A. B. CONSTRUCTORS, INC., )
vs. ) Case No. 99-0726BID
Intervenor. )
Pursuant to notice, a formal hearing was held in this case on March 10, 1999, in Tallahassee, Florida, before Donald R. Alexander, the assigned Administrative Law Judge of the Division of Administrative Hearings.
For Petitioner: F. Alan Cummings, Esquire
For Respondent: Brian F. McGrail, Esquire
Kelly A. Bennett, Esquire Department of Transportation
For Intervenor: Donna A. Stinson, Esquire
The issue is whether the Department of Transportation's proposed award of a contract to Intervenor for ten highway projects in Hernando County, Florida, was contrary to the agency's rules and policies, and the bid specifications, as alleged by Petitioner.
This matter began on November 18, 1998, when Respondent, Department of Transportation, advised Petitioner, D. A. B. Constructors, Inc., that it had selected Intervenor, Smith & Company, Inc., as the lowest responsive bidder on six financial and four federal highway projects in Hernando County, Florida.
On November 20, 1998, Petitioner filed a notice of its intention to protest the award. A Formal Written Protest was then filed by Petitioner on November 27, 1998.
The matter was referred by Respondent to the Division of Administrative Hearings on February 17, 1999, with a request that an Administrative Law Judge be assigned to conduct a formal hearing.
By Notice of Hearing dated February 22, 1999, a final hearing was scheduled on March 10, 1999, in Tallahassee, Florida. On February 22, 1999, Intervenor, Smith & Company, Inc., was granted leave to intervene.
At final hearing, Petitioner presented the testimony of Juanita Moore, manager of the Contract Administration Office;
Sharon Poppel, a clerk specialist; and Ruth Dillard, manager of the Minority Programs Office. Also, it offered Petitioner’s Exhibits 1-17. All exhibits were received in evidence.
Respondent presented the testimony of Juanita Moore and offered Respondent's Exhibits 1-5. All exhibits were received in evidence. Intervenor presented the testimony of Joe Burke, manager of its Estimating Department, and Cameron Michael Kennedy, a messenger for a Tallahassee law firm. Also, it offered Intervenor's Exhibits 1 and 2. Both exhibits were received in evidence.
Petitioner was given the opportunity to late-file a deposition of an agency employee. However, it declined to exercise that right. The Transcript of the hearing was filed on March 24, 1999. At the request of Petitioner, the time for filing proposed findings of fact and conclusions of law was extended to April 15, 1999. The same were timely filed by the parties, and they have been considered by the undersigned in the preparation of this Recommended Order.
On an undisclosed date in 1998, Respondent, Department of Transportation (DOT), issued an invitation for bids on Federal Aid Project Nos. 3014050P, 3014049P, State Road 50 and State Road 45 (U. S. 41), and Financial Project Nos. 2548051-5201, 2548051-
5601, 2548051-5602, 2548161-5601, 2548161-5602, and 2548161-5201,
which involved various road projects in Hernando County, Florida. All bids were to be filed no later than October 28, 1998, and a bid letting would be held later that day.
Pursuant to its rules, the DOT established for the project a ten percent disadvantaged business enterprise (DBE) participation goal. Under Rule 14-78.003(2)(b)3.b., Florida Administrative Code, a bidder was required to submit, at the time of its submission, a completed DBE Utilization Summary Form and Utilization Form, which provided the DOT with information necessary to assure that the bidder would meet or exceed the percentage goals on the project.
Alternatively, the above rule allows a bidder to submit with its bid an incomplete DBE Utilization Summary Form indicating that the DBE goal would be achieved. However, the completed forms had to be filed with DOT's Minority Programs Office (MPO) no later than 5:00 p.m. on the third business day following the bid letting day. This meant that a bidder utilizing this alternative had to file its completed forms with the MPO by the end of the business day on Monday, November 2, 1998. The DOT form itself provided that "[b]ids would be declared non-responsive if all DBE Utilization forms are not received by the [MPO] by 5:00 p.m. on the third business day after the letting." One of the DOT forms noted that the MPO was
located at 3717 Apalachee Parkway, Suite G, Tallahassee, Florida, while the other gave no address.
A public letting for the project was held on October 28, 1998. Intervenor, Smith & Company, Inc., submitted the lowest apparent bid of $26,678,514.61 while Petitioner, D. A. B. Constructors, Inc., submitted the second lowest bid of
$30,817,777.73. Because Intervenor's bid did not contain completed DBE forms, it had to file them with the MPO by 5:00 p.m. on November 2, 1998.
Intervenor's estimator in Fort Lauderdale, Florida, prepared and completed the appropriate DBE forms and on November 2 telefaxed them to its Tallahassee counsel, Vezina, Lawrence, and Piscitelli (VLP), with instructions that they be hand-carried to the MPO by the close of that business day.
A part-time messenger for VLP, Cameron Kennedy, was handed the forms that afternoon and told, without more specificity, to get them filed and date-stamped at the DOT's satellite office at 3717 Apalachee Parkway. That office is located in a two-story structure and houses several DOT offices, including its MPO and Comptroller. The latter office is located on the first floor of the building while the MPO is on the second floor in Suite G.
A directory on the first floor of the building notes that the MPO is on the second floor. However, when Kennedy first entered the building, he asked a DOT employee where he could get
DBE forms filed and date-stamped. She led him to a nearby room in Suite A on the first floor where they were stamped as received at 4:07 p.m. by an employee of the DOT Comptroller's office, Sharon Poppel. Kennedy then left the premises believing that the forms had been properly stamped and filed.
When Poppel later examined the documents, she noted that they involved "a company with money," so she mistakenly sent them to the Comptroller's financial administration office. That office returned them to her desk the next day. After checking with a supervisor, Poppel hand carried the forms to the MPO on November 4, 1998, or two days after they were due. This late filing contravened the terms of Rule 14-78.003(2)(b)3., Florida Administrative Code, and the DBE form which contained the same requirement.
DOT has no policies, procedures, criteria, or guidelines for determining whether an error in a bid submission is a technical or material error. Because the facts in each case may differ, this task is performed on an ad hoc basis by three DOT committees that review bid proposals. When a bidder has failed to file its forms within the three-day period, an event occurring at least thirty-eight times in recent years, DOT has consistently held this to be a material error. However, on the only two occasions when a bidder's DBE forms were timely filed with the agency within the three-day window, but were misdelivered to the
wrong office, the error was considered technical and the forms were accepted.
Under DOT's review process, a good faith efforts committee initially reviews the DBE forms submitted by bidders to determine whether they comply with the agency's rules. In this case, the committee made a recommendation that Intervenor's bid be declared non-responsive on the ground the DBE forms had not been filed with the MPO until November 4, or two days late.
Under DOT protocol, the recommendation of the good faith efforts committee is then referred to the technical review committee to review "bids that have . . . problems." The latter committee is not required to accept the recommendation of the good faith efforts committee. Here, the technical review committee determined that the misfiling by Intervenor was a technical error and not a ground for rejecting the bid. In other words, while the committee continued to follow its policy of strictly enforcing the requirement that DBE forms be filed within three business days, it considered Intervenor's misdelivery of the forms to be a technical error which could be waived. This recommendation was accepted by the contract awards committee and on November 19, 1998, DOT posted its intent to award the contract to Intervenor.
Contrary to Petitioner's assertion, there is no evidence that Intervenor gained an advantage over other bidders by misfiling the documents with the wrong DOT office.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Section 120.57(3), Florida Statutes (Supp. 1998).
In this proceeding, the burden is on the party protesting the award of the contract to establish a ground for invalidating the award. State Contracting and Engr. Corp. v. Dep't of Trans., 709 So. 2d 607, 609 (Fla. 1st DCA 1998).
Section 120.57(3), Florida Statutes (Supp. 1998), controls this proceeding. Paragraph (3)(f) provides as follows:
(f) In a competitive-procurement protest, no submissions made after the bid or proposal opening shall be considered. Unless otherwise provided by statute, the burden of proof shall rest upon 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.
Under the foregoing statute, the undersigned is first obliged to determine, in a de novo setting, whether DOT's action is "contrary to the agency's governing statutes, the agency's rules or policies, or the bid . . . specifications." Within that factual framework, it must then be determined if DOT's action is ”clearly erroneous, contrary to competition, arbitrary, or capricious."
In this case, Petitioner contends that the agency's award of the contract to Intervenor "is contrary to the agency's rules, policies, and the bid specifications, and is both clearly erroneous and arbitrary." The rule allegedly violated by DOT's action is Rule 14-78.003(2)(b)3.b., Florida Administrative Code, which reads in relevant part as follows:
b. In lieu of a completed Disadvantaged Business Enterprise (DBE) Utilization Summary Form, Department of Transportation Form 275- 020-003, Rev. 10/95, and a Disadvantaged Business Enterprise (DBE) Utilization Form, Department of Transportation Form 275-020- 004, Rev. 10/95, the contractor will submit a [Form] which indicates that either the contractor will achieve the DBE goal established for the project for which the bid has been submitted, or that the contractor has submitted sufficient information to demonstrate that the contractor has made a good faith effort to meet the DBE goal as part of the bid submission. If the contractor has submitted a [Form] on which the contractor has indicated that the DBE goal will be achieved, the contractor will provide to the Minority Programs Office
. . . by 5:00 P.M. on the third business day
following the bid letting day:
(I) An updated [Form] listing the DBE subcontractors that will be utilized on the project to meet the DBE goal, the dollar amount of the DBE goal subcontracted to each DBE, and the total dollar amount for the DBE goal; (Emphasis added)
It is undisputed that the DBE forms were filed with the incorrect DOT office in contravention of the instructions on one of the DBE forms and Rule 14-78.003(2)(b)3.b., Florida Administrative Code, and that this misfiling constituted a deviation from their terms. But not every deviation from an
invitation to bid is material. A deviation is only material if it gives a bidder a substantial advantage over the other bidders which subverts competition. See, e.g., Tropabest Foods, Inc. v. Dep't of Gen. Svcs., 493 So. 2d 1032, 1034 (Fla. 3d DCA 1982).
There is no evidence that Intervenor gained such an advantage here.
Within the context of Section 120.57(3)(f), Florida Statutes, an agency's waiver of an irregularity is not "clearly erroneous" or "arbitrary" where the irregularity is technical or minor in nature. Because the rule and form were not contravened in a material way, DOT's action was not clearly erroneous or arbitrary.
Similarly, DOT's action in waiving the irregularity did not contravene its "policies" in a material respect, as alleged by Petitioner. Indeed, the evidence shows that on the rare occasions when papers were timely filed with DOT, but misdelivered to the wrong section, as was done here, DOT has accepted such filings on the theory that the misfiling is a minor irregularity. Petitioner's reliance on DOT's policy of strictly enforcing the requirement that DBE forms be filed within the three-day window is misplaced; that policy deals with the overall timeliness of filings. Moreover, unlike the situation here, it has the salutary purpose of preventing a tardy bidder from gaining an advantage not enjoyed by others. This distinction between the policies is logical and is not arbitrary.
Petitioner also contends that DOT has no discretion to ignore its own rules and accept Intervenor's bid. In doing so, Petitioner relies upon the language in Rule 14-78.003.(2)(b)3.b., Florida Administrative Code, which states that a contractor "will" provide its updated forms to the MPO by the end of the third business day following the bid letting. However, the same rule provides that bids will be declared non-responsive and rejected only if a bidder fails "to satisfy the information requirements," submits forms "that are not signed by an authorized representative of the DBE firm," or attempts to effectuate delivery by "electronic transmissions, such as FAX." The rule does not specifically state that timely, but misdelivered, forms will be automatically rejected.
In exercising its discretion to interpret the DBE rule in the manner that it did, DOT's interpretation was not shown to be clearly erroneous. Cf. State Contracting and Engr. Corp. at 610 (DOT's interpretation of DBE rule in a bid dispute should be given deference). Contrary to Petitioner's assertion, DOT's exercise of discretion will not lead to "quagmires presented by a myriad of factual possibilities that would have to be considered if the letting authority were to engage in a case by case consideration of bidders' failures to follow the rules of public lettings." Indeed, of the presumably hundreds or thousands of bids let by DOT over the years, this unique situation has arisen only twice and does not involve numerous "factual possibilities."
Finally, Petitioner has cited several cases arising before the federal Board of Contract Appeals. While they lend support to Petitioner's view, they are not binding in this jurisdiction. The remaining arguments raised in Petitioner's proposed order have been considered and rejected.
In summary, Petitioner has failed to show that DOT's action contravened its rule, form, and policies in a material respect and thus was clearly erroneous and arbitrary. This being so, Petitioner's protest should be denied.
