and provided copies of Chapter 14-78, Florida Administrative Code. Official notice was taken of the rules in effect during the time the bids were solicited and the intended award was posted. Tom Quinn presented the testimony of one witness. All exhibits and the deposition were entered into evidence without objection.

The transcript of the hearing was filed with the Division of Administrative Hearings on September 20, 1991. Proposed recommended orders were timely received from Kelly Brothers, the Department, and Tom Quinn. Rulings on the proposed findings of fact are in the Appendix of the Recommended Order.

FINDINGS OF FACT

1. State Job No. 10120-3522 is a road construction project on State Road 674 that begins east of US 301 and ends at Pierce Bridge in Hillsborough County. The Department solicited for bids on the work and established June 19, 1991, as the date project bids were due.

   
   

2. As part of the bidding documentation, prime contractors who submitted bids were required to use the bid blank issued by the Department for that purpose. In addition, prime contractors had to certify that they understood the

   Disadvantaged Business Enterprise (DBE) goal for the project was 11 percent of the total dollar amount bid for the project. All of the parties to this bid protest certified that they understood the DBE goal for this project.

   
   

3. The 11 percent DBE goal was a bid specification that was not timely challenged through the bid solicitation protest process within 72 hours of receipt of project plans and specifications.

   
   

4. Bidders who were unable to fully comply with the contract DBE goal were required to demonstrate good faith efforts had been made to meet the DBE goal. The means used by the Department to evaluate the good faith efforts were set forth in Rule 14-78.003, Florida Administrative Code, and the bid specifications.

   
   

5. Kelly Brothers submitted the low bid on this project with the total project bid of $2,311,322.78. The dollar amount for the DBE goal listed on the DBE Utilization Form completed by Kelly Brothers was $205,989.12. The multiplication of this sublet amount into the project bid shows that Kelly Brothers achieved only 8.91 percent of the 11 percent DBE goal.

   
   

6. To support its good faith efforts to meet the DBE goal, Kelly Brothers noted on the DBE Utilization Form that bid quotes were solicited from eleven certified DBEs on the project. It was further represented that seven of those contacted responded to Kelly Brothers' request, and two were actually used in the project bid submitted to the Department.

   
   

7. Documentation of these good faith efforts as set forth in Rule 14- 78.003, Florida Administrative Code, and the bid specifications were not submitted with the bid. Instead, the DBE Utilization Form filed by Kelly Brothers simply stated, "Telephone log will be submitted if necessary."

   
   

8. During the bid protest proceeding, Kelly Brothers supplied evidence of price quotes received from one DBE. This subcontractor was not listed on bid documents and the quotes were not included in the bid.

   
   

9. Tom Quinn submitted the next lowest total project bid of $2,406,167.54. The dollar amount listed for DBE participation on the DBE Utilization Form submitted by Tom Quinn was $262,327.80. The multiplication of this sublet amount into the project bid shows that Tom Quinn achieved 10.9 percent of the 11 percent DBE goal.

   
   

10. The person who completed the bid documents for Tom Quinn rounded the DBE utilization calculation to 11 percent, contrary to the mathematical procedure for the rounding of numbers set forth on the form. The goal was improperly rounded to the nearest tenth as opposed to the nearest tenth percent.

    
    

11. Tom Quinn did not submit documentation of its good faith efforts to comply with the project's DBE goal. A reasonable inference exists that Tom Quinn did not submit the documentation because its mathematical error mistakenly shows that the DBE goal was met in its bid submission.

    
    

12. Hubbard submitted the third lowest project bid of $2,748,991.70. The total dollar amount for DBE goal listed was $302,794.32. Nine DBE's were utilized by Hubbard. The calculations to determine the DBE percentage of the total project show an 11.01 percent DBE goal was achieved.

13. The four remaining bids reached a DBE percentage of the total project that met or exceeded the DBE goal.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Section 120.53 and Section 120.57(1), Florida Statutes.

    
    

15. As an intervenor, Tom Quinn has full party status in these proceedings because the Department waived its objection to his entry into the case prior to the filing of the Motion to Intervene, as represented in the contents of the motion. Section 120.52(12)(c), Florida Statutes. Intervenor Hubbard is the intended awardee of the contract. Its right to intervene was granted pursuant to Section 120.52(12)(b), Florida Statutes.

    
    

16. Essentially, this case involves protests from the two bidders whose contract prices were significantly lower than the price submitted by Hubbard, the intended awardee. Kelly Brothers submitted the low bid and Tom Quinn submitted the next lowest bid. In both cases, the Department deemed the bids to be nonreponsive because they each failed to meet the DBE contract goal and failed to provide the good faith efforts documentation required by the Department before a decision to waive the goal could be made. Without the documentation, the bids are deemed nonresponsive as a matter of law.

    
    

17. Rule 14-78.003(2)(b)3, Florida Administrative Code, which was in effect at the DBE contract goals were established for the project involved in this proceeding, states:

    
    

    For all contracts for which DBE contract

    goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE participation with the bid proposal. Award of the contract shall be conditioned upon submission of the DBE participation with the bid proposal and upon satisfaction of the contract goals or, if the

    goals are not met, upon demonstration that good faith efforts were made to meet the goals.

    Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected.

    
    

18. In evaluating a contractor's good faith efforts, Rule 14- 78.003(2)(b)3.c, states:

    
    

    c. In evaluating a contractor's good faith efforts, the Department will consider:

    1. Whether the contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt requested, or hand delivery, with receipt, to

       all certified DBEs which perform the type of work in the geographical area of the project, which the contractor intends to subcontract, advising the DBEs 1) of the specific work the contractor intends to subcontract; 2) that their interest in the contract is being solicited; and 3) how to obtain information about the review and inspect the contract plans and specifications.

    2. Whether the contractor selected economically feasible portions of the work to be performed by DBEs; including where appropriate, breaking down contracts or combining elements of work into economically feasible units. The ability of a contractor to perform the work with its own work force will not in itself excuse a contractor's failure to meet contract goals.

    3. Whether the contractor provided interested DBEs assistance in reviewing the contract plans and specifications.

    4. Whether the DBE goal was met by other bidders.

    5. Whether the contractor submits all quotations received from DBEs, and for those quotations not accepted, an explanation of why the DBE will not be used during the course of the contract. Receipt of a lower quotation from a non-DBE will not in itself excuse a contractor's failure to meet contract goals.

    6. Whether the contractor assisted interested DBEs in obtaining any required bonding, lines of credit, or insurance.

    7. Whether the contractor elected to subcontract types of work that match the capabilities of solicited DBEs.

    8. Whether the contractor's efforts were merely pro forma and given all relevant circumstances, could not reasonably be expected to produce sufficient DBE participation to meet the goals.

    9. Whether the contractor has on other contracts within the past six months utilized DBEs.

    This list is not intended to be exclusive or exhaustive and the Department will look not only at the different kinds of efforts that the contractor has made but also the quality, quantity and intensity of these efforts.

    
    

19. When the evaluation criteria set forth in the rule and the bid specifications are applied to the bids of Kelly Brothers and Tom Quinn, it is clear that sufficient information was not submitted with either bid prior to bid opening or during this bid protest to establish that these two contractors made good faith efforts to meet the contract DBE goal. The Department's rules and bid specifications logically place that burden on the bidders, who have control over their own bid preparations. Failure to provide the information leaves the

    Department without discretion. The agency is required to reject the bids as nonresponsive. C.H. Barco Contracting Co. v. Florida Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986).

    
    

20. Tom Quinn argued that the rejection of its bid was arbitrary. The bid was $342,824.16 lower than the bid submitted by the apparent low bidder and involved one tenth of a percent deficiency in the stated DBE goal. Although this argument is compelling from an economic standpoint, all of the evidence presented at hearing shows that failure to meet the DBE goal requirements gave Kelly Brothers and Tom Quinn unfair pricing advantages not afforded bidders who met or exceeded the DBE goal. As a result, these two bids were not competitive and were properly deemed to be nonresponsive by the Department. Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986). Accordingly, neither Kelly Brothers nor Tom Quinn should be awarded the contract in this bid letting.

RECOMMENDATION

Based upon the foregoing, it is recommended:

1. The Department's evaluation of the bids submitted for State Job No. 10120-3522 should be upheld as a proper evaluation.

   
   

2. The bids received from Kelly Brothers and Tom Quinn on State Job No. 10120-3522 should be deemed nonresponsive for failure to achieve the DBE participation goal and for failure to submit sufficient documentation of good faith efforts.

   
   

3. The bid protests in this proceeding should be denied and the bid awarded to Hubbard, the apparent responsive low bidder.

RECOMMENDED this 25th day of October, 1991, in Tallahassee, Leon County, Florida.

VERONICA E. DONNELLY

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904)488-9675

Filed with the Clerk of the Division of Administrative Hearings this 25th day of October, 1991.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5337BID

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

1. Accepted. See HO #1.

2. Accepted. See HO #12.

3. Accepted.

4. Accepted.

5. Rejected. Contrary to fact.

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

1. Accepted. See HO #2.

2. Accepted. See HO #2 and #5.

3. Accepted. See HO #4.

4. Accepted. See HO #7.

5. Accepted. See HO #8.

6. Accepted. See HO #8.

7. Accepted. See HO #6.

8. Accepted.

9. Accepted.

10. Accepted. See HO #12 and #13.

11. Accepted. See HO #9 and #12.

12. Rejected. Contrary to fact.

Intervenor Tom Quinn's proposed findings of fact are addressed as follows:

1. Accepted. See HO #1.

2. Accepted.

3. Accepted.

4. Accepted.

5. Rejected. Contrary to fact.

COPIES FURNISHED:

Michael F. Kayusa, Esquire TITUS & KAYUSA

1922 Victoria Avenue, Suite A Fort Myers, Florida 33911

Susan P. Stevens, Esquire Assistant General Counsel Department of Transportation 605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thornton J. Williams, Esquire General Counsel

Department of Transportation 605 Suwannee Street, Rm 562

Tallahassee, Florida 32399 0458

Bruce Leinback, Esquire Cummings, Lawrence & Vezina, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301

Thomas P. Parks, Qualified Representative Tom Quinn Company, Inc.

1321 77th Street East Palmetto, Florida 34221

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: 91-005337BID

Orders for Case No: 91-005337BID