vs. ) CASE NO. 95-1644BID
Respondent. )
Notice was provided and a formal hearing was conducted in this case pursuant to Section 120.57(1), Florida Statutes. The hearing was held on May 3, 1995, at the Offices of the Division of Administrative Hearings, The DeSoto Building, 1230 Apalachee Parkway, Tallahassee, Florida. Charles C. Adams was the Hearing Officer.
Ran Contracting & Engineering, Inc. 3056 Palm Avenue, Suite 1
Ft. Myers, Florida 33916
For Respondent: Thomas H. Duffy, Esquire
Was the decision by the Respondent to reject the bids that it received in ITB-DOT-94/95-5013, for fuel tank removal and disposal, a decision based upon fraud, illegality, dishonesty, arbitrariness or caprice?
Respondent received bids pursuant to its invitation to bid in Project ITB- DOT94/95-5013 (the project). The bidders were Petitioner and Chemical Development Corporation. After bid opening Respondent determined to reject the bids received for the project. Petitioner protested that decision. The parties were unable to resolve their dispute by informal means. Therefore, Respondent forwarded the case to the Division of Administrative Hearings to have a hearing officer assigned to conduct a formal hearing. A hearing officer was assigned and the hearing was conducted on the aforementioned date.
Randy Wiggins, Petitioner's President, was qualified to represent Petitioner in this proceeding.
Randy Wiggins and Terry Newman testified for Petitioner. Petitioner's Exhibit No. 1 was admitted. Respondent presented the testimony of Helen Lund and David Schappell. Respondent's Exhibit No. 1 was admitted. Seven joint Exhibits were admitted.
Petitioner sought to reopen the record to allow Brian D. Anderson to testify. Respondent opposed the motion. The motion was denied by separate order.
A transcript was prepared. The transcript was filed on May 15, 1995.
The parties filed proposed recommended orders. Respondent moved to strike portions of the Petitioner's proposed recommended order. That motion is granted.
The first sentence to page two in Petitioner's facts and the proposed facts offered by the Respondent are examined in an appendix to this recommended order.
Respondent issued an invitation to bid for the project. The bidders were reminded that the bids were due March 9, 1995. The bid opening was to occur on March 10, 1995.
Under the general conditions to the invitation, (at paragraph 7), in the interest of the State, the Respondent reserved the right to reject all bids that it received. That same reservation was announced at paragraph 1.8.1 to the invitation.
In addition to the general reminder that the Respondent had the right to reject all bids, paragraph 1.14 to the invitation describes cancellation privileges available to the Respondent. That paragraph provided that the obligations under the invitation would be subject to and contingent upon the availability of moneys lawfully appropriated to pay for the services.
Paragraph 1.1 to the invitation described the project as one involving removal and disposal of existing tanks and contents of those tanks at three locations. The locations were Floral City, Cocoa, and Kissimmee, Florida.
The project demands at Floral City were for removal and disposal of a 10,000 gallon above-ground "tack coat" tank and surficial "tack coat" material and removal and disposal of a 500 gallon tank.
The work at Cocoa involved removal and disposal of a 10,000 gallon above-ground "tack coat" tank, removal and disposal of a 500 gallon tank and removal and disposal of a 1,000 gallon kerosene tank.
Finally, the Kissimmee work involved removal and disposal of a 500 gallon above-ground "tack coat" tank and surficial "tack coat" material.
In Exhibit "A" to the invitation, describing the scope of services for storage tank removal and disposal, paragraph 2.0 identified more specifically the services that the bidder was to provide.
In Exhibit "A", at subparagraph B.1 to paragraph 2, the bidder was instructed that the work included removal and proper disposal of the tank contents and any related material in the vicinity of the tanks.
In Exhibit "A", at subparagraph B.3 to paragraph 2, the bidder was instructed that the work included removal and proper disposal of all tanks and associated piping.
In Exhibit "A", at subparagraph B.4 to paragraph 2.0, the bidder was instructed that any records and analytical results that the bidder might generate from a storage tank closure assessment should be sent to the State of Florida, Department of Environmental Protection, Storage Tank Regulation Section with a copy of those reports being provided to Respondent's project manager.
In Exhibit "A", scope of services for storage tank removal and disposal, at subparagraph A to paragraph 5.0, further instructions were given concerning the manner in which the tank contents would be removed.
In Exhibit "A" at subparagraph B to paragraph 5.0, more specific instructions were given concerning tank disposal.
In Exhibit "A" at subparagraph H.5 to paragraph 5.0, the bidders were reminded that a laboratory analysis report concerning the contents of the tanks was available upon request from the project manager, David Schappell. The laboratory analysis referred to was one performed on August 31, 1994, by Ardaman and Associates, Inc.
Paragraph 1.9 makes reference to budget constraints involved with the project in which a budgetary ceiling of $45,000 is announced in the materials sent to the prospective bidders. In reality the $45,000 amount was in a circumstance that contemplated an additional site for tank removal and disposal and installation of new tanks in substitution for the removed tanks in Respondent's maintenance facility at Orlando, Florida. The Orlando work is not described in the invitation to bid. The appropriate reference for the budgetary ceiling contemplated by the invitation to bid is $20,000 for the three sites that are described in the project.
Although Respondent through appropriate personnel realized that the
$45,000 amount stated was not correct, that official, Helen Lund, purchasing and contracting agent for Respondent, did not arrange to correct the amount before issuing the invitation to bid. Ms. Lund simply failed to realize that the
$45,000 budgetary ceiling was still set forth in the invitation when the invitation was made. Had she realized this mistake an addendum would have been sent to the prospective bidders to correct the figure to become $20,000.
At hearing, Respondent presented its reasons for establishing a budgetary ceiling of $20,000. Petitioner was allowed to question that estimate. Subsequently, that issue will be discussed in greater detail.
Paragraph 1.7.5 reminds the bidders that any necessary authorizations and/or licenses to provide the services sought in the project should be obtained by the bid due date and time and no later than the point at which a contract would be awarded.
Paragraph 1.8.2 explains to the bidders what is necessary to offer a responsive bid.
In her job Ms. Lund prepares and assembles bid documents, sends those out to the prospective vendors, and conducts bid openings.
In this case David Schappell, Assistant District Drainage and Permits Engineer for Respondent's District V, Deland, Florida, discussed the tank removal project with Ms. Lund. In turn Ms. Lund prepared the bid blank/ITB in its boiler-plate language. Mr. Schappell prepared the invitation to bid concerning the scope of services to be provided by the bidders.
Ms. Lund mailed out eight invitations to bid. She received responses from Petitioner and Chemical Development Corp.
The bid from Chemical Development Corp. was rejected for failure to meet the licensing requirements set forth in paragraph 1.7.5.
That left the Petitioner's bid which was considered responsive. Nonetheless Respondent decided to reject that bid for reasons that the price submitted for performing these services was too high when compared to the
$20,000 estimate by the Respondent. Petitioner's bid price was $38,252.
In addition, Petitioner was concerned that it would have to submit an exceptional purchase request and get the approval from the State of Florida, Department of Management Services, to enter into a contract in a setting in which there was only one responsive bidder.
Finally, Petitioner was also concerned about the disparity between the price submitted by Chemical Development Corp. at $11,520 and the $38,252 price from Petitioner as indicating some possible problem associated with the scope of work contemplated in the project and the understanding which the bidders had about the work to be performed.
Petitioner obtained a copy of the laboratory analysis from Ardaman and Associates to assist in preparing its response to the invitation to bid.
The principal focus in the Ardaman test was to determine constituents related to TCLP as this would determine whether the tank contents constituted hazardous waste.
Results from the Ardaman test revealed that in removing material from the tank at Floral City one would be confronted with chromium concentrations of
1.6 mgl. The threshold limits for chromium concentration as set forth in the Code of Federal Regulation, Title 40, Section 261.24, for determining hazardous characteristics of those materials is 5.0 mgl.
The sampling conducted by Ardaman also revealed a pH of 9.0. According to Ardaman, that ph did not indicate that the "tank coat" is corrosive.
The Ardaman test did not detect reactive cyanide and sulfide.
The test did not reveal characteristic ignitability.
In summary, the Ardaman report concluded that the Floral City facility tank did not exhibit the characteristics of a hazardous substance as determined by the TCLP method, and by the ignitability and corrosivity testing.
Petitioner proceeded on the basis that the Ardaman results indicated that the tank contents did not constitute hazardous waste and could be disposed of as other than hazardous waste material. Theoretically, Petitioner believed that disposal could be made in a landfill that would take the type of material found in the tank.
As Petitioner points out, the Ardaman test did not speak to the possible disposal of the tank material as a fuel source or through incineration.
From the results set forth in the Ardaman report, Petitioner erroneously assumed that Respondent intended to limit the method of disposal to placement in a landfill facility.
While the Ardaman report speaks to the issue of whether the material constitutes hazardous waste, the remaining provisions within the invitation to bid leave open the opportunity for the bidders to make additional tests on those materials in deciding the proper disposal method. The provisions in the invitation do not select a proper disposal method and the results in the Ardaman report do not create the inference that Respondent's choice for disposal is by placement in a landfill.
In Petitioner's research, it concluded that the material in the tanks could not be disposed of by incineration given the nature of this material compared to the type of material that could be destroyed at a facility which used incineration as a disposal method.
Petitioner was persuaded that there might be some possibility to burn the material as a fuel source, but was not confident that this could be done without performing more tests.
Petitioner was unable to find a landfill site that was near Respondent's Cocoa and Kissimmee facilities that would accept the tank contents. Petitioner intended to transport the material from the Cocoa and Kissimmee sites to Floral City and use Floral City as a staging area to consolidate the contents from the tanks.
Having in mind consolidation, Petitioner discussed the possibility that it might make disposal in solid waste facilities in Sumter County, Florida. Petitioner was told that Sumter County facilities would not accept the material.
Petitioner collected a sample of the tank material and had it analyzed by Howco Environmental in an attempt to ascertain the commercial value for the tank contents. Howco is a company that tests materials to ascertain whether those materials can be used as a fuel source and then uses the material as a fuel source. In a test, Howco determined that the tank material had no commercial value.
Petitioner contacted two paving companies to determine whether the paving companies could reuse the tank material in the paving process. Those companies indicated that they could not reuse the material in the paving process.
Terry Newman, who owns Petitioner, holds a B.S. in geology and has worked for the Suwannee River Water Management District, Collier County Pollution Control Department and the Alachua County Pollution Control Department as a hydro-geologist.
Ms. Newman reviewed the Ardaman report and spoke about the report to a chemist in a laboratory which her firm uses. Through this review and discussion and based upon the information set forth in the Ardaman report, she concluded that the only disposal method available was to place the tank contents in a lined landfill.
Ultimately the bid that was submitted by Petitioner was based upon making an arrangement with a sub-contractor to transport the material to Jacksonville for disposal. The transport method was that which would be used for transporting hazardous waste. In this arrangement the material is taken from the tank and put in a container for transport and off-loaded at the landfill. The tank itself would be disposed of in the conventional manner. The subcontractor which the Petitioner intended to use for transporting the contents within the tanks was a hazardous waste carrier.
Mr. Schappell established that the Orlando project which was originally part of the $45,000 pre-bid estimate would cost approximately $25,000 to remove two single-wall steel tanks, one holding diesel fuel and the other gasoline, and replace those tanks with double-wall tanks. That estimate was not shown to be one based upon fraud, illegality, dishonesty, arbitrariness or caprice.
Since the Orlando project was not pursued, this left $20,000 as the estimate to do the work in the three sites described in the invitation to bid.
Prior to the invitation to bid, Respondent had solicited a price quotation, unrelated to a competitive bidding process, for the work at Floral City. ACTS Construction Co., Inc., submitted a price of $12,825 to include
$1,875 for tank closure. The present project does not include a requirement for tank closure. This quotation from ACTS Construction Co., Inc. was from a contractor who had done similar work in removal of tanks, thereby creating proper confidence in Mr. Schappell that the quotation from ACTS was a reasonable quotation.
A total of six vendors were invited to offer price quotations for the work at Floral City unrelated to the present project. Those six vendors were given access to the Ardaman report. There were a wide range of responses to the request for quotations and different ideas concerning methods of disposal. The overall price quotations ranged from the amount quoted by ACTS to an amount of approximately $20,000 by Westinghouse Company.
Based upon the prices quoted by ACTS, Westinghouse, and others, Mr. Schappell determined that the pre-bid estimate for the work to be done at Floral City in the present project would be based upon the ACTS price quotation.
The remaining work to be done at Cocoa and Kissimmee, in the present project, was given a pre-bid price of approximately $7,000. The estimate for Kissimmee and Cocoa was based upon having removed somewhat similar tanks, in somewhat similar conditions, from Respondent's maintenance yards at Oviedo, Leesburg, Ocala, and Cocoa.
Respondent's pre-bid estimate of project costs amounting to $20,000, as established by Mr. Schappell, is a reasonable pre-bid estimate. It was not arrived at by illegal, fraudulent, dishonest, arbitrary, or capricious means.
Mr. Schappell established that the Ardaman report was solely provided to offer assistance to the bidders in responding to the invitation. The
language in the invitation to bid contemplates that limited use. The Ardaman report did not enter into the decision by Mr. Schappell in placing a pre-bid estimate on the work to be done.
Mr. Schappell established that the "tack coat" in the tanks is a bituminous material to be applied as a sealer over the lime rock or soil cement which the Respondent places as a base for road construction. The "tack coat" also has an adhesive property which helps to retain the asphalt material that is placed on top of the lime rock and soil cement.
The condition of the tank material in around the time that the bid invitation was made, was such that the material would be nearly viscous or liquid on warm summer days and in the winter would be solid. Its condition at other times was somewhat in between.
Mr. Schappell properly points out that the invitation to bid relies upon the bidders' expertise in determining proper disposal methods and whether that disposal might involve reusing the tanks contents.
Mr. Schappell established that in addition to the fact that the Petitioner's price far exceeded the pre-bid estimate, there was a concern about the price differential between the Chemical Development Corp. bid and that presented by Petitioner and the expectation that if the project was re-bid more vendors would express an interest in bidding.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this subject matter and the parties to this action in accordance with Section 120.57(1), Florida Statutes.
Petitioner has timely protested the Agency decision to reject all bids. See Section 120.53(5), Florida Statutes.
Petitioner bore the burden to prove by a preponderance of the evidence that the Respondent's decision to reject all bids was based upon fraud, illegality, dishonesty, arbitrariness, or capriciousness. See Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988) and Florida Department of Transportation v. J.W.C., 396 So.2d 778 (Fla. 1DCA 1981).
Respondent's decision to reject all bids was not based upon fraud, illegality, dishonesty, arbitrariness, or capriciousness.
That the final order be entered which dismisses Petitioner's protest to Respondent's decision to reject all bids.
DONE and ENTERED this 16th day of June, 1995, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building
Filed with the Clerk of the Division of Administrative Hearings this 16th day of June, 1995.
The following discussion is given concerning the proposed findings of fact by the parties:
The first sentence to Page 2 is subordinate to facts found.
Respondents facts are subordinate to facts found.
RAN Contracting & Engineering, Inc. 3056 Palm Avenue, Suite 1
Ft. Myers, FL 33916
Thomas H. Duffy, Esquire Department of Transportation Haydon Burns Building, M.S.-58 605 Suwannee Street
Ben G. Watts, Secretary Department of Transportation Haydon Burns Building
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.
