STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STIMSONITE CORPORATION, )

)

Petitioner, )

)

vs. )

) DEPARTMENT OF MANAGEMENT SERVICES, )

) CASE NO. 93-4191BID

Respondent, )

)

and )

)

MINNESOTA MINING AND )

MANUFACTURING, INC., (3M) )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William F. Quattlebaum, held a formal hearing in the above-styled cases on August 31- September 1, 1993 in Tallahassee, Florida.

APPEARANCES

For Petitioner: W. Robert Vezina, Esquire

Mary M. Piccard, Esquire Cummings, Lawrence & Vezina, P.A. Post Office Box 589

Tallahassee, Florida 32302-0589

For Respondent: Cindy Horne, Esquire

Sylvan Strickland, Esquire Department of Management Services Knight Building, Suite 309

2737 Centerview Drive

Tallahassee, Florida 32399-0950

For Intervenor: Geoffrey D. Smith, Esquire

Jay O. Barber, Esquire Blank, Rigsby & Meenan, P.A. 204-B South Monroe Street Post Office Box 11068

Tallahassee, Florida 32302-3068 STATEMENT OF THE ISSUE

The issue in this case is whether, in making an award of a contract for reflective sheeting used in construction of highway signs, the Department of Management Services acted according to the requirements of law.

PRELIMINARY STATEMENT

The Department of Management Services (DMS), in April, 1993, issued an Invitation to Bid (ITB) to establish a 12 month contract for the purchase of signage materials primarily for use by the Florida Department of Transportation.

After opening the bids received in response to the ITB, the DMS determined that the proposal submitted by Minnesota Mining and Manufacturing (3M) was not responsive and proposed an award to Stimsonite Corporation (Stimsonite). After meeting with 3M, the DMS reversed its determination that the 3M bid was non- responsive and proposed an award of the contract to 3M. Stimsonite filed a protest which was referred to the Division of Administrative Hearings. The DOAH assigned the case, numbered 93-4191BID to the undersigned. Subsequent to the referral, the DMS again reversed its determination that the 3M bid was responsive, although for different reasons than relied upon initially. At the time of the hearing, the DMS position was that the 3M bid was non-responsive and that Stimsonite should received the contract award.

At hearing, Stimsonite presented the testimony of five witnesses and had exhibits numbered 1-16 admitted into evidence. The DMS presented the testimony of two witnesses and had exhibits numbered 1-10 admitted into evidence. 3M presented the testimony of five witnesses and had exhibits numbered 1-12 admitted into evidence. The prehearing stipulation filed by the parties was admitted as a Hearing Officer exhibit.

A transcript of the hearing was filed. All parties filed proposed recommended orders which were considered in the preparation of this Recommended Order. The proposed findings of fact are ruled upon either directly or indirectly as reflected in this Recommended Order, and in the Appendix which is attached and hereby made a part of this Recommended Order.

FINDINGS OF FACT

1. On April 16, 1993, the Department of Management Services (DMS) issued an Invitation to Bid (ITB) No. 158-550-590A seeking to enter into a 12 month contract for the purchase of sign materials, including reflective sheeting and other related materials used in construction of road signs.

   
   

2. The ITB projects an anticipated expenditure for the materials of approximately $2.3 million. The DMS issued the ITB on behalf of the Department of Transportation (DOT) and county and municipal governments who purchase materials under the contract.

   
   

3. Materials included in a bid are required to be listed on the Florida Department of Transportation (DOT) Qualified Products List (QPL). The QPL is a compilation of vendor products which have been tested and determined acceptable by the DOT pursuant to the requirements of the Florida DOT Standard Specifications for Road and Bridge Construction.

4. On page 24 of the ITB, the DMS sets forth the specifications for commodity number 550-590-350-0100, the material at issue in this proceeding. Vendors were directed to supply a manufacturer or brand name and a product number/series number. The specification for the material is as follows:

   
   

   Sheeting, reflective Type IIIA, or Type IIIC sizes 1" through 48" by 50 yds, with a precoated pressure sensitive adhesive backing (Class I). Primer Not Required. Sheeting (Both Types) shall be available in no less than the following colors: blue, brown, green, orange, yellow, and silver-white.

   
   

5. Type III sheeting is a highly reflective sheeting used as a background for road signs, onto which are applied either inked or pre-cut letters and symbols. Type IIIA sheeting is manufactured by 3M. Type IIIC sheeting is manufactured by Stimsonite.

   
   

6. In response to the ITB, Stimsonite, 3M, and Vulcan, Inc. timely submitted bids. The bids were opened by the DMS on May 21, 1993. The Vulcan bid was rejected as non-responsive and is not at issue in this proceeding. An apparently cursory review determined that the 3M and Stimsonite bids were responsive.

   
   

7. The 3M bid proposal for the Type III sheeting commodity was $3.74 per square foot for 3M Scotchlite Brand Series 3870 roll sheeting.

   
   

8. The Stimsonite bid proposal for the Type III sheeting commodity was

   $3.74002 per square foot for Stimsonite Series 4200 roll sheeting.

   
   

9. The DMS ITB required that bidding vendors submit a computer diskette which includes a Manufacturer's or Dealer's Published Price Lists, Authorized Dealer's List, and Authorized Service Center Locations for specified items, including the reflective sheeting at issue in this proceeding.

   
   

10. The DMS instituted the diskette requirement to avoid reliance on printed catalog materials submitted by vendors which were apparently often confusing.

    
    

11. On June 14, 1993, the DMS posted a bid tabulation indicating that the 3M bid was rejected as non-responsive. Based on obsolete information, the DOT initially determined that the 3M product bid was cutout lettering rather than reflective sheeting.

    
    

12. On June 22, 1993, 3M filed a formal written protest challenging the DMS determination that the bid was non-responsive.

    
    

13. Neither the DMS nor the DOT reviewed the 3M computer diskette material prior to determining that the 3M material bid was not responsive. The DOT determination was erroneous. The DMS review of the computer diskette material submitted by 3M revealed that the material bid was indeed roll sheeting and was included on the DOT QPL.

    
    

14. On June 29, 1993, the DMS posted a revised bid tabulation identifying 3M as the low responsive bidder. Stimsonite timely protested the DMS revised posting.

15. At an informal meeting held in an attempt to resolve the protest, DMS first became aware that the DOT was in need of two forms of reflective sheeting.

    
    

16. Reflective sheeting is produced and sold in rolls known as roll sheeting. Reflective sheeting is also produced with perforations punched along the outside edges of the material. This material is known as perforated sheeting and is used by DOT in sign machines to produce cutout letters and symbols which are applied to the reflective sheeting. There is no difference between roll sheeting and perforated sheeting but for the holes punched along the outside edge of the perforated form. The DOT needs to be able to purchase perforated sheeting under the state contract.

    
    

17. On July 26, 1993 Stimsonite filed an amended protest challenging the re-posting of the bids and the DMS intent to award the contract to 3M as lowest responsive bidder.

    
    

18. On July 27, 1993, the Stimsonite protest was referred by the DMS to the Division of Administrative Hearings.

    
    

19. On July 27, 1993, the DMS filed an answer to the Stimsonite protest wherein the DMS stated that the 3M bid was not responsive because the 3M bid was limited to non-perforated reflective sheeting.

    
    

20. Apparently, at or around the time of the informal bid protest resolution meeting, the DMS became convinced that the language in the ITB required that perforated sheeting be available with no price differential from roll sheeting. The DMS position is based on the fact that the ITB makes no distinction between perforated sheeting and non-perforated sheeting. Otherwise stated, "sheeting is sheeting."

    
    

21. Prior ITBs and state contracts fail to support the DMS position. The ITB language at issue in this proceeding is identical to that set forth in the previous ITB. Under the existing state contract between the state and 3M, perforated sheeting is not sold to the state at the roll sheeting contract price. Perforated sheeting is sold as an accessory commodity at a higher price. Nothing in the ITB at issue in this proceeding indicates that the DMS will alter its previous interpretation of ITB requirements. The ITB does not require perforated sheeting to be bid at the roll sheeting contract price. The ITB does not address the issue of perforation at all.

    
    

22. At the time of the bid, 3M produced and routinely sold a perforated Type III reflective sheeting (Scotchlite Series 3860), however, the product bid (Scotchlite Series 3870) is non-perforated roll sheeting. There is no bid for perforated sheeting set forth in the 3M proposal.

    
    

23. At the time of the bid, Stimsonite did not routinely sell a perforated Type III reflective sheeting material. The Stimsonite bid does not indicate that Series 4200 includes perforated sheeting. After the bids were opened and the matter of perforated sheeting became relevant, a DMS official orally inquired as to whether Stimsonite Series 4200 included perforated sheeting. A Stimsonite official stated that it did. However, Stimsonite has not commonly sold perforated sheeting under the Series 4200 moniker. The greater weight of the evidence establishes that, at least at the time the bid was submitted, Series 4200 was non-perforated roll sheeting. There is no bid for perforated sheeting set forth in the Stimsonite proposal.

24. Because the ITB fails to require that vendors supply bids on both roll sheeting and perforated sheeting, and because the DOT sign shop and potentially other buyers have need for perforated sheeting material, the ITB fails to address the actual needs of the DOT and other purchasers.

    
    

25. In relevant part, ITB General Condition Paragraph 9 provides as follows:

    
    

    As the best interest of the State may require, the right is reserved to make award(s) by individual item, group of items, all or none, or a combination thereof; on a geographical district basis and/or on a statewide basis with one or more suppliers; to reject any and all bids or waive any minor irregularity or technicality in bids received.

    
    

26. 3M Series 3870 is the material currently being purchased as roll reflective sheeting under the existing state contract. The DMS reviewed the 3M bid to determine whether it included a bid for perforated reflective sheeting in its proposal. 3M did not include a specific perforated sheeting bid in its proposal, however, as previously set forth, the ITB failed to require that vendors submit a bid for perforated sheeting. The 3M bid proposal met the requirements of the ITB.

    
    

27. There has been no review of the Stimsonite bid to determine responsiveness. The DMS asserted that because the DOT did not object to the Stimsonite bid, any irregularities were considered minor. The evidence fails to establish that either the DOT or DMS reviewed the Stimsonite bid for responsiveness.

    
    

28. Stimsonite's bid proposal lacks sufficient detail to permit a determination that the complete range of products required by the ITB are available.

    
    

29. On page 24 of the ITB, the DMS sets forth the specifications for commodity number 550-590-370-0000, accessory items for use with commodity number 550-590-350-0100 (the Type III reflective sheeting at issue in this proceeding.) The specification for the material is as follows:

    
    

    Accessories for use with the above commodity number 550-590-350-0100 (reflective sheeting Type IIIA, or Type IIIC colors, inks, clears, thinners, cut-out letters, numbers, symbols, radius corners, non-reflective films, and other miscellaneous items shall be available from the sheeting contractor and shall be compatible with the sheeting bid. (Materials List Shall Be Furnished With the Bid With Net Delivered Prices).

    550-590-370-0550 Sign Letters

    550-590-370-0560 Sign Numbers

    550-590-370-0590 Inks, Colors, Clears 550-590-370-0604 Thinners

    550-590-370-0950 Non-Reflective Film

30. Stimsonite does not manufacture non-reflective film and did not include a non-reflective film. The paragraph clearly states that non-reflective film is one of the items which "shall be available from the sheeting contractor and shall be compatible with the sheeting bid."

    
    

31. The word "shall" means that the vendor must make such items available. The DOT sign shop routinely uses non-reflective film in sign production.

    
    

    CONCLUSIONS OF LAW

    
    

32. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding. Sections 120.53(5) and 120.57(1), Florida Statutes.

    
    

33. In this case, the DMS originally proposed an award to Stimsonite, 3M protested, and DMS determined that the 3M protest was warranted. The DMS then posted notice of its intent to award the contract to 3M and Stimsonite protested. The DMS transmitted the protest to the Division of Administrative Hearings, but concurrently filed a response to the Stimsonite protest stating that the DMS had determined the 3M bid to be non-responsive once again and would propose an award to Stimsonite.

    
    

34. An agency has wide discretion in soliciting and accepting bids and is accorded substantial deference in competitive bidding activities. The agency decision, when based on an honest exercise of discretion, should not be overturned even if it may appear erroneous and even if reasonable persons may disagree. Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, at 507 (Fla. 1982).

    
    

35. In an administrative challenge to an agency's decision to award a contract or to reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. The hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally or dishonestly. Department of Transportation v. Groves- Watkins Constructors, 530 So.2d 912, at 914 (Fla. 1988). An arbitrary act is one not supported by facts or logic, or despotic. Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759, at 763 (Fla. 1st DCA, 1979).

    
    

36. As to the Stimsonite bid, the DMS proposal to award the contract to Stimsonite is not based on an agency's determination that the bid is responsive. The DMS review of the Stimsonite proposal was cursory at best and relied on the assumption that the DOT would note any defects or abnormalities in the bid. There is no evidence that any employee of DOT reviewed the Stimsonite bid to determine responsiveness. To propose an award to Stimsonite under these circumstances is arbitrary.

    
    

37. As to the 3M bid, the DMS did review the proposal and determined it was non-responsive because it failed to include a bid on perforated Type III sheeting. In fact, the ITB fails to require that a vendor include such a proposal, despite the fact that the DOT sign shop utilizes the material.

    
    

38. Nonetheless, the assertion of 3M, that it is entitled to an award of the contract is not supported by the evidence. In prior years, with identical ITB language, 3M has bid a product series which included a perforated material. In this instant case, the 3M product line specifically identified in the proposal excludes the perforated material. Were a contract entered into on the

    terms of the 3M proposal, the DOT sign shop could not order perforated material as needed. The offer to perforate the non-perforated material in order to meet the DOT's need, as suggested by 3M, is not satisfactory. To award the contract to 3M under these circumstances would be without logic and arbitrary.

    
    

39. The fact that such confusion exists is indicative that the ITB should be revised to clarify the needs of the DOT and other materials purchasers. Public agencies and authorities have the responsibility of preparing and disseminating clear and precise bidding specifications and instructions. Aurora Pump v. Goulds Pumps, Inc., 424 So2d 70 (Fla. 1st DCA 1982).

    
    

40. The DMS suggests that the lack of bid spec protests indicates that the bid specifications were clear. However, although the language of the ITB was identical to previous years, the application of the ITB language, as displayed by the currently operative contract) changed. Absent a revision of the spec, there was no reason for any vendor to assume that the requirements would be implemented differently than in the past.

    
    

41. The ITB failed to require that vendors provide bids on an essential material which the DOT sign shop uses for production of some road signs. Further the agency responsible for determining the responsiveness of the bids used a relatively informal approach to reviewing the submissions received. Accordingly, the ITB should be revised to reflect the current needs of the purchasing agencies and to permit an orderly and methodical review of the bid proposals filed.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Management Services enter a Final Order REJECTING all bids.

DONE and RECOMMENDED this 13th day of October, 1993, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of October, 1993.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4191BID

The following constitute rulings on proposed findings of facts submitted by the parties.

Petitioner

The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows:

6. Rejected, not supported by the greater weight of credible evidence. 8-9. Rejected, unnecessary.

1. Rejected, not supported by the greater weight of credible evidence. The responsiveness of one vendors bid is not based on the availability of materials from a second vendor.

2. Rejected, not supported by the greater weight of credible evidence. There is no language in item 7 which indicates that only accessories offered by bidders be listed on the diskette. Interpretation to the contrary is unsupported by the ITB.

14. Rejected, unnecessary.

1. Statement "...it came to light that sheeting called for by the specification included both perforated and nonperforated..." is rejected as not supported by the greater weight of evidence.

2. Accepted, however contrary to the implication, it should be noted that the 3M perforated sheeting is currently billed to and paid for by the state as an accessory, not at the roll sheeting price.

3. Rejected, unnecessary. Specification does not require provision of perforated sheeting at roll sheeting price.

4. Rejected, subordinate.

26. Rejected, unnecessary.

Respondent

The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows:

5-6. Rejected, not supported by the greater weight of the evidence, which establishes that computer diskette data was required, not for all commodities in the ITB, but only for items 1, 2, 7, and 8.

7, 10-14. Rejected, subordinate.

15-16. Rejected, contrary to greater weight of the evidence which establishes that DMS was unaware of distinction between roll sheeting and perforated sheeting prior to this meeting. Stimsonite "confirmation" that it "shared DMS conception of roll sheeting" is not credible.

1. Rejected, unnecessary.

2. Rejected, subordinate.

3. Rejected, unnecessary.

20-22. Rejected, unnecessary. A review of the diskette data required by the DMS apparently would have resolved the confusion.

1. Rejected, not supported by the greater weight of the evidence. Given that computer diskette data was required, not for all commodities in the ITB, but only for items 1, 2, 7, and 8, it is incorrect to state that the failure to include an item on the diskette would preclude a buyer from ordering it.

2. Rejected, unnecessary.

3. Rejected, contrary to greater weight of the evidence which fails to establish that Stimsonite Series 4200 includes perforated roll sheeting. 28-29. Rejected, unnecessary.

Intervenor

The Intervenor's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows:

18. Rejected, unnecessary. 19-20. Rejected, cumulative.

26-27. Rejected, subordinate. The hearing is de novo.

1. Rejected, unnecessary.

2. Rejected in part as recitation of testimony.

31-33. Rejected, unnecessary. The offers to supply materials after bids are opened is likely an impermissible amendment of a bid document. The fact that such discussion was necessary is indicative of the lack of clarity on the part of DMS as to what the agency's needs were when letting the ITB.

38-39. Rejected, unnecessary.

40, 42-46. Rejected in part as recitation of testimony, unnecessary. 47-48. Rejected, argumentative.

1. Rejected, cumulative.

2. Rejected, contrary to the greater weight of the evidence which establishes that the 3M bid did not include perforated Type III sheeting.

52-58. Rejected, cumulative.

59-64. Rejected in part as recitation of testimony, cumulative, unnecessary. 65-70. Rejected, cumulative, unnecessary.

71. Rejected, contrary to greater weight of the credible evidence which establishes that in the previous year, 3M bid a series of Scotchlite Type III sheeting which included both perforated and nonperforated product, contrary to the bid in the instant case which was only nonperforated Type III sheeting.

73-77. Rejected, cumulative.

78-80. Rejected, argumentative.

81-82. Rejected, not supported by the greater weight of credible evidence. The agency is not required to waive defects. The requirement to provide the information on the computer diskette was not optional. Failure to comply mandates disqualification of a bid proposal.

83. Rejected, argumentative.

87. Rejected, argumentative.

88-95. Rejected, in part as recitation of testimony, cumulative, unnecessary. 96-97, 99. Rejected, cumulative, unnecessary.

103, 105-106. Rejected, conclusion of law.

107-111. Rejected, argumentative. Goes to credibility of agency determination as addressed herein.

112-116. Rejected, cumulative, unnecessary.

118. Rejected, conclusion of law.

COPIES FURNISHED:

William H. Lindner, Secretary Knight Building, Suite 307 Koger Executive Center

2737 Centerview Drive

Tallahassee, Florida 32399-0950

General Counsel

Knight Building, Suite 309 Koger Executive Center 2737 Centerview Drive

Tallahassee, Florida 32399-0950

W. Robert Vezina, Esquire Mary M. Piccard, Esquire

Cummings, Lawrence & Vezina, P.A. Post Office Box 589

Tallahassee, Florida 32302-0589

Cindy Horne, Esquire Sylvan Strickland, Esquire

Department of Management Services Knight Building, Suite 309

2737 Centerview Drive

Tallahassee, Florida 32399-0950

Geoffrey D. Smith, Esquire Jay O. Barber, Esquire Blank, Rigsby & Meenan, P.A. 204-B South Monroe Street Post Office Box 11068

Tallahassee, Florida 32302-3068

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 ten 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: 93-004191BID

Orders for Case No: 93-004191BID