STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS SBR JOINT VENTURE, ) ) Petitioner, ) ) vs. ) Case No. 03 1102BID ) MIAMI DADE COUNTY SCHOOL BOARD, ) ) Respondent. ) _________________________________) M AGNUM CONSTRUCTION M ANAGEMENT ) CORPORATION , ) ) Petitioner, ) ) vs. ) Case No. 03 1104BID ) MIAMI DADE COUNTY SCHOOL BOARD, ) ) Respondent. ) _________________________________) RECOMMENDED ORDER Pursuant to notice, a hearing was conducted in these consolidated cases pursuant to Section 120.569, Florida Statutes, and Section 120.57(1), Florida Statutes, on May 14 and 15, 2003, i n Miami, Florida, before Stuart M. Lerner, a duly designated Administrative Law Judge of the Division of Administrative Hearings. APPEARANCES For SBR Joint Venture: Michael N. Kreitzer, Esquire Bilzin, Sumberg, Baena, Price & Axelrod, LLP Wachovia Financial Center 200 South Biscayne Boulevard Suite 2500 Miami, Florida 33131 For Miami Dade County School Board: Luis M. Garcia, Esquire Miami Dade Co unty School Board 1450 Northeast Second Avenue Suite 400 Miami, Florida 33132 For Magnum Construction Management Corporation: J. Alfredo De Armas, Esquire Alv arez, De Armas & Borron, P.A. 3211 Ponce De Leon Boulevard Suite 302 Coral Gables, Florida 33134 STATEMENT OF THE ISSUE Whether the Miami Dade County School Board's failure to disqualify Magnum Const ruction Management Corporation from bidding on Project No. A0746 pursuant to paragraph G. of the General Requirements of the Request for Qualifications issued in connection with the project was clearly erroneous, contrary to competition, arbitrary, or capr icious. PRELIMINARY STATEMENT On March 26, 2003, the Miami Dade County School Board (School Board) referred to the Division of Administrative Hearings (DOAH), pursuant to Section 120.57(3), Florida Statutes, SBR Joint Venture's (SBR's) formal written prote st of the School Board's announced intention to award to Magnum Construction Management Corporation (MCM) the contract for Project No. A 0746 (Instant Project), a project involving the design and construction of a "1600 student station addition [at] Miami Coral Park Senior High School." In its formal written protest, SBR argued that MCM, the lowest bidder on the project, "never should have been considered for an award of the Coral Park contract" because it was "not compliant with th[e] mandatory condition precedent" set forth in paragraph G. of the General Requirements of the Request for Qualifications issued in connection with the project, which provided as follows: In order to be considered, proposers must meet the following basic requirements: Any propo ser, firm or company desiring to participate in this process must not have as a part of its team an A/E firm presently under contract with the Board for a specific project and a General contractor for the same project. The Board considers this a conflict of interest and such proposals will not be considered for award of a contract under this Request for Qualifications. SBR described in the following manner MCM's alleged "non compliance" with this "[g]eneral [r]equirement": By its own admission, MCM improp erly has as part of its team, an A/E firm (LIVS & Associates) that is presently under contract with the School Board for the remodeling and renovation of Westview Middle School ("Westview"). The General Contractor working on the same Westview project is n one other than MCM. As such, MCM cannot meet the basic prequalification requirements that MCM "must not have as [a] part of its team an A/E firm presently under contract with the Board for a specific project and a General [c]ontractor for the same project ." Because of this "conflict of interest," SBR contended, "MCM must be disqualified from any further proceedings with respect to the Coral Park project" and, "[u]pon disqualification, the [contract for the] project must be awarded to SBR" as the second lo west bidder. SBR's written formal protest was docketed by DOAH's Clerk as DOAH Case No. 03 1102BID. The case was thereafter assigned to the undersigned. On March 26, 2003, and March 27, 2003, the School Board referred to DOAH a formal written protest and an amended formal written protest, respectively, that MCM had filed with the School Board in anticipation of the School Board's agreeing with SBR, "disqualify[ing] MCM as low Bidder on the [Instant Project]," and either awarding the contract for the proje ct to SBR or rejecting all bids and "resolicit[ing] bids for the [p]roject." MCM's formal written protest and its amended formal written protest were docketed as DOAH Case No. 03 1104BID. The case was thereafter assigned to the undersigned. By order issu ed March 28, 2003, DOAH Case Nos. 03 1102BID and 03 1104BID were consolidated pursuant to Rule 28 106.108, Florida Administrative Code, at the joint request of the School Board, SBR, and MCM (which request was made during a telephone conference call with t he undersigned held earlier that same day). The final hearing in these consolidated cases was originally scheduled for April 23, 2003, but was continued at the request of the parties (who "stipulated to the waiver of the statutory requirement to commence the hearing within thirty (30) days after the Division's [DOAH's] receipt of the formal written protests." 1 ) and rescheduled to commence on May 14, 2003. As noted above, the final hearing was held on May 14 and 15, 2003. At the outset of the hearing, t he undersigned and the parties agreed that the issues to be litigated at hearing (and addressed in this Recommended Order) were those, and only those, related to SBR's claim that MCM should have been disqualified from bidding on the Instant Project pursuan t to paragraph G. of the General Requirements of the Request for Qualifications issued in connection with the project, and that the issues raised in MCM's formal bid protest and amended formal bid protest that were unrelated to SBR's claim were not ripe fo r consideration. Five witnesses (all called by MCM) testified at the final hearing: John Pennington, Fernando Munilla, Hector Vergara, Blanca Bazan, and John Junkin. In addition to the testimony of these five witnesses, 55 exhibits were offered and recei ved into evidence: SBR's Exhibits 1 through 26 and 28 through 30, the School Board's Exhibits 1 through 6, and MCM's Exhibits 1 through 15, 18 through 22, 24, and 25. At the close of the evidentiary portion of the hearing, in accordance with the request of the parties (who "agreed to waive the 30 day requirement for the Administrative Law Judge to [enter] his recommended order," as authorized by Section 120.57(3)(e), Florida Statutes), the undersigned established the deadline for filing proposed recommend ed orders at 20 days from the date of the filing with DOAH of the transcript of the final hearing. The Transcript of the final hearing (consisting of three volumes) was filed with DOAH on June 16, 2003. MCM, the School Board, and SBR filed their Proposed Recommended Orders on July 3, 2003, July 7, 2003, and July 8, 2003, respectively. The undersigned has carefully considered all of these post hearing submittals, including the School Board's, which MCM, by motion filed July 25, 2003, has unpersuasively ar gued "should be ignored." 2 FINDINGS OF FACT Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: The School Board 1. The School Board is a duly constituted district school board charged with the duty of operating, controlling, and supervising all free public schools in Miami Dade County, including, among many others, Westview Middle School (Westview) and Miami Coral Park Senior High School. The Westview Project 2. Westview is currently undergoin g expansion, remodeling, and renovation work (Westview Project). 3. The project is almost complete. 4. Blanca Bazan is a School Board employee who serves as project manager on School Board construction projects. 5. At all times material to the instan t cases, Ms. Bazan has been the Project Manager on the Westview Project. 6. LIVS and Associates (LIVS), an architectural and engineering firm, has been the Project Architect/Engineer (or A/E of Record) on the Westview Project since October of 1997, when i t entered into a written agreement (which is still in effect) to assume such responsibility in return for a "lump sum" payment, plus additional fees (LIVS Westview Agreement). 7. Paragraph III.G. of the LIVS Westview Agreement describes the "basic service s" LIVS is to provide during the "construction phase" of the project. It provides, in pertinent part, as follows: The following are to be performed by the A/E [LIVS], and shall in all cases be in accordance with the requirement of the contract documents: 1. OBSERVATION a.) The A/E shall provide construction administration of the Contract for Construction as set forth in this AGREEMENT and in the General Conditions of the Contract for Construction unless otherwise provided in this AGREEMENT. The A/E sh all visit the site at least weekly or as appropriate to the stage of construction or as otherwise directed by the BOARD to become generally familiar with the progress and quality of the Work completed and to determine in general if the Work is being perfor med in a manner indicating that the Work when completed will be in accordance with the Contract Documents. As part of the A/E's basic services, the A/E shall conduct 120 on site observation visits. A/E shall provide a report to the PM [Project Manager] . . . . On the basis of on site observations as the A/E, the A/E shall keep the BOARD and Contractor informed immediately in writing of the progress or lack of progress and quality of the Work, and shall endeavor to guard the BOARD against defects and defi ciencies in the Work. The A/E shall at all times have access to the Work, wherever it is in preparation or progress. * * * b.) . . . . A/E will enforce the faithful performance of Contract and assure that the Work has been or is being performed in accordance with the Construction Documents. . . . A/E will provide written notice to BOARD if it observes or has reason to become aware of any defect or non conformance with the Construction Documents. 2. CONTRACTOR'S SUBMITTALS The A/E shall review and evaluate samples, schedules, shop drawings, and other submissions for conformance with the design requirements of the Project, applicable codes and ordinances. . . . The A/E shall also prepare in a timely manner change order item s, including the proper documentation for DOE transmittal. . . . * * * 4. QUALITY CONTROL The A/E shall make a reasonable effort to evaluate materials and/or workmanship for conformance with Construction Documents, evaluate qu ality control testing reports, advise the Construction Contractor and the BOARD immediately of any unacceptable materials and workmanship the A/E may discover and [e]nsure that the Contractor take appropriate action to remedy unacceptable conditions. * * * 7. CERTIFICATION OF PAYMENTS The A/E shall review the Contractor's notarized requisitions for payment, the schedule of values, subcontractor partial releases and the Project schedule. The A/E shall determine the amount which in the A/E's opinion should be paid to the Contractor and shall recommend for [the] BOARD'S approval certificates for payments in such amounts. These certificates will constitute a representation to the BOARD, based on site observations by all appropriat e Designated Specialists for architectural and engineering disciplines and on the data comprising the application for payment, that the Work has progressed to the point indicated. By recommending a certificate for payment consistent with the contract docu ments, the A/E shall also represent to the Board that, to the best of the A/E's knowledge, information and professional judgment, the quality of work is in accordance with the Construction Contract Documents, unless the BOARD has been notified to the contr ary in writing. Prior to issuing certification for payment, A/E shall review the status of Contractor's Construction Documents and Project schedule and verify that the documents and/or schedules are up to date and accurate to the extent visual observation of construction will disclose. A/E shall also confirm that after the first application for payment, each subsequent application shall be accompanied by subcontractor partial lien release fully accounting for subcontractor payments due for the previous ap plication. If the Construction Documents and Project Schedule are not up to date and/or accurate, A/E shall include in its certification for payment a statement that the Construction Documents and/or Project Schedule are not up to date. In such event, BO ARD may, a.) hold an additional ten (10)% of amount then due Contractor until A/E verifies that the Construction Documents and/or Project Schedule are up to date and accurate, b.) refuse to process the partial or final requisition for payment, or c.) pay C ontractor. . . . The A/E's certification is a representation by A/E to Owner that all required items noted herein are submitted and proper and serves as a recommendation for payment only. The A/E shall make every reasonable effort to process the Contract or's requisition for payment in accordance with the timelines[] established in the General Conditions of the Construction Contract. . . . * * * 10. SUBSTANTIAL COMPLETION The A/E, upon written notification by the Contractor th at the Work is substantially complete and ready for substantial completion . . . shall promptly conduct inspection to determine the date or dates of substantial completion for the work. . . . c) Not Substantially Complete If A/E determines that the Work has not achieved Substantial Completion, A/E will notify Contractor in writing of the deficiencies within ten (10) days of the Inspection. 11. FINAL COMPLETION AND FINAL PAYMENT a) Upon receipt of written notice that the Work is ready for Final Inspec tion and Acceptance and upon receipt of a final Requisition for Payment, or at completion of the thirty (30) day punchlist period, whichever is earliest, A/E, its engineers and other consultants, BOARD and Contractor shall participate in a walk through to inspect the Work. At the conclusion of the inspection, the Work shall be determined to be as follows: 1) Finally Complete If it determined that the Work has achieved Final Completion, final payment shall be made in accordance with the Contract Document s. 2) Not Finally Complete If it is determined that the Work has not achieved Final Completion, A/E shall prepare a Final Completion Punchlist and Final Completion shall be achieved in accordance with the Contract Documents and such other consequences a s allowed by contract and at law shall be employed. . . . After all Final Inspection Punchlist items have been completed, A/E will recommend to BOARD acceptance of the Project and make recommendations regarding Contractor's final payment request. . . . 8 . Paragraph X.B. of the LIVS Westview Agreement provides as follows: If for any reason, the A/E is unable to perform the services under this contract, the BOARD reserves the right to either name or approve the A/E selected to complete the performance of t his AGREEMENT. The BOARD reserves the absolute right to recommend a successor A/E or terminate the services of the A/E.[ 3 ] 9. Paragraph XII. of the LIVS Westview Agreement provides that "[t]he BOARD may terminate this AGREEMENT, with or without cause, a t any time upon thirty (30) days written notice to the A/E." 10. With LIVS' assistance, a Project Manual for the Westview Project (Westview Manual) was prepared in anticipation of the letting of the Contract for Construction of the project through a compe titive bidding process. 11. Included in the Westview Manual were the General Conditions of the Contract for Construction. Subsections 3.1.1, 3.3.1, 3.3.2, and 3.3.3 of these General Conditions read as follows: 3.1.1 Contractor is the person, firm or cor poration authorized to do business in the State of Florida and properly licensed or registered for the work to be performed with whom a Contract has been made with the Board for the performance of the Work described in the Construction Documents. * * * 3.3.1 Contractor shall supervise and direct the Work in a manner consistent with contemporary community standards. Contractor shall be solely responsible for and have control over construction means, methods, techniques, sequence s and procedures and for coordinating all portions of the Work under the Contract, unless the Construction Documents give other specific instructions concerning these matters. 3.3.2 Contractor shall be responsible to Board for acts and omissions of Contr actor's employees, Subcontractors and their agents and employees and other persons performing portions of the Work under the Contract and shall be responsible to A/E and Board for coordination and complete execution of the Work in accordance with the Const ruction Documents. 3.3.3. Contractor shall not be relieved of obligations to perform the Work in accordance with the Construction Documents either by activities or duties of A/E in its administration of the Contract, or by tests, inspections or approvals required or performed by persons other than Contractor. 12. In or around 1999, the Contract for Construction of the Westview Project was awarded by the School Board to J.V. Construction Corporation (J.V.). 13. As required by law and the terms of the Contract for Construction, J.V. executed and delivered to the School Board a payment and performance bond issued by The Hartford Fire Insurance Company (Surety). 14. J.V. subsequently defaulted and its right to proceed under the Contract for Construction was terminated by the School Board, which called upon the Surety to fulfill the Surety's obligations under the payment and performance bond it had issued. As a result, the Surety "essentially step[ped] into the shoes of [J.V.]" under the Contract for Cons truction. 4 15. The Surety thereafter contracted with MCM to act as a "completion contractor" and complete the work J.V. had begun under the Contract for Construction. The School Board was not a party to this contractual arrangement. The Completion Contr act into which the Surety and MCM entered (which has been in effect since October 25, 2001) provides, in pertinent part, as follows: THIS COMPLETION CONTRACT (the "Contract") is effective the 25th day of October 2001 by and between The Hartford Fire insur ance Company (the "Surety") and Magnum Construction Management Corp. (the "Completion Contractor"). RECITALS WHEREAS, J.V. Construction Corp. (the "Former Contractor") and THE SCHOOL BOARD OF MIAMI DADE COUNTY, FLORIDA (the "Owner") entered into a contra ct (the "Original Contract") for the Former Contractor to furnish all labor and material and perform all work for the construction of an addition to the Westview Middle School Project No. A0670 (the "Project") in accordance with the terms and provisions of the Original Contract including all contract documents forming a part of the Original Contract; WHEREAS, as required by law and under the terms of the Original Contract, the Former Contractor and Surety made, executed and delivered to the Owner a Perform ance Bond, Bond No. 21 BCS AE 8081, and Payment Bond, Bond No. 21 BCS AE 8081 (collectively, the "Bonds"), each in the penal sum of $6,678,000.00; WHEREAS, the Owner has terminated Former Contractor's right to proceed under the Original Contract, and the Owner has called upon the Surety to fulfill its obligations as surety under the terms of the Performance Bond; WHEREAS, the Completion Contractor has submitted a proposal dated July 25, 2001, to the Surety to complete the Original Contract, and said propo sal is incorporated herein . . . ; and WHEREAS, the Surety and the Completion Contractor desire to enter into this Contract under the terms and conditions hereinafter set forth. NOW, THEREFORE, the Surety and the Completion Contractor, for and in consid eration of the mutual obligations and promises herein set forth, do contract and agree as follows: AGREEMENTS 1. Contract Documents . The Contract to the Surety consists of the terms and provisions contained herein, including the proposal from MCM Const ruction to the Surety dated July 25, 2001, to complete the Original Contract . . . ; and the Original Contract, including all General, Supplementary and Special Conditions, drawings, specifications, forms, addenda and documents forming a part of the Origin al Contract and any modifications to the Original Contract, all of which are incorporated herein by reference and which are hereinafter referred to collectively as the "Contract Documents." The Completion Contractor hereby warrants that it has received an d read all of the Contract Documents. 2. Strict Compliance . The Completion Contractor shall be bound to the Surety by all of the terms and provisions of the Contract Documents, including administrative as well as technical provisions, and shall strictly comply therewith in all respects. Furthermore, the Completion Contractor shall be bound in the same manner and to the same extent that the Surety and the Former Contractor or either of them would be bound to the Owner under the Original Contract, includi ng but not limited to the conditions or determinations by the Owner with respect to all work done thereunder. The Completion Contractor shall have no responsibility or liability for indebtedness incurred by the Former Contractor. * * * 4. Work to be Performed . The Completion Contractor shall furnish and pay for all labor, materials, services and equipment and shall do everything else necessary to perform and satisfactorily complete the work of the Original Contract as required by the Contract Documents to the satisfaction of the Surety and the Owner in such manner as to fully protect and save the Surety harmless as to its liability to the Owner for the completion of the original Contract (The "Work"). 5. Time for the Perfor mance of the Work . . . . . Subject to allowable time extensions as provided under the terms of the Original Contract, if the Completion Contractor fails to achieve Substantial Completion as defined in the Original Contract in the time allowed by this Pa ragraph, the Completion Contractor is liable to the Surety for all liquidated damages assessed against the Surety for the Work under the Original Contract after 713 days from the execution of this Agreement by both parties. The Surety may withhold from th e Completion Contractor payments which otherwise may be due to the Completion Contractor in an amount equal to the liquidated damages assessed by the Owner. 6. Price . The Surety shall pay to the Completion Contractor and the Completion Contractor agrees to receive and accept Four Million, Seven Hundred Eighty Eight Thousand, Three Hundred ($4,788,300.00) Dollars (the "Price") as full compensation for the performance and completion of the Work as described in the Contract Documents. . . . * * * 9. Payment . As specified in the Original Contract, the Completion Contractor shall prepare, sign and submit to the Owner, on behalf of the Surety, a request for payment (the "Surety/Owner Requisition") showing the value of the work comp leted and the materials stored to date in accordance with the terms of the Original Contract. The Surety/Owner Requisition shall be based on the Original Contract price of the Former Contractor. The amount of the Surety/Owner Requisition as approved by t he Owner and the Surety shall be due and payable to the Completion Contractor within seven (7) days after the Surety receives payment from the Owner. If the Owner refuses to pay the Surety for any reason related to the Completion Contractor's performance, nonperformance, or in any way related to the Completion Contractor's actions, the Surety shall have no obligation to pay the Completion Contractor until the Owner pays the Surety. In this event, the Surety shall only be obligated to pay the Completion Co ntractor whatever amounts are received by the Surety within seven (7) days of the Surety's receipt of payment from the Owner. In the event Owner refuses to pay Surety for any reason NOT related to the actions of the Completion Contractor, or its Subcontra ctors, Surety shall make payment to completion contractor, for all work in place as of the date of the payment application, within the timeframe set forth in the Original Contract for payment to the Original Contractor from the Owner. * * * B. In the same time frame as specified in the Original Contract, the Completion Contractor shall prepare and submit to the Surety a request for payment (The "Surety/Completion Contractor Requisition") based upon the amount of the Completion Contractor's price to the Surety. The Surety/Completion Contractor Requisition shall be based on the same percentages of completion (the value of the work completed and the materials stored to date (as the Surety/Owner Requisition.). The Surety shall pay the Completion Contractor for the Surety/Completion Contractor Requisition as specified in the immediately preceding paragraph. * * * 12. Defects in Work . The Completion Contractor shall be responsible for any and all defec ts in the work performed or materials supplied by the Completion Contractor and/or any of the Completion Contractor's subcontractors or materialmen after the execution of this Agreement by both parties. 13. Independent Contractor . Except as otherwise pr ovided in this Contract and the Original Contract the Completion Contractor will be permitted to exercise the full prerogatives of a prime contractor, in prosecuting the work, including but not limited to the selection and classification of supervisors and workers, scheduling, determination of equipment and material requirements, and the establishment of work hours and work week including overtime. It is further understood and agreed that the Completion Contractor is an independent contractor in connection with all work to be performed by it pursuant to the Contract Documents. * * * 15. The Completion Contractor as the Surety's Representative on the Project . The Surety shall be represented at the Project by the Completion Cont ractor. Prior to the issuance of the Notice to Proceed, the Completion Contractor shall name, and the Surety shall specifically authorize in writing an individual with the Completion Contractor to be its representative (the "Authorized Individual") solely for the purposes set forth in this paragraph. The Authorized Individual will represent the Surety in dealing with the Owner on day to day construction issues with respect to the Project. The Surety hereby designates the Authorized Individual to prepare and process pay requisitions on the Contract. However, the Surety will sign all pay requisitions submitted to the Owner. Payments from the Owner shall be made payable to the Surety and transmitted to the Surety . . . . * * * 17. Termination of Agreement . (a) Termination for Convenience . This Contract may be terminated in whole or in part by the Surety at any time for the Surety's convenience, provided the Completion Contractor is given not less than ten (10) calendar days written notice of intent to terminate and an opportunity for consultation with the Surety prior to termination. . . . (b) Termination for Cause . Should the Completion Contractor, at anytime, in the judgment of either the Owner or the Surety, refuse or fail to supply a sufficient number of properly skilled workmen or materials, tools, equipment, facilities, or supplies of a proper quality; or fail in any respect to prosecute the work with promptness and diligence; or interfere with or impede the work of others on the Project; or fail in the performance of any of its obligations under this Contract or under the Original Contract, and should the Completion Contractor fail within three (3) days after receipt of written notice from either the Owner or the Sur ety to remedy such default; . . . or disregard the instructions of the Owner or the Surety; or for any other cause whatsoever shall not carry on the work in an acceptable manner, the Surety may, in any such event, either terminate this Contract or may exc lude the Completion Contractor and its employees and agents from the work without terminating this Contract. . . . 16. Following the execution of the Completion Contract, the Surety's attorney wrote a letter, dated November 7, 2001, to Ms. Bazan, which read as follows: The Hartford is in receipt of your letter dated November 2, 2001, and has requested that we respond on its behalf. In response to your specific questions, please be advised of the following: 1. The Hartford's authorized representative on the project is: Mr. Fernando Munilla MCM Corp. 6201 S.W. 70th Street Second Floor Miami, Florida 33143 2. The Hartford has also authorized Mr. Fernando Munilla to prepare and process pay requisitions on the project. Ho wever, the Hartford will sign all pay requisitions submitted to the School Board. Payments from the School Board shall be made payable to the Hartford Fire Insurance Company and transmitted to The Hartford at the following address unless and until the Sc hool Board is notified in writing of a different address: The Hartford Fire and Insurance Company Hartford Plaza T4 Hartford, Connecticut 06115 Attention: Robert Griffith, Esq. Bond Claims 3. Mr. Fernando Munil la shall have, on behalf of The Hartford, the authority to negotiate and sign change orders for extra work requested or required by the School Board (hereinafter "Change Order") without The Hartford's prior written approval, provided that the Change Order does not exceed $10,000.00 and that MCM requests and is given additional time to perform the Change Order. If the Change Order does exceed $10,000.00, or if MCM requests additional time but no additional time is given to MCM to perform the Change Order, t hen The Hartford's written approval is required to negotiate the Change Order and the final Change Order must be signed by The Hartford and not Mr. Munilla. If the total of the approved Change Orders exceeds the sum of $50,000.00, then The Hartford, and n ot Mr. Munilla, must approve in writing all additional or subsequent Change Orders regardless of the amount of each such Change Order. Mr. Munilla has no authority to negotiate deductive Change Orders, credits, backcharges or net deductions from the Origi nal Contract of any nature whatsoever without The Hartford's prior written approval. Mr. Munilla has no authority to negotiate on behalf of The Hartford on any disputes between MCM and The Hartford. I trust this letter answers all of your questions. Ple ase do not hesitate to contact me should you require any additional information or clarification. 17. Since the effective date of the Completion Contract, LIVS, acting pursuant to the LIVS Westview Agreement as the School Board's A/E of Record on the Wes tview Project, has been inspecting and evaluating the work performed by MCM under the Completion Contract and verifying that work for which payment is sought (through the submission of pay requisitions by MCM on behalf of the Surety) has been completed in accordance with the requirements of the Contract for Construction. 18. If a pay requisition is approved by LIVS, it is then sent to Ms. Bazan for her review and approval. If everything is in order, Ms. Bazan signs the pay requisition and then "run[s] it through the chain of command." 19. When all the necessary signatures are obtained, the School Board makes payment to the Surety, which, in turn, pays MCM under the terms of the Completion Contract. 20. MCM does not have any contract with the School Board in connection with the Westview Project. The payment it receives for the work it does on the project comes from the Surety (with which it does have a contractual relationship), not from the School Board. 21. The School Board considers the Surety to be t he Westview Project "contractor" (as evidenced by MCM Exhibit 19, which is an excerpt of an October 30, 2002, printout listing School Board construction projects). 5 22. In the Statement of Contractor's Qualification that MCM submitted to the School Board in 2002 to obtain its Certificate of Contractor Prequalification for "General Contractor [W]ork" (which certificate was effective July 10, 2002, until July 10, 2003, and authorized MCM "to have under contract with the [School] [B]oard at any one time a tot al dollar value of work in the amount of $100,000,000.000 and maximum dollar value of each individual project in the amount of $40,000,000.00"), MCM stated, among other things, the following under "Contracts in Progress": PROJECT NAME: WESTVIEW MIDDLE SC HOOL REMODELING & RENOVATION OWNER: Miami Dade County Public Schools, Blanca Bazan (305)995 4538 ARCHITECT: LIVS and Associates CONSTRUCTION COST: $4,788,300 START/COMPLETION: 10/01 to 10/03 DESCRIPTION OF PROJECT: Addition, renovation and remo deling of an existing middle school with very stringent phasing requirements and time frames. The project consists of three phases. The first phase is a new building with classrooms and a media center, as well as a new parking lot. The second phase cons ists of the renovation and remodeling of a one story building with a courtyard, classrooms, locker rooms, band room, and shop class. The third phase is a two story building with a parking lot, classrooms, auditorium and an immediate phasing that consists of remodeling a cafetorium during summer break. The remodeling and renovation includes: asbestos abatement, architectural, electrical and mechanical demolition. The Instant Project 23. In or about July of 2002, the School Board issued a Request for Qua lifications for Design Build Firms for "State School 'MMM' 1600 Student Station Addition at: Miami Coral Park Senior High School (Project No. A 0746)" (RFQ). 24. In a design build project like the Instant Project (in contrast to the "traditional bid co ntract scenario"), the School Board enters into a single contract (with a design build firm) for both the design and construction components of the project. 6 25. In the Legal Advertisement that was part of the RFQ, the School Board announced that it "in tend[ed] to pre qualify three (3) to six (6) design build firms to subsequently invite them to bid" on the Instant Project and further stated, in pertinent part, the following: Firms and companies desiring to participate in the design build pre qualificati on process shall submit an original qualification proposal and eight copies . . . . * * * If the applicant is a joint venture, an executed copy of the joint venture agreement must be submitted with the application. Percentages of participation of fees must be clearly stated for each joint venture partner. Only one submittal will be accepted per applicant, either as a single prime or as part of a joint venture. Firms or companies desiring to participate in this contract must h ave been pre qualified by the Board, in accordance with Board rule for Pre Qualification of Contractors for Educational Facilities Construction, prior to submitting their proposal for this advertisement. . . . 26. The General Requirements portion of the RFQ provided, in pertinent part, as follows: In order to be considered, proposers must meet the following basic requirements: * * * D. A pre proposal conference will be held . . . . Attendance is highly encouraged. This will be the only opportunity to present questions regarding the proposal. Written questions may be forwarded to Mr. Ivan M. Rodriguez, R. A., . . . and said questions will be answered at the pre proposal conference. Questions and answers will be distributed to attendees. E. Proposers must be authorized to do business in the State of Florida and must possess all required registration, certification and licenses (including design and construction) in accordance with all applicable Florida Statues, ordinances, regulations, and/or Board Rules. A joint venture, including a joint venture composed of qualified business organizations, is itself a separate and distinct organization that must be qualified in accordance with Board Rules and Florida Statute 489.119(2)( c). F. Proposers must have been in business for a period of no less than five years. In the event of a joint venture or a newly formed company, at least one of the entities of the joint venture or principal of the newly formed company must have been in business for a period of no less than five years. G. Any proposer, firm or company desiring to participate in this process must not have as a part of its team an A/E firm presently under contract with the Board for a specific project and a General contra ctor for the same project. The Board considers this a conflict of interest and such proposals will not be considered for award of a contract under this Request for Qualifications. * * * M. MDCPS reserves the right to reject an y proposal, to waive technicalities, or to accept the proposal that, in its sole judgment, best serves the interest of Miami Dade County Public Schools. * * * Q. Failure to file a protest within the time prescribed in § 120.57( 3), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. R. Any questions concerning this RFQ should be directed to the Department of A/E Selection, Negotiations & Design Management; attention, Mr. Ivan M Rodrig uez, R. A. Director at . . . . 27. The Pre Qualification Process portion of the RFQ provided, in pertinent part, as follows: A. Intent : 1. To pre qualify between three (3) to six (6) design build firms to subsequently invite them to bid on the followi ng project: State School "MMM" 1600 Student Station Addition @ Miami Coral Park Senior High School (Preliminary estimated Construction Cost $17,473,890) 8865 S.W. 16th Street, Miami, Florida 33165 Project No.: A0746 2. The selected proposer wi ll be placed on a list of qualified bidders for bidding on design build services for the above project. * * * C. Pricing The selected proposers will be allowed to bid the above listed project[], under a competitive bid proces s, based on design criteria established by a Design Criteria Professional under contract by MDCPS. 28. The Evaluation/Scoring Process portion of the RFQ provided, in pertinent part, as follows: All proposers will be evaluated based on information present ed in their submittals, utilizing the Board approved "Procedure[] for [] Selection of Design Build Firms" dated January 5, 1994 (Updated March 10, 1999) . . . . The "Procedure[] for [] Selection of Design Build Firms" referenced in this portion of the RFQ provided, in pertinent part, as follows: I. SELECTION PROCESS : A. INTENT 1. To select Design Build firms for bidding on each DCPS Design Build project identified. 2. Selected proposers will be placed on a list of qualified bidders for bidding on ea ch DCPS Design Build project as advertised. B. SCHEDULE : Dates for the items listed below shall be projected and become part of future Request for Proposals (RFP) advertisement. 1. Board Review 2. Mailing Advertisement 3. Proposal Submittal Deadline 4. Evaluation 5. Interviews 6. Bid on Design Build Projects 7. Award of Design Build Project * * * C. PRICING : Selected proposers will be allowed to bid each Design Build project identified under a competitive bid process . * * * E. EVALUATION/SCORING PROCESS : All proposers will be evaluated based on information presented in their submittals . . . . 2. SCORING The evaluation/scoring process will be conducted in two steps. First, staff shal l evaluate all factors in the Initial Screening section of Form 1 . . . . Second, the Selection Committee shall evaluate all factors contained in the Interview section of Form 1 . . . . The evaluation/scoring process shall be as follows: a. INITIAL S CREENING All proposers will undergo an initial screening process conducted by staff where they will be evaluating the proposer[]s' qualifications. The proposers will be evaluated by staff utilizing Form 1 . . . ; maximum score in this category is 115 po ints. Proposers that do not comply with the RFP will not be accepted and shall be duly notified. b. INTERVIEWS All proposers that comply with the RFP shall be contacted to schedule interviews by the Selection Committee. The Proposers will be evaluated by each of the members of the Selection Committee utilizing Form 1 . . . . The maximum score in this category is 115 points. c. RANKING Both the initial screening score and the interview score will be added, and the sum of both scores will determine the ranking of all proposers. The highest and lowest of the seven (7) total scores for each proposer will be dropped, and an average taken of the remaining five (5), to determine total score and ranking. d. Three (3) or more firms will be selected as el igible to bid on the project advertised. F. The Board shall have the right to make exceptions to this procedure when valid public emergency conditions warrant. INSTRUCTIONS FOR USE OF DADE COUNTY PUBLIC SCHOOLS DESIGN BUILD SERVICES SELECTION FORM 1 * * * III. INITIAL SCREENING (115 POINTS TOTAL) From the proposer's response to the RFP, staff will objectively evaluate the firm's abilities in accordance with those criteria listed below (Scores for each applicant wi ll be based on comparison with all other applicants): * * * C. ARCHITECTURAL ENGINEERING DESIGN ( 30 POINTS) : Submit General Services Administration Standard forms 254 (one for each discipline) and 255 (one for entire te am), which best describes the proposed architectural/engineering design team. . . . * * * IV. INTERVIEWS After the proposers have been evaluated based on their written applications, they will be invited to make a presentation to the Selection Committee on their approach to perform Design Build projects for DCPS. . . . * * * 29. The Submittal Requirements portion of the RFQ provided, in pertinent part, as follows: Note : Please refer to Pages 4 9 of the "Procedure[] for [] Selection of Design Build Firms" attached hereto as Exhibit "C" of this RFQ, for additional information on the following items: * * * E. Architectural/Engineering design Submit Forms 254 and 255 for A /E team members only. Identify the architect's experience in design build, the A/E team's experience with DOE codes, MDCPS design criteria/standards, master specifications, educational specifications and furniture, fixtures and equipment. Describe the A/ E team's design coordination and quality control systems. * * * P. State of Florida licenses (design and construction) Provide current copy of State of Florida registration and licenses for proposer and all its professional c onsultants. * * * R. Contractors Pre qualification Certificate Provide current copy of MDCPS Contractor Pre qualification Certificate. Proposers must have a valid certificate with a minimum of $17,473,890 single project capa city, in order to be considered. * * * 30. The pre proposal conference referenced in the RFQ was held on July 25, 2002. Attendees were given a written document which contained, among other things, the following questions (that had been submitted in advance of the conference) and answers (that had been given to these questions by "staff"): 1. QUESTION Can an A/E firm presently under contract with the Board for a specific school project, join with the general contractor for the same school project and present a proposal. ANSWER No! The Board views this as a conflict of interest and will not consider such entities. 2. QUESTION Can one firm submit two different proposals, one as a single prime firm and the other as part of a joint venture? ANSWER No! The legal advertisement is very specific to this issue and will only allow one submittal per applicant, either as a single prime firm or as part of a joint venture. 3. QUESTION Can A/E firms presently under contract with the Board as term consultants participate in a design build entity submitting a proposal? ANSWER Yes! Staff does not see any conflict with this situation. The Board, at their meeting of April 1994, has ruled that neither a direct nor an implied con flict exists. 4. Question : Will there be a design evaluation at the time of bidding in determining the successful bidder? ANSWER No! The successful bidder will be determined based on the bid process. All bidders are to comply with the design crite ria bidding documents. However, during the selection process, we will be evaluating the design approach to this project. 5. Question : The RFP [sic] requires the applicant to be authorized to do business in the State of Florida as a design build entity; however, when we called the State there is none available. What do we do? ANSWER You must comply with all State requirements including required registration and licenses (Design & Construction) in accordance with Florida law. It is your responsibili ty to comply. 31. MCM was among those that submitted a qualification proposal in response to the RFQ (MCM's Qualification Proposal). 32. MCM's Qualification Proposal was accompanied by a cover letter, dated August 1, 2002, from its President, Jorge Mun illa, which read, in pertinent part, as follows: MCM is pleased to submit our qualifications to provide Miami Dade County Public Schools with Design Build Service for State School MMM * * * MCM has substantial experience with the Design Build process as it relates to constructing educational facilities. We have assembled a team of professionals that will deliver the quality and cost efficiency required by Miami Dade County Public Schools. The team includes: PJB Associates, who[ ] will provide architectural services; Bliss & Ny[i]tray, [who] will supply structural engineering requirements; Fortin, Leavy, Skiles, Inc., [who] will provide civil engineering services; LIVS [and] Associates,[ 7 ] [who] is providing mechanical, electrical , plumbing and fire protection consulting expertise; and the talented firm of Rosenberg Design Group, [who] will provide Landscape Architecture design. It is significant that our team members have all participated in Design Build projects for Miami Dade C ounty Public Schools and therefore are acquainted with the unique relationship which it necessitates. The MCM Design Build team will deliver the cost effective construction, timely delivery, and quality design goals that are required by Miami Dade County Public Schools. The information that follows this letter details precisely how the MCM team will satisfy these project objectives. * * * 33. MCM's Qualification Proposal contained a Proposer's Profile, which provided, in pert inent part, as follows: TOTAL NUMBER OF YEARS IN BUSINESS MCM Corp. is confident that our team, if selected for this project, will execute the contract and deliver functionally effective facilities in concert with M DCPS staff. The project team and our o rganization are structured in such a manner as to provide clear cut lines of communication and accountability. . . . MCM Corp. has learned that a critical factor in the achievement of project goals is the selection of a project team that has the technica l knowledge and experience to deliver. The following lists the principal occupation of each member of the design build team, their occupational license number, and the number of years they have been engaged in that practice. Team Members License Years in Business MCM Corp. General Contractors CG C023834[ 8 ] 19 PJB Associates, P.A. Architects AA 0003085[ 9 ] 5 Fortin, Leavy, Skiles, Inc. Civil Engineering 3653 19 Bliss & Nyitray, Inc. Structural Engineering 674 39 LIVS Associates MEP EB 17 0004134[ 10 ] Rosenberg Design Group Landscape LA 0000143 31 34. Also included in MCM's Qualification Proposal were Standard Forms (SFs) 254 (Architect and Related Services Questionnaires) for PJB Associates, P.A. (PJB); Fortin, Leavy, Skiles, Inc. (Fortin); Bliss & Nyitray, Inc. (Bliss); LIVS; and Rosenberg Design Group (Rosenberg); and an SF 255 (Architect and Related Services Questionnaire for Specific Project) completed by PJB as MCM's proposed Project Arc hitect (or A/E of Record). Under the arrangements that had been made, if MCM were the successful bidder on the Instant Project, it would enter into an agreement for design services with PJB and PJB, in turn, would retain the services of Fortin, Bliss, LIV S, and Rosenberg (as sub subcontractors/sub subconsultants on the project, having no direct contractual relationship with MCM) to assist it in fulfilling its contractual obligations to MCM. 35. The SF 254 for LIVS was filled out by Hector Vergara, the p artner that is "in charge of all [the firm's] mechanical work, and it lists the Westview Project as an "example" of the projects the firm has done in the "[l]ast 5 [y]ears." According the form, the "[c]ost of [LIVS'] [w]ork" on the Westview Project was $6 ,800,000.00 and the "[c]ompletion [d]ate (. . . [e]stimated)" of such work was "2003." 36. The SF 255 reflected that Fortin, Bliss, LIVS, and Rosenberg would be "consultants" to PJB on the Instant Project in the "[s]pecialit[ies] of "[c]ivil [e]ngineering ," "[s]tructural engineering," "[m]echanical/[e]lectrical/ [p]lumbing/[f]ire [p]rotection," and [l]andscape [a]rchitect[ure]," respectively, and it contained "brief resumes" of "key persons" from these entities who would be working on the project. Among t hese "brief resumes" were those of Mr. Vergara and Arnold Leon of LIVS, which indicated that they both had done work on the Westview Project. 37. Among the other documents that were part of MCM's Qualification Proposal were the "job descriptions" and "res umes" of MCM personnel who would be assigned to the Instant Project, including Fernando Munilla (a principal of MCM), Alexis Leal (MCM's Vice President of Purchasing), and Riccardo Salani (an Estimator Scheduler with MCM). Fernando Munilla's, Mr. Leal's, and Mr. Salani's resumes each listed the Westview Project as one of the projects on which they had worked. 38. This was not the first design build project solicitation of the School Board's to which MCM had responded. It had, " several months before," sub mitted a qualification proposal in response to the School Board's Request for Qualifications for Design Build Firms for State School "FF," 11 which contained the same General Requirements, including paragraph G., as the RFQ in the instant cases. As in the i nstant cases, PJB was MCM's proposed Project Architect (or A/E of Record) on the State School "FF" project. TLC Engineering (TLC) was the original proposed MEP (mechanical/electrical/ plumbing) sub subcontractor/sub subconsultant. After MCM had submitted its qualification proposal, however, MCM and PJB wanted to replace TLC with LIVS as the proposed MEP sub subcontractor/sub subconsultant. When School Board staff (Ms. Bazan, Carlos Hevia of Capital Construction, and Ivan Rodriguez of the Department of A/ E Selection, Negotiations and Design Management) were asked whether such a substitution could be made, they indicated that it would be "no problem." 12 MCM therefore assumed, when it submitted its Qualification Proposal in the instant cases, that its propos ing LIVS as an MEP sub subcontractor/sub subconsultant would not result in MCM's disqualification from further consideration pursuant to paragraph G. of the General Requirements of the RFQ, notwithstanding that LIVS was the School Board's A/E of Record on the Westview Project and MCM was the "completion contractor" on that same project (the identical roles LIVS and MCM had had at the time MCM was competing for the State School "FF" design build contract). 39. Following the review and evaluation of the qua lification proposals that had been submitted in response to the RFQ in the instant cases, the School Board posted an "official interview schedule," on which the competing "design build firms'" "initial screening scores" were announced. These scores were a s follows: 105.50 for SBR; 103.50 for James Pirtle Construction Company (Pirtle); 98.00 for Betancourt Castellon Associates, Inc. (Betancourt); 93.00 for MCM; and 77.50 for the Beck Group (Beck). This "official interview schedule" also contained the foll owing "notes": NOTE 1: Each firm must bring all equipment necessary to conduct its presentation. NOTE 2: The initial scores shall be cumulative to the interview scores. The final ranking for each firm shall consist of the initial score plus the intervi ew score. NOTE 3: The following firm has withdrawn from the interviews: 1. The Haskell Company 40. Prior the first scheduled interview, Beck withdrew its proposal, leaving only four proposers to compete for award of the contract for the Instant Proj ect. The determination was thereafter made to "pre qualify" for bidding all of the remaining proposers without conducting the scheduled interviews. 41. The evidentiary record does not reveal that anyone protested this "pre qualif[ication]" decision; ho wever, neither does it reflect that the School Board gave notice of the opportunity any adversely affected persons 13 had to file such a protest and of the consequences of their not taking advantage of such opportunity. 42. Following this "pre qualif[icatio n]" decision, the proposers were provided copies of the Criteria Documents (or design criteria package) that had been prepared for the Instant Project. 43. Volume I of the Criteria Documents contained, among other things, an Instructions to Bidders, a Lis t of Subcontractors Form, Special Provisions for Compliance with M/WBE, General Conditions of the Design Build Contract, and General Requirements. 44. The Instructions to Bidders provided, in pertinent part, as follows: INSTRUCTIONS TO BIDDERS * * * 2.3.7 The Instructions to Bidders, General Conditions of the Design Build Contract, Special Conditions for Design Build Projects and all other documents and sections, listed in the Specifications under the Bidding Requirements, appl y equally to each Section and Division of the Specifications. 2.3.8 All sections of the Criteria Documents are complementary and are part of the contractual requirements. 2.7.1 Board reserves the right to waive informalities and irregularities in a pro posal, to reject any bid that shows omissions, alterations or additions not called for in the Criteria Documents and to reject any bid containing conditions or unauthorized alternate bids. * * * 2.8.1 A bid may not be modified, withdrawn or canceled by the bidder during the stipulated time period following the time and date designated for the receipt of bids and the bidder so agrees in submitting the bid. * * * 3.2.2 When notified by Criteria Profess ional, prior to or after Award of Contract by Board, the successful bidder shall meet with representatives of Board at MDCPS/DCP/DB "Kick Off" meeting. At that time, the successful bidder shall bring the Design Build Team whose work is highly crucial to t he completion of the Work. . . . 45. The List of Subcontractors Form contained the following directions: This list of subcontractors shall be submitted to the Section of Contract Management, 155, N.E. 15th Street, Miami, Florida, 33132, no later than the end of the second working day after award, i.e., for bids awarded on Wednesday, list shall be submitted by 4:30 p.m. on Friday. If the list of subcontractors is not submitted as requested, the Board may initiate action which will result in rescinding the award. Subcontractor as used herein shall be defined in Florida Statute 713.01(16) Subcontractor means a person other than a material supplier or laborer who enters into a contract with the contractor for the performance of any part of such contractor' s contract. For each subcontract listed below, the bidder shall name the subcontractor or list the bidder's firm if he/she proposes to do the work. The cost of work as quoted by the subcontractor shall be listed. If the name of a subcontractor is delete d or added, the owner shall be notified immediately along with the justification for the change. 46. The Special Provisions for Compliance with M/WBE provides, in pertinent part, as follows: Subcontractor/Subconsultant A person other than material pers on or laborer who enters into a contract with a contractor for the performance of any part of such Design Builder's contract. Design or other required consultant services contracted for, in the performance of this contract will be considered as a Subcontr actor. . . . 47. The General Conditions of the Design Build Contract provided, in pertinent part, as follows: General Conditions of the Design Build Contract * * * 1.1.2 The Contract The Contract represents the entire integr ated agreement between the parties hereto and supercedes prior negotiations, representations or agreements, either oral or written. The Contract may be amended or modified only by a Modification. The contract shall not be construed to create a contractua l relationship of any kind (1) between the Board and a Subcontractor or Sub subcontractor, or (2) between any persons or entities other than the Board and the Design Build Contractor. The Contract Documents include the Criteria Documents and the approved Construction Documents. * * * 3.1.1 The "Design Build Contractor" is the person, firm or corporation authorized to do business in the State of Florida and properly licensed or registered for the work to be performed with whom t he Contract has been made with the Board for the performance of the Work described in the Criteria Documents. "Contractor" refers to a third party Contractor. * * * 3.3.2 The Design Build Contractor shall be responsible to the Board for acts and omissions of the Design Build Contractor's employees, Subcontractors and their agents and employees and other persons performing portions of the Work under the Contract and shall be responsible to the Board for coordination and complete execution of the Work in accordance with the Contract. * * * 3.3.6 The Design Build Contractor shall enforce strict discipline and good order among its employees and other persons carrying out the Contract including its Subcon tractors and Sub subcontractors. . . . * * * 3.9.2 During the Construction Phase, the Design Build Contractor shall employ a competent, full time, on site Superintendent, the Design Build Contractor's A/E of Record Representati ve, who participated at least fifty percent (50%) of his/her time during the Design Phase, and shall be on site at a minimum of 50% of the working hours of each week. An M/E/P coordinator and necessary assistants shall be in attendance at the job site dur ing the performance of the Work. . . . The Design Build Contractor's A/E of Record on site Representative shall not be used for checking shop drawings. The Superintendent, the Design Build Contractor's A/E of Record Representative, M/E/P Coordinator and the major Subcontractor's Superintendents shall be fluent in English. * * * 3.12.1 Shop drawing are drawings, diagrams, schedules and other data specifically prepared for the Work by the Design Build Contractor or a Subcontrac tor, Sub Subcontractor, . . . to illustrate some portion of the Work. The Design Build Contractor, Subcontractor, Sub Subcontractor, . . . shall not use the Design Build Contractor's A/E of Record contract drawings as shop drawings, but the Design Build C ontractor shall require these entities to produce and submit such documents independently. * * * 3.18.1 The Design Builder shall negotiate a fair and equitable agreement with each of the Architect/Engineer consultants listed in the Design Builder's response to the request for qualifications for this project. The Design Builder may choose additional A/E consultants, for which prior written notice to Board shall be given, but shall not terminate or replace those A/E consultants o riginally designated without the prior written approval of the Board. When requesting termination or replacement of A/E consultants, the Design Builder must submit the following items: (1) Letter requesting written Board approval of the action, stating clearly the reason for such request and the proposed replacement A/E consultant(s). (2) Signed and sealed or notarized release from the A/E consultant(s) being replaced or justification acceptable to the Board that such release is not obtainable. (3) F ederal Standard Form 255 and 254 of the proposed A/E consultant(s). (4) Site specific professional liability insurance incorporating the proposed A/E consultant(s) in the policy. (5) A hold harmless clause signed and notarized . . . . * * * 4.1.1 The Board's Representative (also referred to as the "Design Criteria Professional" or "DCP") will provide administration of the Contract as described in the Criteria Documents . . . * * * 4.2.6 The DCP will review and approve or take other appropriate action upon Design Build Contractor's submittals, previously approved by the Design Build Contractor's A/E of Record such as Shop Drawings, Product Data and Samples, for conformance with the information giv en and the design concept expressed in the Criteria Documents. . . . * * * 4.2.12 The Design Build Contractor and Design Build Contractor's A/E of Record shall provide DCP which will confirm completeness and correctness of sam e and forward to Board for Board's review and records, the written documents required by the Contract to be provided such as Warranties, Operation and Maintenance Manuals, as built drawings, releases of claim and other documents required of the Contract. The DCP will process any pending Change Order requests and evaluate the assessment of liquidated damages, if any. Upon its determination that the Design Build Contractor and Contractor[']s A/E of Record has fulfilled the requirements of the Contract, the DCP will issue a final Certificate for Payment. * * * 5.1.1 A Subcontractor is a person or entity other than a materialman or laborer who enters into a subcontract with the Design Build Contractor for the performance of any par t of the Design Build Contractor[']s Work. The term "Subcontractor" is referred to throughout the Contract as if singular in number and means a Subcontractor or an authorized representative of the Subcontractor. The term "Subcontractor" does not include a separate contractor (sometimes referred to as a "third party contractor" ) or subcontractors of a separate (third party) contractor. 5.1.2 A Sub subcontractor is a person or entity other than a materialman or laborer who enters in to a sub subcontract with a subcontractor for the performance of any part of such subcontractor's contract. The term "Sub Subcontractor" is referred to throughout the Contract as if singular in number and means a Sub subcontractor or any authorized representative of the Sub s ubcontractor. The term "Sub subcontractor" does not include separate subcontractors of a third party contractor. All Subcontractor's shall be licensed and/or certified as required by the Florida Building Code and state statutes. Separate permits may be required including but not limited to electrical, plumbing, mechanical, and roofing work. * * * 5.2.1 As stated in the Instructions to Bidders, the Design Build Contractor shall furnish in its proposal to Board the list of Subc ontractors, Sub subcontractors and materialmen (including those who are to furnish materials or equipment fabricated to a special design) proposed for each principal portion of the Work . . . . 5.2.2 If Board has a reasonable objection to any proposed Su bcontractor, Sub subcontractor or materialman, Board will promptly notify Design Build Contractor. 5.2.3 The Design Build Contractor shall not contract with any proposed Subcontractor, Sub subcontractor or materialman to whom Board has made a reasonable objection pursuant to Subparagraph 5.2.2. 5.2.4 If Board has a reasonable objection to a Subcontractor, Sub subcontractor or materialman, the Design Build Contractor shall propose another to whom the Board has no reasonable objection. 5.2.5 A Subcontra ctor, Sub subcontractor or materialman may be added to the list of Subcontractors, Sub subcontractor[s] or materialmen if required for performance of Change Order Work. A listed Subcontractor, Sub subcontractor or materialman may be changed only upon writ ten approval of the Board. The request to change shall state reasons for the request and shall be accompanied by a signed and notarized release from the listed Subcontractor or Contractor's Affidavit to Board that such a release is not obtainable. * * * 48. The General Requirements include Procedural Requirements, Subsections 2.03 and 9.01 of which provide as follows: 2.03 DESIGN BUILDER ("D B") D B shall appoint its D B Project Manager which is D B's representative for the Pr oject. The collective management of D B services, including D B'[s] architect, engineers and other consultants, is to be vested in D B Project Manager. D B Project Manager is the representative of D B and all communications are to be through him/her to D CP and M DCPS Project Manager. D B Project Manager's role does not preclude the involvement of D B's architect, engineers and other consultants. The architects, engineers and other consultants with responsibility for different aspects of the Project are to attend appropriate meetings but this must be coordinated with D B Project manager. 9.01 PRE CONSTRUCTION CONFERENCE Prior to beginning construction, DCP (through PM) shall schedule a Pre Construction Conference. Ten (10) days notice is required for the meeting. At minimum, the following parties shall attend: A. DCP Team (DCP) B. Design Builder Team (D B) C. PM D. Major Subcontractors E. Region Superintendent E. Principal F. BCC Representatives G. Testing Lab Consultant H. HVAC Test & Ba lance Consultant H. Others as applicable. * * * 49. Section 01012 of the General Requirements discusses the Project Architect. It provides as follows: 1.01 PROJECT ARCHITECT (Also referred as Architect/Engineer of Record or D B'[s] A/E. A. The Project Architect (A/E of Record) is a Principal, Partner, Agent, Subcontractor or Employee of the Design Builder,[ 14 ] and is the person lawfully licensed to practice Architecture and Engineering or an entity lawfully practicing Archi tecture and Engineering identified as such in the Contract; and is referred to throughout the Criteria Documents as is singular in number. The term Architect/Engineer of Record means the Architect/Engineer of Record or its authorized representative. B. Whenever the terms Design Builder's A/E or A/E is used throughout the Criteria Documents, it refers to the Project Architect. 1.02 DUTIES AND RESPONSIBILITIES OF THE PROJECT ARCHITECT A. The Project Architect shall have all the duties and responsibilit ies established under the applicable State Statutes regulating the professions of Architects and Engineers. B. The Project Architect shall employ a Project Manager and necessary assistants, and shall be responsible for managing all design and production of Design and Construction Documents and the coordination of its implementation during the construction. C. The Project Architect shall review and approve or take other appropriate action upon Subcontractor submittals, such as Shop Drawings, Product Data and Samples prior to their submittal to the DCP for approval. D. The Project Architect shall consult with the DCP concerning all items related to the design and production of the Construction Documents. E. The Project Architect shall be responsible fo r the preparation of the Record Drawings. F. Prior to Design Builder's request for determination by DCP of substantial completion, the Project Architect shall determine, on his/her own, that the Project has achieved substantial completion. The Project A rchitect shall inspect the work and provide, through the Design Builder, a punchlist of all items to be completed or corrected. Upon receipt of request for determination of substantial completion from the Design Builder, the DCP shall proceed to determine if the work is ready for inspection as provided under the General Conditions. 50. All four remaining proposers, MCM, SBR, Pirtle, and Betancourt, submitted sealed bids. The bids were opened on December 17, 2002, and subsequently tabulated. MCM had the lowest "base bid" ($17,673,600.00). SBR had the second lowest "base bid" ($18,037,446.00). Betancourt's and Pirtle's "base bids" were $18,269,000.00 and $19,540,000.00, respectively. 51. Following the tabulation of bids, School Board staff recommended to the members of the School Board that the contract for the Instant Project be awarded to MCM as the lowest bidder. 52. On February 6, 2003, SBR, through counsel, filed a notice of protest with the School Board, which read as follows: This firm represent s SBR Joint Venture, who as you know, has submitted a proposal for construction of the above referenced [p]roject [the Instant Project]. It has come to our attention that MCM Corp. ("MCM") who submitted a proposal to provide design build services for the above referenced project, must be disqualified from further consideration in connection with an award of the Project due to MCM's failure to comply with general requirements as promulgated by the Miami Dade County Public Schools relative to the Project. S pecifically, item I G of the General Requirements mandates that: " Any proposer, firm or company desiring to participate in this process must not have as a part of its team an A/E firm presently under contract with the Board for a specific project and a G eneral [c]ontractor for the same project." As disclosed by MCM in its proposal to construct the [p]roject, MCM is currently performing substantial work connection with another project known as the Westview Middle School remodeling and renovation ("Westvie w"). The architect under contract with the School Board regarding the Westview Project is LIVS and Associates. In conflict with the qualification general requirements, MCM's proposal to construct school MMM contemplates the formation of a design build te am which will include LIVS and Associates, as its mechanical, electrical, plumbing and fire protection consulting engineers. As such, the proposal by MCM is violative of the requirements of design/build firms in order to qualify for the Project. Back up documentation including, but not limited to, material portions of the request for qualifications and disclosures by MCM are attached for your review. Under the circumstances, we respectfully request that MCM be disqualified from performing any services in connection with [p]roject and the second [lowest] bidder, which is SBR Joint Venture, be awarded the Project. 53. MCM responded to SBR's notice of protest by letter dated February 10, 2003, in which it argued that SBR's protest was without merit and "sh ould be dismissed" and further stated, among other things, the following: The Contract documents permit[] the board to waive all irregularities. If the board were to consider that Ivan Rodriguez, Carlos Hevia and Blanca Bazan[ 15 ] misspoke on behalf of MDCP S when they approved LIVS as part of the MCM Design Build team, and or if the board were to consider the inclusion of LIVS as part of the Design Build Team as a conflict, then if that be the case, by this letter MCM hesitantly tenders substitution of LIVS (who has graciously agreed), with SDM Consulting Engineers, Inc., who is also fully qualified, has had extensive experience with DCPS and has agreed to take on the challenge. 54. The members of the School Board were scheduled to vote at their February 12 , 2003, meeting on staff's recommendation to award the contract for the Instant Project to MCM, but the "item [was] tabled" because of the pendency of SBR's protest. 55. At the meeting, the School Board Attorney told the School Board members that he had " reviewed [SBR's] protest with staff and [they had] come to the conclusion that [they did not] agree with [SBR's] position," explaining, in part, as follows: The language [of paragraph G. of the General Requirements of the RFQ] is interpreted that if you ha ve the A/E and the general contractor, who are under contract with the board on the same project, that is considered a conflict. In this particular instance, you have a third element here. One, is that the bonding company took over this project and the b onding company brought MCM in as a subcontractor, if you will, a completing contractor here in this particular instance. So, it was never the intent of this language to cover a situation other than one where you had both the A/E and the general contractor under contract with the board. 56. Construing the language of paragraph G. of the General Requirements of the RFQ (which is not clear and unambiguous on its face) as not "cover[ing] [the] situation" present in the instant cases is not at all unreasonabl e. 57. Because it has a contract with the Surety and not the School Board, MCM is not the Westview Project's "General contractor" 16 as that term is typically used in the construction industry. 17 Since there is no language manifest in the proposal/bid sol icitation documents in evidence which compels the conclusion that, for purposes of the solicitation, this accepted industry meaning of the term was not intended, it is entirely appropriate to rely on this meaning and find, as did School Board staff, that M CM's role in the Westview Project does not disqualify its proposal from consideration under paragraph G. of the General Requirements of the RFQ. 18 58. Moreover, even if it could not be reasonably disputed that MCM was the Westview Project's "General cont ractor" within the meaning of paragraph G. of the General Requirements of the RFQ (which, as noted above, is not the case), MCM's proposed use of LIVS on the Instant Project would still not, under every reasonable interpretation of the paragraph, create a "conflict of interest" of the type the paragraph prohibits. It is not beyond reason, particularly when the provisions of the Criteria Documents are considered 19 (most significantly, Subsection 3.18.1 of the General Conditions and Section 01012 of the Gener al Requirements), to conclude that an "A/E firm" on the design build "team," within the meaning of paragraph G., does not refer to an entity, like LIVS, that is neither the design builder seeking the contract for the Instant Project, a member of such a des ign builder (where it is joint venture or partnership), the design builder's proposed "Project Architect" as described in Section 01012 of the Criteria Documents' General Requirements (who is also referred to therein as the "Architect/Engineer of Record" o r "A/E"), nor any other Architect/Engineer consultant with whom the design builder intends to contract in accordance with the requirements of Subsection 3.18.1 of the Criteria Documents' General Conditions, but rather is merely a proposed MEP sub subcontra ctor/sub subconsultant (that is, a third tier contractor). 59. The evident purpose of paragraph G. of the General Requirements of the RFQ is to avoid a situation where a firm acting as the School Board's A/E of Record on another School Board project let u nder the "traditional bid contract scenario" is inclined to deal with the "General contractor" on that project in a lax manner compromising the School Board interests because of a relationship the firm has with that "General contractor" on the Instant Proj ect. 20 The chance of this happening if the firm were merely a third or lower tier contractor on the Instant Project would be remote, so remote that it is reasonable to believe (as John Pennington, the School Board's Director for Construction Compliance, wh o was "intimately involved in making [the language in paragraph G.] the final language," credibly testified) that it was not the School Board's intent, in including paragraph G. in the General Requirements of the RFQ, to eliminate a potential competitor ba sed on this possibility . 21 Had the School Board intended otherwise, it could have made its intent clear and unmistakable by having the first sentence of paragraph G. read as follows: "Any proposer, firm or company desiring to participate in this process m ust not propose to have working on the instant project in any capacity, including as a third or lower tier contractor, both a firm that is presently serving under a contract with the Board as the Board's A/E of Record on another project and a firm that is a General contractor for that same project." It did not do so, however. Instead, it used language in paragraph G. reasonably susceptible to the interpretation that, under this provision, proposing to use as an MEP sub subcontractor/sub subconsultant on t he Instant Project a firm that is the School Board's A/E of Record on another project does not disqualify a proposer even if the proposer is the "General contractor" for that other project. 60. Following the School Board meeting, SBR, on February 16, 20 03, filed its formal written protest of the intended decision to award the contract for the Instant Project to MCM. 61. On February 18, 2003, Fernando Munilla sent a letter to School Board member Dr. Marta Perez, which read, in pertinent part, as follows: MCM has been informed that unfortunately MCM's response to SBR's bid protest was not provided to you prior to the February 12, 2003, Board meeting. We enclose same for your ready reference. We respectfully request you inquire on the particulars raised i n our letter, and if you agree with your staff's recommendation (that SBR's alleged irregularity in MCM's bid lacks [sic] merit), then we ask you move the Board to exercise its right to waive the alleged irregularity, as permitted by the bid documents unde r section 00100 page 4 subsection 2.7.1 in order that MCM continue to work on the project. 62. On March 4, 2003, the School Board Attorney sent a memorandum to the Superintendent of Schools advising that upon further review of the matter he had changed h is opinion and was now of the view that SBR's protest had merit, explaining in the memorandum as follows: This specification [paragraph G. of the General Requirements of the RFQ] prohibits a proposer from having as a part of its Design Build team an Archit ect/Engineer (A/E) firm who is under contract with the Board for a specific project and General Contractor for the same project. The specification provides that the Board considers this a conflict of interest and such proposals would not be considered for award of the contract. MCM submitted a proposal which has LIVS [and] Associates, an A/E firm under contract for the Westview Middle School project as part of its team. MCM is the General Contractor on the Westview Middle School project under a contract with the surety company to complete the project as the completing contractor. MCM contends that in view of the fact that they are the completing contractor and are not in direct contract with the Board for the project, this particular provision should not apply. We disagree. The particular specification in question does not specify or require that the general contractor for the same project be under contract with the Board. Conflict exists by virtue of the fact that the A/E, acting on behalf of the Boar d for the Westview Project, has to inspect and review the work of MCM and, with this proposal, will be in business with MCM on another Board project. Accordingly, MCM's proposal should not have been considered for award. 63. While it is true that, in pa ragraph G. of the General Requirements of the RFQ, the School Board did not include the words "under contract with the Board" after "General contractor," if it intended that "General contractor," as used in paragraph G., have the same common meaning as the term has in the construction industry (and there is no language in the proposal/bid solicitation documents in evidence compelling the conclusion that it did not have such an intent), these additional words would have been redundant because, as noted above , a "General contractor," as that that term is typically used in the construction industry, is necessarily one who is "under contract" with the owner. 64. Furthermore, contrary to the suggestion made by the School Board Attorney in his March 4, 2003, mem orandum, under MCM's proposal, MCM and LIVS would not have a direct business relationship 22 ; rather, LIVS would be doing business with PJB. 23 While LIVS' participation (as a third tier contractor) in the Instant Project with MCM may create a potential "conf lict" for LIVS, this potential "conflict," at least arguably, is not the type that is prohibited by paragraph G. of the General Requirements of the RFQ. 65. On March 11, 2003, MCM and PJB sent the following letter to the School Board: This letter will ser ve as our formal request to replace the engineering firm of LIVS originally selected for State School MMM [with] SDM Consulting Engineers in which MCM's architect of record, PJB Associates, P.A., had entered LIVS as their mechanical and electrical consulta nts for the above referenced project [the Instant Project]. Even though we consider LIVS to be an excellent engineering firm, d[ue] to an alleged conflict of interest that is said to exist, we are respectfully requesting replacement to prevent controversy .[ 24 ] We also request that you submit this to M DCPS's Legal Department to verify if there is any conflict; and if so, we respectfully request a written reply. In the absence of a reply within the next three working days, we will assume that this issue has been resolved. Thank you in advance for your attention. 66. Also on March 11, 2003, MCM, anticipating that it would not be awarded the contract for the Instant Project, sent the School Board another letter, which read as follows: This letter will se rve as notice of the intent of Magnum Construction Management Corporation (MCM) to protest any decision of the Miami Dade County School Board to reject all bids on the Miami Coral Park Project. Based on information obtained to date, MCM will assert that t he decision to reject all bids is based on the false assumption that under the terms of the Request for Qualifications, MCM was disqualified to bid on the Miami Coral Park Project and that bids on the project were over budget. MCM will assert that it was qualified to bid on the project and that its bid was responsive and within the budget. 67. MCM subsequently filed a formal written protest and an amended formal written protest. 68. On March 12, 2003, the Design Criteria Professional for the Instant Pro ject sent a letter to Ms. Bazan advising her that the three lowest bids submitted for the Instant Project "were within the budget of $17,473,891.36," and that the two lowest bids, those submitted by MCM and SBR, were "substantially below the State of Flori da allowable cost per student station under the Smart Schools Clearinghouse." 69. On March 26, 2003, the School Board referred SBR's and MCM's formal written protests to DOAH. A day later, it referred MCM's amended formal written protest to DOAH. CONC LUSIONS OF LAW 70. Section 120.57(3), Florida Statutes, sets forth the "procedures applicable to protests to contract bidding or award[s]" by "agencies," such as the School Board, that are subject to the provisions of Chapter 120, Florida Statutes. See S ublett v. District School Board of Sumter County , 617 So. 2d 374, 377 (Fla. 5th DCA 1993)("A county school board is a state agency falling within Chapter 120 for purposes of quasi judicial administrative orders."); Davis v. School Board of Gadsden County , 646 So. 2d 766, 768 (Fla. 1st DCA 1994)("[T]he Administrative Procedure Act of 1974, section 120.50 et seq. , Florida Statutes (1993) [APA] governs school boards and other state agencies alike."); and Mitchell v. Leon County School Board , 591 So. 2d 1032, 1 033 (Fla. 1st DCA 1991)("Petitioner is correct that the [Leon County School] Board is an agency for purposes of Florida's Administrative Procedure Act, chapter 120, Florida Statutes."). 71. Section 120.57(3), Florida Statutes, provides as follows: Agencie s 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[ 25 ] shall at least provide that: (a) The agency shall provide notice of a decision or intended decision concerning a solicitation, contract award, or exceptional purchase by electronic posting. This notice shall contain the following statement: "Failure to file a protest within the time prescribed in section 120.57(3), Flor ida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes." (b) Any person who is adversely affected by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours af ter the posting of the notice of decision or intended decision. With respect to a protest of the terms, conditions, and specifications contained in a solicitation, including any provisions governing the methods for ranking bids, proposals, or replies, awa rding contracts, reserving rights of further negotiation, or modifying or amending any contract, the notice of protest shall be filed in writing within 72 hours after the posting of the solicitation. The formal written protest shall be filed within 10 day s after the date the notice of protest is filed. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter. The formal written protest shall state with particularity the fa cts and law upon which the protest is based. Saturdays, Sundays, and state holidays shall be excluded in the computation of the 72 hour time periods provided by this paragraph. (c) Upon receipt of the formal written protest that has been timely filed, t he agency shall stop the solicitation or contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the solici tation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare. (d)1. The agency shall provide an opportunity to resolve the protest by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and state holidays, after receipt of a formal written protest. 2. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and state holidays, after receipt of the formal written protest, and if there is no disputed issue of material fact, an informal proceeding shall be conducted pursuant to subsection (2) and applicable agency rules before a person whose qualifications have been prescribed by rules of the agency. 3. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and state holidays, after receipt of the formal written protest, and if there is a disputed issue of material fact, the agency shall refer the protest to the division for proceedings under subsection (1). (e) Upon receipt of a formal written protest referred pursuant to this subsection, the director of the division shall expedite the hearing and assign an administrative law judge who shall com mence a hearing within 30 days after the receipt of the formal written protest by the division and enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichev er is later. Each party shall be allowed 10 days in which to submit written exceptions to the recommended order. A final order shall be entered by the agency within 30 days of the entry of a recommended order. The provisions of this paragraph may be wai ved upon stipulation by all parties. (f) In a protest to an invitation to bid or request for proposals procurement, no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered. In a protest to an invitation to negotiate procurement, no submissions made after the agency announces its intent to award a contract, reject all replies, or withdraw the solicitation which amend or supplement the reply shall be considered. Unless otherwise provided by s tatute, the burden of proof shall rest with the party protesting the proposed agency action.[ 26 ] In a competitive procurement protest, other than a rejection of all bids, proposals, or replies, the administrative law judge shall conduct a de novo proceedin g to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the solicitation specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous,[ 27 ] contrary to competition,[ 28 ] arbitrary, or capricious.[ 29 ] In any bid protest proceeding contesting an intended agency action to reject all bids, proposals, or replies, the standard of review by an administrative law judge shall be whether the agency's intended action is illegal, arbitrary, dishonest, or fraudulent.[ 30 ] (g) For purposes of this subsection, the definitions in s. 287.012 apply. 72. "To establish that one is adversely affected [within the meaning of Section 120.57( 3), Florida Statutes, and therefore entitled to file a protest pursuant thereto], it must be shown that the proposed action [under challenge] will cause immediate injury in fact; and that the injury is of the type that the pertinent statute was designed to protect." Advocacy Center for Persons With Disabilities, Inc. v. Department of Children and Family Services , 721 So. 2d 753 ( Fla. 1st DCA 1998). 73. The "de novo proceeding" that, pursuant to the mandate of Section 120.57(3), Florida Statutes, must be c onducted by an Administrative Law Judge when an "adversely affected" person has filed a "competitive procurement protest, other than [one involving] a rejection of all bids," and there are disputed issues of material fact, is "a form of intra agency review . The Judge may receive evidence, as with any formal hearing under section 120.57(1), but the object of the proceeding is to evaluate the action taken by the agency" based upon the information that was available to the agency at the time it took such acti on. State Contracting and Engineering Corporation v. Department of Transportation , 709 So. 2d 607, 609 (Fla. 1st DCA 1998); Cf. Fairbanks North Star Borough School District v. Bowers Office Products, Inc. , 851 P.2d 56, 60 (Alaska 1992)("The determination of whether the school district had a reasonable basis for its decision should be made based on the information the school district had at the time it awarded the contracts."). The standard of review the Administrative Law Judge is required to employ in ev aluating the "protested" agency action is a deferential one. If the Administrative Law Judge concludes that the agency's procurement action had a reasonable basis in fact and law, the Judge may not recommend that the agency reverse its action, even if the Judge, had he or she been in the agency's position, would have taken a different course of action. 31 Compare with Latecoere International, Inc. v. Department of the Navy , 19 F.3d 1342, 1355 56 (11th Cir. 1994 )(" The APA provides in pertinent part: "The r eviewing court shall . . . (2) hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. . . ." This standard requires a disappointed bidde r to show 'either that (1) the procurement official's decisions on matters committed primarily to his own discretion had no rational basis, or (2) the procurement procedure involved a clear and prejudicial violation of applicable statutes or regulations.' This deferential standard reflects the respect that reviewing courts are required to accord to agencies in their evaluation of bids and in their interpretation and application of procurement regulations. 'While contracting officers may not opt to act ill egally, they are entitled to exercise discretion upon a broad range of issues confronting them, including considerations of price, judgment, skill, ability, capacity, and integrity in the selection of businesses with whom the government will enter into con tracts.' Accordingly, reviewing courts should be concerned with whether the contracting agency provided a coherent and reasonable explanation of its exercise of discretion. Proof that the award lacked a reasonable basis generally establishes arbitrary an d capricious action. Thus, if a reviewing court: finds a reasonable basis for the agency's action, the court should stay its hand even though it might, as an original proposition, have reached a different conclusion as to the proper administration and ap plication of the procurement regulations. Only when the court concludes that there has been a clear violation of duty by the procurement officials should it intervene in the procurement process and proceed to a determination of the controversy on the meri ts.")(citations omitted); Cincom Systems, Inc. v. United States , 37 Fed. Cl. 663, 671 72 (1997)("Contracting officials may properly exercise wide discretion in their evaluation of bids and the application of procurement regulations. . . . It is well settl ed that courts should respect acts of procuring officials when they exercise their discretionary functions. The court should not substitute its judgment for that of a procuring agency and should intervene only when it is clear that the agency's determinat ions were irrational or unreasonable. It is the burden of the aggrieved bidder to demonstrate that there is no rational basis for the agency's determination.") (citations omitted); and Herbert F. Darling, Inc. v. Beck , 442 F. Supp. 978, 981 (W.D. N.Y. 197 7)("The question before the court on the defendants' motion for summary judgment is whether the Regional Administrator's decision disapproving the proposed award to Darling had a rational basis. This standard of review is designed to ensure that judicial deference is given to the well reasoned decisions of E.P.A. officials in interpreting the agency's own procurement and contracting regulations. A court may not set aside agency action solely because it would have interpreted the bidding procedures or the regulations differently had it made the initial determination.")(citations omitted). 74. In its bid protest, SBR has argued that the School Board clearly erred when it failed to disqualify MCM from bidding on the Instant Project pursuant to paragraph G. of the General Requirements of the RFQ because MCM "improperly has as part of its team, an A/E firm (LIVS & Associates), that is presently under contract with the School Board for the remodeling and renovation of Westview Middle School ("Westview")" [and] "[t]he General Contractor working on the same Westview project is none other than MCM." 75. The resolution of this protest turns on whether paragraph G. is reasonably susceptible to an interpretation that would support the School Board's decision not t o disqualify MCM. It is not the undersigned's function to determine whether such an interpretation, in his opinion, is the best or most reasonable one. He need only ascertain whether it is within the range of permissible interpretations. See R. N. Exper tise, Inc. v. Miami Dade County School Board , No. 01 2663BID (Fla. DOAH 2002)(Recommended Order )(" Consequently, in a post proposed award protest, if the dispute turns on the interpretation of an ambiguous, vague, or unreasonable specification, which could have been corrected or clarified prior to acceptance of the bids or proposals had a timely specifications protest been brought, and if the agency has acted thereafter in accordance with a permissible interpretation of the specification (i.e. one that is no t clearly erroneous), then the agency's intended action should be upheld . . . ."). 32 76. For the reasons set forth in the Findings of Fact portion of this Recommended Order, the undersigned finds that, in not disqualifying MCM from bidding on the Instant Project pursuant to paragraph G. of the General Requirements of the RFQ, the School Board acted in accordance with an interpretation of paragraph G. that was reasonable and that actually promoted, not stifled, competition. 77. Because SBR has not shown t hat there is any valid reason to disturb the School Board's determination to award to the contract to MCM as the lowest bidder, that determination should be sustained. See Intercontinental Properties, Inc. v. State Dept. of Health and Rehabilitative Servi ces , 606 So. 2d 380, 386 87 (Fla. 3d DCA 1992)("There is a very strong public interest in favor of saving tax dollars in awarding public contracts. . . . [T]here is a strong public policy in favor of awarding contracts to the low bidder . . . ."). RECOMM ENDATION Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board enter a final order rejecting SBR's protest and awarding the contract for the Instant Project to MCM. DONE AND ENTERED this 1st day of August , 2003, in Tallahassee, Leon County, Florida. S STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399 3060 (850) 488 9675 S UNCOM 278 9675 Fax Filing (850) 921 6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of August, 2003. ENDNOTES 1/ Waiver of this requirement is authorized by Section 102.57(3)(e), Florida Statutes. 2/ In its Proposed Recommended Order, the School Board, through its counsel, announced that it now "agrees with SB R that awarding the contract on the disputed project to MCM would lead to an unavoidable conflict of interest . . . prohibited by the express [and unambiguous] language in Sub section (G) of the General Requirements of the RFQ" and that therefore a final o rder should be entered "ordering that MCM be disqualified" and awarding the contract to the next lowest bidder, SBR. This announcement is tantamount to a confession of error. Such a confession of error, however, is not binding on the undersigned, nor is it even entitled to special deference (although it should at least be considered and evaluated, like the arguments made by the other litigants). Cf . Perry v. State , 808 So. 2d 268 (Fla. 1st DCA 2002)(" It is ethically appropriate for the state to make a co nfession of error if no good faith argument can be made to support a point on appeal, see Philip J. Padovano, Appellate Practice , § 16.11 at 242 43 (2000 2001 Ed.). A confession of error, however, is not binding upon an appellate court, . . . and it is t he practice of Florida appellate courts not to accept erroneous concessions by the state."); Santiago v. State , 669 So. 2d 334, 335 (Fla. 3d DCA 1996)("In response to the appellants' brief filed in this cause, the appellee filed a document entitled 'Confes sion of Error Brief of Appellee' wherein 'the State concedes that there is no causal connection between the offense for which the defendants were convicted . . . and the expense incurred in taking and keeping the child in Virginia.' We find that confessi on to be both ill advised and legally incorrect. Accordingly, we do not accept it."); Franklin Federal Savings Bank v. Director, Office of Thrift Supervision , 927 F.2d 1332, 1337 (6th Cir. 1991)("We owe deference to an agency because the agency presumably has applied its particular specialized expertise to a problem. Thus, for example, we do not defer to positions taken by the agency in the course of litigation, as these positions are generally dictated by agency lawyers, not by those with the specialized expertise upon which courts legitimately rely."); Ashland Oil, Inc. v. F.T.C ., 548 F.2d 977, 981 82 (D.C. Cir. 1976)("Even if government counsel had attempted to disavow the basis on which the FTC acted and it is clear from the foregoing that he did not h is statements could not bind the court to ignore the rationale on which the FTC's decision was actually based. No principle of administrative law is more firmly established than that a court must review discretionary actions in terms of the rationale on w hich the agency acted, rather than 'accept appellate counsel's post hoc rationalizations' . . . . Without citation of authority, the dissent would go far beyond merely accepting appellate counsel's post hoc rationalizations and would hold that such ration alizations may actually preclude the court from considering the basis on which the agency in fact acted. There is no support for this novel doctrine. The analogy that comes closest is a confession of error by appellate counsel, but even there, it is sett led that such a confession of error is not binding.")(footnote omitted); and Capsopoulos on Behalf of Capsopoulos v. Chater , 1996 WL 717456 *6 (N.D .Ill. 1996)("But the Court need not give deference to an agency's litigating positions; deference to an agen cy's interpretation is due only with respect to agency regulations, rules and administrative practice."). 3/ The School Board could invoke this provision if LIVS were to become "unable to perform the services under this contract" due to a "conflict of interest." 4/ See the testimony of John Pennington on page 46, lines three and four, of the Transcript of the final hearing; see also C.A. Oakes Construction Co., Inc. v. Ajax Paving Industries, Inc. , 652 So. 2d 914 , 916 (Fla. 2d DCA 1995)(" The [general contractor's] surety stood in the shoes of the [general contractor]."); Balboa Insurance Co. v. Bank of Boston Connecticut, 702 F. Supp. 34, 37 (D. Conn. 1988)("When a surety performs its obligations under a performance and payment bond, it stands in the s hoes of the contractor."); and Pacific Lining Co., Inc., v. Landis Construction Co. , 1986 WL 11898 *1 n.1 (E.D. La. 1986)(" As surety, USF & G, stands in the shoes of the contractor . . . .") . 5/ Compare with Homestead Insurance Co. v. Chicago Transit A uthority , 1997 WL 43232 *1 ( N.D. Ill. 1997), wherein the agreement at issue recited that the surety had " assumed the role of general contractor . . . [and had] entered into a subcontract with J.K. Contractors as the completion contractor." 6/ District sc hool boards in Florida are authorized, pursuant to Section 1013.45(1), Florida Statutes, to use "design build [procedures] pursuant to s. 287.055," Florida Statutes, " for construction of new facilities, or major additions to existing facilities." For purp oses of Section 287.055, Florida Statutes, a "design build contract" means "a single contract with a design build firm for the design and construction of a public construction project." Section 287.055(2)(i), Florida Statutes; see also Rule 60D 13.002(1), Florida Administrative Code ("'Design Build' means providing one single administrative entity (a 'firm' as defined herein) responsible for design and construction under one contract where services within the scope of practice of architecture, or professio nal engineering as defined by the laws of the State of Florida are performed by a registered architect or professional engineer and where those services within the scope of construction contracting as defined by the laws of the State of Florida for constru ction are performed by a certified or registered contractor as applicable according to Florida Statutes."). 7/ It is anticipated that, if MCM was awarded the contract, LIVS would be responsible for " 20 and 30 percent of the entire work on the project." 8/ This is the "general contractor's" license issued by the Florida Construction Industry Licensing Board to Jorge Munilla. A copy of this license was included in MCM's Qualification Proposal. 9/ This is an "architect corporation" license issued by the Florida Board of Architecture and Interior Design. A copy of this license was included in MCM's Qualification Proposal. 10/ This is a certificate of authorization issued by the Florida Board of Professional Engineers. A copy of this certificate was in cluded in MCM's Qualification Proposal. 11/ State School "FF" is a middle school in Key Biscayne. 12/ Because of budget issues, the State School "FF" project "was not undertaken." 13/ The School Board's "pre qualif[ication]" of MCM (which SBR is cha llenging in these cases) did not deprive SBR or any other proposer of the chance to bid on the Instant Project, although it did result in the bidding process being more competitive than it otherwise would have been (which, as will be seen, worked to the de triment of SBR and MCM's other competitors, but benefited the School Board). 14/ This provision, particularly when read together with those portions of the Criteria Documents in evidence that differentiate between subcontractors and sub subcontractor s, makes clear that a sub subcontractor cannot be a design build contractor's A/E of Record. See J. W. Bateson Co., Inc. v. U.S. ex rel. Board of Trustees of National Automatic Sprinkler Industry Pension Fund , 98 S. Ct. 873, 876 (1978)(" This passage indic ates both that Congress understood the difference between 'sub subcontractors' like Colquitt and 'subcontractors' like Pierce, and that it intended the scope of protection of a payment bond to extend no further than to sub subcontractors."). 15/ It is e xpected that Ms. Bazan will be the Project Manager on the Instant Project. 16/ For this same reason, it does not meet the definition of "contractor" set forth in Section 3.1.1 of the Westview Manual. 17/ See the testimony of Fernando Munilla on pages 1 29 and 130 of the Transcript of the final hearing; see also Commercial Openings, Inc. v. Mathews , 819 S.W.2d 347 , 350 (Mo. 1991)(" The owner contracts directly with the general contractor . . . . Subcontractors, however, do not contract directly with the o wner."); Weymouth v. Department of Corrections , 1983 WL 17987 *5 ( Del. Ch. 1983)(" A general contractor has been defined as 'any person who contracts directly with the owner,' the phrase not being limited to one undertaking to complete every part of the wor k. 17 C.J.S., Contracts § 11, p. 589."); Executive House Building, Inc. v. Demarest , 248 So. 2d 405, 411 ( La. App. 1971)(" Turning now to the consideration of the term general contractor, a general contractor, in building contract sense, is any person who contracts directly with the owner, the phrase not being limited to one undertaking to complete every part of the work."); Miller v. Batten , 273 S.W.2d 383, 385 ( Ky. 1954) (" A peculiar meaning is given to the word 'contractor,' when used in connection with t he building trade. Such a contractor is the person who contracts directly with the owner of the property to erect or construct a building or other structure or improvement belonging to the owner."); and Revels v. Southern California Edison Co. , 248 P.2d 9 86, 989 ( Cal. App. 1952)(" We use the term 'general contractor' to indicate one who contracts directly with the owner to do the work; and the term 'subcontractor' to indicate one who contracts with the general contractor to do part of the work."). 18/ See Carr v. Stockton , 92 So. 814, 815 ( Fla. 1922) (" It is well settled that an established custom or trade usage respecting a commercial transaction may annex incidents to a written contract, and that a contract involving such a transaction should be interpret ed in the light of such custom or usage."); National Merchandise Co., Inc. v. United Service Automobile Association , 400 So. 2d 526 , 532 (Fla. 1st DCA 1981)(" Commercial transactions and contracts should be interpreted in light of custom or trade usage."); John W. Johnson, Inc. v. J. A. Jones Construction Co. , 369 F. Supp. 484, 495 96 ( D.C. Va. 1973) ("Even though the Architect's decision is to be final he cannot ignore the custom and trade usage in rendering a decision. This has to be read into the contract . There is no provision or term of the contract which expressly or impliedly rejects or alters this custom and usage of the trade in this action."); and Harza Northeast, Inc. v. Lehrer McGovern Bovis, Inc. , 680 N.Y.S.2d 379, 380 ( N.Y. App. 1998) (" If, as plaintiffs aver, the term 'cost of construction' has an accepted meaning among architects and defendant wished to deviate from that meaning because of the nature of its contractual relationship with NYNEX, it was incumbent upon defendant when it drafted it s agreement with plaintiffs to make that clear."). 19/ See Iniguez v. American Hotel Register Co. , 820 So. 2d 953, 955 (Fla. 3d DCA 2002)("The contract should be considered as a whole, not in isolated parts."); Excavating Engineers, Inc. v. National Fire Insurance Company of Hartford , 524 So. 2d 1112 (Fla. 4th DCA 1988)("Third party beneficiary contracts, like all contracts, must be read as a whole, and isolated words and phrases are not determinative of the parties' intentions."); Hillsborough County Avi ation Authority v. Cone Brothers Contracting Co. , 285 So. 2d 619, 621 (Fla. 2d DCA 1973), quoting from the Restatement of Contracts ("'A writing is interpreted as a whole and all writings forming part of the same transaction are interpreted together.'"); P rice v. Yellow Cab Company of Philadelphia , 278 A.2d 161, 170 (Pa. 1971)("[The trial court] erred in not construing the release agreement together with the check given by Yellow Cab in consideration of the release. Both instruments were inseparably part o f the same transaction and should therefore have been considered and construed together."); and Schubert v. Ivey , 264 A.2d 562, 564 (Conn. 1969)("In considering the expressed intent of a contract evidenced, as was this, by multiple writings, all of the wri tings should be considered and an endeavor made to ascertain the expressed intent of the contract as a whole."). 20/ It is this potential "conflict of interest" that the School Board's A/E of Record on the other project would have, not any "conflict of i nterest" of the proposer's, that results in disqualification of the proposer under paragraph G. of the General Requirements of the RFQ. 21/ As Mr. Pennington further credibly testified, the School Board " would like to expand [the pool of design builders] to choose from, if possible," in projects like the Instant Project, not needlessly limit its size. 22/ See Powers Regulator Company V. Seaboard Surety Company of New York , 22 Cal. Rptr. 373, 377 (Cal. App. 1962)("A sub subcontractor has no agreement w ith the general contractor and the latter owes him nothing regardless of nonpayment by his immediate employer."). 23/ MCM and LIVs have not entered into a "teaming agreement," as "that term is normally understood within the context of government contrac ting." ATACS Corp. vans World Communications, Inc. , 155 F.3d 659, 666 (3d Cir. 1998)("Typically, a teaming agreement is an arrangement whereby a subcontractor will 'team' with a company intending to bid on a government contract as a prime contractor i n order to pool financial and technical resources. The subcontractor would ordinarily provide technical expertise and assist in the prime contractor's bid submission in return for the prime contractor's promise to award the subcontract. Parties to such a teaming agreement benefit from the arrangement not only as a means of sharing resources, but also as a hedge against the many uncertainties involved in government contracting. In many cases, the finalized subcontract between the parties to a teaming agre ement will specifically enumerate the scope of obligations for each party contingent upon the prime contractor winning the RFP so that there is usually little need to enforce the teaming arrangement itself. Often, however, the parties may reach an underst anding to team, but fail to execute a subcontract as anticipated in the teaming agreement.")(citations omitted). 24/ Effectuating such a substitution (which is permitted under the General Conditions of the Design Build Contract) would eliminate any exis ting concerns, however justifiable, that awarding the contract for the Instant Project to MCM would potentially have an adverse impact on LIVS' ability to faithfully represent the School Board's interests in discharging its responsibilities as the School B ard's A/E of Record on the Westview Project. 25/ These "uniform rules of procedure" are found in Rule Chapter 28 110, Florida Administrative Code. 26/ "'As a general rule the comparative degree of proof by which a case must be established is the same before an administrative tribunal as in a judicial proceeding that is, a preponderance of the evidence . It is satisfied by proof creating an equipoise, but it does not require proof beyond a reasonable doubt.'" Florida Department of Health and Rehabil itative Services v. Career Service Commission , 289 So. 2d 412, 415 (Fla. 4th DCA 1974); see also Section 120.57(1)(j), Florida Statutes ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary proceedi ngs or except as otherwise provided by statute. . . ."); cf . Board of Trustees of the Internal Improvement Trust Fund v. Levy , 656 So. 2d 1359, 1363 (Fla. 1st DCA 1995)("The burden of proving abuse of agency discretion is upon the challenger of the rule, w ho must meet that burden with a preponderance of the evidence"). 27/ An agency's decision or intended decision will be found to be "clearly erroneous" if it is without rational support and, consequently, the Administrative Law Judge has a " definite and f irm conviction that a mistake has been committed." U.S. v. U.S. Gypsum Co. , 68 S. Ct. 525, 542 ( 1948); see also Pershing Industries, Inc. v. Department of Banking and Finance , 591 So. 2d 991 , 993 (Fla. 1st DCA 1991)(" It is axiomatic that an agency's const ruction of its governing statutes and rules will be upheld unless clearly erroneous. If an agency's interpretation is one of several permissible interpretations, it must be upheld despite the existence of reasonable alternatives.")(citations omitted); Mot el 6, Operating L.P. v. Department of Business Regulation, Division of Hotels and Restaurants , 560 So. 2d 1322 , 1323 (Fla. 1st DCA 1990)(" It is axiomatic that an agency's construction of its governing statutes and rules will be upheld unless clearly errone ous; if an agency's interpretation is one of several permissible interpretations, it must stand despite the existence of other reasonable alternatives."); and Hinton v. Judicial Retirement and Removal Commission , 854 S.W.2d 756 , 758 (Ky. 1993)(" The standar d of review on appeals from the Judicial Retirement and Removal Commission is that the Supreme Court must accept the findings and conclusions of the commission unless they are clearly erroneous; that is to say, unreasonable.") . 28/ An act is "contrary t o competition" if it unreasonably interferes with the objectives of competitive bidding, which, it has been said, are: [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only coll usion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible expense; and to afford an equal advantage to all desiring to do business with the [government], by affording an opportunity for an exact comparison of bids. Wester v. Belote , 138 So. 721, 723 24 (Fla. 1931); and Harry Pepper & Associates, Inc. v. City of Cape Coral , 352 So. 2d 1190, 1192 (Fla. 2d DCA 1 977). 29/ An "arbitrary" action is "one not supported by facts or logic, or [is] despotic." A "capricious" action is "one which is taken without thought or reason or [is] irrational[]." Agrico Chemical Co. v. Department of Environmental Regulation , 365 So. 2d 759, 763 (Fla. 1st DCA 1978); see also Board of Clinical Laboratory Personnel, v. Florida Association of Blood Banks , 721 So. 2d 317, 318 (Fla. 1st DCA 1998)("An 'arbitrary' decision is one not supported by facts or logic. A 'capricious' action is one taken irrationally, without thought or reason."); and Dravo Basic Materials Company, Inc. v. Department of Transportation , 602 So. 2d 632, 634 n.3 (Fla. 2d DCA 1992)("If an administrative decision is justifiable under any analysis that a reasonable pe rson would use to reach a decision of similar importance, it would seem that the decision is [not] arbitrary."). 30/ This last sentence of Section 120.57(3), Florida Statutes, represents a codification of the holding in Department of Transportation v. Gr oves Watkins Constructors , 530 So. 2d 912, 913 (Fla. 1988) that, where a state agency's decision to reject all bids/proposals is challenged, "the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, ille gally, or dishonestly" in making its decision. (Pursuant to Chapter 96 159, Laws of Florida, effective October 1, 1996, the title of DOAH's Hearing Officers was changed to Administrative Law Judge.) 31/ This is similar to the deference that must be give n by a reviewing court to the interpretation of a statute, ordinance, or rule by the agency responsible for its administration. See PW Ventures, Inc. v. Nichols , 533 So. 2d 281, 283 (Fla. 1988)("At the outset, we note the well established principle that t he contemporaneous construction of a statute by the agency charged with its enforcement and interpretation is entitled to great weight. . . . The courts will not depart from such a construction unless it is clearly unauthorized or erroneous."); Las Olas T ower Company v. City of Fort Lauderdale , 742 So. 2d 308,313 (Fla. 4th DCA 1999)("Generally, a reviewing court should defer to the interpretation given a statute or ordinance by the agency responsible for its administration. . . . Of course, that deference is not absolute, and when the agency's construction of a statute amounts to an unreasonable interpretation, or is clearly erroneous, it cannot stand."); and Amisub (North Ridge Hospital), Inc. v. Department of Health and Rehabilitation Services , 577 So. 2 d 648, 649 (Fla. 1st DCA 1991)("[A]n administrative agency is afforded wide discretion in interpreting statutes which it administers. The agency's statutory construction is entitled to great weight, and is not to be overturned on appeal unless clearly err oneous."). 32/ In a " post proposed award protest" involving an ambiguous "specification" susceptible to differing reasonable interpretations, the procuring agency, if it has "second thoughts" about the interpretive choice it has made, may not delegate to the Administrative Law Judge the responsibility of determining the preferable interpretation of the "specification." Cf. Procacci v. State, Department of Health and Rehabilitative Services , 603 So. 2d 1299, 1300 01 (Fla. 1st DCA 1992)("An agency may not delegate to a hearing officer its legislatively prescribed responsibilities. . . . Thus, HRS had no authority to enter into the stipulation by which it purported to agree that the hearing officer could determine which of the bidders should be awarded the lease. Moreover, because it was the responsibility of HRS to evaluate the bids, and then to select the bidder to whom the lease should be awarded, the hearing officer lacked jurisdiction to make such a decision. In such a case, jurisdiction cannot be con ferred by agreement or consent of the parties; nor can it be based upon waiver or estoppel."). COPIES FURNISHED : Merrett R. Stierheim Interim Superintendent Miami Dade County S chool Board 1450 Northeast Second Avenue No. 912 Miami, Florida 33132 1394 Daniel J. Woodring, General Counsel Department of Education 325 West Gaines Street 1244 Turlington Building Tallahassee, Florida 32399 0400 Honorable Jim Horne Commissioner of Education Department of Education 325 West Gaines Street Turlington Building, Suite 1514 Tallahassee, Florida 32399 0400 J. Alfredo De Armas, Esquire Alvarez, De Armas & Borron, P.A. 3211 Ponce De Leon Boulevard Suite 302 Coral Gables, Florida 33134 L uis M. Garcia, Esquire Miami Dade County School Board 1450 Northeast Second Avenue Suite 400 Miami, Florida 33132 Michael N. Kreitzer, Esquire Bilzin Sumberg Dunn Baena Price & Axelrod, LLP 200 South Biscayne Boulevard Suite 2500 Miami, Florida 331 31 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 O rder in this case.

Docket for Case No: 03-001102BID

Orders for Case No: 03-001102BID