STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECREATIONAL SURFACES, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-1869BID

) SCHOOL BOARD OF PALM BEACH ) COUNTY, FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written Notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Daniel Manry, held a formal hearing in the above-styled case on April 10, 1992, in West Palm Beach, Florida.

APPEARANCES

FOR PETITIONER: Frederic J. Cohen, Esquire

2001 Palm Beach Lakes Boulevard, Suite 503 West Palm Beach, Florida 33409

James Petrucelli, President, pro se Recreational Surfaces, Inc.

Route 910 & McClellan Road Indianola, Pennsylvania 15051

FOR RESPONDENT: Hazel Lucas, Esquire

3318 Forest Hill Road

West Palm Beach, Forida 33406-5318 STATEMENT OF THE ISSUE

The ultimate issue for determination in this proceeding is whether Respondent's award of a contract for surfacing tracks at two high schools in Palm Beach County, Florida was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency for the reason that the successful low bidder is a corporation which was not registered to do business in the state at the time that the bid was submitted but was so registered within a reasonable period thereafter.

PRELIMINARY STATEMENT

The matter was referred to the Division of Administrative Hearings (the "Division") for assignment of a hearing officer on March 25, 1992. A formal hearing was scheduled for April 9, 1992, pursuant to a Notice of Hearing issued on March 26, 1992.

At the formal hearing, the Petitioner presented the testimony of Ms. Betty Helser, Director of Purchasing and Stores for Respondent, and Mr. Joseph Kozar, President and Owner of the successful bidder, All American Tracks Corporation. Petitioner submitted no exhibits for admission in evidence. Respondent presented the testimony of Mr. Alfred Jerome Jones, Project Manager, Palm Beach County School District. Respondent submitted six exhibits which were admitted in evidence without objection.

A transcript of the formal hearing was requested by Respondent and filed with the undersigned on April 22, 1992. Proposed findings of fact were originally due to be filed with the undersigned no later than May 4, 1992.

Proposed findings of fact and conclusions of law were timely filed by Respondent on May 4, 1992.

Counsel for Petitioner filed a Motion To Withdraw on May 1, 1992.

Petitioner filed proposed findings of fact and conclusions of law with the undersigned, pro se, on May 6, 1992. Petitioner did not oppose the Motion To Withdraw in its proposed findings of fact and conclusions of law and has not filed a written response in opposition to the Motion To Withdraw as of the date of this Order. The Motion To Withdraw is granted. The parties proposed findings of fact are addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. A request for bids to furnish and install resilient track surfaces at William T. Dwyer and Olympic Heights high schools was issued by Respondent on November 19, 1991, for Project No. SB 92-184T. The track surfaces are to be installed on existing tracks, are removable, and are not permanently affixed to real property. Bid proposals were timely filed by six bidders on December 18, 1991.

   
   

2. Bid proposals were reviewed by the Department of Purchasing & Stores and the Department of Facilities Design pursuant to the procedures customarily followed by Respondent. All required procedures were followed without defect.

   
   

3. The low bidder was rejected for failure to include in its bid proposal a two year warranty in violation of the bid specifications. The second low bidder, All American Tracks Corporation ("All American"), was selected as the lowest and best

   bidder which met specifications, terms, and conditions of the bid documents.

   
   

4. The award of contract was to be approved by Respondent at the school board meeting scheduled for January 15, 1992. Petitioner, however, timely filed its protest to set aside the proposed award of contract.

   
   

5. At Petitioner's request, Respondent conducted an informal hearing on March 9, 1992, pursuant to Section 120.53(3)(d), Florida Statutes. At the informal hearing, Petitioner asserted that All American's bid was not responsive because All American was not registered to business in the state at the time All American submitted its bid. Respondent's Office of General Counsel issued a legal opinion on March 13, 1992, recommending that the contract be awarded to All American. The opinion concluded that the corporate status of All American had no affect on the responsiveness of the bid submitted and that, if it otherwise would have had an affect, All American was exempt from the registration requirements. The Office of General Counsel notified all parties of its intent to award the bid to All American.

6. Petitioner timely filed a formal bid protest on March 20, 1992. The bid protest alleged that ". . . it would be totally outside the existing Florida Statutes to consider [All American] a responsive bidder."

   
   

7. The bid specifications in this proceeding do not require that a bidder have a certificate of authority to do

   business in the state in order to be eligible to submit a bid. Rather, each bidder was required by Special Condition M, Certificate of Competency/Occupational License, to meet the following minimum licensing/certification requirements:

   
   

   1. Each vendor shall have a valid Palm Beach County Occupational License as a general contractor or track coating contractor.

   2. Each vendor submitting bids on this contract shall hold a current certificate from the U.S. Tennis Court and Track Builders Association.

      
      

      All American satisfied the minimum licensing and certification requirements specified in the bid documents. Furthermore, All American has been authorized since March 26, 1992, and is currently authorized by the Secretary of State to conduct business in Florida.

      
      

8. All American is not a contractor required to obtain a certificate of authority from the state in order to submit a bid proposal. The track surface to be installed is removable and not permanently affixed to real property. The Department of Professional Regulation does not require installers of synthetic tracks to be licensed as contractors.

   
   

9. The work required by the bid is exempt from the registration requirements generally applicable to corporations. The proposed project will require less than 30 days to complete. The bid proposals of Petitioner and All American indicate that the proposed project will require approximately 20 days to complete. Furthermore, All American has never performed track surfacing or resurfacing in Florida and has never built a track in Florida from scratch. Outside of Florida, however, All American has calculated, surveyed, striped, and installed synthetic track surfaces throughout the world.

   
   

10. Respondent reserved the right to reject any and all bids and to waive any irregularity in bids received. In paragraph 18 of the General Conditions, the Invitation To Bid stated:

    In case of any doubt or difference of opinion as to the items to be furnished hereunder, the decision of the Board shall be final and binding on both parties.

    
    

11. Petitioner suffered no unfair economic advantage by the failure of All American to be registered to do business in the state at the time All American submitted its bid. All American was exempt from the registration requirements because it had never previously performed such work in the state and because the work to be performed required less than 30 days to complete. Even if All American was not exempt from the registration requirements, the alleged irregularity in All American's bid was de minimis and was cured on March 26, 1992, approximately 98 days after the bids were submitted and prior to the commencement of any work.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter in this

    proceeding. The parties were duly noticed for the formal hearing.

    
    

13. Petitioner has the burden of proof. Petitioner must show by a preponderance of the evidence that Respondent's proposed agency action is arbitrary, capricious, or beyond the scope of Respondent's discretion as a state agency. Capeletti Brothers, Inc. v. State Department of General Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983); Volume Services Division v. Canteen Corp.,

    369 So.2d 391, 395 (Fla. 2d DCA 1979); Mayes Printing Company v. Flowers, 154 So.2d 859, 864 (Fla. 1st DCA 1963); William A. Berbusse, Jr., Inc. v. North Broward Hospital Dist., 117 So.2d 550 (Fla. 2d DCA 1960). 1/

    
    

14. The failure of All American Tracks Corporation ("All American") to register to do business in the state before submitting a bid on the proposed project did not violate the requirements of the bid documents. The bid specifications require each bidder to have a valid Palm Beach County Occupational License as a general contractor or track coating contractor and a current certificate from the U.S. Tennis Court and Track Builders Association. All American satisfied the minimum licensing and certification requirements specified in the bid documents.

    
    

15. All American is not required to register to do business in the state before submitting a bid on the proposed project. In Marinair Freight Forward, Inc. v. Florida Department of Commerce, 419 So.2d 1136, 1137 (Fla. 1st DCA 1982), the court held that a foreign corporation is not required to register to do business in the state before submitting a bid on a government printing project. In Greenhut Construction Company, Inc. v. Henry A. Knott, Inc., 247 So.2d 517 (Fla. 1st DCA 1971), however, the court held that a foreign corporation was required to obtain a certificate of authority prior to submitting a bid on a construction project. In Mariner, 419 So.2d at 1137, the court distinguished the two holdings as follows:

    
    

    . . . the circumstances here are wholly dissimilar to Greenhut Construction Company, Inc. v. Henry A. Knott, Inc., 247 So.2d 517 (Fla. 1st DCA 1971), relied upon by Graphic. In Greenhut, this Court reversed a judgment that would have permitted a contractor to bid on a construction project without prior registration. The result in Greenhut was

    dictated by the unique registration requirements of former Chapter 468, in which "contractor"

    was defined as one who, among other things, submits a bid to build. In effect [sic] the statute specified that to submit a construction

    bid is to engage in the business of a contractor, thus requiring that a contractor register to do business before bidding.

    
    

    The track surface to be installed in this proceeding is removable and not permanently affixed to real property. The Department of Professional Regulation does not require installers of such synthetic tracks to be licensed contractors.

16. All American is exempt from the general requirement to obtain a certificate of authority. Section 607.1501(1), Florida Statutes, prohibits a foreign corporation from transacting business in the state until it obtains a certificate of authority from the Department of State. Section 607.1501(2)(j), however, expressly provides that the following activities do not constitute transacting business for which a certificate of authority is required in Section 607.1501(1):

    
    

    Conducting an isolated transaction that is completed within 30 days and that is not one in the course of repeated transactions of a like nature. 2/

    
    

    The uncontroverted evidence establishes that the proposed project will take less that 30 days to complete and is not one that is in the course of repeated transactions of a like nature.

    
    

17. Even if All American is required to obtain a certificate of authority and failed to do so prior to submitting a bid proposal, the failure to do so is not a material deviation from the requirements of an invitation for bid. 3/ A deviation is material or substantial if its waiver would either: (a) deprive the public body of an assurance that a contract will be entered into, performed, and guaranteed in accordance with specified requirements; or (b) adversely affect competitive bidding. Robinson Electrical, 417 So.2d at 1034. A determination of whether a deviation is material or substantial must be made based upon the facts and circumstances present in a particular case.

    
    

18. The failure of the successful bidder to be registered to conduct business in the state does not deprive Respondent of an assurance that a contract will be entered into, performed, and guaranteed in accordance with bid specifications. The uncontroverted evidence establishes that All American has substantial experience in performing similar projects throughout the world, and is otherwise ready, willing, and able to complete the proposed project. Furthermore, Respondent considers the asserted deficiency in All American's bid to be de minimis.

    
    

19. The failure of the successful bidder to obtain a certificate of authority to conduct business in the state does not adversely affect competitive bidding. A deviation adversely affects competitive bidding if its waiver would either place a bidder in a position of advantage over other bidders or otherwise undermine the necessary common standard of competition. Robinson Electrical,

    417 So.2d at 1034. The uncontroverted evidence establishes that All American was exempt from the corporate registration requirements for conducting business in the state. Even if not so exempt, Petitioner suffered no unfair economic advantage by the alleged irregularity in All American's bid, and the alleged irregularity did not undermine the necessary common standard of competition among all of the bidders.

    
    

20. Even if All American is not exempt from the requirement for a certificate of authority in Section 607.1501(1), Florida Statutes, All American complied with that statutory requirement on March 26, 1992. In Marinair, the successful bidder registered with the Secretary of State within two weeks after the bids were opened. In this proceeding, All American received its certificate of authority from the Secretary of State on March 26, 1992, within 71 days after the bid was initially scheduled for approval.

21. The purpose of a formal administrative proceeding is to formulate final agency action, not to review action taken earlier and preliminarily. Capeletti Brothers v. State, Department of General Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983); Couch Construction Company, Inc. v. Department of Transportation,

361 So.2d 172, 176 (Fla. 1st DCA 1978); McDonald v. Department of Banking and Finance, 346 So.2d 569, 584 (Fla. 1st DCA 1977). In formulating final agency action, the undersigned may consider competent and substantial evidence of facts and circumstances as they exist up to and including the date of the formal hearing. Baptist Hospital, Inc. v. State, Department of Health and Rehabilitative Services, 500 So.2d 620, 625 (Fla. 1st DCA 1987); Turro v. Department of Health and Rehabilitative Services, 458 So.2d 345, 346 (Fla. 1st DCA 1984). Evidence that the alleged irregularity was cured on March 26, 1992, may be considered in the formal hearing even though such evidence was not known to Respondent at the time Respondent issued its notice of intent to award bid on March 20, 1992. See also, Marinair, 419 So.2d at 1137.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner's written formal protest be DENIED and the

contract be awarded as proposed by Respondent.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 21st day of May, 1992.

DANIEL MANRY

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 21st day of May, 1992.

ENDNOTES

1/ See also System Development Corp. v. Department of Health and Rehabilitative Services, 423 So.2d 433, 434 (Fla. 1st DCA 1982); Glatstein v. City of Miami,

399 So.2d 1005 (Fla. 3rd DCA 1981)(pertaining to the burden of proof in an administrative proceeding involving a protest of a request for proposals).

2/ Sec. 607.1501(3), Fla. Stat., provides that the ". . . list of activities in subsection (2) is not exhaustive."

3/ Bid proposals containing material or substantial deviations from the requirements of an invitation for bid are not responsive. Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192-1193, (Fla. 2nd DCA 1977); cf. Robinson Electrical Co. v. Dade County, 417 So.2d 1032, 1034 (Fla.

3rd DCA 1982). See also Glatstein v. City of Miami, 399 So.2d at 1008 (pertaining to deviations in responses to requests for proposals). A material

or substantial deviation in a bid proposal cannot be waived. Robinson Electrical, 417 So.2d at 1034 (citing Harry Pepper & Associates, 352 So.2d 1190).

APPENDIX

Petitioner submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Petitioner's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1, 3, 4 Rejected as a conclusions of law

2 Rejected as irrelevant and immaterial. This is not a license discipline proceeding brought by the Department of Professional Regulations.

5 Rejected as unsupported

by competent and substantial evidence.

Respondent submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted.

Respondent's Proposed Findings of Fact

Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1, 2 Accepted in Finding 1

1. Accepted in Finding 2

2. Accepted in Finding 3

3. Accepted in Finding 4

4. Accepted in Finding 5

5. Accepted in Finding 6

6. Accepted in Finding 7

8-9 Accepted in Finding 8

1. Accepted in Finding 7

2. Accepted in Finding 10

COPIES FURNISHED:

Hon. Betty Castor Commissioner of Education The Capitol

Tallahassee, Florida 32399-0400

Mr. Thomas J. Mills, Superintendent Palm Beach County School Board

3323 Belvedere Road

West Palm Beach, Florida 33402

Hazel Lucas, Esquire

3318 Forest Hill Boulevard

West Palm Beach, Florida 33406-5318

Frederic J. Cohen, Esquire

2001 Palm Beach Lakes Boulevard Suite 503

West Palm Beach, Florida 33409

James Petrucelli, President Recreational Surfaces, Inc. Route 910 & McClellan Road Indianola, PA 15051

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: 92-001869BID

Orders for Case No: 92-001869BID