STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUY THE SQUARE YARD, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 93-2672BID

) PALM BEACH COUNTY SCHOOL BOARD, )

)

Respondent, )

) ACOUSTI ENGINEERING COMPANY OF ) FLORIDA, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a duly designated Hearing Officer of the Division of Administrative Hearings, on July 22, 1993, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: V. Lynn Whitfield, Esquire

Post Office Box 34

West Palm Beach, Florida 33402

For Respondent: Robert A. Rosillo, Esquire

3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813

For Intervenor: Kevin D. Wilkinson, Esquire

Northbridge Centre, Suite 300, Pavilion

515 North Flagler Drive

West Palm Beach, Florida 33401 STATEMENT OF THE ISSUE

The ultimate issue for determination at formal hearing was whether the intended decision by the Palm Beach County School Board to reject all bids on project SB93C-216T and readvertise departs from the essential requirements of law.

PRELIMINARY STATEMENT

On February 16, 1993, the Palm Beach County School Board (Respondent) issued an invitation to bid (ITB) for project SB93C-216T--removal, preparation and installation of carpet-glue down. On March 31, 1993, the bids were opened. Even though eight bids were received, only seven were considered. 1/

Respondent's Department of Contracting & Procurement reviewed the bids and on April 12, 1993, posted its recommendation that the bid be awarded to Carpetech, the "lowest and best bidder meeting specifications, terms, and conditions."

Two of the bidders, Buy the Square Yard, Inc., and Acousti Engineering Co. of Florida (Acousti Engineering), filed timely written protests to the recommendation. On April 28, 1993, Respondent held an informal hearing on the protests, and the recommendation was, based upon the arguments presented by the protestors, that all bids be rejected and the project readvertised, with all previous bidders provided an invitation to rebid.

A formal hearing was requested by Buy the Square Yard (Petitioner). The matter was referred to the Division of Administrative Hearings. Initially, Acousti Engineering did not request a formal hearing because it was in agreement with Respondent that all bids should be rejected and the project rebid; however, subsequently, Acousti Engineering (Intervenor) intervened in the formal proceeding. A formal hearing was scheduled on July 22, 1993, pursuant to notice. The parties filed a pretrial stipulation. Petitioner presented the testimony of five witnesses, and Intervenor presented the testimony of two witnesses. Respondent called no witnesses. The parties entered nine joint exhibits into evidence, and Intervenor entered four exhibits into evidence, with a fifth exhibit being rejected.

A transcript of the formal hearing was ordered. The parties agreed to file post-hearing submissions ten days after filing of the transcript. Respondent timely filed proposed findings of fact and conclusions of law. Petitioner and Intervenor were allowed to file their proposed findings of fact and conclusions of law beyond the ten-day period. No response was filed by Respondent to the late filings. All proposed findings of fact and conclusions of law are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. The Palm Beach County School Board (Respondent) issued an invitation to bid (ITB) on February 16, 1993, requesting bids for the removal, preparation, and installation of carpet-glue down on project SB93C-216T. The ITB provided that all bids were to be submitted by March 31, 1993, at 2:00 p.m., at which time all bids were to be publicly opened.

   
   

2. Pertinent sections of the ITB to the case at hand include a section entitled "Invitation To Bid" which provides in pertinent part:

   
   

   AWARDS: In the best interest of the School Board, the Board reserves the right to reject any and all bids and to waive any irregularity in bids received; to accept any item or group of items unless qualified by bidder; to acquire additional quantities at prices quoted on this invitation unless additional quantities are not acceptable, in which case the bid sheets must be noted "BID IS FOR SPECIFIED QUANTITY ONLY." All awards

   made as a result of this bid shall conform to applicable Florida Statutes.

3. Another section entitled "General Conditions, Instructions and Information for Bidders" provides in pertinent part:

   
   

   26. Any and all Special Conditions that may vary from these General Conditions shall have precedence.

   
   

4. The section entitled "Special Conditions" provides in pertinent part:

   
   

   C. AWARD: Bid will be awarded to the lowest and best bidder meeting specifications, terms and conditions . . .

   The School Board shall elect to award to a primary and a secondary vendor . . . .

   * * *

   N. CONTRACTOR QUALIFICATIONS: The contractor must have at least three years of verifiable experience in the floor covering contracting business. The contractor must have in force the required occupational licenses from Palm Beach County and it's municipalities. All documentation of the above requirements must be submitted with the proposed bid by each bidding contractor. The contractor shall not sub-contract any portion of their work, outlined in this contract, to any person(s) or company, without advance written permission from the Carpentry Supervisor of the Department of Maintenance & Plant Operations.

   
   

5. Another section of the ITB entitled "Additional Information" provides in pertinent part:

   
   

   Additional information will not be a determining part of the award of this bid except in the instance where the per square yard prices are too close to determine a clear awardee. In that instance we will look at the optional items in this section as the determining factor. (This usage is also based upon all other factors being equal.)

   . . .

   1. Cost of heavy patching. $ per sq. ft. . . .

   2. Cost of heavy patching. $ per sq. ft. . . .

      
      

6. By March 31, 1993, eight bids were received. However, only seven bids were considered. Respondent's Department of Contracting & Procurement reviewed the bids.

   
   

7. On April 12, 1993, the Department of Contracting & Procurement (Department) posted the bid tabulations, which showed, inter alia, that the apparent lowest bidder was Carpetech at $28,029.61, that the apparent second lowest bidder was Buy the Square Yard (Petitioner) at $32,107.32, and that the apparent highest bidder was Acousti Engineering of Florida (Intervenor).

8. Additionally, the recommendation was that the bid be awarded to the "lowest and best bidder meeting specifications, terms, and conditions" with Carpetech being the "Primary" bidder and Petitioner being the "Secondary" bidder.

   
   

9. Moreover, the bid tabulation sheet noted that the "price" of each bid was determined by using a "hypothetical" that was typical of a School Board project. This was the first time that the bidders were aware of a hypothetical being used. Respondent had not used a hypothetical in past bids for this type of work, and it was not included in the bid specifications

   
   

10. At first, after the bids were opened, Respondent's Department used the base bid, which excluded any alternate work, to determine the apparent lowest bidder. The calculation showed Intervenor as the apparent lowest bidder at

    $11.03 sq. yd. and Petitioner as the apparent second lowest bidder at $11.08 sq. yd. Carpetech's base bid was $11.295 sq. yd. A discussion ensued as to whether the bids were "too close"; but, there was no consensus as to the meaning of "too close." However, the Department determined that, taking into consideration the alternate work which would have to be done, Intervenor was not the best bidder. The Department first considered recommending the rejection of all bids and readvertising, but decided upon using a hypothetical which included the base bid and the alternates in the calculations. As a result of using the hypothetical, Carpetech, not Intervenor, was the apparent lowest bidder.

    
    

11. However, Carpetech, unlike any other bidder, changed one of the specifications in its bid from the "cost of heavy patching" to the "cost of light patching." Respondent admits that a clerical error had occurred and that particular specification should have been "light" patching, instead of "heavy" patching.

    
    

12. Also, Carpetech failed to submit an occupational license with its bid. However, subsequent to the bid opening, Carpetech submitted an occupational license.

    
    

13. Like Carpetech, Intervenor also failed to submit an occupational license with its bid. 2/

    
    

14. To the contrary, Petitioner submitted an occupational license with its bid. The occupational license forbade Petitioner to have employees at its location but allowed it to hire outside employees, which meant that it could hire contract labor to perform under the contract of the bid. 3/

    
    

15. Out of the three bidders--Carpetech, Petitioner and Intervenor--only Petitioner is a minority owned business. Initially, when Petitioner began its business in December 1991, it was owned by a minority female and a minority male. Subsequently, for financial purposes, the minority female became the sole shareholder/owner and the minority male became the business consultant (consultant), receiving consulting fees. On or about March 24, 1992, Petitioner was certified as a Minority Business Enterprise (MBE) by Palm Beach County, and on or about March 19, 1992, it was certified as a MBE by Respondent, with the certification effective from May 1992 to May 1993. Petitioner became incorporated in or around April 1992 and again in July 1992 when the minority female became the sole owner.

16. Prior to Petitioner's formation, its consultant had his own flooring business (carpet and tile sales and insulation) for several years. The prior business had financial difficulties which resulted in court judgements against it.

    
    

17. Petitioner's sole owner was never involved in the consultant's prior business. She provides Petitioner's financial security, and there have been no court judgments against Petitioner.

    
    

18. Respondent's Department was familiar with flooring work of Petitioner's consultant before he became associated with Petitioner. He had performed flooring work for Respondent in the past, which was very satisfied with his work.

    
    

19. The Department was not aware of the court judgements against the prior business of Petitioner's consultant. However, even if it was, the judgments would not have had a negative effect on Petitioner in the award process of the current contract.

    
    

20. On or about April 14, 1993, Intervenor filed its written protest, which was timely.

    
    

21. On or about April 22, 1993, Petitioner filed its written protest, which was timely.

    
    

22. On April 28, 1993, Respondent held an informal meeting on the written protests. On May 3, 1993, Respondent's counsel issued its recommendation on the protests, which was to "reject all bids and rebid with new terms and conditions and specifications" in order for all bidders to be given "a fair playing field."

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Subsections 120.57(1) and 120.53(5), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

24. The case of Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), sets the parameters for review of a bid protest matter by a hearing officer:

    
    

    [A]lthough the APA provides the procedural mechanism for challenging an agency's decision to award or reject all bids, the scope of inquiry is limited to whether the purpose of competitive bidding has been subverted. In short, the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly.

    
    

    Id., at 914.

    
    

25. The challengers to Respondent's intended action--Buy The Square Yard (Petitioner) and Acousti Engineering Company of Florida (Intervenor)--must prove by a preponderance of the evidence that Respondent's actions were arbitrary or capricious, and not based upon facts reasonably tending to support its action.

    Baxter's Asphalt and Concrete, Inc. v. Department of Transportation, 475 So.2d 1284, 1286-87 (Fla. 1st DCA 1985); Capeletti Brothers, Inc. v Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983).

    
    

26. The case at hand is replete with irregularities or variances from the specifications attributable to the bidders and to Respondent. Specifications in invitations to bid, like "[w]ords in [almost] an[y] instrument should be given their natural or most commonly understood meaning." Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 51-2 (Fla. 1st DCA 1986). "Although a bid containing a material variance is unacceptable . . . not every deviation from the invitation is material." Robinson Electrical Co. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986); Glatstein v. Miami, 399 So.2d 1055 (Fla. 3rd DCA) rev. den. 407 So.2d 1102 (Fla. 1981). Unless the variance from specifications frustrates governmental requirements, it "is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, supra; Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977).

    
    

27. Both Carpetech, the apparent lowest bidder, and Intervenor failed to submit an occupational license with their bids. Respondent made this submission a requirement. Failure to comply with the required condition is a material deviation and cannot be permitted.

    
    

28. Intervenor calls into question Petitioner's occupational license which was submitted with Petitioner's bid. Intervenor contends that Petitioner's occupational license would not allow it to employ outside workers. No evidence was presented to refute Petitioner's contention that, under its occupational license, it could have outside workers to perform under the contract; therefore, Intervenor's argument is not persuasive.

    
    

29. In one part of the specifications, Carpetech changed "heavy" patching to "light" patching. Although Respondent admits that the wording was in error and that it should have been "light" patching, no other bidder changed the specifications or recognized that it was in error; an assumption can, therefore, be made that the other bidders believed that the specification, as written, was correct and bided accordingly. To not consider this change by Carpetech as a material variance would give Carpetech an unwarranted substantial advantage.

    
    

30. Intervenor contends also that Petitioner fails to meet the bid requirement that the contractor have at least three years of verifiable experience in the floor covering contracting business. In the bid documents vendor and bidder are used interchangeably. It is not clear from the bid documents whether contractor means or is used the same as vendor or bidder. Respondent contends that, even though Petitioner has not been in business for three years, its consultant has been in the floor covering contracting business for more than three years and has in fact performed satisfactory on several projects for Respondent. Respondent is satisfied that Petitioner has met the requirement through its consultant. Intervenor has failed to show that Respondent has interpreted this requirement any differently in the past or that Respondent's interpretation is unreasonable.

    
    

31. Additionally, Intervenor contends that Petitioner is not responsible based upon court judgments against Petitioner's consultant and his former floor covering business. However, Petitioner's consultant has no ownership in the present business, and the court judgments are not against Petitioner. Moreover,

    even though Respondent had no knowledge of the judgments until the formal hearing, Respondent contends that the judgments are irrelevant to Petitioner and would not make Petitioner not responsible. Intervenor's argument is not persuasive.

    
    

32. Respondent, itself, acted contrary to the bid documents in awarding the contract. At first glance, the base bids of all the parties were close, particularly the intended awardee, Carpetech, at $11.295 sq. yd. and Intervenor at $11.03 sq. yd. The bid documents provided that additional information would be used only when the per square yard prices were "too close" to determine a clear awardee; however, Respondent had no clear interpretation of "too close" which frustrated the bid process.

    
    

33. Moreover, after Respondent determined that Intervenor's bid was not the best bids, it used a hypothetical, which included using the alternatives contained in the additional information. Respondent had never used a hypothetical before in its floor covering bids, and the hypothetical was not mentioned in the bid documents; therefore, the bidders had no notice that a hypothetical would be used. Hence, Respondent acted contrary to its own bid documents and specifications.

    
    

34. It is clear that the bid process has been compromised, and that Respondent's intended action to award the bid to Carpetech is arbitrary or capricious and its action is not based upon facts reasonably intended to support its action. Under the circumstances of the case at bar, it is not unreasonable to reject all bids and rebid the contract.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Palm Beach County School Board enter its final order

rejecting all bids on project SB93C-216T and readvertise.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of December 1993.

ERROL H. POWELL

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 2nd day of December 1993.

ENDNOTES

1/ One bid was rejected due to a major irregularity of not executing its bid as provided in the ITB in the section entitled "General Conditions, Instructions and Information for Bidders," paragraph numbered 1, Execution of Bid.

2/ No contradicting testimony was offered as to the interpretation of Petitioner's occupational license or the specific nature of such an occupational license.

3/ Intervenor's bid submittal which was entered into evidence as a joint exhibit was void of an occupational license.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-2672

The following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact

1. Substantially adopted in finding of fact 8.

2. Rejected as contrary to the greater weight of the evidence presented-- not the "only" reason for rejecting bids.

3. Substantially adopted in finding of fact 8.

4. Substantially adopted in findings of fact 4 and 13.

5. Substantially adopted in finding of fact 9.

6. Substantially adopted in finding of fact 5.

7. Substantially adopted in finding of fact 9.

8. Substantially adopted in findings of fact 8 and 9.

9. Substantially adopted in finding of fact 7.

10. Substantially adopted in finding of fact 20.

Respondent's Proposed Findings of Fact

1. Substantially adopted in findings of fact 1, 7 and 9.

2. Substantially adopted in finding of fact 7, 18 and 19.

3. Substantially adopted in finding of fact 20.

4. Subordinate to the issues herein.

5. Substantially adopted in findings of fact 2, 4 and 5.

6. Substantially adopted in finding of fact 2.

Intervenor's Proposed Findings of Fact

1. Substantially adopted in findings of fact 4, 7 and 10.

2. First and second sentences substantially adopted in finding of fact 12. Third, fourth and fifth sentences rejected as constituting argument, or conclusions of law, or recitation of testimony. Last sentence rejected as contrary to the record.

3. Rejected as contrary to the greater weight of the evidence presented.

4. First and fifth sentences of the first paragraph and the second paragraph substantially adopted in findings of fact 4 and 14. Second and third sentences of the first paragraph and last paragraph rejected as contrary to the greater weight of the evidence presented. Fourth sentence of the first paragraph rejected as constituting argument, or conclusions of law.

5. Rejected as constituting argument, conclusions of law, or recitation of testimony.

6. First paragraph, second sentence of paragraph two and first and last sentences of paragraph three rejected as constituting argument, or conclusions of law. First sentence of paragraph two substantially adopted in finding of fact 14. Second sentence of paragraph three rejected as contrary to the evidence presented.

7. Rejected as constituting argument, conclusions of law, or recitation of testimony.

8. No finding of fact indicated.

9. Substantially adopted in finding of fact 8.

10, 11 and 12. Rejected as constituting argument, or conclusions of law.

13. Sentence one rejected as contrary to the greater weight of the evidence presented. Sentence two substantially adopted in finding of fact 9. Third sentence, which is the last sentence, rejected as constituting argument, or conclusions of law.

COPIES FURNISHED:

V. Lynn Whitfield, Esquire Post Office Box 34

West Palm Beach, Florida 33402

Robert A. Rosillo, Esquire

3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813

Kevin D. Wilkinson, Esquire Northbridge Centre

Suite 300, Pavilion

515 North Flagler Drive

West Palm Beach, Florida 33401

Dr. C. Monica Uhlhorn Superintendent of Schools

Palm Beach County School Board 3380 Forest Hill Boulevard West Palm Beach, Florida

Abbey G. Hairston General Counsel

Palm Beach County School Board 3380 Forest Hill Boulevard West Palm Beach, Florida

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: 93-002672BID

Orders for Case No: 93-002672BID