STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SUNSHINE TOWING, )

)

Petitioner, )

)

vs. ) Case No. 00-5142BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on February 9, 2001, at Fort Lauderdale, Florida, before Michael M. Parrish, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Andrew S. Atkins, Esquire

Barry T. Shevlin, Esquire

Law Offices of Barry T. Shevlin, P.A. 1111 Kane Concourse, Suite 605

Bay Harbor Islands, Florida 33154

For Respondent: Brian A. Crumbaker, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUES

The basic issue in this case concerns whether, upon consideration of the responses to ITB-DOT-00-01-4004, the Department of Transportation's ("Department's") intended action

to award the subject contract to All-American Towing, Inc., "is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications."

PRELIMINARY STATEMENT

In response to the Department's Invitation to Bid in connection with Road Ranger Service Patrol on Interstate 95, Interstate 595, and Interstate 75 in Broward County, ITB-DOT-00- 01-4004 ("ITB"), the Department received bids from seven firms. On November 3, 2000, the Department opened the bid proposals that were submitted in response to the ITB. The Department posted its tabulation on November 21, 2000, announcing its intent to award the contract to All-American Towing, Inc. In response to the bid tabulation, Sunshine Towing timely filed a Notice of Protest with the Department's Clerk of Agency Proceedings on November 27, 2000. A Formal Written Protest and a Protest Bond were subsequently filed on December 4, 2000, within the time provided by law.

After the Department determined that there were material issues of fact in dispute, the matter was referred to the Division of Administrative Hearings ("DOAH") on December 28, 2000, for assignment of an Administrative Law Judge to conduct the final hearing. By agreement of the parties, the final hearing was scheduled for February 9, 2001.

At the final hearing on February 9, 2001, the Petitioner presented the testimony of four witnesses and offered sixteen exhibits, all of which were received in evidence.

The Respondent presented the testimony of five witnesses and offered two exhibits, both of which were received in evidence. At the conclusion of the final hearing, the parties requested, and were granted, ten days from the filing of the transcript within which to file their proposed recommended orders. The transcript of the final hearing was filed with DOAH on February 23, 2001. Thereafter, both parties filed timely proposed recommended orders containing proposed findings of fact and conclusions of law.1 The proposals of both parties have been carefully considered during the preparation of this Recommended

Order.

Stipulated Facts

FINDINGS OF FACT

1. In their Prehearing Stipulation the parties admitted that the following facts are true without the need for proof at hearing.2

   1. The Department issued an invitation to bid entitled ITB-DOT-00-01-4004, for road ranger service patrol along I-95, I-595, and I-75 in Broward County.

   2. The Department held a mandatory pre- bid meeting for this Project.

   3. The mandatory pre-bid meeting for this Project was held on Friday, October 20, 2000.

   4. All-American Towing Services, Inc., is a Road One Company.

   5. All-American Towing Services, Inc., has been registered with the Florida Department of State, Division of Corporations, since July 18, 1997.

   6. Road One, Inc., is registered with the Florida Department of State, Division of Corporations.

   7. Road One, Inc., has been registered with the Florida Department of State, Division of Corporations, since April 1997.

   8. Wareham Enterprises, Inc.'s, principal place of business was 4971 SW 34th Place, David, Florida 33314.

   9. Wareham Enterprises, Inc., was a Florida corporation registered with the Florida Department of State, Division of Corporations.

   10. Wareham Enterprises, Inc., was registered with the Florida Department of State, Division of Corporations, from 1986- 1998.

   11. John Wareham was the president and director of Wareham Enterprises, Inc.

   12. John Wareham was a director of All- American Towing, Inc.

   13. All-American Towing, Inc., was administratively dissolved on September 22, 2000, prior to the date of bid submission.

   14. Gary Pasborg was present at the mandatory pre-bid meeting for this project.

   15. Road One/All-American failed to enter the firm's SPURS vendor number in its response to the Invitation to Bid.

   16. Road One/All-American may not be excluded from bidding for failure to list the firm's SPURS vendor number.

   17. Road One/All-American's failure to list the firm's SPURS vendor number is a minor irregularity.

   18. Road One/All American's bid indicated a total annual estimated cost of $1,893,369.

   19. Road One/All-American made a mathematical error in computing the bid's total annual estimated cost.

   20. The Department corrected the total annual estimated cost in All-American's bid.

   21. The Department did not modify the hourly rate per service patrol vehicle contained in All-American's bid.

   22. The Department's correction of All- American's mathematical error is a minor irregularity.

   23. The corrected total annual estimated cost in All-American's bid is $1,893,440.

   24. The corrected total annual estimated cost did not alter the order of award.

   25. Sunshine Towing is a sole proprietorship owned and operated by Alexis Ramos and Ann Margaret Ramos.

   26. Every company who appeared at the mandatory pre-bid conference received, at the conclusion of the meeting, a sign in sheet which did not contain the name All- American, or All-American Towing.

       aa. The Department contacted Road One/All-American to request copies of licenses and registrations.

       bb. Ann Margaret Ramos, Alexis Ramos, Monica Savits, George Gonzalez, and Lourdes Zapata were all present at the mandatory pre-bid conference.

       
       

       Facts Proved at Hearing

       
       

2. In response to the subject ITB, the Department received bids from seven firms by the deadline of October 27, 2000. The bids were opened on November 3, 2000. The only bids relevant to this proceeding are the bids of All-American Towing, Inc.,3 and Sunshine Towing. All-American Towing, Inc., was the low bidder with a bid in the amount of $1,893,440.00. Sunshine Towing was the second lowest bidder with a bid in the amount of

   $2,135,000.00.

3. Sunshine Towing is currently under contract with the Department in District VI to provide services similar to those requested in the ITB at issue in this case.

4. All-American Towing, Inc., is a wholly owned subsidiary of a corporation named Road One, Inc. At all times material to this case, All-American Towing, Inc., has been a dissolved Florida corporation. Notwithstanding its dissolved status, All- American Towing, Inc., appears to have continued to engage in the towing business in Florida. All-American Towing, Inc., has engaged in the towing business in Florida for more than five years. All-American Towing, Inc., has employees and managers who have engaged in the towing business in Florida for more than five years. Although Road One, Inc., is the sole owner of All- American Towing, Inc., it continues to operate All-American Towing, Inc., as a separate, but related, company.

5. All bidders were required to attend a mandatory pre-bid meeting. Representatives of All-American Towing, Inc., attended the meeting.4 Representatives of Sunshine Towing also attended the mandatory pre-bid meeting.

6. The ITB in this case requires bidders to have "a minimum of five (5) years of experience in the towing industry in the State of Florida."5

7. Section 5.0 of the ITB requires that each bidder have at least fourteen service patrol vehicles and that it include

   with the bid a photocopy of the vehicle registration for each such vehicle. At all times material to this proceeding, All- American Towing, Inc., had the required number of service patrol vehicles.

8. All-American Towing, Inc., submitted with its bid only twelve photocopies of vehicle registrations. After the bids were opened, the Department contacted All-American Towing, Inc., and requested photocopies of two additional vehicle registrations.6 The two additional photocopies were promptly provided.

9. Section 9.6 of the subject ITB reads as follows:

   
   

   The Department may waive minor informalities or irregularities in proposals received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other proposers. Minor irregularities are defined as those that will not have an adverse effect on the Department's interest and will not affect the price of the Proposals by giving a proposer an advantage or benefit not enjoyed by other proposers.

   
   

10. Sunshine Towing is a responsible bidder, and it submitted a responsive bid. Sunshine Towing meets all of the requirements of the ITB.

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these

    proceedings pursuant to Sections 120.569 and 120.57, Florida Statutes.

12. In 1996, the Legislature enacted substantial revisions to Chapter 120, Florida Statutes. In a competitive-procurement protest, such as the matter at bar, the proceedings are conducted pursuant to Section 120.57(3)(a)-(f), Florida Statutes. Section 120.57(3)(f), Florida Statutes (1997), provides in pertinent part:

    In a competitive procurement contest, 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 statues, the agency's rules, or policies, or the bid or proposal specifications. The standard of proof for such proceeding shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious.

    
    

    See also Intercontinental Properties, Inc. v. Department of Health and Rehabilitative Services, 606 So. 2d 380, 386 (Fla. 3d DCA 1992); State Contracting & Engineering Corp. v. Department

    of Transportation, 709 So. 2d 607, 609 (Fla. 1st DCA 1998) (citing Intercontinental Properties).

13. The burden of proof is on Sunshine Towing to demonstrate by a preponderance of the evidence that the Department's proposed agency action is clearly erroneous,

    contrary to competition, arbitrary, or capricious. Section 120.57(3)(f), Florida Statutes (2000).

14. The purpose of the competitive bidding process is to avoid favoritism and fraud, to allow the government to acquire the best values at the lowest possible expenses, and to afford an equal opportunity to all wishing to do business with a governmental entity. Department of Transportation v. Groves- Watkins Contractors, 530 So. 2d 913 (Fla. 1988); Webster v. Belote, 138 So. 721, 723 (Fla. 1931).

15. In the course of the competitive bid process, an agency is afforded wide discretion in soliciting and accepting bids, and its decision, when based on an honest exercise of this discretion, will not be overturned by the court event if it may appear erroneous and even if reasonable persons may disagree. Liberty County v. Baxter's Asphalt & concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982).

16. In determining whether to waive an irregularity, an agency must consider whether the error or omission at issue is a material irregularity or a technical or minor irregularity. Rule 60A-1.001(16), Florida Administrative Code, defines "minor irregularity" as:

    [a] variation from the invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed

    by the other bidders or offerors, or does not adversely impact the interests of the agency.

    
    

17. The courts have reached similar conclusions as to what constitutes a minor irregularity:

    In determining whether a specific non- compliance constitutes a substantial and hence nonwaivable irregularity, the courts have applied two criteria-first, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition.

    
    

    Robinson Electrical Company, Inc. v. Dade County, 417 So. 2d

    
    

    1032 (Fla. 3d DCA 1982)(citing Glatstein v. City of Miami, 399 So. 2d 1005 (Fla. 3d DCA 1981).

18. The difficulty lies in determining when a public authority should exercise this discretion in the competitive bid process. The court in Intercontinental Properties, Inc., 606 So. 2d at 387, stated that "there is strong public policy in favor of awarding contracts to the low bidder, and an equally strong public policy against disqualifying the low bidder for technical deficiencies which do not confer an economic advantage on one bidder over another." Furthermore, in exercising the wide discretion afforded the agency in waiving minor

    irregularities, there is a strong public policy that the agency use this authority for the purpose of saving tax dollars. The court in Overstreet Paving v. Department of Transportation, 608 So. 2d 851, 853 (Fla. 2d DCA 1992), declared that "there is a strong public interest in favor of saving tax dollars in awarding public contracts."

19. "Although a bid containing a material variance is unacceptable . . . not every deviation from the invitation is material." Robinson Electrical Co. v. Dade County, 417 So. 2d

    1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc. v. State Department of General Services, 493 So. 2d 50, 52 (Fla. 1st DCA 1986). "It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Id.; See also Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190, 1193 (Fla. 2d DCA 1977).

20. When All-American Towing, Inc., submitted its bid, it enclosed copies of only twelve motor vehicle registrations. The ITB clearly required copies of fourteen motor vehicle registrations. This omission in the bid submitted by All- American Towing, Inc., is a "minor irregularity" within the meaning of Rule 60A-1.001(16), Florida Administrative Code, quoted above. The omission of photocopies of two motor vehicle registrations did not affect the price of the bid, did not give

    All-American Towing, Inc., an advantage or benefit not enjoyed by the other bidders, and did not adversely impact the interests of the agency. Such being the case, the omission of the two photocopies is an irregularity which may properly be waived by the Department.

21. With regard to the issue concerning the mandatory pre- bid meeting, the facts in this case sufficiently show that All- American Towing, Inc., was represented at the pre-bid meeting. Accordingly, there is no factual basis for the Petitioner's arguments on this issue.7

22. With regard to the issue of whether All-American Towing, Inc., meets the experience requirements set forth in the ITB, the facts in this case sufficiently show that All-American Towing, Inc., has been in the towing business in Florida for more than five years. The facts also show that All-American Towing, Inc., has employees and managers who have worked in the towing business in Florida for more than five years. Accordingly, under any reasonable interpretation of the experience requirements in the ITB, All-American Towing, Inc., meets the experience requirements.

23. The final issue which requires disposition is the issue of whether All-American Towing, Inc., has the legal capacity to enter into and perform the contract for which it submitted a bid. All-American Towing, Inc., is a Florida

corporation. At the time it submitted its bid in this case, its legal status was that of a dissolved Florida corporation, its having been administratively dissolved by the Florida Department of State. As of the date of the hearing there was no evidence that All-American Towing, Inc., had been reinstated by the Florida Department of State. Pursuant to Section 607.1405, Florida Statutes, "a dissolved corporation continues its corporate existence but may not carry on any business except that appropriate to wind up and liquidate its business and affairs. . . ." As a result of its status as a dissolved corporation, All-American Towing, Inc., lacks the legal authority to engage in the business for which it seeks to obtain a contract. Such being the case, All-American Towing, Inc., fails to meet the requirements of section 8.0 of the ITB, and its bid should be rejected. Stated otherwise, it would be arbitrary and capricious for the Department to award the subject contract to a business entity that is no longer authorized to do

business in Florida.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that the Department of Transportation issue a final order in this case rejecting the bid submitted by All-American Towing, Inc., and awarding the contract to Sunshine Towing.

DONE AND ENTERED this 13th day of April, 2001, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 13th day of April, 2001.

ENDNOTES

1/ Although timely served, the Department's Proposed Recommended Order was inadvertently filed one day late. The Department's motion seeking to have its Proposed Recommended Order treated as though timely filed is granted.

2/ The admitted facts to which the parties stipulated are memorialized here in the exact language of the stipulation entered into by the parties. At several places in the stipulation there are references to an entity described as "Road One/All-American." By way of clarification, it is noted that there is no entity named "Road One/All-American." there is a corporation named Road One, Inc., that uses the business name "Road One." There is a corporation named All-American Towing, Inc., which is owned by Road One, Inc. All-American Towing, Inc., submitted a bid for the contract at issue here. Road One, Inc., did not submit a bid.

3/ Throughout the pleadings, the testimony, and the Proposed Recommended Orders, there has been a great deal of inconsistency and ambiguity in references to the entity that submitted the low bid in response to the ITB in this case. That entity is a corporation named All-American Towing, Inc.

4/ Gary Pasborg and Courtney McCoy attended the mandatory pre- bid meeting. At an earlier stage in this proceeding there was

some question as to whether they had attended the mandatory pre- bid meeting solely on behalf of Road One, Inc. The greater weight of the evidence is to the effect that Pasborg and McCoy attended the mandatory pre-bid meeting on behalf of both Road One, Inc., and All-American Towing, Inc.

5/ The wording of the experience requirement in the subject ITB is by no means a model of clarity. To reduce the possibility of misinterpretation in the future, the Department should prepare a more precisely worded experience requirement for use in future ITBs.

6/ The Department also contacted several other bidders who had omitted documents from their bids and asked those bidders to provide the missing documents. This is a well-intentioned practice that the Department might be well-advised to discontinue in view of the first sentence of Section 120.57(3)(f), Florida Statutes, which reads: "In a competitive-procurement protest, no submissions made after the bid or proposal opening amending or supplementing the bid or proposal shall be considered."

7/ Even if the facts were otherwise, failure to attend a mandatory pre-bid meeting is not always a fatal flaw. Such a failure may be waived by the agency as a minor irregularity. Beach Construction Company, Inc. v. Department of Corrections, DOAH Case No. 97-3309BID (Recommended Order issued October 13, 1997).

COPIES FURNISHED:

Brian A. Crumbaker, Esquire Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

Andrew S. Atkins, Esquire Barry T. Shevlin, Esquire

Law Offices of Barry T. Shevlin, P.A. 1111 Kane Concourse, Suite 605

Bay Harbor Islands, Florida 33154

James C. Myers

Clerk of Agency Proceedings Department of Transportation

Haydon Burns Building, Mail Station 58 605 Suwannee Street

Tallahassee, Florida 32399-0458

Pamela Leslie, General Counsel Department of Transportation

Haydon Burns Building, Mail Station 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: 00-005142BID

Orders for Case No: 00-005142BID