STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NIPPON CARBIDE INDUSTRIES )

(USA), INC., )

)

Petitioner, )

)

vs. ) Case No. 98-3594BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

MINNESOTA MINING AND ) MANUFACTURING, INC. ("3M"), )

)

Intervenor. )

)

RECOMMENDED ORDER

Following notice to all parties, Don W. Davis, Administrative Law Judge for the Division of Administrative Hearings, held a final hearing in the above-styled case on September 17 and 18, 1998, in Tallahassee, Florida.

APPEARANCES

For Petitioner: F. Alan Cummings, Esquire

Alejandro Espino, Esquire Cummings, Thomas and Snyder, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301

For Respondent: Brian McGrail, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458

For Intervenor: Geoffrey D. Smith, Esquire

Blank, Rigsby and Meenan, P.A.

204 South Monroe Street Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue in this case is whether the Department of Transportation (DOT) acted correctly in deeming the bid of Nippon Carbide Industries (NCI) to be nonresponsive.

PRELIMINARY STATEMENT

NCI, Intervenor (3M) and one other company responded to DOT’s Invitation to Bid (ITB) JN1098D1 to provide reflective sheeting for the production of roadway signs.

DOT received bids on June 10, 1998. Upon opening the bids on June 10, 1998, NCI was the apparent low bidder and 3M was the apparent second low bidder.

After the public bid opening, a preliminary review of the three bids was conducted by three DOT staff members to determine material compliance with the bid specifications. The reviewers determined the NCI bid did not meet the technical specifications of the bid.

In later meetings, DOT sought to resolve whether the NCI process inks could be utilized in the manner set forth in the bid specifications. A screening of the inks in the actual conditions present in the DOT Sign Shop was considered. DOT agreed to postpone the June 19, 1998 bid award date. NCI balked at the Sign Shop as the test site. DOT remained firm, advising NCI that the screening would be conducted by the Sign Shop personnel at

the Sign Shop under typical sign production circumstances.

Eventually, DOT determined that NCI was not going to cooperate in providing the materials for the ink tests and proceeded with its decision to award the reflective sheeting contract to 3M as the lowest, responsive bidder. NCI filed a protest.

On August 8, 1998, DOT referred this matter to the Division of Administrative Hearings (DOAH) for conduct of formal administrative proceedings.

At the final hearing, NCI presented three witnesses and eight exhibits. DOT presented three witnesses and four exhibits. 3M presented one witness and eight exhibits.

A transcript was filed on October 6, 1998. The parties requested and were granted leave to file proposed recommended orders more than 10 days after the filing of the transcript.

Proposed recommended orders filed by the parties have been reviewed and utilized to the extent possible in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The bid specifications called for reflective sheeting for the production of roadway signs by DOT. Included in the bid specifications for the reflective sheeting bid was a specification contained in Section 4.1 that required the process inks be one component that required no pre-mixing and air dried in four hours or less.

2. A document contained in NCI’s bid, identified as an

   “Order Worksheet,” contained the following:

   
   

   PLEASE NOTE:

   3800 Series inks are supplied as a set with

   80 grams of 3630 hardener.

   
   

   3800 Series inks are pre-thinned for proper viscosity. If thinning is required, use 3811 or turpentine.

   
   

   3800 series inks have a pot life of five hours after mixing.

   
   

   The NCI bid reference to mixing the 3800 Series inks with the 3630 hardener and that the ink and hardener were supplied as a set concerned the reviewers. Mixing the 3800 Series inks with the 3630 hardener did not meet the specifications of the bid requiring no component pre-mixing.

3. Immediately following the bid opening and preliminary review on June 10, 1998, the reviewers (composed of Lisa Sweet, Contract Manager in the Purchasing Office; Chris Warren, Manufacturing Operations Engineer for the DOT Sign Shop; and Randall Wainwright, Manager of DOT Sign Shop) were present when Sweet telephoned NCI’s National Technical and Marketing Director (Director) to ask for clarification of the bid documents. NCI’s Director advised the group during the telephone conversation that the process inks bid by NCI required mixing and volunteered to provide mixing instructions.

4. Following the telephone conversation, the Director faxed to DOT a three-page document, a cover letter from the Director referencing the telephone call, and two pages of mixing

   instructions. Both the telephone conversation with the Director on June 10, 1998, and the mixing instructions provided by the Director to DOT on the same day, confirmed the belief of DOT

   
   

   personnel that that NCI’s bid did not conform to the bid specifications and should be deemed nonresponsive.

5. NCI subsequently contacted DOT on several occasions beginning on June 11, 1998, to indicate that it may have provided the wrong information regarding the process inks. On June 12, 1998, NCI’s Director faxed to DOT a letter stating that the mixing instructions were in error and requested a meeting with key personnel DOT before June 19, 1998, the bid award posting date. The June 12, 1998, letter contained instructions as well. Although the reference to mixing the process ink with a hardener was deleted, the instructions contained information on how to store the process inks and hardener. This new information was in conflict with the previous information and inconclusive in establishing that NCI’s process inks met the requirement for one component ink that did not require mixing. DOT did not consider the information provided in the June 12, 1998, letter in its decision to deem NCI’s bid nonresponsive and award the bid to 3M.

6. NCI requested a meeting with DOT’s Procurement Office, which took place on June 17, 1998. Unable to convince DOT that its bid was responsive, NCI then requested a meeting with DOT administrative officials. On June 18, 1998, NCI representatives

   met with the DOT’s Assistant Secretary for Transportation Policy and the State Highway Engineer. NCI again attempted to persuade DOT that its process inks did not have to be mixed with the hardener and the use of the hardener was merely an option, even though the ink and hardener are supplied as a set.

7. The use of inks with hardener in the production of roadway signs in the Sign Shop would require a change in the production process not contemplated by the bid specifications, nor desired by DOT.

8. Nevertheless, following the meeting, DOT considered screening NCI’s Process inks without the hardener to determine if the NCI inks met the one component ink bid specification. Under the arrangement, NCI was to provide the ink and reflective sheeting so that the inks could be screened onto the sheeting at the Sign Shop under normal production circumstances and ambient conditions, not under artificially controlled conditions in an independent lab that would not simulate the actual production process environment. In a series of correspondence with DOT employees, NCI raised objections to the type of testing and test protocols to be employed by DOT. Ultimately NCI failed to provide the inks and sheeting for testing in a timely manner and the testing was never conducted.

9. Dr. Eugene Janulis provided unrefuted expert testimony at final hearing that the deletion of hardener from NCI’s 3800-

   Series inks would raise serious concerns about the durability, weather resistance, and colorfastness of the inks.

10. Dr. Janulis is a research chemist with over 15 years of experience in developing and testing of traffic control materials. He holds, or is co-holder of, 13 patents, and has authored numerous scientific articles pertaining to the chemical and elemental properties of reflective traffic control materials.

    
    

11. Janulis testified that NCI’s 3800-Series inks were developed as a two-component reactive ink system which rely upon a chemical reaction between the ink and the hardener to form a “cross linking” chemical bond. A single component, nonreactive ink, has polymers that are high in molecular weight with known durability. Alternatively, the multi-component, reactive system with its cross-links to a second component has resultant effect on the mechanical and physical properties of the two component ink where viscosity builds up in the ink, eventually rendering the ink no longer screen printable. Consequently that is why the NCI 3800 Series inks have a limited pot life after mixing of five to six hours.

12. The fact that NCI calls the 3630 substance a hardener indicates it was placed in the ink system to cause cross-linking. The cross-linking enables the ink system to build viscosity.

13. If you simply delete the use of the hardener, you have a new, different polymer system than when you use the ink and

    hardener. The primary detriment of a coating’s durability is the polymer matrix and how the pigment in that polymer matrix resists fading. When you change the polymer you no longer have the same system. By not cross-linking, not making the polymer hard, you are making the polymer softer. With a softer polymer, there will be an accelerated degradation mechanism on the surface of the ink and a faster loss of retro-reflectivity performance. As a result, the ink system’s ultimate durability is not known. It is not the same process ink that is warranted by NCI when used with the 3630 hardener.

14. On June 30, 1998, DOT determined to post the bid award to 3M and declare NCI’s bid nonresponsive. There was no bias or prejudice on behalf of DOT against NCI.

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Chapter 120, Florida Statutes.

16. Section 120.57(3)(f), Florida Statutes, provides in pertinent part:

    (3) ADDITIONAL PROCEDURES APPLICABLE TO PROTESTS TO CONTRACT BIDDING OR AWARD.– Agencies subject to this chapter shall utilize the uniform rules of procedure, which provide procedures for the resolution of protests arising from the contract bidding process. Such rules shall at least provide that:

    * * *

    (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 . . .

    
    

17. NCI, the party protesting DOT’s proposed action, bears the burden of demonstrating that the proposed agency action is “clearly erroneous, contrary to competition, arbitrary, or capricious.” NCI has failed to meet that burden.

18. NCI submitted no credible evidence upon which to conclude that DOT’s rejection of its bid was irrational, taken without thought or reason, despotic in nature or unsupported by facts or logic.

19. DOT’s ITB specifically required that bidders supply process inks that would “require no component pre-mixing” and that would air dry in four hours or less. The process inks are a material aspect of the products to be supplied with the bid, not a minor technical requirement as to form. A bid specification is considered material, where, as here, waiver of the requirement would deprive an agency of assurance that the contract would be entered into, performed, and guaranteed according to the specified requirements. Glatstein v. City of Miami, 399 So. 2d 1005 (Fla. 3d DCA 1981) rev. denied, 407 So. 2d 1102 (Fla. 1981)

20. While DOT’s effort to seek clarification of NCI’s bid was reasonable, it was not an open door for NCI to change or amend the bid it submitted. NCI’s attempts to amend or supplement its bid through new documents deleting references to the hardener component constitutes an impermissible attempt to

amend its bid subsequent to the bid opening. In competitive- procurement protests, no submissions made after the bid or proposal opening amending or supplementing the bid or proposal shall be considered. Section 120.57(3)(f), Florida Statutes; See also Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190, 1192 (Fla. 2nd DCA 1977).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order awarding the bid to Intervenor, Minnesota Mining and Manufacturing, Inc.

DONE AND ENTERED this 19th day of November, 1998, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1998.

COPIES FURNISHED

F. Alan Cummings, Esquire Alejandro Espino, Esquire Cummings, Thomas and Snyder, P.A. 1004 DeSoto Park Drive Tallahassee, Florida 32301

Geoffrey Smith, Esquire Blank, Rigsby and Meenan, P.A.

204 South Monroe Street Tallahassee, Florida 32301

Brian McGrail, Esquire Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

James C. Myers, Agency Clerk Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

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: 98-003594BID

Orders for Case No: 98-003594BID