STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHEESBRO ROOFING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-0608BID

) SCHOOL BOARD OF ORANGE COUNTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on March 18, 1994 in Orlando, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: David K. Wittek, Esquire

Wright, Fulford, Moorhead & Wittek, P.A.

145 North Magnolia Avenue Post Office Box 2828 Orlando, Florida 32802

For Respondent: William M. Rowland, Jr., Esquire Broad and Cassel

390 North Orange Avenue, Suite 1100 Post Office Box 4961

Orlando, Florida 32801 STATEMENT OF THE ISSUES

Whether Petitioner, who had no MBE or WBE subcontractor or supplier participation in its bid, demonstrated that it made a good faith effort to attain the MBE/WBE subcontractor/supplier goals established by Respondent's rule in its bid submission.

Whether Petitioner made and demonstrated the requisite good faith effort to solicit MBE/WBE participation as subcontractors and suppliers to Petitioner as required by the Respondent's rule.

PRELIMINARY STATEMENT

In late 1993, the School Board of Orange County, Florida (School Board) invited bids for the reroofing to its Winter Park 9th Grade Center. Five bids were received, including the bid of Cheesbro Roofing, Inc. (Cheesbro). Bids were opened on December 7, 1993. Cheesbro's bid was the lowest bid. School

Board on December 13, 1993, provided to each bidder a written notice that School Board intended to reject all bids.

On December 13 and December 15, 1993, Cheesbro filed with School Board separate written Notices of Protest of School Board's intended decision to reject all bids, and on or about December 27, 1993, Cheesbro filed with School Board Cheesbro's written Formal Bid Protest pursuant to Section 120.53(5), Fla. Stat. On January 24, 1994, School Board referred Cheesbro's Formal Bid Protest to the Division of Administrative Hearings and requested that the Division of Administrative Hearings conduct formal proceedings thereon pursuant to Section 120.57(1), Fla. Stat.

All bidders were notified of the bid protest and the hearing. No petition to intervene was filed in these proceedings. The formal hearing was scheduled but was continued at the request of the parties. The statutory time requirements were waived. A formal hearing was held and conducted before the undersigned Hearing Officer on March 18, 1994 on Cheesbro's petition (protest). Cheesbro and School Board were each represented by counsel at the hearing.

Cheesbro presented the testimony of four (4) witnesses, John C. Cook, Martha Cheesbro, Alvin T. Chester and Mildred Eason. School Board did not call any witnesses for direct examination, but chose to rely on its examination of the witnesses called by Cheesbro. Nineteen (19) exhibits were offered in evidence by Cheesbro without objection and were received in evidence. A transcript of the hearing proceedings was not prepared. Each party filed proposed findings of fact, conclusions of law and supporting arguments on April 6, 1994.

To the extent that the proposed findings and conclusions submitted by the parties, and the arguments made by them, are in accordance with the findings, conclusions and views stated herein, they have been accepted. To the extent that such proposed findings, conclusions and arguments of the parties are inconsistent herewith, they have been rejected. Certain proposed findings and conclusions have been omitted herefrom as not relevant or as not necessary to a proper determination of the material issues presented and delineated in these proceedings. To the extent that the testimony of various witnesses is not in accord with the findings herein, such testimony is not credited. My specific rulings on the parties' proposals are contained in the Appendix attached hereto.

FINDINGS OF FACT

Based upon the testimony and proofs admitted in these proceedings, and upon the matters stipulated by the parties, the undersigned Hearing Officer finds the following facts to exist:

1. Respondent solicited bids for the reroofing of its Winter Park 9th Grade Center Reroofing Project No. 9209 ("the Project").

   
   

2. Respondent also caused to be compiled a Project Manual for the Project, which among other things contains Instructions To Bidders which governed the bidding process.

   
   

3. In its Advertisement For Bid, as well as its Instructions To Bidders, Respondent reserves the right to reject any or all Bids.

   
   

4. The Instructions to Bidders also reserves the right to reject any and all bids when Respondent, in its sole discretion, deems it to be in its best interest to reject same.

5. The Project Manual contains a bid form to be used by bidders. In it the bidder understands and agrees that the Owner (Respondent) reserves the right to reject the bid or any and all bids for the Project. Such language was contained in the bid submitted by Petitioner.

   
   

6. Included in the Project Manual was a document entitled "Affirmative Action Minority and Women Business Enterprises Program for Construction Work and Construction Materials" (hereinafter "the MBE/WBE rule") which had been adopted by the School Board as an administrative rule. The MBE/WBE Rule established MBE/WBE subcontractor and supplier participation goals for Respondent construction projects, and in pertinent part:

   
   

   1. it requires bidders on Respondent construction projects to solicit (by newspaper advertisements and by letters) MBE/WBE subcontractor and supplier participation in the work on Respondent construction projects,

      
      

   2. it permits and requires a bidder who fails to meet the goals to demonstrate and prove to Respondent's MBE/WBE Manager that the bidder made a good faith effort to attain the goals, as a condition precedent to acceptance of his bid, and

      
      

   3. it establishes criteria which a bidder may use or meet in an effort to show a good faith effort. It also permits a bidder to show any other factor to prove the existence of a good faith effort.

      
      

7. By Addendum No. 2 to the Project Manual for the Project, Respondent apprised bidders of its amendment to the MBE/WBE Rule which served to alter and increase the participation percentages of the Rule to 27.5 percent.

   
   

8. Petitioner's bid was the apparent low bidder of five bids received by Respondent. Petitioner's bid was in the amount of $795,000.00 and was the only bid under budget. The next lowest bid was in the amount of $823,000.00.

   
   

9. Cheesbro's bid showed that Cheesbro had no MBE/WBE subcontractor or supplier participation. All other aspects of Petitioner's bid were proper and responsive.

   
   

10. None of the other bidders on the Project achieved the 27.5 percent M/WBE participation goal.

    
    

11. Section II of the M/WBE Program acknowledges that the 27.5 percent M/WBE participation requirements "are goals only." This section of the M/WBE Program further states that "[n]o bid of any bidder will be rejected by the School Board solely because the bidder fails to attain the goals..., however, the bidder... must demonstrate to the MBE/WBE Manager, within 72 hours after the time of bid opening (exclusive of Saturdays, Sundays, and Holidays), that such bidder made a good faith effort to contract with qualified subcontractors and/or suppliers for the construction work sufficient to meet the requirements of the goals."

    
    

12. Petitioner met with the Respondent's M/WBE Manager within 72 hours after the time of bid opening and demonstrated its good faith effort to contract with qualified subcontractors and/or suppliers for the construction work pursuant to the contract documents. The M/WBE Program requires that each bidder must solicit sub-bids and price quotations from MBE and from qualified MBE and WBE contractors. All potential bidders, including Petitioner, received a list of the qualified M/WBE contractors from the School Board at the pre-bid meeting.

    The M/WBE Program specifically sets forth the manner in which the bidders must solicit "from M/WBE subcontractors and suppliers" and "the failure of a Bidder to solicit same shall render the bid of such bidder unresponsive and the School Board will reject such bid."

    
    

13. The School Board's M/WBE Program establishes the format by which each bidder must solicit bids from qualified M/WBE subcontractors and suppliers. Pursuant to the M/WBE Program, each potential bidder must publish advertisements in two daily newspapers which are published and widely circulated in Orange County. The Orlando Sentinel and Orlando Times are identified by the contract documents as two acceptable newspapers for these advertisements. Each bidder must also prepare and deliver, by certified or registered mail with return receipt requested, three solicitation letters to not less than three approved M/WBE subcontractors and/or suppliers. The contract documents identify an approved form for the referenced advertisements and solicitation letters. Further, the bidders must attach to their bids proof of publication and mailing for the advertisements and solicitation letters, respectively.

    
    

14. Petitioner complied with each requirement set forth by the M/WBE with regard to soliciting sub-bids and price quotations from M/WBE subcontractors and suppliers. Petitioner timely published the requisite advertisement in the Orlando Sentinel and the Orlando Times as required by the contract documents. Petitioner also went beyond the three solicitation letters required by the contract documents and sent eight solicitation letters to approved M/WBE subcontractors on the Project. Petitioner also attempted to solicit an oral bid from Mavis Painters but none was received by them.

    
    

15. Petitioner received only two telephone calls in response to its advertisements and solicitation letters. One M/WBE subcontractor advised Petitioner that it was going to bid on the Project as a prime contractor (which did not occur), and the other M/WBE subcontractors who called advised Petitioner that they would not bid the Project because they were too busy with other work. Petitioner received no other response to either its advertisements or solicitation letters. Petitioner attempted to make telephone contact with some of the M/WBE subcontractors to whom the letters were sent but was unable to contact them. Despite its efforts, petitioner received no price quotations from any approved M/WBE subcontractors or suppliers. And, none was included in Petitioner's bid.

    
    

16. Petitioner is a licensed Florida roofing contractor. Petitioner bid the Project as a prime, rather than as a general, contractor. In this regard Petitioner was to retain a substantial portion of the work to be done by its own forces, rather than to subcontract out most of the work.

    
    

17. There are certain portions of any project which lend themselves to work by subcontractors who are specialized in a particular trade. On this Project, Petitioner sought price quotations from electrical, mechanical, plumbing, lightweight concrete, and metal roofing subcontractors. These are the areas which Petitioner looked to subcontract to others on the Project. As a roofing contractor it was logical for Petitioner to do the actual roof work itself and to subcontract out the remainder of the work.

    
    

18. Petitioner sought price quotations from approved M/WBE subcontractors on the electrical, mechanical, and plumbing portions of the work. None of the lightweight concrete installation or metal roofing M/WBE subcontractors listed by the School Board were approved applicators for the lightweight concrete installation and metal roof as specified for this Project by the School Board's

    architect. Therefore, Petitioner was unable to obtain any price quotations, and did not request quotations, from any approved M/WBE subcontractors in these two trade areas. Installation by a manufacturer's approved applicator is essential in order to obtain the warranty documents as required by the contract documents. Also, these two subcontract areas make up a substantially larger percentage of the overall contract amount than do the electrical, mechanical, and plumbing sections. While there may be some other areas which Petitioner could have subcontracted to other forces, these other areas were within the general "roofing" scope of work and better able to be performed by Petitioner. The pool of approved M/WBE subcontractors which Petitioner had available to choose from in order to meet the minority participation requirements was therefore severely restricted.

    
    

19. Shortly after the bid opening, a representative of Petitioner met with the School Board's M/WBE Manager to demonstrate Cheesbro's good faith effort to achieve the M/WBE percentage participation goals. Petitioner explained the efforts which it had taken. These efforts were beyond the minimum required by the contract documents in order to obtain minority participation on the Project.

    
    

20. However, the Assistant to the School Board's M/WBE Manager felt that Petitioner had not made a good faith effort and the Manager agreed and recommended to the School Board that it reject all bids and rebid the Project. This recommendation was based on the Manager's determination that petitioner should have actively solicited bids from M/WBE sub-contractors well beyond sending letters and the newspaper ads.

    
    

21. On December 13, 1993, School Board furnished to Cheesbro a written notice of its intended decision to reject all bids. The basis of such intended decision was that no bidder had attained the MBE/WBE goals and that no bidder, including Cheesbro, had shown that it had made the good faith effort required by the MBE/WBE Rule.

    
    

22. On December 14, 1993, School Board sustained the determination of the MBE/WBE Manager that a good faith effort was not shown by Cheesbro and rejected all bids as recommended by School Board's Superintendent of Schools.

    
    

23. On December 27, 1993 Cheesbro filed a written Formal Protest, which is the subject of these proceedings.

    
    

24. There is no evidence or claim that the MBE/WBE Manager, in determining that Cheesbro had failed to prove it made a good faith effort to obtain the goals, acted illegally, fraudulently or oppressively, in reaching her decision. However, the evidence shows that the determination was arbitrary and was not justified based on the proofs offered by Petitioner.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

26. A public body in Florida has wide discretion in soliciting and accepting bids for public improvements. Its decision, when based on an honest exercise of such discretion, will not be overturned, even if it may appear erroneous and even if reasonable persons may disagree, absent a finding of illegality, fraud, oppression or misconduct. Where a public body is authorized to reject all bids, judicial intervention to prevent the rejection of a bid

    should occur only when the purpose or effect of the rejection is to defeat the object and integrity of competitive bidding. D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988).

    
    

27. Section 235.31, Florida Statutes, which authorizes a School District to advertise and award contracts for construction, remodeling or renovation of an educational plant, reads in pertinent part as follows:

    
    

    "... the board, after advertising the same in the manner prescribed by law or rule, shall award the contract for such building or improvements to the lowest responsible bidder... The board may, within its discretion, reject all bids received, if it deems the same expedient, and may readvertise, calling for new bids. "

    
    

28. Under Section 231.35, Florida Statutes, Respondent, in its discretion, was authorized either to award the contract for the reroofing of Winter Park 9th Grade Center to the lowest responsible bidder or to reject all of the bids.

    
    

29. In this case it is undisputed that there are no procedural defects or omissions with regard to Petitioner's bid. Petitioner's bid is responsive in all other respects except for those issues dealing with the M/WBE participation requirements and Cheesbro's good faith effort to attain these goals.

    
    

30. Within 72 hours after the bid opening, Cheesbro contacted and met with the Assistant to the Manager of the School Board's M/WBE Compliance Department in order to demonstrate its good faith efforts to meet the M/WBE participation goals.

    
    

31. Cheesbro timely attempted to demonstrate to the Assistant to the MBE/WBE Manager that Cheesbro has made a good faith effort to attain the goals prior to bid opening; however, the Assistant determined that no sufficient good faith effort was shown by Cheesbro and the MBE/WBE Manager accepted that determination.

    
    

32. The project specifications and detail manual provide minimum requirements which a bidder must meet in order to procure M/WBE participation. Specifically, the project specifications require that a bidder publish advertisements for M/WBE participation in two daily newspapers which are published and widely circulated in Orange County. The Orlando Sentinel and Orlando Times are identified by the contract documents as two acceptable newspapers for these advertisements.

    
    

33. The project specifications also require that three (3) letters be sent to approved M/WBE subcontractors and/or suppliers, soliciting a bid from them for the Project. Petitioner sent a total of eight (8) solicitation letters to approved M/WBE subcontractors requesting a bid from them for the Project.

    
    

34. Petitioner also attempted to solicit an oral bid from Mavis Painters, but none was received by them.

    
    

35. Petitioner did not receive a response from any approved M/WBE subcontractors and/or suppliers, pursuant to its newspaper advertisement or the solicitation letters.

36. Certain portions of the work, (i.e. light weight roof deck and standing seam metal roof) require the applicators to have technical expertise and approval by the manufacturer prior to installation.

    
    

37. None of the M/WBE subcontractors listed on the Respondent's list were approved applicators for these materials as specified in the contract documents. Therefore, Cheesbro could not subcontract any of this work to any M/WBE subcontractors because the manufacturer would not supply a warranty if not installed by an approved applicator.

    
    

38. Even if Cheesbro obtained minority participation by subcontractors for each remaining aspect of the work (i.e. electrical, mechanical, and plumbing) Cheesbro still would not have obtained the 27.5 percent minority participation set forth in the contract documents.

    
    

39. The Respondent's M/WBE Program provides that Petitioner must show by "the preponderance of the evidence and proofs" that it has made a good faith effort to attain M/WBE participation goals. The project specifications state that "the determination of whether or not Bidders has made a good faith effort to attain the goals is somewhat of a subjective determination, ..."

    
    

40. The project specifications also provide a number of factors which are to be considered by the M/WBE Manager in determining whether or not a good faith effort to attain the goals has been made by the bidder.

    
    

41. Petitioner has either met each of the criteria listed or such criteria is not applicable in this matter because Cheesbro did not receive a response from any M/WBE subcontractors or suppliers on the Project.

    
    

42. Cheesbro has made a good faith effort to attain the M/WBE participation goals.

    
    

43. The manager's requirement that Petitioner actively recruit M/WBE participants cannot be found in the Program or the project's specifications. Such requirement was completely subjective on the part of the Manager and subverts the bidding process. This is so since none of the bidders would have known at the time their bids were submitted if they had complied with the specifications and were responsive. The responsiveness of the bid was to be determined by a subjective determination made by the Manager. The bid documents set forth the bidders responsibility to notify M/WBE subcontractors of the availability to bid on the job. It does not notify them that they must recruit M/WBE participants. The program sets goals for M/WBE participation, not mandatory quotas. If the compliance with the goals were to be required, then all bidders should have been notified prior to the bid opening. They were not.

1. The preponderance of the evidence shows that Petitioner has, in fact, made a good faith effort to attain the M/WBE participation goals as set forth in the project documents.

   
   

2. The M/WBE Manager's decision that Petitioner had not made a good faith effort to meet the M/WBE participation goals is not supported by the evidence and the School Board's acceptance and confirmation of that decision was therefore arbitrary and capricious.

   
   

3. The School Board erred in rejecting all bids for the Project and Petitioner is, in all respects, the lowest responsive bidder on the Project.

RECOMMENDATION

Based on the foregoing findings of fact, it is

RECOMMENDED that The School Board of Orange County enter a Final Order granting the relief requested by the Petitioner, Cheesbro Roofing Inc., and certifying that Petitioner is the lowest responsive bidder and enter into a contract with Cheesbro for the Project pursuant to the bid.

DONE and ORDERED this 9th day of May, 1994, in Tallahassee, Florida.

DANIEL M. KILBRIDE

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 9th day of May, 1994.

APPENDIX

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties.

Proposed findings of fact submitted by Petitioner.

Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,

13, 14, 15, 16, 17, 18, 19, 20, 21, 22 (in part), 23.

Rejected as argument or conclusion of law: paragraph 22 (in part). Proposed findings of fact submitted by Respondent.

Accepted in substance: paragraphs 1, 2, 3, 4, 5, 7, 8, 9, 10, 11 (in

part), 12, 13, 14, 15, 16 (in part), 17 (in part).

Rejected as argument or conlusion of law: paragraphs 6, 11 (in part), 19.

Rejected as against the greater weight of evidence: paragraphs 16 (in part), 17 (in part), 18.

COPIES FURNISHED:

David K. Wittek, Esquire Wright, Fulford, Moorhead & Wittek, P.A.

145 N. Magnolia Avenue

P. O. Box 2828

Orlando, Florida 32802

William M. Rowland, Jr., Esquire Broad and Cassel

390 N. Orange Avenue, Suite 1100

P. O. Box 4961

Orlando, Florida 32801

Dr. Donald Shaw Superintendent

Orange County School Board

P. O. Box 271

Orlando, Florida 32802-0271

Douglas L. "Tim" Jamerson Commissioner of Education The Capitol

Tallahassee, Florida 32399-0400

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 consult with the agency that will issue the final order in this case concerning their 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: 94-000608BID

Orders for Case No: 94-000608BID