STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUTLER CONSTRUCTION COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3971BID

) DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on August 6, 1993, in Tallahassee, Florida, before Stuart M. Lerner, a duly designated Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jeffrey L. Gibson, Vice President

Butler Construction Company

210 Hardee Lane

Post Office Box 560398 Rockledge, Florida 32956-0398

For Respondent: R. Beth Atchison, Esquire

Steven S. Ferst, Esquire Office of the General Counsel Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500 STATEMENT OF THE ISSUE

Whether the Department of Corrections (hereinafter referred to as the "Department") should sustain Petitioner's challenge to the preliminary determination to award the contract for Department Project No. NV-30A to McMahan Construction Company, Inc.?

PRELIMINARY STATEMENT

By letter dated July 9, 1993, Petitioner protested the preliminary determination to award the contract for Department Project No. NV-30A to McMahan Construction Company, Inc. (hereinafter referred to as "McMahan"). In its letter, Petitioner claimed that McMahan's bid should have been declared "unresponsive" because McMahan "submitted Reverse Osmosis ("R.O.") Qualifications Forms for more tha[n] one vendor." According to Petitioner, "[t]his [was] not in conformance with the Bid Documents and gave [McMahan] an unfair advantage." On July 22, 1993, the matter was referred to the Division of Administrative Hearings for the assignment of a hearing officer to conduct a formal hearing.

At the final hearing held in this case on August 6, 1993, a total of three witnesses testified: Jeffrey L. Gibson, Petitioner's Vice President; Charles Payne, an engineer employed by the Department; and John Justus, Jr., an employee of McMahan. In addition to the testimony of these eight witnesses, a total of

14 exhibits (Joint Exhibits 1 through 11 and Petitioner's Exhibits 1 through 3) were offered and received into evidence.

At the close of the evidentiary portion of the hearing, the Hearing Officer announced on the record that post-hearing submittals had to be filed no later than ten days following the Hearing Officer's receipt of the transcript of the hearing. The Hearing Officer received the hearing transcript on August 16, 1993. Petitioner and the Department timely filed separate post-hearing submittals on August 26, 1993. These post-hearing submittals have been carefully considered by the Hearing Officer. The Department's post-hearing submittal, unlike Petitioner's, contains what are labelled as proposed "findings of fact." These proposed "findings of fact" are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made:

1. In March of 1993, the Department issued an Advertisement for Bids (hereinafter referred to as the "Advertisement") through which it solicited the submission of bids on a construction project (Department Project No. NV-30A, which is hereinafter referred to as the "Project") involving the expansion of the water treatment facility at the Martin Correctional Institution.

   
   

2. The Advertisement, along with the other bid documents issued in conjunction with the Advertisement, including, but not limited to, the Instructions to Bidders (hereinafter referred to as the "Instructions") and the Proposal Form, were compiled in a two-volume Specifications Manual (hereinafter referred to as the "Manual") that was made available for public inspection.

   
   

3. Section B of the Manual's first volume contained the Instructions.

   
   

4. Section B-2 2.A.(11) thereof provided that "Section 01420 as contained in the Technical Specifications must be submitted and the qualifications listed therein must be satisfactory to the Owner and the Engineer. "

   
   

5. "Section 01420 as contained in the Technical Specifications" was a "Bidder's Qualification Form, Reverse Osmosis Treatment System Component" (hereinafter referred to as the "R.O. Form"), on which the bidder was to provide "R.O. [Reverse Osmosis] System Supplier" information.

   
   

6. The R.O. Form repeated the directive that the bidder was to "[r]eturn [the] [c]ompleted [R.O.] Form [w]ith [its] proposal."

   
   

7. Section B-14 of the Instructions addressed the subject of "preparation and submission of bids" and provided, in pertinent part, as follows:

   
   

   Each Bidder shall copy the proposal form on his own letterhead, indicate his bid prices thereon in proper spaces, for the Base Bid and for alternates on which he bids. . . .

   Proposals containing . . . . items not called for or irregularities of any kind may be rejected by the Owner.

   
   

8. Section B-16 of the Instructions addressed the subject of "disqualification of bidders" and provided, in pertinent part, as follows:

   
   

   More than one bid from an individual, firm, partnership, corporation or association under the same or different names will not be considered. Reasonable grounds for believing that a Bidder is interested in more than one proposal for the same work will cause the rejection of all proposals in which such Bidders are believed to be interested.

   
   

9. The subject of "contract award" was addressed in Section B-21 of the Instructions, which provided, in pertinent part, as follows:

   
   

   . . . The recommendation for contract award will be for the bidder qualified in accordance with Section B-2 and submitting the lowest bid provided his bid is responsible and it is in the best interest of the Owner to accept it. The qualified bidder submitting the lowest bid will be that bidder who has submitted the lowest price for the base bid, or the base bid plus additive

   alternates or less deductive alternates, taken in the numerical order listed in the bid documents in an amount to be determined by

   the Owner. The Order of the alternates may be accepted by the Owner in any sequence so long as such acceptance does not alter the designation of the low bidder.

   
   

   The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner.

   
   

10. Section C of Volume I of the Manual contained the Proposal Form that all bidders were required to use to indicate their bid prices.

    
    

11. The following statement appeared at the bottom of the second page of the Proposal Form:

    
    

    There is enclosed:

    1. A certified check, cashier's check, treasurer's check, bank draft or Bid Bond in the amount of not less than five (5) percent of the Base Bid payable to the Department of Corrections, as a guarantee.

    2. An executed Trench Excavation Safety Certification, Section F-13.

    3. An executed Experience Questionnaire and Contractor's Financial Statement and Public Entity Criminal Conviction Form, Section L.

    4. An executed Bidder's Qualifications Form (Reverse Osmosis), Technical Specification Section 01420.

       
       

12. While one completed R.O. Form had to accompany each bid, there was no provision in any of the bid documents issued by the Department requiring a bidder to submit only one such completed form and no more.

    
    

13. Petitioner, McMahan and R.J. Sullivan Corporation (hereinafter referred to as "Sullivan") were among the contractors that timely submitted bids in response to the Advertisement.

    
    

14. McMahan's and Sullivan's bids were each accompanied by more than one completed R.O. Form.

    
    

15. Petitioner, on the other hand, provided the Department with only one completed R.O. Form along with its bid.

    
    

16. Of the bids submitted, McMahan's was the lowest, Sullivan's was the second lowest and Petitioner's was the third lowest.

    
    

17. McMahan's base bid price was $857,000.00. Petitioner's was

    $905,000.00.

    
    

18. McMahan's total price, including the nine additive alternates accepted by the Department, was $948,000.00. Petitioner's was $1,032,600.00, $84,600.00 more than McMahan's.

    
    

19. By letter dated July 1, 1993, the Department advised McMahan of its intent "to award the contract [for Department Project No. NV-30A] to [McMahan] as the lowest responsive bidder."

    
    

20. On July 9, 1993, Petitioner filed a formal written protest of the preliminary determination to award the contract to McMahan alleging that McMahan was not a responsive bidder inasmuch as McMahan "submitted Reverse Osmosis ("R.O.") Qualifications Forms for more tha[n] one vendor." According to Petitioner, "[t]his [was] not in conformance with the Bid Documents and gave [McMahan] an unfair advantage."

    
    

    CONCLUSIONS OF LAW

    
    

21. With certain exceptions not applicable to the instant case, state agencies may award contracts for construction projects only through the process of competitive bidding. Chapter 255, Fla. Stat.; Rule Chapter 60D-5, Fla. Admin. Code.

22. It has been said on more than one occasion that competitive bidding requirements, such as those imposed upon state agencies, have as their purpose and object the following:

    
    

    [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible expense; and to afford an equal advantage

    to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids.

    
    

    Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2d DCA 1977).

    
    

23. In soliciting and accepting competitive bids, a state agency has wide discretion. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913 (Fla. 1988); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982).

    
    

24. An agency's discretion with respect to these matters, while broad, is not unbridled. Such discretion may not be exercised in a manner that is illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or in any other way that would subvert or undermine the purpose and object of competitive bidding. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913-14 (Fla. 1988); Caber Systems v. Department of General Services, 530 So.2d 325, 336 (Fla. 1st DCA 1988); Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978); Wood-Hopkins Contracting Company v. Roger J. Au & Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA 1978).

    
    

25. In exercising its discretion, a state agency may not accept a bid that is materially at variance with the bid specifications. Rule 60D-5.0071(8), Fla. Admin. Code(agency may reject bid when it "determines that the bid is not valid according to the bid specifications"). "However, although a bid containing a material variance is unacceptable, not every deviation from the [bid specifications] is material. It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986). If it does not provide the bidder with such a palpable competitive advantage, it constitutes a minor irregularity that should be waived by the agency. See Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Rule 60D-5.0072, Fla. Admin. Code("[t]he [a]gency shall reserve the right to waive any non-material bid deviation in bids received").

    
    

26. In the instant case, Petitioner argues that the bids of the two lowest bidders, McMahan and Sullivan, should have been rejected by the Department because, contrary to the bid specifications, they each were accompanied by more than one completed R.O. Form. Petitioner claims that "this is a major irregularity that the Department should not be allowed to waive."

27. A careful examination of the bid specifications, however, including those upon which Petitioner specifically relies, reveals that they contained no requirement that a bidder submit only one (as opposed to at least one) completed

    R.O. Form.

    
    

28. Accordingly, in submitting more than one completed R.O. Form, McMahan and Sullivan did not deviate in any way, much less a material one, from the bid specifications.

    
    

29. Their submission of more than one completed R.O. Form thus did not render their bids non-responsive and thereby disqualify them from being awarded the contract for the Project.

    
    

30. Given that McMahan submitted the lowest bid of all bidders and Petitioner has failed to substantiate the allegation made in its bid protest regarding the non-responsiveness of McMahan's bid, the Department should act in accordance with its announced intention to award the contract for the Project to McMahan. Rule 60D-5.007, Fla. Admin. Code.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the Department of Corrections enter a final order finding Petitioner's bid protest to be without merit and awarding McMahan, as the lowest responsive and qualified bidder, the contract for Department Project No. NV-30A.

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

STUART M. LERNER

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 2nd day of September, 1993.

ENDNOTES

1/ The Technical Specifications were found in the second volume of the Manual.

2/ The terms "Owner" and "Engineer," as used in the Instructions, were defined in Section B-1 thereof as follows:

OWNER: Department of Corrections of the State of Florida.

ARCHITECT-ENGINEER (OR ARCHITECT OR

ENGINEER): The Design Professional commissioned by the Owner and identified in the Advertisement for Bids acting directly or through a duly authorized representative.

3/ Bids had to be filed with the Department by 12:00 p.m. on May 28, 1993.

4/ A "valid bid," as that term is used in Rule Chapter 60D-5, Florida Administrative Code, "means a bid that is responsive to the bidding documents and is submitted by a qualified responsible bidder. The validity of the bid is determined by the [a]gency." Rule 60D-5.002(11), Fla. Admin. Code.

5/ A "non-material bid deviation," as that term is used in Rule Chapter 60D-5, Florida Administrative Code, "means a variation from the invitation to bid terms and conditions which does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders, or does not adversely impact the interest of the agency."

6/ In coming to this conclusion, the Hearing Officer has given the words used in these documents "their natural and most commonly understood meaning." See Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50, 51-52 (Fla. 1st DCA 1986).

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3971BID

The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the Department in its post-hearing submittal:

1-8. Accepted and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order.

9. To the extent that this proposed finding asserts that McMahan's bid was "$99,000.00 cheaper [than Petitioner's] with all the alternates," it has been rejected because it is not supported by competent substantial evidence. Otherwise, it has been accepted and incorporated in substance.

10-13. Accepted and incorporated in substance.

14. To the extent that this proposed finding states that the bid documents contain language "specifically permitt[ing] vendors to submit more than one Bidder Qualification Form," it has been rejected because it is contrary to the greater weight of the evidence. To the extent that it suggests that there was no language in these documents directing that bidders limit the number of such forms they submitted to one, it has been accepted and incorporated in substance.

15-16. Accepted and incorporated in substance.

17. Rejected because it is contrary to the greater weight of the evidence. 18-19. Accepted and incorporated in substance.

20. First sentence: Accepted and incorporated in substance; Second sentence: To the extent that this proposed finding suggests that the submission of more than one R.O. Form was an irregularity, it has been rejected because it is contrary to the greater weight of the evidence. To the extent that it states that the submission of more than one R.O. Form "was at most a minor irregularity," if an irregularity at all, it has not been incorporated in this Recommended Order because it is unnecessary to make any findings regarding the

matter given the Hearing Officer's finding that the submission of more than one

R.O. Form was not in derogation of the bid specifications and did not constitute an irregularity of any type.

21-25. Not incorporated in this Recommended Order because it is unnecessary to resolve the factual issues addressed in these proposed findings.

26. Rejected because it is more in the nature of a summary of testimony than a finding of fact based upon such testimony.

27-28. Not incorporated in this Recommended Order because it is unnecessary to resolve the factual issues addressed in these proposed findings.

COPIES FURNISHED:

Jeffrey L. Gibson, Vice President Butler Construction Company

210 Hardee Lane

Post Office Box 560398 Rockledge, Florida 32956-0398

R. Beth Atchison, Esquire Steven S. Ferst, Esquire Office of the General Counsel Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Louis A. Vargas, Esquire General Counsel Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Harry K. Singletary, Jr., Secretary Department of Corrections

2601 Blair Stone Road Tallahassee, Florida 32399-2500

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 of time 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: 93-003971BID

Orders for Case No: 93-003971BID