STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BROOKS BUILDERS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 97-1502BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

) PINO-FONTICIELLA CONSTRUCTION ) CORP., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Administrative Law Judge of the Division of Administrative Hearings, on April 18, 1997, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Mary M. Piccard, Esquire

Vezina, Lawrence & Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

For Respondent: Mary S. Miller, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

For Intervenor: John A. Barley, Esquire

400 North Meridian Post Office Box 10166

Tallahassee, Florida 32301 ISSUE PRESENTED

The issue presented is whether Petitioner Brooks Brothers, Inc., should be awarded the contract to renovate the Snapper Creek Service Plaza.

PRELIMINARY STATEMENT

Petitioner Brooks Builders, Inc., and Intervenor Pino- Fonticiella Construction Corp. submitted timely bids for state project number 97870-3363. Petitioner timely brought this proceeding to challenge the Department of Transportation's notice of intent to award the contract to Intervenor. Pino- Fonticiella's ore tenus motion to intervene at the commencement of the final hearing was granted.

Petitioner presented the testimony of Brooks M. Muse, II. The Department presented the testimony of Sylvia Porter and of Brooks M. Muse, II. The Intervenor presented no witnesses.

Additionally, Petitioner's Exhibits numbered 1-3, 6-9, and 12-16, the Department's Exhibits numbered 3-8, and Intervenor's Exhibits numbered 1 and 2 were admitted in evidence.

The transcript of the hearing was filed on May 7, 1997. All parties thereafter filed proposed recommended orders which have been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. This is a bid protest arising out of an invitation to bid (hereinafter “ITB”) for state contract number 97870-3363, a construction project for renovation of the Snapper Creek Service Plaza on Florida’s Turnpike (the “contract” or “project”).

2. The ITB included requirements relating to participation on the project by minority business enterprises (hereinafter “MBEs”). The ITB established a goal of 21% MBE participation. The 21% only could be met by utilizing MBE firms certified by the state Minority Business Advocacy and Assistance Office.

3. According to the ITB, if the apparent low bid did not reflect that 21% of the work would be performed by certified MBE firms, the apparent low bidder would be required to submit documentation within 2 days establishing that a good faith effort had been made to meet the goal. If the low bidder could not demonstrate that it had made a good faith effort to meet the goal, the bid would be considered non-responsive and the Department would evaluate the next lowest bid for responsiveness. The process would be repeated until a responsive bid was found.

4. Section B-27 of Exhibit 20 to the ITB specifically required the MBE participation information to be submitted with the contractor's bid and further provided, in pertinent part, as follows:

1. Good Faith Efforts

   
   

   In evaluating a contractor's good faith efforts, the Owner will consider the statutory requirements and documentation submitted to demonstrate implementation undertaken by the contractor. Contractors may utilize methods in addition to those set forth below to attempt to increase participation by MBE's [sic]. Documentation of other methods will be considered.

   
   

   1. . . .Whether the contractor attended any solicitation or prebid meetings that were scheduled by the agency to inform minority business enterprises of contracting and subcontracting opportunities.

      
      

      * * *

      
      

   2. . . .Whether the contractor advertised in general circulation, trade association, and/or minority-focus media concerning the subcontracting opportunities.

      
      

      * * *

      
      

   3. . . .Whether the contractor provided written notice to a reasonable number of specific minority business enterprises that their interest in the contract was being solicited in sufficient time to allow the minority business enterprises to participate effectively.

      
      

      * * *

      
      

   4. . . .Whether the contractor followed up initial solicitation of interest by contacting minority business enterprises or minority persons to determine with certainty whether the minority business enterprises or minority persons were interested.

      
      

      * * *

   5. . . .Whether the contractor selected portions of the work to be performed by minority business enterprises in order to increase the likelihood of meeting the minority business enterprises goals, including, where appropriate, breaking down contracts into economically feasible units to facilitate minority business enterprise participation.

      
      

      * * *

      
      

   6. . . .Whether the contractor provided interested minority business enterprises or minority persons with adequate information about the plans, specifications, and requirements of the contract or the availability of jobs.

      * * *

      
      

   7. . . .Whether the contractor negotiated in good faith with interested minority business enterprises or minority persons, not rejecting minority business enterprises or minority persons as unqualified without sound reasons based on a thorough investigation of their capabilities.

      
      

      * * *

      
      

   8. . . .Whether the contractor effectively used the services of available minority community organizations; minority contractors' groups; local, state, and federal minority business assistance offices; and other organizations that provide assistance in the recruitment and placement of minority business enterprises or minority persons.

      
      

      * * *

      
      

2. Evaluation

   
   

   1. The Owner will examine apparent low bid proposal to calculate whether the contractor has met the project MBE goal by determining

      whether:

      
      

      1. The MBE's [sic] listed on the Utilization Summary are certified by the Bureau of Minority Business Assistance Office.

         
         

      2. The MBE's [sic] are certified to perform the trade or service specified.

         
         

      3. The percentage of the contract amount to be paid to qualifying MBE's [sic] meets or exceeds the project goal.

         
         

   2. The Owner will notify the apparent low bidder whether the project goal has been met. If the goal has not been met, the bidder must dispatch all documentation of its good faith not later than two working days after notification effort [sic] for overnight delivery to the Owner. The documentation will be reviewed by the Evaluation Committee to determine whether a good faith effort has been made.

      
      

   3. If the apparent low bidder is determined not to have made a good faith effort, the Owner will repeat steps 1 and 2 with the next lowest bid. This process will be repeated until a responsive bid within budget is found.

1. The bid documents included forms on which bidders were to identify any MBE firms intended to be used on the project. The title of the form is “MBE Utilization Summary.”

2. Sixteen contractors submitted bids for the project. After bid opening, the Department reviewed the bids to determine responsiveness including compliance with the MBE requirements.

3. Carivon Construction Company submitted the apparent low bid. On its MBE Utilization Summary, Carivon indicated it would

   use its own forces and one other MBE to meet the 21% goal.

   
   

4. The Department determined that Carivon’s bid did not meet the 21% MBE goal because Carivon was not a certified MBE at the time of the bid. In accordance with the ITB, the Department informed Carivon that it had not met the goal and provided Carivon an opportunity to establish its good faith effort to do so. The Department determined that Carivon’s good faith effort was insufficient and rejected Carivon’s bid as non-responsive.

5. The Department then reviewed the second low bid submitted by Spectrum Group Construction, Inc. Spectrum’s MBE Utilization Summary indicated that Spectrum would meet the goal by subcontracting some of the work to MBE firms and performing some of the work with its own forces. Spectrum was a certified MBE at the time its bid was submitted.

6. The Department determined that Spectrum’s bid did not reflect that the goal was met because the other firms identified on Spectrum’s MBE Utilization Form were not certified. When the participation of those firms was excluded, Spectrum’s bid did not reflect that 21% of the work would be performed by MBE firms even though Spectrum was an MBE and had identified itself on the MBE Utilization Summary as one of the MBEs to work on the project.

7. The Department therefore requested that Spectrum submit its good faith efforts documentation. Spectrum responded with information explaining that it would perform more than 21% of the work with its own forces, thereby performing more of the work

   itself than it had indicated on its MBE Utilization Summary.

   
   

8. The Department determined that Spectrum had failed to demonstrate its good faith efforts and, in actuality, was amending its bid. It, therefore, rejected Spectrum’s bid as non- responsive.

9. The Department then reviewed the third low bid submitted by Pino. Pino had submitted an MBE Utilization Summary indicating that 21% of the work would be subcontracted to MBE firms.

10. Pino also was a certified MBE at the time of the bid. However, unlike Carivon and Spectrum, Pino’s MBE Utilization Summary did not include itself and did not indicate that it intended to meet the goal by using its own forces. Pino’s certification is not apparent from the face of the bid.

11. The Department determined that the bid did not on its face meet the MBE goal because one of the minority firms Pino identified on its MBE Utilization Summary was not certified. Without that firm, Pino’s bid reflected only 11.8% MBE participation.

12. The Department therefore sent Pino a letter advising that Pino's MBE participation totaled only 11.8% and requesting that Pino submit documentation of its good faith efforts to meet the 21% goal. The request for good faith efforts documentation specifically stated that it was made in accordance with Section B-27, C of Exhibit 20.

13. Pino’s response to the Department's request did not attempt to document its good faith efforts to meet the goal in accordance with Section B-27, C of Exhibit 20 of the ITB.

    Rather, like Spectrum, Pino submitted information explaining that it was a certified MBE and would perform more than 25% of the work with its own forces.

14. Unlike its treatment of Spectrum, the Department accepted Pino’s explanation and posted a notice of intent to award the contract to Pino. In doing so, the Department did not consider the fact that Pino's bid did not reflect that it was a certified MBE or that it intended to count its participation toward the MBE requirement. Rather, Pino's bid certified on its signed MBE Utilization Summary that it was relying on certain named subcontractors to meet the MBE requirement.

15. Brooks submitted the fourth lowest bid. Brooks’ bid also included an MBE Utilization Summary indicating that at least 21% of the work would be performed by MBE firms. One of the MBE firms identified in Brooks’ bid was not certified.

16. During the deposition of Brooks M. Muse, II, taken the afternoon before the final hearing in this cause and admitted in evidence at the final hearing as one of the Department's exhibits, the Department reviewed Brooks’ good faith efforts documentation. Documentation was produced as to the elements contained in the bid specifications for performing good faith efforts. The Department's representative who attended the

    deposition announced on the record in the deposition that she was satisfied with Brooks' documentation, and the Department's attorney who was taking the deposition announced on the record in the deposition that Brook's documentation was more thorough than she had ever seen.

17. Brooks' representative attended the pre-bid conference. Brooks' advertised for MBEs in the Miami Herald. Brooks contacted the Hispanic Builders Association, the Black Builders Association, and Women in Construction. Brooks faxed to minority businesses and persons a solicitation letter and a follow-up letter. Brooks met with interested MBEs, gave them copies of the bid specifications, and offered them assistance. Brooks' representative contacted the Minority Business Advocacy and Assistance Office for information as to additional certified MBEs. Brooks documented these many contacts.

18. Brooks made a good faith effort to meet the MBE goal in accordance with the specifications in the ITB.

19. The ITB also included the following provisions regarding subcontractor participation on the project.

    EXHIBIT 5. LIST OF SUBCONTRACTORS FORM -

    Architect-Engineer shall insert only major types of subcontractors applicable to this job and removing all unused blanks.

    
    

    * * *

    
    

    1. LISTING OF SUBCONTRACTORS

       
       

       In order that the Owner may be assured that only qualified and competent subcontractors

       will be employed on the project, each Bidder shall submit with the proposal a list of the subcontractors who will perform the work for each Division of the Specifications utilizing the 'List of Subcontractors' form enclosed as Exhibit 5. [Emphasis added.]

       
       

       * * *

       
       

    2. SUBCONTRACTOR DATA

    
    

    Within 2 working days after bid opening, the apparent low bidder shall submit to the Owner's Project Director the following for each subcontractor.

    
    

    1. Corporate Charter Number. (If applicable).

       
       

    2. License Number.

       
       

    3. Name of record license holder.

       
       

    4. Complete name, address and phone number for listed subcontractors.

    
    

    * * *

    
    

    2. The Contractor shall provide a certified list of all subcontractors, laborers and material suppliers to the owner within thirty (30) calendar days of his receiving his notice to proceed with the work. [Emphasis added.]

    
    

20. The List of Subcontractors form referenced in section B-14 contained five numbered spaces for identifying the type of work to be performed and the name of the subcontractor. The directions on the form state: “The undersigned, hereinafter called 'bidder’, lists below the name of each subcontractor who will perform the phases of the work indicated. [Emphasis added.]

21. Nevertheless, the List of Subcontractors form does not

    indicate any "phases of work." Further, the List of Subcontractors form does not provide that all subcontractors the bidder intends to use must be listed. Moreover, section B-15 of the ITB established that the apparent low bidder would be required to submit a complete list of all subcontractors within 2 days of notification by the Department.

22. Certain portions of the work to be performed are considered “specialty work” which requires a specialty license. Unless the bidder possessed the specialty license, it would have to subcontract that work.

23. Brooks' president and sole stockholder has been bidding for public contracts for over 30 years. He understands that in submitting competitive bids, bidders may not alter or amend the bid form or the bid will be considered non-responsive. Further, the ITB for this project specified in section B-13 that any proposal containing any alteration might be rejected. He determined, therefore, that he could not amend the List of Subcontractors form by adding an attachment. Based upon his experience, the language of the form, and the existence in the ITB of specifications providing for the subsequent submittal of subcontractor information to the Department, Brooks listed five subcontractors on the List of Subcontractors form although Brooks intends to utilize additional subcontractors, specifically certain specialty subcontractors.

24. Brooks identified several subcontractors on the List of

    Subcontractors form that would perform various portions of the division of the work identified in the ITB as “mechanical.” Brooks also identified a subcontractor that would perform fencing and a subcontractor that would perform concrete and masonry work. Fencing is included in one of the divisions of the work.

    Concrete and masonry is identified as a division of work under two separate sections. The List of Subcontractors form did not specify the categories of work for which subcontractors were to be identified. The ITB did indicate that only major types of subcontractors would be required to be identified. Brooks’ understanding of the requirements for identifying subcontractors was consistent with the totality of the provisions contained in the ITB.

25. Like Brooks, Pino did not list all the subcontractors it would utilize on the project. Specifically, Pino did not identify certain specialty subcontractors which it would require in order to perform the specialty work for which Pino does not have a specialty license. Pino only listed three of its subcontractors, leaving two lines blank.

26. Pino did not submit a complete list of all subcontractors within 2 days of being notified that it was the apparent low bidder. By the time of the final hearing in this cause, Pino had still not identified all subcontractors.

27. Brooks has not yet submitted to the Department a complete written list of all subcontractors. However, Brooks has

    not yet been notified that it is the apparent low bidder.

    
    

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Section 120.57(3), Florida Statutes.

29. In 1996, the Florida Legislature passed substantial revisions to Chapter 120, Florida Statutes. Section 120.57(3) now provides in pertinent part:

    (f) In a competitive-procurement protest, no submissions made after the bid or proposal opening amending or supplementing the bid or proposal shall be considered. Unless otherwise provided by statute, the burden of proof shall rest with the party protesting the proposed agency action. In a

    competitive-procurement protest, other than a rejection of all bids, the administrative law judge shall conduct a de novo proceeding to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. In any bid-protest proceeding contesting an intended agency action to reject all bids, the standard of review by an administrative law judge shall be whether the agency's intended action is illegal, arbitrary, dishonest, or fraudulent.

30. Contrary to the Department's reliance on case law pre- dating the 1996 revisions to the statutory bid protest proceeding, the amendments substantially expand the scope of inquiry and change the standard of proof which existed previously. The inquiry no longer is limited to a review of

    agency action based upon a presumption of correctness. Rather, the statute expressly mandates that the proceeding shall be de novo, i.e., a proceeding to formulate agency action. The protester must show that the action proposed by the agency is contrary to statute, rule, policy or the bid specifications.

    State Contracting and Engineering Corporation, DOAH Case No. 96- 4856BID (Feb. 3, 1997).

31. The 1996 amendments include an express provision that no submission made after the bid opening amending or supplementing the bid shall be considered. Here, the ITB included specifications allowing certain information-- specifically, subcontractor information and good faith efforts documentation--to be submitted by the apparent low bidder after the bid opening. By providing for that post-bid information in the bid specifications, the information is part of the bid rather than a modification or amendment of the bid.

32. The Department's consideration of the post-bid submission of Pino, however, was not authorized by and is contrary to the bid specifications. Pino's post-bid submission was not submitted in accordance with the ITB specifications governing good faith efforts. Rather, it was submitted solely for the purpose of amending or supplementing Pino's bid.

33. The face of Pino’s bid clearly reflected that Pino intended to meet the MBE goal by using MBE subcontractors that would perform over 21% of the work. When the Department

    determined that not all of Pino's MBE subcontractors were certified and the 21% goal was not met, the Department gave Pino the opportunity, as provided for in the bid specifications, to demonstrate its good faith efforts. However, Pino did not respond with that authorized response. Instead, Pino advised the Department for the first time that Pino was a certified MBE and that it was counting its own participation, instead of its listed MBE subcontractors, toward meeting the project's goal. Pino's post-bid submission was provided for the purpose of supplementing or amending its bid to establish that it would meet the goal, not to establish that it had made a good faith effort to do so.

34. The submittal of supplemental information that was not in accordance with the ITB requirements concerning good faith efforts and the consideration of that information by the Department was not a mere technical irregularity in the bid process. The statutory prohibition against consideration of the post-bid submission is mandatory and unambiguous.

35. The Department's representative testified that Pino's post-bid submission clarified for her information that she had assumed to be the case. However, the assumption is not based on any information contained in Pino's bid and is not supported by any competent evidence of record in this cause. Moreover, the ITB does not authorize the Department to make assumptions concerning matters not contained in a bid and then later "clarified" by post-bid information.

36. Furthermore, the Department's contention that it assumed that Pino would meet the goal because by the terms of the ITB the prime contractor was required to perform at least 15% of the work is equally applicable to Spectrum. If the Department intended to give certified MBE prime contractors the benefit of an assumption that they only needed to perform an additional 6% of the work to meet the MBE goal, it would have had to find that Spectrum was responsive. Unlike Pino, Spectrum had indicated on its MBE Utilization Summary that it would be performing a percentage of the work to go toward meeting the goal. It is arbitrary and capricious to reject Spectrum’s bid and award the contract to Pino on the basis of the Department's assumptions flowing from the requirement that the prime contractor perform 15% of the work.

37. Moreover, the procedure employed by the Department created an opportunity for Pino to exercise an impermissible second look. If Pino had determined after bid opening that it did not want the bid, it could have responded to the Department's inquiry by stating truthfully that it did not have documentation of good faith efforts in accordance with Section B-27 of Exhibit

    20 of the ITB. Pino then would have been found to be non- responsive since it appeared from the face of the bid that Pino had a total of only 11.8% MBE participation. In short, under the procedure adopted by the Department, Pino had the opportunity to walk away from its bid without penalty had it so desired. Giving

    Pino such an opportunity is contrary to competition.

    
    

38. The primary evidence submitted by the Department concerning the responsiveness of Brooks’ bid relates to the List of Subcontractors form. The exclusion from the form of some of Brooks’ intended subcontractors cannot support rejection of Brooks’ bid. First, and foremost, the uncontroverted evidence establishes that Pino also failed to identify all of its subcontractors. Yet, the Department concluded that Pino’s bid was responsive. The Department cannot take inconsistent positions in the evaluation of bids. If Pino’s failure to identify all of its subcontractors on the List of Subcontractors form was not considered a material irregularity--and it was not-- Brooks’ similar failure to list all subcontractors cannot be considered a material irregularity. Further, Brooks at least used all five spaces provided; Pino only used three spaces and failed to delete the unused spaces as instructed by the bid specifications for completion of the form.

39. Second, to the extent the specifications are interpreted as requiring bidders to include all subcontractors on the form even if there were more than could be listed in the space provided, and even though the Department failed to indicate the phases of the work on its pre-printed form, in this instance the requirement is a purely technical one. Section B-15 of the ITB required that the apparent low bidder submit a complete list of subcontractor information within 2 days. Accordingly, by

    complying with that specification, the bidder would provide the information that, according to the Department's argument, should have been submitted with the bid. This circumstance does not create an opportunity for an impermissible second look because under the specifications the low bidder was required to provide the subcontractor information. Therefore, the low bidder would not have the opportunity to decline to do so without being subject to forfeiture of its bid bond.

40. Finally, Pino’s bid was non-responsive because Pino did not submit the required subcontractor information within 2 days of being advised that it was the apparent low bidder, or at any time thereafter.

41. The Department correctly determined that Pino’s bid did not meet the MBE goal. The Department's intended decision to award the contract to Pino was based on its improper consideration of Pino’s post-bid submission that was not authorized by the ITB. Therefore, the agency's intended award to Pino is clearly erroneous and contrary to competition.

42. Brooks complied with all substantive requirements for making a good faith effort to meet the MBE goal. The statements made by the Department's representative and the Department's attorney on the record during the deposition of Brooks' president after reviewing Brooks' good faith efforts documentation establish the Department's belief that Brooks' efforts were sufficient and well documented, and the evidence of good faith

    efforts offered by Brooks during the final hearing fully support that belief. The Intervenor's cross-examination during the final hearing suggests the Intervenor's belief that more effort could have been made, but the bid specifications only require the bidder to use good faith efforts to secure the MBE participation goal, not to exhaust every conceivable possibility.

43. The Department's representative testified as to how she would interpret ambiguous or conflicting provisions in the ITB. The Department relies on her interpretations in its proposed recommended order. While the law is well settled that an agency has discretion to interpret the statutes it is charged with administering, the law is also well settled that any ambiguities or conflicts in contract documents are construed against the drafter of those documents.

44. The evidence reveals that Brooks' bid is in excess of the amount budgeted by the Department for this project, although there is no evidence as to by how much Brooks' bid exceeds the budget. There is no requirement that the Department enter into a contract for in excess of the money the Department can, or is willing to, pay for the project. Once this de novo proceeding began, only the bidders participating remained viable bidders. Since Brooks' is the only remaining bidder on the project responsive in all ways but price, the Department should attempt to negotiate with Brooks a price that is within the project's budget. Failing that, the Department should reject all bids and

commence the procurement process anew.

RECOMMENDATION

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

RECOMMENDED THAT the Department enter a final order rejecting Pino’s bid as non-responsive and awarding the contract to Brooks if the Department is able to negotiate with Brooks a price for the project which is within the Department's budget.

If the Department is unable to negotiate a price within budget, then the Department should enter a final order rejecting all bids.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 10th day of June, 1997.

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 10th day of June, 1997.

COPIES FURNISHED:

Mary M. Piccard, Esquire

Vezina, Lawrence & Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

Mary S. Miller, Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street

Tallahassee, Florida 32399-0458 John A. Barley, Esquire

400 North Meridian Post Office Box 10166

Tallahassee, Florida 32301

Ben G. Watts, Secretary Department of Transportation c/o Diedre Grubbs

Haydon Burns Building, M.S. 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 10 days from the date of 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: 97-001502BID

Orders for Case No: 97-001502BID