STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEAMINGTON, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 93-3291BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in the above-styled case on July 2, 1993, in Sarasota, Florida.

APPEARANCES

For Petitioner: Michael E. Riley, Esquire

Rumberger, Kirk & Caldwell, P.A.

106 East College Avenue, Suite 700 Post Office Box 10507

Tallahassee, Florida 32302

For Respondent: William H. Roberts, Esquire

Assistant General Counsel Department of Transportation 605 Suwannee Street

Mail Station 58

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUES

Whether the Department of Transportation's contract bid award on State Job #17030-3536, Contract No. E-1706 was arbitrary, capricious or lacked competent factual support.

PRELIMINARY STATEMENT

Petitioner was the apparent low bidder on FDOT Contract No. E-1706, Job #17030-3536. Petitioner's bid was rejected based on the Department's determination that Petitioner was not a responsible bidder. On April 20, 1993, the Department advised Petitioner, at the bid posting, that it intended to award the job to the second lowest bidder, Simco, Inc. of Sarasota (Simco) Petitioner filed a formal protest on June 14, and on June 22, 1993, the matter was set for hearing for July 2, 1993 and was heard as scheduled.

At the hearing, Petitioner presented the testimony of John Hummell, its President. Respondent presented the testimony of Glenn Ivey, a District Construction Engineer in the Department's Bartow office, Bobby Cranford, a

Maintenance Engineer employed by the Department for approximately twenty-three

1. years, Angelo Boyas, Respondent's Contracts Manager for the Sarasota Unit and Dennis Hall, Respondent's District Staff Director. Petitioner recalled John Hummell as a rebuttal witness.

   
   

   The parties presented a joint stipulation which was submitted with certain amendments and modifications. Specifically, paragraphs 5 and 10 of the stipulation was rejected and paragraphs 6, 7, 8 and 9 were presented with certain additions. Petitioner's exhibits 1-14 were offered and all were received with the exception of exhibit 6. Respondent's exhibits 1-8 were offered and received in evidence at the hearing. The parties filed proposed recommended orders which were considered in preparation of this recommended order. Proposed findings which are not incorporated herein are the subject of specific rulings in an appendix.

   
   

   FINDINGS OF FACT

   
   

   1. Leamington (Petitioner herein), is a road maintenance and construction contractor doing business since approximately 1985. John Hummell is Petitioner's President and is responsible for all bids submitted for contract awards. Petitioner contracts primarily with the Florida Department of Transportation (Respondent herein). Since 1985, Petitioner has entered into approximately forty-one (41) contracts with Respondent.

      
      

   2. Petitioner was one of seven bidders on State Job #17030-3536, Contract E-1706, let by Respondent in District I. Respondent notified Petitioner of its decision to award the bid to the second lowest bidder, Simco, by notice posted on April 19, 1993 stating that Leamington's bid was rejected because it was considered not to be responsible and was not in the best interest of the Department (to contract with Leamington).

      
      

   3. The work in question involves the repairs of the bridge located at SR- 789 at Little Ringling Causeway west of Sarasota in Sarasota County. The work entails removal and replacement of silicone sealant on the bridge deck and replacement and rejacketing of piling with grout epoxy. The bid tabulations revealed that Petitioner's bid was approximately $500.00 less than that of the second lowest bidder, Simco, Inc., of Sarasota.

      
      

   4. The Department has a procedure called the "district contracts procedure". Part of the procedure calls for the awards committee to review bids and determine who the bid should be awarded to. The awards committee, which was chaired by Glenn Ivey, the District Director of Operations, reviewed the bid submitted for project E-1706. The awards committee voted unanimously to reject Leamington's bid on Contract E-1706.

      
      

   5. The decision to reject Petitioner's bid, by the awards committee, was based on Petitioner's performance on its more recent Department contracts. Specifically, the awards committee considered projects E-1649, for sidewalk repair in several counties; contract E-1545, a concrete repair job in Lakeland; and contract E-1652, a roadway shoulder repair job.

      
      

   6. Leamington's contract on the concrete repair job (E-1545) was rated as being poor when Leamington was, in effect, asked to leave the job. Based on Leamington's poor workmanship and difficulties encountered on that contract, Respondent terminated work on the contract after approximately sixty percent (60 percent) of the work was completed. The remainder of that project was completed by another contractor. Specifically, Job No. E-1545 called for Petitioner to

      remove and replace portland concrete slabs on Memorial Boulevard in Lakeland. Petitioner failed to restore the concrete slabs to a smooth surface, making it necessary for Respondent to have the slabs ground such that motorists had a smooth driving surface. After several warnings, Respondent cancelled the project and, as noted, approximately forty percent (40 percent) of the work was completed by another contractor.

      
      

   7. Another project reviewed by the awards committee was Contract E-1652, a roadway shoulder repair contract. On that project, Petitioner was advised that the shoulder had to be graded at a certain angle and was shown, by several of Respondent's engineers, the proper manner in which to accomplish the task. Petitioner failed to grade the shoulder at the correct angle as requested. Petitioner also routinely failed to provide proper traffic control during the performance of Contract E-1652 and frequently disputed Respondent's employees advice as to work instructions and ways to eradicate the poor workmanship on that project. Additionally, Petitioner failed to use skilled workers and did not have ample equipment on the job to perform the work on Contract E-1652. Initially, Petitioner had limited equipment at the beginning of the work on Contract E-1652. After Petitioner received a letter from Respondent advising that there wasn't adequate equipment to complete the project, Petitioner obtained additional equipment.

      
      

   8. The Department terminated Petitioner's work under Contract E-1652 because Petitioner had approached the contract deadline for completion and due to of the numerous problems the Department experienced with Petitioner in getting the work completed acceptably.

      
      

   9. Bobby Cranford, the Assistant Maintenance Engineer for the Petitioner's Sarasota Maintenance Unit, recommended that Petitioner not be awarded any more roadway shoulder repair contracts based on the difficulties experienced by Petitioner's "poor" workmanship on contract E-1652.

      
      

   10. Another project reviewed by the awards committee was Petitioner's work performance on Contract E-1649, a sidewalk repair job which encompassed several counties. Petitioner did not have the required personnel and expertise to perform the sidewalk job correctly. Petitioner was kept informed of deficiencies and necessary corrections to correctly perform the sidewalk repair job, however, the proper repairs have not been made.

       
       

   11. The Respondent introduced a composite of twenty-three (23) photos showing the extent of the problems Petitioner needed to correct the sidewalk repairs with notes as to the corrective action that was needed. Specifically, Petitioner used little expansion joint materials and no edging tools were utilized on the project. Similar problems were found throughout the four county area in which Petitioner was engaged on the sidewalk project.

       
       

   12. By letter dated May 13, 1993, Respondent advised Petitioner of the numerous problems on contract E-1649. Specifically, Petitioner's President was told of visual inspections which showed substandard work on the original work as well as the work wherein Petitioner attempted to correct deficiencies which were discovered by Respondent. For example, Petitioner was advised that at 506 First and Main Streets in Wachula, there were sections of concrete sidewalk removed and scheduled for replacement with adjacent sections now damaged. Petitioner was further advised that workers had driven trucks on the sidewalk damaging several slabs not marked for replacement. Finally, Petitioner was asked to correct broken sprinklers at the work site and to resolve a claim filed by a Mrs. Campbell, which was registered with Respondent.

   13. The awards committee also relied upon an independent inspection report prepared by Bobby Cranford. That report is a forty (40) page report citing numerous deficiencies on the sidewalk repair project.

       
       

   14. Respondent requires that contractors employ english speaking superintendents at each work site to assist in communicating with its inspectors. Petitioner utilized superintendents who did not speak english and thereby created a language barrier making communication difficult with Respondent's personnel.

       
       

   15. Respondent had to monitor Petitioner's projects extensively and at a cost which increased the Department's overhead disproportionately when compared to other projects let to other district contractors.

       
       

   16. Based on a review of Respondent's work on Petitioner's recent contracts, no other contractors performing contracts in District I had a performance record as poor as Petitioner.

       
       

   17. When the awards committee made its decision to reject Petitioner's bid on the subject contract, it also relied on a memorandum from , Wally Clark, a District I attorney. In the memorandum it was concluded that Petitioner had subcontracted work to Hummell, Inc., a separate entity and that the required prior written approval of the subcontracting had not been obtained from Respondent. The investigation also revealed that the subcontractor, Hummell, Inc., had not been paid for its services (by Petitioner). An internal audit also prepared by Wall revealed that Hummell, Inc. was an unpaid subcontractor of Petitioner.

       
       

   18. The awards committee also considered allegations from Phillip Spears, a subcontractor of Petitioner, who had not been paid for work performed on Respondent's contracts. The committee also considers a newspaper article which stated that Petitioner was under investigation by local law enforcement officials for failure to pay subcontractors on the Interstate 75 project.

       
       

   19. Dennis Hall is the District Investigator for District I. Hall accompanied Wall, the author of the internal audit report, on investigations and interviews in compiling the audit report. One of the persons interviewed by Wall and Hall was Larry Zavitz.

       
       

   20. Zavitz was an inspector employed by Petitioner in excess of twenty- eight (28) years and had performed the inspection on Petitioner's sidewalk repair project under Contract E-1649. During the interview of Zavitz, he admitted to receiving a loan of $1,000.00 from John Hummell which Zavitz had not fully repaid at the time of the interview. Upon Zavitz admission of accepting the loan, he was asked and later resigned from the Department.

       
       

       CONCLUSIONS OF LAW

       
       

   21. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to subsection 120.53(5), Florida Statutes.

       
       

   22. The parties were duly noticed pursuant to Chapter 120, Florida Statutes.

   23. The authority of the Respondent is derived from section 337, Florida Statutes.

       
       

   24. Subsection 337.11(4), Florida Statutes provides, in pertinent part that:

       
       

       The Department may award the work proposed to the lowest responsible bidder, or it may reject all bids and proceed to bid the work in accordance with subsection 2 or otherwise perform the work.

       
       

   25. Section 337.11(4), Florida Statutes and section 2.1 of the General Specifications of the subject project number, which terms of the invitation to bid were accepted by Petitioner, provides as follows:

       
       

       The Department will consider award of the contract to the lowest responsive and responsible bid which companies with all the requirements set forth in the specifications, and respective contract documents, and advertisement of bid. The Department reserves the right to award the work as determined to be in the best interest of the Department.

       The Department reserves the right to reject any or all bids and any single items of the bid, or waive any minor irregularity or technicality in proposals received. (emphasis added)

       
       

   26. Based on the authority granted to the Department in both the specifications and relevant statutes, the Department may reject bids based on its determination as to who is not responsible and may reject those with whom it would not be in the best interest of the Department to contract. Petitioner was found to be non-responsible based on projects which it had completed recently. In determining that Petitioner was not responsible, the Department relied upon the evaluation of practices enumerated by the Florida Supreme Court's decision in Willis V. Hathaway, 117 So.89 (1928). Those factors include the degree of experience, reputation for performance, possession of facilities, outstanding obligations, obligations then or about to be assumed, integrity, credit and other matters which might influence the ability of the bidder to perform the contract. Specifically here, the awards committee relied upon its knowledge of Petitioner in its past performance on Department contracts, internal investigative reports by the Department's office of internal audit, the listing of various deficiencies on an ongoing sidewalk repair job, newspaper articles indicating that Petitioner was under investigation by the State Attorney's office, a legal opinion prepared by the District Contracts Attorney, Wally Clark, one of Petitioner's subcontractors that it failed to advise the Department that it had subcontracted, the verbal allegations of a person (Spears) claiming to be a subcontractor who had not been paid for work performed for Petitioner on the Department's contracts. For all of these reasons, the Department properly determined that Petitioner was not the lowest responsible bidder. Accordingly, Respondent properly rejected Petitioner's bid and filed its notice to award the contract (E-1706) to the second lowest responsible bidder, Simco, Inc. of Sarasota.

RECOMMENDATION

Based on the foregoing, it is, hereby,

RECOMMENDED that: Petitioner's protest of the rejection of its bid on Contract E-1706 be rejected and the Department enter its award of the subject contract to the second lowest responsible bidder, Simco, Inc. of Sarasota.

DONE AND RECOMMENDED this 8th day of September, 1993, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1993.

COPIES FURNISHED:

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

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thornton J. Williams, Esquire General Counsel

Haydon Burns Building

562 Suwannee Street

Tallahassee, Florida 32399-0458

William H. Roberts, Esquire Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399-0458

Michael E. Riley, Esquire

106 East College Avenue Post Office Box 10507 Tallahassee, Florida 32302

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.

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AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION

LEAMINGTON, INC.,

Petitioner,

vs.

DOAH CASE NO. 93-3291BID

DEPARTMENT OF TRANSPORTATION, DOT CASE NO. 0167

Respondent.

/

FINAL ORDER

On June 14, 1993, LEAMINGTON, INC., (hereinafter LEAMINGTON), Petitioner, filed a formal bid protest, protesting the DEPARTMENT OF TRANSPORTATION's (hereinafter DEPARTMENT) decision to award Contract No. E-1706, State Job No. 17030-3536 to the second lowest bidder, Simco, Inc., (Simco). The DEPARTMENT referred the matter to the Division of Administrative Hearings for an administrative hearing.

A hearing was held in this matter on July 2, 1993. At the hearing, Petitioner presented testimony of John Hummell, its president. Respondent presented the testimony of Glenn Ivey, the District Construction Engineer in the DEPARTMENT's Bartow office; Bobby Cranford, Maintenance Engineer, employed by the DEPARTMENT for 23 years; Angelo Boyas, the DEPARTMENT's Contracts Manager, for the Sarasota Maintenance Unit and Dennis Hall, Respondent's District Staff Director. Petitioner offered exhibits 1-14 into evidence and all were received with the exception of exhibit 6. Respondent offered exhibits 1-8 into evidence and all were received. Both parties filed Proposed Recommended Orders, which were considered by the Hearing Officer in the preparation of his Recommended Order. The Hearing Officer entered his Recommended Order on September 8, 1993, copy attached. On September 16, 1993, Petitioner filed five exceptions to the Hearing Officer's Findings of Fact and one exception to one of the Hearing Officer's Conclusions of law. None of the exceptions cited are supported by the record. The exceptions of the Petitioner are addressed below.

FILED EXCEPTIONS

1. Petitioner's first exception is as follows: "In paragraph 6, LEAMINGTON takes exception to the finding that "LEAMINGTON was, in effect, asked to leave the job." LEAMINGTON's continued performance on contract E-1545 was settled by supplemental agreement. The Florida Department of Transportation (Department) did not terminate contract E-1545."

   
   

   There was competent substantial evidence to support the finding that LEAMINGTON was asked to leave the job on Contract E-1545. The testimony of Glenn Ivey (Transcript, 58:1-19; 59:5-6), established that the DEPARTMENT ended the contract leaving approximately 40 percent of the contract unperformed due to LEAMINGTON's poor workmanship on the contract. Petitioner's exception number one is rejected.

   
   

2. Petitioner's second exception is as follows: "In paragraph 8, LEAMINGTON takes exception to the finding that the DEPARTMENT terminated petitioner's work under contract E-1652. The DEPARTMENT agreed to LEAMINGTON's request that the DEPARTMENT not issue additional work orders under that contract."

   
   

   There is competent substantial evidence to support this finding of fact by the Hearing Officer. Bobby Cranford, who oversees maintenance operations and contracts for the DEPARTMENT, including Contract E-1652, testified that there were so many problems with LEAMINGTON's work on the contract, and that LEAMINGTON was approaching the end of its allotted time for the contract, so that when LEAMINGTON asked if it could stop the work on the contract the DEPARTMENT agreed. This left a significant portion of the contract unaccomplished. (Transcript: 94-98). Although the contract was ended at LEAMINGTON's request it was nevertheless ended by the DEPARTMENT. The Petitioner's second exception is rejected.

   
   

3. Petitioner's third exception is as follows: "In paragraph 8, LEAMINGTON, takes exception to any findings of fact drawn from Wally Clark's memorandum. Clark's memorandum was hearsay and was not admitted into evidence. There was no competent non-hearsay evidence admitted at the proceeding to allow Clark's memorandum to be considered by the Hearing Officer."

   
   

   It is true that Clark's memorandum was hearsay. However, the duty of the DEPARTMENT in determining whether a bidder is responsible is to use information available to it to evaluate certain factors. Willis v. Hathaway 117 So. 89 (Fla. 1928). Glenn Ivey testified at hearing that the Awards Committee had Clark's memorandum and relied on it at the time it made its decision to reject LEAMINGTON's bid. (Transcript 26; 50:7-26; 51:1-13). Although the conclusions contained in the opinion may have been hearsay for purposes of admissibility, the information contained therein was nevertheless among the information available to the Awards Committee at the time it determined LEAMINGTON was not responsible. The Awards Committee, being neither trier of fact or law was not responsible for making the determination as to the hearsay nature of such information. The Hearing Officer in his Recommended Order did not make a finding based on the content of the memorandum. The finding of fact was that the committee relied on the memorandum in making its decision. Consequently the finding of fact is not based on hearsay and Petitioner's exception number three is rejected.

4. Petitioner's fourth exception is as follows: "In paragraph 18, LEAMINGTON takes exception to the finding that the "award committee also considers (sic) a newspaper article which stated that Petitioner was under investigation by local law enforcement officials for failure to pay subcontractors on the Interstate 75 project." The award committee met on or before April 19, 1993; the newspaper article was published on May 25, 1993. It was impossible for the award committee to have considered that newspaper article in its review of LEAMINGTON's bid."

   
   

   There is no record support for this finding and so it is erroneous. That newspaper article was published on May 25, 1993, and the Awards Committee met on or before April 19, 1993. It is true that it would have been impossible for the Awards Committee to consider that particular newspaper article. However, the content of the article was that LEAMINGTON had failed to pay two subcontractors, James Hummell (John Hummell's brother), and Philip Spears. The Awards Committee was aware and had been informed of the allegations of Spears and James Hummell. Glenn Ivey, Chairman of the Awards Committee, testified that the Awards Committee considered the allegations of Spears and James Hummell in making its decision in determining LEAMINGTON was not responsible. (Transcript:59).

   Therefore, Petitioner's exception number four is accepted to the extent that the Awards Committee did not rely on the newspaper article itself and the statements in the newspaper article that LEAMINGTON was under investigation by local law enforcement officials. It is however rejected to the extent it implies that the Awards Committee did not rely on the allegations of the contractors which were reported in the article and which resulted in the investigation reported in the newspaper article.

   
   

5. Petitioner's fifth exception is as follows: "In paragraphs 19 and 20, LEAMINGTON takes exception to findings of fact involving Larry Zavitz. The investigation report referencing Zavitz's alleged statement was not admitted into evidence at the hearing. There was no competent non-hearsay evidence admitted in the hearing which would support a finding of fact referencing Zavitz's alleged statements."

   
   

   There is competent and substantial evidence to support the findings of fact made in paragraph 19 of the Recommended Order, in that Dennis Hall testified that he accompanied Investigator Barry Wall on his investigation interviews and was present when Wall interviewed Larry Zavitz. (Transcript: 125-127).

   Petitioner's exception to paragraph 19 of the Recommended Order is therefore rejected.

   
   

   There is also competent substantial evidence for the finding of fact made in paragraph 20 of the Recommended Order. Hall was present at the interview of Zavitz, and heard Zavitz admit that Zavitz had performed the inspection on LEAMINGT0N's sidewalk repair project, and that he had received a loan of

   $1,000.00 from John Hummell which he had not fully repaid at the time of the interview. Based on that admission, Zavitz was asked to resign from the DEPARTMENT. (Transcript: 127- 128). Hall's testimony is admissible, falling within the hearsay exception found in Section 90.8O4(2)(c), Florida Statutes, a statement against interest. At hearing, the Hearing Officer admitted this testimony over objection based on that hearsay exception. Petitioner's exception number five is therefore rejected.

6. Petitioner also filed an exception to paragraph 26 under the conclusions of law of the Recommended Order. Florida Administrative Code Rule 28-5.404 permits exceptions to be filed to findings of fact, but does not allow for exceptions to conclusions of law. Petitioner's exception number six is therefore rejected.

With the exception of the finding of fact that the Awards Committee considered a newspaper article dated May 25, 1993, in arriving at its decision that LEAMINGTON was a non-responsible bidder, the remaining findings of fact and conclusions of law in the Hearing Officer's Recommended Order are found to be correct in law and fact, and there is sufficient competent and substantial evidence to support the Hearing Officer's recommendation. With that one exception, the Recommended Order is ADOPTED and incorporated herein.

ORDERED that the bid protest of LEAMINGTON, INC., is DISMISSED. DONE AND ORDERED this 18th day of October, 1993.

BEN G. WATTS, P. E.

Secretary

Florida Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399

Copies furnished to:

Michael E. Riley, Esquire

106 East College Avenue

P.O. Box 10507

Tallahassee, Florida 32302

William H. Roberts, Esquire Assistant General Counsel

Florida Department of Transportation Haydon Burns Building

605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

E. C. Thompson Contracts Administrator

Florida Department of Transportation 801 N. Broadway

Bartow, Florida 32830

NOTICE OF RIGHT TO APPEAL

THIS ORDER CONSTITUTES FINAL AGENCY ACTION AND MAY BE APPEALED BY PETITIONER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND RULE 9.110, FLORIDA RULES OF APPELLATE PROCEDURE, BY FILING A NOTICE OF APPEAL CONFORMING TO THE REQUIREMENTS OF RULE 9.110(D), FLORIDA RULES OF APPELLATE PROCEDURE, BOTH WITH THE APPROPRIATE DISTRICT COURT OF APPEAL, ACCOMPANIED BY THE APPROPRIATE FILING FEE, AND WITH THE DEPARTMENT'S CLERK OF AGENCY PROCEEDINGS, HAYDON BURNS BUILDING, 605 SUWANNEE STREET, M.S. 58, TALLAHASSEE, FLORIDA 32399-0458, WITHIN THIRTY (30) DAYS OF RENDITION OF THIS ORDER.

Docket for Case No: 93-003291BID

Orders for Case No: 93-003291BID