vs.
Intervenor.
) Case No. 07-2941BID
Pursuant to notice, a formal hearing was held in this case on October 9, 2007, in Fort Lauderdale, Florida, before Administrative Law Judge June C. McKinney of the Division of Administrative Hearings.
For Petitioner: Joseph M. Goldstein, Esquire
Michael J. McAllister, Esquire Shutts & Bowen, LLP
The issues in this case are: whether the Department of Transportation's (hereinafter "Department") decision to award the contract contemplated in its Invitation to Bid (for pressure cleaning and other related cleaning services at southern region toll plazas) was contrary to Respondent's governing statutes, rules, policies, and solicitation specifications and whether its decision was clearly erroneous, contrary to competition, arbitrary or capricious.
On April 9, 2007, the Department issued an advertisement and solicitation for contract No. E8I13 (hereinafter "Solicitation" or the "ITB") for toll plaza pressure cleaning services. On May 8, 2007, the Department posted its Notice of Intent to award the contract to SFM Services, Inc. (hereinafter "SFM") as the vendor to whom it intended to award the contract. Petitioner, Sunshine Cleaning Systems, Inc. (hereinafter “Petitioner” or "Sunshine Cleaning"), timely filed a Notice of Intent to Protest on May 11, 2007, indicating its intent to challenge the proposed award. Petitioner filed a Petition for
Formal Hearing (hereinafter "Petition") with the Department on May 22, 2007.
The Petition alleged that the intended award to SFM is contrary to the Department's governing statutes, its rules or policies, and the solicitation specifications. Petitioner argued that the Department had failed to perform an analysis and/or sufficient review of the low bidder to determine its responsibility and/or the Department had improperly found that SFM is a responsible contractor. Petitioner further alleged that SFM and another low bidder were nonresponsible. Further allegations included assertions that the Department misled bidders about the scope of the work and the acceptable project cost.
On July 2, 2007, the Petition was forwarded to the Division of Administrative Hearings challenging the Department's Notice of Intent to award a contract pursuant to its ITB. By order dated July 5, 2007, a hearing was scheduled for August 21 and 22, 2007. On July 26, 2007, SFM filed a Petition to Intervene, which was granted on August 27, 2007. Discovery disputes arose and the hearing scheduled to begin on August 21, 2007, was cancelled and subsequently rescheduled for September 20 and 21, 2007. Petitioner's Motion for Continuance was granted on September 19, 2007. Accordingly, an Amended Notice of Hearing
was issued July 16, 2007, rescheduling the hearing for October 9 and 10, 2007.
The parties filed Unilateral Pre-hearing Statements setting forth their respective positions, with SFM joining in the Department's position.
At hearing, Petitioner presented the testimony of five witnesses: Santiago Alverez, Facilities and Communications Administrator for the Department; John Cerasari, Jr., Support Services Manager and Project Administrator of Jacobs Civil; Judith Hilliard, Contract Specialist; Jose Infante, Sr., president of SFM; and Larry Calufetti, president of Sunshine Cleaning. The Department presented the testimony of Woodrow L. Lawson, Jr., Turnpike Contractual Services Administrator. SFM presented the testimony of Jose Infante, Jr., vice president of SFM. Petitioner's Exhibits numbered 1 through 22 were admitted into evidence. Respondent's Exhibits numbered 1 and 2 were admitted into evidence. SFM did not offer any exhibits.
At the conclusion of the hearing, the parties agreed to file their proposed recommended orders within ten working days from the filing of the transcript. The proceeding was recorded and transcribed. The transcript was filed with the Division on October 26, 2007. Petitioner, Respondent, and Intervenor filed timely Proposed Recommended Orders, which have been considered in the preparation of this Recommended Order.
On April 9, 2007, the Department advertised and issued a Solicitation for all labor, material, equipment and incidentals to provide comprehensive pressure cleaning and other related cleaning services at various locations on the South Region of Florida's Turnpike System, including the Homestead Extension, Mainline Turnpike, Alligator Alley Toll Plaza East and West, and the Sawgrass Expressway in Miami-Dade, Broward, Palm Beach, Martin, St. Lucie and Collier counties.
The Department announced that maintenance contract E8I13 would be awarded to the "responsible bidder with the lowest bid." The ITB requested bids for a year with the option of three 12-month renewals.
The Solicitation outlined the type and scope of the services to be performed.
The ITB required vendors to bid on six pay items related to toll plaza pressure cleaning identifying the item number and item description and approximate quantities and units. The pay items are E735-74-11 for the cleaning of toll plaza including debris, litter, sand and gravel; E735-74-22 for pressure cleaning for the toll plaza traffic lanes; E735-74-23 for pressure cleaning of the canopies at toll plazas; E735-74-24 for pressure cleaning of the lanes to remove tar and asphalt; E735-74-25 for the pressure cleaning of the buildings,
sidewalks, pads, sheds and patios; E735-74-26 for the pressure cleaning of the concrete aprons. Each vendor was required to bid a price for each of these pay items based on the estimated square footage outlined in the specifications, which described the type of work to be performed under each line item. Sunshine Cleaning did not file a challenge to the specifications pursuant to the solicitation requirements.
The Solicitation stated as follows:
NOTE: For contract bid amounts up to
$500,000, bidders are hereby notified that all bids are likely to be rejected if the lowest responsive bid exceeds the engineer's estimate by more than fifteen percent (15%) or is below the engineer's estimate by twenty-five percent (25%). For contract bid amounts greater than $500,000, bidders are hereby notified that all bids are likely to be rejected if the lowest responsive bid exceeds the engineer's estimate by more than ten percent (10%) or is below the engineer's estimate by twenty-five percent (25%).
On April 24, 2007, a mandatory pre-bid conference was held and representatives of SFM, Straight and Narrow Striping (hereinafter "Straight and Narrow"), and Sunshine Cleaning (the number one, two and three bidders, respectively) attended. All bidders attended the pre-bid conference and were informed that the area to be cleaned included more than the travel lanes themselves. Bidders at the pre-bid conference were invited to submit questions.
Neither SFM nor Straight and Narrow submitted questions.
On April 26, 2007, Petitioner submitted two questions.
Two addenda were published answering Petitioner's questions about the procurement.
Petitioner asked for clarification on the square footage of the work units described in the solicitation and asked whether pay item No. E735-74-22 was misleading because it lumped "cleaning of toll equipment, toll booths, signs and gatorheads, bollards and stairwells" into the unit price for lane cleaning without accounting for the square footage of these items.
On April 27, 2007, the Department issued Addendum No. 1 answering this question as follows:
All costs associated with additional elements of the work required under this description of work should be included in the contractor's bid per square foot of lane surfaces. The concrete islands, booths, equipment, signs, etc. are incidental work that shall be completed by the contractor under this pay item and the associated costs of the incidental work should be included in the contractor's price per square foot bid for pressure cleaning of traffic lane.
Petitioner had measured most of the additional “incidental” square footage and determined that it added approximately 50% to the total square footage to be cleaned. SFM, which has turnpike landscaping contracts with the
Department and is, therefore, familiar with the turnpike locations, visited one toll plaza in preparation of its bid on the ITB and determined that incidentals would be 20% more than the total square footage to be cleaned.
The Department published in the Solicitation something it called a "Work Program Amount" of $412,000.00. The Department did not define or explain the “Work Program Amount.”
Petitioner’s second question asked whether the “Work Program Amount” was rationally related to the scope of work.
On April 30, 2007, the Department issued Addendum No. 2 to the Solicitation in response to this question stating:
The Work Program Amount represents funding set aside to open and advance a project through the Department. It does not represent an estimate for the contract nor is it a fixed amount. In essence, it is a placeholder for the project with an arbitrary amount of funds associated with the work program item. The Work Program Amount is required to move forward with the development of the project including advertising the contract. The Department will add to or remove funds from the work program line item as necessary upon receipt of bids and the award of the contract.
The bids for the project were due on May 1, 2007.
All three prospective contractors, Petitioner, SFM, and Straight and Narrow submitted bids. SFM was the lowest bidder with a bid of $355,500.00. Straight and Narrow bid
$391,000.00, and Sunshine Cleaning bid $651,700.00.
Judy Hilliard, acting as the Department's contract specialist, evaluated the proposals for compliance with the mandatory requirements of the ITB. Ms. Hilliard completed a memo of May 3, 2007, detailing the differences between the engineer's estimate and the proposed bids. Ms. Hilliard stated that SFM was 32% below the engineer’s estimate, Straight and Narrow was 25% below the engineer’s estimate, and Petitioner was 25% above the engineer’s estimate.
Ms. Hilliard also checked the debarred list, d/b/a plan, the bid guarantee bond, and the completeness of the forms while evaluating the proposals. Based on Ms. Hilliard's review of the proposals and her ultimate determination that the proposals met the mandatory requirements of the ITB, the Department accepted Petitioner's proposal, SFM's proposal, and Straight and Narrow's proposal as responsive and responsible. Ms. Hilliard followed her normal procedures in evaluating the bids for the ITB.
On May 4, 2007, John Cerasari and Marvin Cooper, the Turnpike Contract Manager, conducted a site visit to ensure that SFM had the offices, administrative support, management capacity, equipment, and facilities to meet the scope of work required under the ITB. SFM’s President and Vice President provided Mr. Cerasari and Mr. Cooper a tour of the facility, showing them the equipment to be used and discussed staffing
requirements, additional equipment and material acquisition schedules, staff qualifications, maintenance of traffic and other relevant aspects of their plan of action and requirements of the project.
After the site visit, Mr. Cerasari, who reports to the Communications Administrator for the Department, recommended award of the contract to SFM.
Santiago Alverez, Facilities and Communications Administrator for the Department, oversees the facility maintenance program for Turnpike Enterprises. Mr. Alvarez, by an independent review, made the determination to award the contract to SFM after reviewing a copy of each proposed bid, Mr. Cerasari's memo of the site visit, and the May 3, 2007 memorandum from Ms. Hilliard which described the percentages below the engineer's estimate of SFM’s bid and the SFM confirmation letter dated May 8, 2007.
On May 8, 2007, the Department posted its notice of intent to award the contract to SFM which had the lowest bid price of $355,500.00.
Prior to posting the notice of intended award to SFM, the Department contacted SFM to ensure that the contractor was confident with the prices bid. SFM provided a letter dated
May 8, 2007, confirming its prices stating: “This letter . . .
is to confirm that we wish to proceed with the bid award referenced above. We are confident with our unit bid prices.”
The ITB was awarded to SFM. SFM obtained a commitment from a bonding agency to write a performance bond covering 100% of the bid price.
Sunshine Cleaning filed a notice of intent to protest with respect to the intended award of the bid to SFM on May 11, 2007, followed by a formal written protest on May 21, 2007. While Sunshine Cleaning presented evidence concerning SFM's ITB response, they failed to offer evidence concerning Straight and
Narrow’s bid.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Sections 120.569 and 120.57(1), Florida Statutes.1
Subsection 120.57(3)(f), Florida Statutes, provides in relevant part the following:
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. Unless
otherwise provided by statute, the burden of proof shall rest with the party protesting the proposed agency action. In a competitive-procurement protest, other than a rejection of all bids, proposals, or replies, the administrative law judge shall
conduct a de novo proceeding to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the solicitation specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. . . .
Petitioner contends that the Department: failed to refer the low bid to a technical review committee; failed to conduct a sufficient review of the low bid; misled bidders about the acceptable project cost; misled bidders about the scope of work; and did not perform any additional responsibility review.
Petitioner, as the party challenging the proposed agency action, has the burden to establish that the decision to award the contract to SFM must be invalidated. Moreover, as the party challenging the proposed agency action, Petitioner has the burden of proof in this proceeding and must show that the agency's proposed action is contrary to the agency's governing statutes, rules or policies, or the bid or proposal specifications.
Under Subsection 120.57(3)(f), Florida Statutes, it is not enough for Petitioner to show at hearing that the proposed award of the contract is contrary to the agency's governing statutes, rules, policies, or proposal specifications. To prevail, Petitioner must also show that the proposed award is
clearly erroneous, contrary to competition, or arbitrary or capricious.
A decision is considered to be clearly erroneous when although there is evidence to support it, after review of the entire record, the tribunal is left with the definite and firm conviction that a mistake has been committed. U.S. v. U.S.
Gypsum Co., 333 U.S. 364, 395 (1948). An agency action is capricious if the agency takes the action without thought or reason or irrationally. Agency action is arbitrary if it is not supported by facts or logic. See Agrico Chemical Co. v. State
Department of Environmental Regulation, 365 So. 2d 759, 763 (Fla. 1st DCA 1978). An agency decision is contrary to competition if it unreasonably interferes with the objectives of competitive bidding. See Webster v. Belote, 103 Fla. 976, 138 So. 721, 723-34 (1931).
Agencies have wide discretion when it comes to soliciting and accepting proposals, and an agency's decision when based upon an honest exercise of such discretion, will not be set aside even where it may appear erroneous or if reasonable persons may disagree. Baxter's Asphalt and Concrete, Ind. V. Department of Transportation, 475 So. 2d 1284, 1287 (Fla. 1st DCA 1985); Capeletti Brothers, Inc. v. State, Department of
general Services, 432 So. 2d 1359, 1363 (Fla. 1st DCA 1983).
A de novo hearing was conducted to evaluate the action taken by the agency. § 120.57(3)(f), Fla. Stat.; State
Contracting and Engineering Corp. v. Department of Transportation, 708 So. 2d 607 (Fla. 1st DCA 1998). The administrative law judge may receive evidence, as with any hearing held pursuant to Section 120.57(1), Florida Statutes, but the purpose of the proceeding is to evaluate the action taken by the agency based on the information available to the agency at the time it took the action. Id.
As found above, there were no protests to the terms and conditions of the bid solicitation. Therefore, any challenge presented at this juncture is limited to substantive application of those terms.
The essence of Petitioner's argument is that the Department cannot contract with SFM because Intervenor is not responsible and therefore, should have been rejected. All bidders' proposals submitted in the support of the bid were properly accepted by the Department as responsive and sufficient to meet the ITB based on all proposers being reviewed the same by Ms. Hilliard and being deemed to have met the requirements of the ITB.
Florida Administrative Code Rule 14-22.0141 dictates that contractors bidding on maintenance contracts are presumed to be responsible unless the Department determines otherwise.
The rule provides options for the Department to consider in making its determination. However, there is no mandate that the Department consider the options and the ITB did not require such. In this matter the Department chose to check each bidder’s bid guarantee bond, d/b/a plan, and to ensure that they were not on the debarred or suspended list of vendors.
Additionally, no competent evidence was presented to rebut the presumption of responsibility.
Petitioner seeks to have SFM and Straight and Narrow’s proposals deemed nonresponsible based on both of their bids being below 25% of the engineer’s estimate. Even though the Department warned under-priced bidders by stating in the Solicitation that bid prices below the engineer’s estimate by 25% were “likely to be rejected,” the Solicitation did not mandate that all such bids would be rejected. Such language in the Solicitation only warned bidders of such a possibility.
Petitioner attacked the procedure the Department used to deal with SFM being 32% and Straight and Narrow being 25% below the engineer's estimate, alleging that the Department was required to conduct further analysis of the bidders. Petitioner asserts that the Department was required to do two things pursuant to Agency Policy #375-000-001-o. First, the underpriced bids should have been referred to the Technical Review Committee for a determination of whether the bid price
was feasible in order to accept the low bids. Second, the Department should have also detailed the rationale for accepting the low bids in writing. The Solicitation for the subject contract is silent on the use of agency policies as required authority for the ITB in this matter. Consequently, the Department's failure to use the policy is not erroneous when Turnpike Enterprises chose not to use Sections 5.1.4 and 5.1.5 pursuant to the exemption for Turnpike Enterprises under Section 20.23(4)(e), Florida Statutes. Therefore, Petitioner has failed to show that the Department acted arbitrarily or capriciously by utilizing an individual review by the Director without detailed written minutes.
Petitioner also asserted the Department should have rejected the bids because SFM’s and Straight and Narrow’s bids were below the engineer's estimate and the Department should have conducted a more in-depth review of their bid proposals. The Solicitation did not mandate such an analysis. Further, the Department was aware of the percentage deviations when the award was made. Ms. Hilliard provided Mr. Alverez a memo outlining the specific low percentage amounts. Thus, such an award with the low percentages considered during the determination was neither arbitrary nor capricious.
Petitioner further contends that the Department misled the bidders by disguising the true scope of work. Even though
the work units for “incidentals” was lumped into the pay item for “lane cleaning,” all bidders were informed at the mandatory pre-bid conference that the contract entailed more work than the lanes. Furthermore, Addendum No. 1 identified that concrete islands, booths, equipment, signs etc . . . as incidental work. Each bidder was provided the same information in the original solicitation, pre-bid conference and Addendum No. 1 regarding the incidental scope of work for the square footage of the work units for the traffic lane cleaning. The record demonstrates that Petitioner made a determination that the approximate additional incidental amount to be cleaned was 50% and SFM decided the incidental amount was approximately 20%. Such results are not contrary to competition. The Department noticed the bid as a low bid contract with the goal of getting the work done for the best price. The estimated incidental amounts neither interfered with the objectives of competitive bidding nor acted contrary to competition. There is no requirement that any bidder include within its bid a profit. Therefore, Petitioner failed to establish the Department acted arbitrary and/or capricious by misleading bidders regarding "incidentals."
Petitioner also failed to demonstrate that the Department misled the proposers into submitting artificially low bids by publishing a “Work Project Amount” far below the agency’s actual cost estimate for the job. Addendum No. 2
clarified the term specifying it “does not represent an estimate for the contract nor is it a fixed amount. . . . The Department will add to or remove funds from the work program line item as necessary upon receipt of bids and the award of the contract.” The final amount each bidder chose to provide the Department as a bid for pressure cleaning services was totally within the bidders' discretion. No error was demonstrated regarding the “Work Program Amount”. Additionally, the record fails to show the Department either acted irrationally in listing the “Work Program Amount” or failed to logically define the term in the addendum. Therefore, all “Work Program Amount” related references and actions of the Department were within the parameters of the Solicitation.
It is concluded, based on the totality of the evidence presented, that Petitioner has failed in its proof of the grounds alleged. In this case, the evidence failed to rebut the presumption of responsibility of SFM. The Department's intended decision to award the subject contract to SFM is not contrary to the Department's governing statutes, the Department's rules or policies, or the specifications of the ITB. Petitioner also failed to establish that the Department’s award of the contract to SFM is clearly erroneous, contrary to competition or arbitrary and capricious.
RECOMMENDED that Respondent, Department of Transportation, issue a final order dismissing Sunshine Cleaning Systems, Inc.’s Petition.
DONE AND ENTERED this 3rd day of December, in Tallahassee, Leon County, Florida.
JUNE C. McKINNEY
Filed with the Clerk of the Division of Administrative Hearings this 3rd day of December, 2007.
1/ Unless otherwise indicated, all references to the Florida Statutes are to the 2007 codification.
C. Denise Johnson, Esquire Department of Transportation
Joseph M. Goldstein, Esquire Shutts & Bowen, LLP
James C. Myers, Agency Clerk Department of Transportation
Alexis M. Yarbrough, General Counsel Department of Transportation
10 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
