STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

On April 20, 2009, a duly-noticed hearing was held by means of video-teleconferencing in Tallahassee and Jacksonville, Florida, before Administrative Law Judge Lisa Shearer Nelson, of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Paul Christopher Wrenn, Esquire

University of North Florida

J.J. Daniel Hall, Suite 2100

1 University of North Florida Drive Jacksonville, Florida 32224-7699

For Respondent: Jay Chung, President

Core Construction Company

4940 Emerson Street, Suite 205

Jacksonville, Florida 32207 STATEMENT OF THE ISSUE

The issue to be determined is whether Respondent's proposed award for ITB 09-22 for Building 14B renovation is contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.

PRELIMINARY STATEMENT

On February 27, 2009, the University of North Florida (UNF or the University) received a formal protest from Core Construction Company challenging the University's award of ITB- 09-22 (GC's for Building 14B Renovation). On March 25, 2009, the protest was referred to the Division of Administrative Hearings pursuant to the University's contract with the Division with a request that an administrative law judge be assigned. The case was assigned to the undersigned and, after a telephone conference with the parties held March 30, 2009, it was agreed that the hearing would be held by means of video-conferencing on April 20, 2009, and the hearing proceeded as scheduled.

The hearing was conducted pursuant to the authority granted in Florida Board of Governors Rule 18.002, and the procedures outlined in University of North Florida Regulation 13.0020R. Consistent with that regulation, the parties exchanged exhibits in advance of the hearing, and submitted a prehearing statement including admitted facts which have been incorporated into the findings of fact below. Neither party objected to the documentary evidence submitted by the other. At hearing, Petitioner presented the testimony of Jay Chung, Dirk Harrison, and Gary Arcuri, and Petitioner's Exhibits 1-13 were admitted into evidence. Respondent submitted the testimony of Dianna White and Kathryn Ritter, and Respondent's Exhibits 1-12 were admitted.

The parties both expressed the desire for the proceedings to be expedited as much as possible. To that end, it was agreed that proposed recommended orders would be submitted no later than April 27, 2009. Both parties timely submitted their proposed orders, which have been carefully considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The University of North Florida published its Notice of Bid/Request for Proposal in reference to ITB #09-22 entitled "GC's for Building 14B Renovation" on December 19, 2008, with a submission deadline of January 27, 2009. The opening date was eventually extended to January 30, 2009.

2. There were four addendums to the ITB #09-22 Project.

   
   

3. The Notice of Bid/Request for Proposal document contained the following provisions:

   This project consists of the following scope of work: The work includes all labor, supervision, equipment, and materials required to execute the Contract Documents in two phases for the tenant build-out of the existing UNF Building 14-B (approximate square footage 9742). The work includes, but is not limited to, demolition of all interior walls, finishes, mechanical, electrical, plumbing and communication components as well as a new exterior curtain wall system.

   Exterior construction will include new glazing in aluminum curtain wall. Interior construction will include new gypsum wallboard partitions with metal stud walls, millwork, suspended acoustical and gypsum wallboard ceilings, wood and metal doors in hollow metal frames, coiling overhead grilles, toilet partitions and vanities.

   Interior finishes include carpeting, resilient tile, ceramic tile, painting, and window treatments. Mechanical work includes installation of new Owner provided HVAC units with ductwork and all necessary connections to the UNF Central Plant chilled water system. Plumbing includes new piping and fixtures for the tenant build-out and renovation of the group male and female restrooms. Electrical work includes new wiring, devices and lighting for the new tenant build-out.

   
   

   Successful bidders must have demonstrable previous experience with the described systems and technical requirements. All bidders must be qualified at the time of the bid opening in accordance with the Bidders Qualification within the ITB 09-22 Bid documents. . .

   
   

4. Article I, Section 2 includes a heading in bold stating "Qualification Criteria." This section states:

   Participants must qualify to bid on this project. UNF will utilize the following criteria to qualify the general contractors within this ITB. The information must be completed on the UNF Qualifications Form provided (page 10-11):

   
   

   Bonding: Demonstrates a bonding capacity of at least $2 million dollars and has an A.M. Best Rating of "A-V" or better.

   
   

   Licenses: Company is licensed to do business in the state of Florida and approved by the US Department of Treasury listing as an acceptable surety.

   
   

   Project references: Company has successfully completed at least 3 commercial construction projects of more than $1 million dollars each in the past three (3) years. List 3 such projects to include project name, client name, completion date, location, project value, role in project. Reference: Project name, owner, owner's representative

   name/phone number, completion date and construction cost.

   
   

   Years of experience: Company has a minimum five (5) years of GC experience under the current company name.

   
   

5. The directions for the General Contractor's Qualification Summary, under Related Experience, reiterated that the bidder was to list "No more than 4 projects of comparable type, size and complexity. (1) Project must be for a college/university)."

6. Addendum I for the Project, issued January 9, 2009, clarified that the requirement for having completed successfully a project of similar size and scope at a Florida University in the last three years is a qualification factor for this project.

7. Addendum II, issued January 12, 2009, removed the requirement for bidders to have completed one project for a college or university. The other two addenda did not address contractor qualifications.

8. Petitioner, Core Construction Company (Core Construction or Petitioner) bid in response to the ITB. Approximately 19 other bidders also responded. Core Construction was the apparent low bidder on the project, with a bid of $1,073,000. There was some concern expressed by the architect reviewing the bids because the bids were all within ten percent of each other for the top bidders, with the bidders 2-10 being within six percent of each other. In an e-mail to Dianna White, the Senior Buyer for UNF purchasing, Mr. Norman stated:

   Overall there was a 20% range in bid prices which I attribute to a significant difference in the size, quality and abilities of the contractors that bid this project. The apparently low bidder was $60,516 below the second low bidder and $83,000 below the third low bidder. This is a significant concern since there is only $46,484 between the second and fifth low bidders. I suggest the apparent low bidder be contacted and asked if they feel comfortable with their bid, because it appears to me they are missing something significant in their pricing. Purchasing should also carefully review their current financials and current bonding capacity if this is allowed.

   
   

9. Project reference checks, price verification against the architect's construction estimate and bonding checks were performed with respect to the four lowest bidding companies:

   Core Construction, Pooley Contracting, Rivers & Rivers and Warden Construction.

10. Pooley Contracting, the second-lowest bidder, was disqualified as non-responsive because its bid package did not include a bonding letter.

11. Core provided the names of three completed projects that were valued at over one million dollars. Dianna White called each of the references provided, not only for Core but for three of the four lowest bidders. The same questions were asked of each reference for each company: 1) Was the project on time and within budget; 2) Did the project run smoothly; 3) Were project issues handled; and 4) Would you use the contractor again.

12. Calls related to Pooley Contracting were not completed because it was disqualified as non-responsive. While the references for Rivers & Rivers and Warden were consistently good, two of the three references received for Core were not. Ms. White described them as the most "strongly negative" references she had ever received. In particular, the references indicated difficulty in completing jobs within budget and on time, which the Respondent viewed as the basis for determining whether a contractor had successfully completed a project. Two of the references indicated that they would not use the contractor again, or as one put it, "not if there was any way around it."

13. Based on the recommendations received, the Purchasing Office for the University recommended that Core Construction be disqualified for failing to demonstrate successful completion of three projects over one million dollars that were similar in scope. Because Pooley Construction was also disqualified, the Purchasing Department recommended that the Project be awarded to the third-lowest bidder, Rivers & Rivers.

14. The recommendation to award the project to Rivers & Rivers was accepted by the Vice President of Administration and Finance, and on February 18, 2009, a Notice of Award issued identifying Rivers & Rivers as the company receiving the award.

15. On February 19, 2009, Core Construction notified Respondent that it intended to protest the award of the Project to Rivers & Rivers. On February 24, 2009, Core Construction

    provided a $10,000.00 surety bond and a written protest of the award.

16. The basis of the protest was two-fold. First, Core Construction contended that Rivers & Rivers did not meet the qualification criteria set out in the ITB, because it was did not have a minimum of five years of general contractor experience under the current company name. Second, Core felt that the poor references received should not be a basis for disqualification.

17. Upon receiving the bid protest, Respondent contacted Rivers & Rivers to verify its licensure status. Upon inquiry, it was determined that while the principals of the company had over

    30 years of experience, the Rivers & Rivers entity had not been licensed under that name for the requisite five years.

18. While no action has been taken while this bid protest is pending, Respondent indicated its intention to withdraw the award from Rivers & Rivers and award the contract instead to the next lowest bidder.

19. The procedures used by the University in determining the appropriate award were not contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.

20. It was consistent with University policy to check references for projects of similar scope and size. Therefore, it was appropriate to ask for and check references for projects of over one million dollars.

21. There is no indication that any bidder questioned what the University would consider as successful completion of a project. The time for questioning this issue would have been when the specifications were issued, consistent with Article I, Section 7 of the ITB. Having a project come in on time and within budget is a reasonable measure of successful completion. It is not the same as "substantial completion," which generally refers to a point of time in the construction process, not the final completion of the project.

    CONCLUSIONS OF LAW

    
    

22. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action in accordance with Florida Board of Governors Regulation

    18.002. This hearing has been conducted in accordance with the requirements of Board of Governor's Regulation 18.002 and the University's Regulation 13.0020R.

23. Core Construction has standing to bring this bid protest inasmuch as it was the apparent low bidder for the project.

24. As the Petitioner in this proceeding, it is Core Construction's obligation to demonstrate that the award of the contract to the successful bidder is contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.

25. Core Construction was successful in proving that Rivers & Rivers should be disqualified because of its failure to meet the qualification criteria in terms of years of experience.

    The University acknowledged this problem and indicated its intent to vacate the award to Rivers & Rivers on this basis.

26. The elimination of Rivers & Rivers, however, does not result in an award to Core Construction. Consistent with University procedures and the terms of the ITB, the Purchasing Department asked for references with respect to jobs completed in the last three years that were over one million dollars in size. Consistent with University procedures and the terms of the ITB, Purchasing Staff asked a set of questions designed to determine whether bidders met the specified criteria regarding completion of similar projects within the last three years. Completion of reference checks from the persons identified by Petitioner in its response to the ITB led to the reasonable conclusion that Petitioner did not meet this criteria.

27. Petitioner maintains that it had very good references from other projects completed during the three year period. However, these projects were smaller in scope and did not meet the criteria for references specified in the ITB. To consider these references, when no other bidder was given the opportunity to supplement its bid, would serve to give to Core Construction an unfair advantage.

28. The decision to eliminate Core Construction from consideration is not contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.

RECOMMENDATION

Upon consideration of the facts found and conclusions of law reached, it is

RECOMMENDED:

That the President of the University of North Florida, pursuant to his authority under Board of Governor's Regulation 18.002, enter a final order dismissing Petitioner's written protest.

DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 Fax Filing 921-6847

www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009.

COPIES FURNISHED:

Jay H. Chung

Core Construction Company, Inc. 4940 Emerson Street, Suite 205

Jacksonville, Florida 32207

Paul Christopher Wrenn, Esquire University of North Florida

J.J. Daniel Hall, Suite 2100

1 University of North Florida Drive Jacksonville, Florida 32224

John A. Delaney, President University of North Florida

J.J. Daniel Hall, Suite 2800

1 University of North Florida Drive Jacksonville, Florida 32224

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

Pursuant to the procedure specified in Board of Governor's Rule 18.002, upon submission of this Recommended Order to the President of the University of North Florida, the President will issue a preliminary order for final action and notify the parties of such order. The preliminary order of the president shall be final, unless the firm under consideration takes exception to such order; in which event it may file with the President such exceptions within twenty-one days of receipt of notice of the preliminary order.

Docket for Case No: 09-001567BID

Orders for Case No: 09-001567BID