STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
THE WEITZ COMPANY, LLC, )
)
Petitioner, )
)
vs. ) Case No. 10-8182BID
) BROWARD COUNTY SCHOOL BOARD, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a hearing was conducted in this case pursuant to Sections 120.569 and 120.57(1), Florida Statutes,1 before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings (DOAH), on September 16, 2010, by video teleconference at sites in Lauderdale Lakes and Tallahassee, Florida.
APPEARANCES
For Petitioner: Vincent F. Vaccarella, Esquire
401 Southeast 12th Street, Suite 300 Fort Lauderdale, Florida 33316
For Respondent: Robert Paul Vignola, Esquire
School Board of Broward County
K. C. Wright Administration Building 600 Southeast Third Avenue, 11th Floor Fort Lauderdale, Florida 33301
STATEMENT OF THE ISSUE
Whether Respondent's intended rejection of all responses to its solicitation of "qualifications" from entities interested in contracting with Respondent to perform construction management at risk services in connection with a project at Fort Lauderdale High School is illegal, arbitrary, and/or dishonest, as alleged
by Petitioner.
PRELIMINARY STATEMENT
On August 23, 2010, Respondent referred to DOAH Petitioner's formal written protest of Respondent's announced intention to reject all responses (including Petitioner's) to a Request for Qualifications (issued in 2008) inviting firms to submit their qualifications to provide construction management at risk services for a project at Fort Lauderdale High School (FHS Project). Before having made this decision to reject all responses, Respondent had attempted, over an extended period of time, without success, to negotiate a contract with Petitioner, the responding firm which had been selected by Respondent as the most qualified.
On September 15, 2010, the parties filed a Joint Pre- Hearing Stipulation, which contained, among other things, an extensive "Statement of Admitted Facts."
As noted above, the final hearing was held on September 16, 2010. Three witnesses testified at the hearing: Peter
Jakubiec, Joseph Richard Kolb, and Denis Herrmann. In addition to the testimony of these three witnesses, 155 exhibits (Joint Exhibits 1 through 42 and 49 through 162) were offered and received into evidence.
After the conclusion of the evidentiary portion of the hearing, the undersigned announced on the record the following post-hearing deadlines (agreed to by both parties): proposed recommended orders to be filed no later than ten days from the date that the transcript of the final hearing is filed with the DOAH; and the recommended order to be issued no later than 30 days from the date that the last timely-filed proposed recommended order is filed with DOAH.
The Transcript of the final hearing (consisting of two volumes) was filed with DOAH on September 22, 2010.
Petitioner and Respondent timely filed their Proposed Recommended Orders on October 4, 2010.
FINDINGS OF FACT
Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made:
Respondent is a district school board responsible for the operation, control and supervision of all public schools (grades K through 12) in Broward County, Florida (including,
among others, Fort Lauderdale High School) and for otherwise providing public instruction to school-aged children in the county.
As authorized by Florida Administrative Code Rule 6A- 1.012, Respondent has "establish[ed] purchasing rules" (denominated as "policies").
Respondent's Policy 3320 contains Respondent's "Purchasing Policies."
Part III of Respondent's Policy 3320 prescribes "Purchasing Policies" for Respondent's Facilities and Construction Management Division, and it provides, in pertinent part, as follows:
All additions, modifications, and alterations to School Board properties shall conform with the State Requirement for Educational Facilities (SREF), Florida Building Code (FBC) and the laws of the State of Florida. School Board administrators shall obtain assistance in preparing bid specifications and applicable building permit(s) from the Facilities and Construction Management division for these items.
Part VIII of Respondent's Policy 3320 addresses the subject of "protests arising from the competitive solicitation process" and incorporates the protest procedures found in Section 120.57(3), Florida Statutes.
Respondent's Policy 7003 is entitled, "Pre- Qualification of Contractors and Selection of Architects,
Engineers, Design Builders, Construction Managers, and Total Program Managers Pursuant to the Consultants Competitive Negotiation Act." It provides, in pertinent part, as follows:
The School Board shall pre-qualify bidders for construction contracts, and, publicly announce, in a uniform and consistent manner, each occasion when construction and/or professional services are required to be purchased in compliance with governing statutes and regulations. The Superintendent shall establish procedures for the pre-qualification of contractors and selection of architects, engineers, design- builders, construction managers and total program managers consistent with this policy, applicable statutes and State Requirements for Educational Facilities (SREF).
Rules
The School Board authorizes the Superintendent to:
Receive applications for Contractor Pre- Qualification on the attached application form in compliance with FS 1013.46 and SREF 4.1(8), as amended. . . .
* * *
4. Designate an evaluation committee of eleven (11) voting members for the purpose of Pre-Qualification of contractors and selection of architects, engineers, design builders, construction managers and total program managers.
* * *
The committee shall make recommendations to the Superintendent regarding the pre- qualification of contractors. The
Superintendent shall make recommendations to the Board:
Along with a report from the committee containing findings of fact indicating the proposers' compliance with the procurement requirements and scoring criteria
and the Board shall have the final approval of such recommendations.
The Contractor Pre-Qualification Application Form "attached" to Policy 7003 contains the following description of the contractor pre-qualification process:
The School Board ("Board") through the Superintendent or his/her designee, shall pre-qualify all "contractors" for construction contracts, and any other contracts that require a certificate issued pursuant to Chapter 489, Florida Statutes, including, but not limited to, all bidders, construction managers, design-builders, job- order contractors, term contractors, and all other types of contractors on an annual basis or for a specific project according to the rules set forth in the State Requirements for Educational Facilities (SREF) Section 4.1(8).
Contractors shall be pre-qualified on the basis of the criteria set forth in SREF and included in the foregoing application form. In addition to the foregoing criteria the applicant shall provide the Dun and Bradstreet report indicated in the application. The evaluation committee shall be as set forth in Board Policy 7003.
The applicant shall complete the form in its entirety and submit all required documents by the deadline set forth in the public announcement. Separate applications shall
be submitted for each desired contracting category.
The School Board of Broward County shall receive and either approve or reject each application for prequalification within sixty (60) days after receipt of application in its entirety and all required documents. Approval shall be based on the criteria and procedures set forth in SREF.
The Board shall issue to all pre-qualified contractors a certificate valid for one (1) year from the date of approval or for the specific project(s). That certificate shall include the following:
A statement indicating that the contractor may bid, propose, or otherwise be considered, on the specific project(s) or for this specific time period.
A statement establishing the total dollar value of the work the contractor will be permitted to have under contract with the Board at any one time. The maximum value shall not exceed the contractor's bonding capacity or ten (10) times the net quick assets.
A statement establishing the maximum dollar value of each individual project the contractor will be permitted to have under contract with the Board at any one time. The maximum value of each project may be up to twice the value of the largest similar project previously completed but shall not exceed the Contractor's bonding capacity or ten (10) times the net quick assets.
A statement establishing the type of work the contractor will be permitted to provide.
The expiration date of the certificate.
It shall be the responsibility of the contractor to renew annually certificates not for a specific project. Financial statements or written verification of bonding capacity on file with the Board shall be updated annually. Failure to submit a new statement or verification of bonding capacity within thirty (30) days written notice by the Board shall automatically revoke a pre-qualification certificate.
1. Pre-qualified contractors may request a revision of their pre-qualification status at any time they believe the dollar volume of work under contract or the size or complexity of the projects should be increased if experience, staff size, staff qualifications, and other pertinent data justify the action.
These procedures are in accordance with requirements set forth in Section 4.1 of the State Requirements for Educational Facilities.
As the parties stipulated in Admitted Fact 6, "[o]n May 20, 2008, [Respondent] approved the Request for Qualifications No. 2008-030-FC (RFQ) entitled 'Construction Management at Risk Services for Districts 2, 3 and 4 Projects (Cooper City High School - Project No. 1931-99-02; Fort Lauderdale High School – Project No. 0951-27-01; Margate Elementary School – Project No. 1161-26-01; and Northeast High School – Project No. 1241-27-01),' and authorized the public announcement of the RFQ." "[In] [t]he summary explanation and background [section of] the Agenda Request Form [for this agenda
item, it was] stated that the 'Facilities and Construction Management staff recommend[ed] the procurement of construction services utilizing Construction Management at Risk delivery method due to the complexity, scope and scale of the projects.'"
This "delivery method" is to be distinguished from the "hard bid" or "design/bid/build" method of procurement, where a contractor is hired only after "the construction documents are completed." Under the "Construction Management at Risk delivery method," contrastingly, the construction manager typically assists in the development and "complet[ion]" of the "construction documents," offering advice and recommendations to maximize quality and cost efficiency. As a result, it is "not uncommon" for there to be post-solicitation changes in a project's scope and budget when this "delivery method" is employed.
As the parties stipulated in Admitted Fact 7, "[a]t the time of [Respondent's] approval of the RFQ, the portion of the RF[Q] pertaining to [the FHS Project] had an advertised Proposed Construction Budget of $29,150,340 and a project scope which was described [in RFQ] as follows: 'Concurrent replacement in two phases to include: Phase I – Construct a 3- story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1
Business Technology Lab, 1 Family and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14.'" Phase II of the project was, at the time, described in the RFQ as follows: "Construct Parent drop off & pick up area and Staff/Visitor Parking; Construct Regional Athletic Facility; Renovate Building 8 into Science Labs; Demolish existing tennis courts & replace with 6 tennis courts; Demolish Swimming Pool; Construct basketball courts; Resurface Student Parking."
These descriptions represented the "initial concept" of the FHS Project (the design of the project having been then only in the "conceptual stage" of development). Respondent wanted to have the benefit of the input and advice of a construction manager (working together with the architect selected for the project) in developing the project's design beyond the "conceptual stage."
As the parties stipulated in Admitted Facts 12 through 19, "[b]etween the initial public release of the RFQ and the submission of proposed qualifications, [Respondent] issued seven
(7) addenda revising the RFQ's terms and conditions," with "Addendum No. 4 chang[ing] the scope of the [FHS Project] component of the RFQ as follows":
(Emphasis, by bolding, supplied in original). Addendum No. 6 "[r]evised the [RFQ's] Submittal Due Date to read 'No later than 2:00 p.m. on September 3, 2008.'"
As the parties stipulated in Admitted Fact 20,"[a]fter [the] issuance of Addendum No. 7 to the RFQ, the scope of the [FHS Project] component of the RFQ was described as follows [with strike-throughs and underlining indicating, respectively, post-issuance deletions and additions]:
Concurrent replacement in two phases to include: Phase I – Construct a 3-story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1 Business Technology Lab, 1 Family
and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, [1 Pre-Law Public Service Education Lab], Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish the existing track and athletic field and relocate existing baseball field. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14.
Phase II – Construct Parent drop off & pick up area and a 3-story parking structure including required road access work for Staff Parking and /Visitor Parking[.] Construct Regional Athletic Facility[.] Renovate building 8 into Science Labs[.] Demolish existing tennis courts & replace with 6 tennis courts construct five (5) tennis courts. Demolish Swimming Pool.
Renovate existing courtyard to provide ADA access to existing gymnasium and auditorium. Construct basketball courts. Resurface Student Parking."
As the parties stipulated in Admitted Facts 10 and 11, on August 26, 2008, the date that Respondent issued its final addendum to the RFQ (Addendum No. 7), it also issued a Revised Public Announcement publicizing the issuance of the RFQ (as revised by the seven addenda). The Revised Public Announcement read, in pertinent part, as follows:
In order to supplement the expertise of the Facilities and Construction Management Department, the Superintendent of Schools, pursuant to Florida Statutes, announces that The School Board of Broward County, Florida, is in need of Construction Management Services, related to new construction and renovations of educational facilities.
Pursuant to this request for qualifications, The Board will consider contracts with one of more proposers to provide these services.
Services under this contract include, but are not limited to the following items and shall be in accordance with SREF [State Requirements for Educational Facilities] 1999 Chapter 4:
Bid and award activities including managing bidder listing, addendum, bidding, proposals, schedule of values, contracts, guaranteed maximum price, value engineering, and bonds.
Construction activities including managing meetings, contract administration, monitoring procedures, contract records, inspections, non-conformances, owner- supplied equipment, testing, project accounting, and construction services.
Warranty activities including managing claims and periodic inspections.
Provide other basic services as required.
Refer to the Request for Qualifications for more detailed project scopes.
* * *
RFQ No. 2008-30-FC Project Nos. 0951 27
01/P000687 Fort Lauderdale High School (proposed construction budget $29,150,340): Phase replacement in 2 phases to include:
Phase I - Demolish selected buildings, tennis courts, swimming pool, track and athletic field. Construct a 3-story Administration Classroom Buildings[2] of 68,949 GSF; parent drop off/pick-up area and visitor parking; 5 tennis courts. Relocate existing baseball field.
Phase II - Demolish selected building. Construct a 3-story parking structure including required access road work; Regional Athletic Facility. Renovate
existing courtyard for ADA access to Gym and Auditorium. Renovate Building 8 into Science Labs.
* * *
Award: Project will be awarded by Facility.
Proposed Construction Budget: Includes all costs inclusive of the Construction Manager's fees, Cost of Work, and any other costs related to construction.
Minimum Selection Criteria: Will include the following as a minimum, (refer to document RFQ, Article X Submittal Requirements for expanded list of selection criteria):
The company's history, structure, personnel, licenses, and experience.
Related projects similar in scope or amount completed by the company, including name of client or its representative.
Financial information such as balance sheet and statement of operations and bonding capacity.
Project management, scheduling and cost control systems the company uses for similar projects.
Proposed minority business involvement in the project. . . .
Cost control, value engineering techniques and constructability reviews.
Description of litigation, major disputes, contract defaults and liens in the last five (5) years.
Interview.
Confirmation of references.
Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of selection of the most qualified firms.
* * *
The completed RFQ response must be delivered
. . . .
NO LATER THAN
2:00 PM SEPTEMBER 3, 2008
* * *
Qualifications Selection Evaluation Committee (QSEC): After submission, proposers will be evaluated by the Qualification Selection Evaluation Committee (QSEC) based upon the above minimum criteria. The QSEC will select no less than three (3) proposers, ranked in order of tabulated score. The QSEC will recommend the finalist(s) for award of contracts to Construction Managers to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will authorize the Superintendent, or designee, to negotiate a contract for services for fees to provide direct management of the Construction Management at Risk Contract.
Recommendations by the Qualification Selection Evaluation Committee do not guarantee a contract will be awarded by the Board. Award of a contract does not guarantee that work will be issued. Fees
will be negotiated in accordance with Board Policy 7003 and Section 287.055, F.S.
Article I of the RFQ (as revised) listed "General Requirements" that "proposers [had to] meet" "[i]n order to be considered."
As the parties stipulated in Admitted Fact 21, Article
I.D. of the RFQ (as revised) provided, in pertinent part, as follows:
All proposers must be prequalified according to 1013.46 F.S., SREF 4.1(8), and Board
Policy 7003 at the time of submittal due date to this RFQ.
Article I.H. of the RFQ (as revised) provided as follows:
The School Board of Broward County, Florida reserves the right to reject any or all responses, to waive technicalities, or to accept the proposal that, in its sole judgment, best serves the interest of The School Board of Broward County, Florida.
Article II of the RFQ (as revised) described the "Selection Process."
As the parties stipulated in Admitted Fact 22, Article
of the RFQ (as revised) "was entitled 'Proposal Review by Staff' and stated as follows":
Facilities and Construction Management Division staff will conduct a review of the proposer's submittal to determine whether the proposer meets the terms of this RFQ, requirements of the Florida Statutes, State Requirements for Educational Facilities
regulations, Florida Building Code, and any other code, statute, or standard applicable at the time of response. Facilities and Construction Management Staff will provide information to the QSEC Members showing payments made by the district to the proposing firms over the past three (3) years. Non-compliant proposals will be recommended to the committee for rejection.
As the parties stipulated in Admitted Fact 23, Article
of the RFQ (as revised) "was entitled 'Shortlist Selection' and stated as follows":
The QSEC Members will assign points to each proposer, for each facility, based upon the Selection Criteria below and attached Selection Criteria Score Sheet in the shortlist evaluation process. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The firm that receives the most first choice votes from the committee will be the top-ranked proposer.
The second-ranked proposer will be the proposer that receives the most points, other than the proposer who was already selected as the top-ranked, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll-call vote will be taken. The selection process will establish a "shortlist" for each facility/project of not less than three (3) proposers and no more than five (5) proposers submitting proposals. Shortlist selection will be done by each facility.
Article II.E. of the RFQ (as revised) called for "[p]resentations" to be made to the QSEC by the shortlisted proposers.
As the parties stipulated in Admitted Fact 24, Article
II.G. of the RFQ (as revised) "was entitled 'Final Selection' and stated as follows":
The QSEC will interview and rank the shortlisted firms. The QSEC will assign points to each proposer, for each facility, utilizing the Selection Criteria and point schedule included with the Selection Criteria Score Sheet to finalize the selection. Note, M/WBE staff will provide scores for M/WBE categories. However, such scores are recommendations by M/WBE staff and may be adjusted by individual QSEC Members. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores for each project/facility. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The proposer that receives the most first choice votes from the committee will be the top-ranked proposer. The second-ranked proposer, will be the proposer that receives the most points, other than the proposer who was selected as the top-ranked proposer, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll- call vote will be taken. The QSEC will recommend the finalist(s) for award of contract to Construction Manager to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will
authorize the Superintendent, or designee, to negotiate a contract with the top-ranked firm according to Section 287.055, F.S. The Board shall have final approval of such recommendations. Final selection will be done by each facility.
Article II.H. of the RFQ (as revised) contained the "Minimum Selection Criteria." This provision read as follows:
Minimum Selection Criteria: Will include the following as a minimum, (refer to this document Article XI Submittal Requirements for expanded list of selection criteria):
The company's history, structure, personnel, licenses, and experience.
Related projects similar in scope or amount completed by the company, including name of client or its representative.
Financial information such as balance sheet and statement of operations and bonding capacity.
Project management, scheduling and cost control systems the company uses for similar projects.
Proposed minority business involvement in the project (refer to this document Article I, J for requirements).
Cost control, value engineering techniques and constructability reviews.
Description of litigation, major disputes, contract defaults and liens in the last five (5) years.
Interview.
Confirmation of references.
Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of section of the most qualified firms.
As the parties stipulated in Admitted Fact 25, Article III of the RFQ (as revised) "[was] entitled 'Competitive Negotiations' and state[d] as follows":
After the QSEC ranks the firms, recommends the finalist(s) to the Superintendent, and the Superintendent recommends the finalist(s) to the Board[,] [t]he Superintendent, or designee will negotiate a contract for services for fees to provide direct management cost of the CM and Guaranteed Maximum Price (GMP). The CM contract shall maintain an "open book" project accounting process, with any savings returned to the Board.
Should the negotiations not result in a contract with the finalist at a price determined by both parties to be customary, fair, competitive, and reasonable, negotiations with that firm shall be formally terminated. The Superintendent, or designee, shall undertake negotiation with the second most qualified firm and thereafter, if necessary, with the third firm.
Should the Board be unable to negotiate a satisfactory contract with any of the selected firms, additional firms will be selected in accordance with the above- described procedure. Negotiation should continue in accordance with Section 287.055, F.S., or until the Board determines not to proceed and to re-advertise and repeat the process.
Article IV of the RFQ (as revised) addressed the "Scope of Services." It simply provided as follows: "Refer to attached Agreement Between Owner and Construction Manager for requirements."
Article 3 of the "attached Agreement Between Owner and Construction Manager" (Sample Contract) enumerated the "Construction Manager's Services."
Those services to be performed by the hired construction manager during the "Pre-Design Phase" were described in Article 3.2 of the Sample Contract as follows:
The Construction Manager shall review project requirements, educational specifications, on and off-site development, survey requirements, preliminary budget, and make value engineering and constructability recommendations for revisions to the Owner and Project Consultant in the form of a written report prior to the final payment for this phase.
The Construction Manager shall, subject to Owner's approval and compliance with existing Owner completion schedule, establish a preliminary master project schedule identifying all phases, Critical Path elements, responsibilities of the Owner, Project Consultant, outside agencies, third parties and any other impacts which would affect project schedule and progress and update them monthly throughout the duration of the contract.
When the project includes renovation or expansion of an existing Facility, the Construction Manager will assist the
Construction Team in preparing an analysis package outlining the condition of the existing Facility, existing structure, existing finishes, and existing equipment, code deficiencies, energy use, and life expectancy of other building systems by providing constructability, value engineering, and cost estimates recommendations. The package should contain the Construction Manager's recommendations, cost estimates and preliminary schedules. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase.
The Construction Manager shall prepare detailed cost estimates and recommendations to Owner and Project Consultant at S.D. (Schematic Design),
D.D. (Design Development), C.D. (50% and 100% Construction Documents) phases of the project. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for each phase.
The Construction Manager shall provide project delivery options for the design, bid, and bid packaging of the project for efficient scheduling, cost control and financial resource management. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase.
The Construction Manager shall utilize information and reporting systems to provide the Owner with monthly reports containing accurate and current cost controls, work status, including but not limited to Work narrative, Work completed/anticipated, short term and long term schedules, estimated expenditures, and project accounting systems of the project at all times. Such information
shall be provided to the Owner and Project Consultant in the form of a written report, prior to final payment for this phase.
The Construction Manager shall prepare a report with the Project Team's participation which shall describe, as a minimum, the Work plan, job responsibilities, and written procedures for reports, meetings, inspections, changes to the project, building systems, and delivery analysis and other relevant matters. Such information shall be provided to the Owner and Project Consultant prior to final payment for this phase.
The Construction Manager shall provide market analysis and motivation for subcontractor interest and recommendations for minority business participation. This shall include analysis of the Construction Manager's historical data for subcontracting, communication with contractor and trade organizations requesting participation, review of the Owner's M/WBE data, advertising, outreach programs, mailings to all prospective bidders identified by these actions, and reporting of all of the for[e]going to the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase.
The Construction Manager's personnel to be assigned during this phase and their duties and responsibilities to this project and the duration of their assignments are shown on Exhibit D to the General Conditions. All required reports and documentation shall be submitted and approved by the Owner as pre-requisite to progress payments to the Construction Manager by the Owner during this phase.
Those services to be performed by the hired construction manager during the "Design Phase" were described in Article 3.3 of the Sample Contract as follows:
The Construction Manager will be required to attend all project related meetings and include a summary of the meeting of its monthly report to the Owner as specified in Document 01310.
The Construction Manager will periodically review to the best of their abilities all Contract documents for constructability and compliance with applicable laws, rules, codes, design standards, and ordinances. Such information shall be provided to the Owner and Project Consultant in the form of a written report in the format as noted herein prior to final payment for this phase (Refer to exhibits G and H).
The Construction Manager will be required to work with and coordinate [its] activities with any additional consultants, or testing labs and others that Owner provides for the project and report all findings as specified in Document 01310.
The Construction Manager shall review all Contract documents for the new and existing buildings and/or building sites and provide value engineering recommendations to minimize the Owner's capital outlay and maximize the Owner's operational resources. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. All such recommendations shall be acknowledged and incorporated into the construction documents by the Project Consultant unless otherwise authorized by the Owner in writing.
The Construction Manager will review construction documents and the new and existing buildings conditions and/or building site to reduce to the best of [its] abilities conflicts, errors and omissions and shall coordinate with the Project Consultant in order to eliminate change orders due to errors, omissions and unforeseen conditions.
The Construction Manager shall periodically update the master project schedule and make recommendations for recovery of lost time. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase.
The Construction Manager will coordinate with the Project Consultant and provide to the Project Construction Team permitting applications and requirements for the projects. The Construction Manager will periodically update cost estimates and make recommendations to keep the project within the FLCC.
AT COMPLETION OF THE CONSTRUCTION MANAGER'S REVIEW OF THE PLANS AND SPECIFICATIONS, EXCEPT ONLY AS TO SPECIFIC MATTERS AS MAY BE IDENTIFIED BY APPROPRIATE WRITTEN COMMENTS PURSUANT TO THIS SECTION, CONSTRUCTION MANAGER SHALL WARRANT, WITHOUT ASSUMING THE PROJECT CONSULTANT'S RESPONSIBILITES, THAT THE PLANS AND SPECIFICATIONS ARE CONSISTENT, PRACTICAL, FEASIBLE AND CONSTRUCTIBLE. CONSTRUCTION MANAGER SHALL WARRANT THAT THE WORK DESCRIBED IN THE PLANS AND SPECIFICATIONS FOR THE VARIOUS BIDDING PACKAGES IS CONSTRUCTIBLE WITHIN THE SCHEDULED CONSTRUCTION TIME.
DISCLAIMER OF WARRANTY: THE OWNER DISCLAIMS ANY WARRANTY THAT THE PLANS AND SPECIFICATIONS FOR THE PROJECT ARE ACCURATE,
PRACTICAL, CONSISTENT OR CONSTRUCTIBLE OR WITHOUT DEFECT.
.10. The Owner may select certain projects for expediting using fast-track construction. When this option is exercised, in writing, by SBBC, it shall be implemented in accordance with the following:
A. Design/Construction documents as noted herein shall be submitted by the Consultant for review and approval by SBBC (including Building Code review and Building permit issuance for 100% completion documents), the Construction Manager and others, as applicable, having jurisdiction:
Foundation/Structural/LCCA/Site and Off-
Site Package-100% Documents
A separate 50% completion progress set (for information only) of Building Finish Package drawings shall also be submitted which shall show all of the major characteristics of the project utilities and service, detailed site and floor plans, elevations, section, schedules, etc.
Construction may begin after approvals and building permit is obtained for above package.
Building Finish Package-100% Documents
As mutually agreed by the parties in writing.
.11 Guaranteed Maximum Price (GMP): Upon completion of the design phase [construction documents 100% complete] and prior to the bidding and award phase, the Construction Manager shall present to the Owner the GMP for the Owner[']s review and approval in accordance with Article 6 of this Agreement.[3]
Those services to be performed by the hired construction manager during the "Bidding and Award Phase" were described in Article 3.4 of the Sample Contract as follows:
At this stage the Construction Manager assumes the leadership responsibility for the project team. Upon obtaining all necessary approvals of the Construction Documents including a Building Permit as required by FBC and Owner approval of the latest Statement of Probable Construction Cost, the Construction Manager shall obtain bids and commence awarding construction contracts. The Owner will have the drawings and specifications printed for bidding purposes, either through its open Agreements with printing firms or as a reimbursable service through the Project Consultant, or as set forth in Article 26.03.08 in the General Conditions of this CM Agreement.
The Construction Manager shall review the Owner[']s records of pre-qualified contractors, including Minority/Women Business Enterprises (M/WBE) and prepare a list of those recommended for work pursuant to this contract. The Owner reserves the right to reject any or all subcontractors recommended for approval. The Construction Manager shall maintain a list of all potential bidders, including M/WBEs and those who are approved as pre-qualified.
The Construction Manager shall prepare and issue the bid packages to cover the scope of the Work for this contract.
The Construction Manager, in coordination with the Owner, shall schedule pre-bid conferences as required and issue a written summary of the conference(s).
Solicitation of Bids:
.1 The Construction Manager shall enter into Contracts with the firm who submits the lowest, responsive and responsible bid. The Construction Manager shall advertise according to SBBC policies as amended from time to time for bids on Documents 00101 at least three (3) times, seven (7) days apart, and with the third (3rd) advertisement prior to a pre-bid conference if applicable and at least seven (7) days prior to the bid opening. Written proposals based on drawings and/or specifications shall be submitted to the Construction Manager. The written proposals shall be opened at the usual location for bid opening. A tabulation of the results shall be furnished by Construction Manager to the Owner.
.6 The Construction Manager and Owner shall open at the Construction Manager location and evaluate at least three bids, if possible, for each portion of the Work solicited. The Construction Manager shall also make recommendations to the Owner for award to the lowest, responsive, and responsible bidder. A recommendation for award to other than the lowest bidder shall be justified in writing.
Those services to be performed by the hired construction manager during the "Construction Phase" were described in Article 3.5 of the Sample Contract as follows:
The Construction Manager shall fully comply with the provision[s] of the Owner's Project Manual, including but not limited to Division 0 and 1, and the attached General Conditions of this contract. In the event of a conflict between this Agreement and such documents the agreement shall control.
The Construction Manager shall provide the minimum staffing level as set forth in Exhibit C-F for this project.
The Construction Manager shall maintain and prepare monthly updates for all project schedules, including Critical Path elements, provide written progress reports, describe problems and corrective action plan(s) and conduct briefings as required by the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report with progress payments requests.
The Construction Manager may self perform certain construction work when it benefits the Owner, results in cost and time savings, and is pre-approved by the Owner in writing.
The Construction Manager shall coordinate project close-out, operation, and transition to occupancy.
The Construction Manager shall coordinate with the Project Consultant to provide complete project records including project manual and electronic Computer Assisted Drafting (CAD) drawings corrected to show all construction changes, additions, and deletions. (Construction Manager shall note all changes on the as-builts for the Project Consultant to reflect on the drawings and CAD disc.)
The Construction Manager shall coordinate with the Owner's staff to prepare the Certificate of Final Inspection.
The Construction Manager shall obtain and review all warranties, operation and maintenance manuals and other such documents, for completeness, have them corrected if necessary and submit them to the owner.
The Construction Manager shall complete all punch list items generated by the Building Code Inspector (BCI), the Owner, the Project Consultant and any others having
jurisdiction over the project during its inspections.
Those services to be performed by the hired construction manager during the "Warranty Phase" were described in Article 3.6 of the Sample Contract as follows:
The Construction Manager shall provide a minimum one (1) year warranty and shall coordinate and supervise the completion of warranty Work during the warranty period.
Construction Manager shall participate with the Owner in conducting of warranty inspections held on the sixth (6th) and eleventh (11th) months after occupancy.
Construction Manager shall deliver as-built drawings, warranties and guaranties to the Owner.
Where any Work is performed by the Construction Manager's own forces or by subcontractors under contract with the Construction Manager, the Construction Manager shall warrant that all materials and equipment included in such work will be new except where indicated otherwise in Contract Documents, and that such Work will be free from improper workmanship and defective materials and in conformance with the Drawings and specifications. With respect to the same Work, the Construction Manager further agrees to correct all work found by the Owner to be defective in material and workmanship and not in conformance with the Drawings and Specifications for a period of one year from the Date of Owner Occupancy of the Project or a designated portion thereof or for such longer periods of time as may be set forth with respect to specific warranties contained in the trade sections of the Specifications or by Florida Law.
The Construction Manager shall collect and deliver to the Owner any specific written warranties given by others as required by the Contract Documents.
The Construction Manager shall provide a Warranty Summary Report at the end of the 6- month warranty period and 11-month warranty period. This report shall provide at a minimum:
Description of each warranty item during the period.
Date item reported to Construction Manager.
Date item corrected. If more than one trip required, document each.
Description of action taken to cure warranty item.
Obtain signature of school principal or designee acknowledging warranty items have been completed.
Other pertinent information, if applicable.
Article V of the RFQ (as revised) provided the following information with respect to "Fees and Pricing":
Successful proposers shall negotiate a fee for providing construction management services during the design phase and subsequently shall negotiate a GMP for construction services during the bidding and construction phase.
Architectural/Engineering firms will develop Contract documents under separate contract with the Board.
As the parties stipulated in Admitted Fact 26, Article VII of the RFQ (as revised) "[was] entitled 'Board's Right to Reject' and state[d] in part as follows":
The Board reserves the right to reject any and all proposals and readvertise the project(s) at any time prior to Board approval of the recommended proposer(s) and the negotiated agreement(s). All costs incurred in the preparation of the Proposal and participation in this RFQ process shall be borne by the proposers. Proposals submitted in response to this RFQ shall become property of the Board and considered public documents under applicable Florida law.
The District reserves the right to accept or reject any and all submittals, or to waive any technicalities or formalities when and if it is in the best interests of the District.
Rejection: A submittal shall be rejected for failure to comply with one or more of the following requirements:
The proposer is not licensed or registered in the State of Florida to provide the proposed services.
The submittal shall be rejected if not received by The School Board of Broward County, Florida by the specified deadline.
Not Applicable.
Article XI of the RFQ (as revised) discussed "Submittal Requirements" and contained the following provisions concerning "Related Projects Similar in Scope (to this RFQ)" and "References":
Related Projects Similar in Scope (to this RFQ): List educational projects of related scope and size. Provide name and location of project, project owner, project owner name, address phone and contact person, project cost, current project
status, firm[']s key personnel assigned to the project. . . .
L. References: Provide a list of all projects, clearly stating name of project, using Construction Management at Risk, completed or in progress within the last five (5) years from due date of this RFQ. If Proposer[']s firm also has offices outside the tri-county area (meaning
Broward, Miami-Dade, or Palm Beach), then at a minimum provide references for all Construction Management at Risk projects in the tri-county area. List projects that are
75 percent or greater of the construction budget statement in the Public Announcement for each listed project. Provide the address, telephone numbers and contact person(s) listed as references for each project. . . .
As the parties stipulated in Admitted Fact 27, "[o]n or about September 3, 2008, [Respondent] received proposed qualifications to provide construction management at risk services for [the FHS Project] from 13 vendors including Petitioner." Among the other "vendors" submitting "proposed qualifications" were Elkins Constructors, Inc., the Morganti Group, Inc., and W. G. Mills, Inc.
As the parties stipulated in Admitted Fact 28, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, Respondent's Qualifications Selection and Evaluation Committee ('QSEC') recommended the rejection of certain proposers for their failure to comply with [Respondent's] pre-qualification
requirements or limits." There were three such "proposers": Elkins Constructors, Inc.; the Morganti Group, Inc.; and W. G. Mills, Inc. At the time of the "submittal due date to this RFQ [as revised]," neither Elkins Constructors, nor the Morganti Group, was "prequalified according to 1013.46 F.S., SREF 4.1(8), and Board Policy 7003" for any project. W. G. Mills, on the other hand, was "prequalified" for certain projects, but only within the following limits: a "[p]er [p]roject [l]imit [of]
$25,000,000 [and an] [a]ggregate [l]imit [of] $250,000,000."
The "advertised Proposed Construction Budget" of the FHS Project was $29,150,340, which was more than W. G. Mills' "[p]er [p]roject [l]imit [of] $25,000,000."
As of the date "proposed qualifications" were due, there were 11 prequalified firms, including W. G. Mills, who had a "[p]er [p]roject [l]imit" of between $17,000,000 and
$26,000,000. These firms were not eligible to be awarded the contract for the FHS Project because the project's "advertised Proposed Construction Budget" was in excess of their "[p]er [p]roject [l]imit." W. G. Mills was the only one of these 11 prequalified firms to respond to the RFQ (as revised).
As the parties stipulated in Admitted Fact 29, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, [the] QSEC next evaluated and short-listed the remaining proposers.
It thereafter received presentations from the short-listed proposers and, after scoring those short-listed proposers, recommended Petitioner . . . to [Respondent] as the proposer with whom to negotiate a contract for services for fees to provide direct management cost of the construction manager and the project's guaranteed maximum price ('GMP')."
As the parties stipulated in Admitted Fact 30, "[o]n October 7, 2008, [Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had for [the] Fort Lauderdale High School component of the RFQ [as revised] and 'authorized negotiations for Construction Management at Risk Services.' The scope of Construction Management at Risk services was [as noted above] included within the RFQ [as revised]. The summary explanation and background portion of the agenda item to authorize negotiations stated that the 'Superintendent's designees will negotiate the selected Constriction Management at Risk Services fees for the projects and recommend award of contracts at a future School Board Meeting.'"
As the parties stated in the "Statement of the Controversy" section of their Joint Pre-Hearing Stipulation, "[n]egotiations between [Respondent] and [Petitioner] occurred between October 2008 [following Respondent's approval of the QSEC's selection of Petitioner] and December 2009."
In December 2009, Cubellis, the architectural firm working on the FHS Project for Respondent, was "experiencing some financial difficulties" and there was uncertainty as to whether it would "be able to continue [on] the project." As a result, negotiations between Respondent and Petitioner were halted. Eventually, Cubellis "assigned [its] contract [with Respondent] to somebody else" (specifically, Manuel Synalovski Associates, LLC), but negotiations between Respondent and Petitioner never resumed.
Petitioner's last written contract proposal was dated December 10, 2009. It was based on a proposed construction budget of $18,297,367 and provided for the following "Negotiated Contract Terms":
Construction Manager Fees:
Pre-Design Not Applicable
Design Not Applicable
Bidding & Award $37,685
Construction Phase Fee $1,172,370
Warranty $35,000
Overhead $289,200
Profit $185,385
General Conditions $659,846
Total $2,379,489
Above Fees based on scope of work issued "Project Scope" document dated 11/5/2009 per 11/9/2009 letter from M. Decker. CM Performance and Payment Bonds and GL Insurance are included based on budgeted contract amount of $18,297,367. Builders Risk, Contingency, and Subcontractor insurance costs are not included in the fees
and will be shown in the schedule of values as separate line items as a cost of work.
Should the cost of work increase Bonds and GL insurance fees are to be adjusted at insurance providers' invoiced amount.
Overhead, profit and bond allowances for Change Orders: 10%
Substantial Completion: 570
Final Completion in General Conditions 25.01.02: 600
Construction Phase Fee and General Conditions in 25.01.02: $3,050 per Consecutive Calendar Day
Liquidation Damages for Substantial Completion: $1,000 per Consecutive Calendar Day
Liquidation Damages for Final Completion:
$600 per Consecutive Calendar Day
This contract proposal was made following a
December 8, 2009, negotiation session at which Denis Herrmann, Respondent's Director of Design and Construction Contracts, had stated that he had negotiated a construction management at risk contract for another project the previous day where the "Construction Manager Fees" were 13.8 percent of that particular project's proposed construction budget. Mr. Herrmann had relayed this information to Petitioner's representatives at the meeting to give them "a flavor for the range [Respondent was] talking about, not to give them a [specific] number [or percentage] that would be acceptable."
The "Construction Manager Fees" proposed by Petitioner in its December 10, 2009, offer were slightly less than 13.8 percent of the $18,297,367 proposed construction budget (but they did not cover any "Pre-Design"-related or "Design"-related work).
While Respondent has never, in writing, specifically rejected Petitioner's December 10, 2009, offer, neither has ever formally accepted it. As the parties stipulated in Admitted Facts 45 and 48, respectively, Respondent's "Superintendent of Schools has not placed an item on [the School Board] agenda recommending that [Respondent] enter into a contract with [Petitioner] concerning the RFQ [as revised]," and "[Respondent] has not approved a contract with [Petitioner] concerning [the] RFQ [as revised]."
It has been two years since "[Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had." Significant changes impacting the FHS Project have occurred over that period of time.
Respondent now finds itself in the midst of an "unprecedented budget crisis," making it especially imperative that it "take every [possible] step to maximize the purchasing power of the public's dollars."
A precipitous decline in revenue available for capital projects (due, in large measure, to a decline in property
values, coupled with a reduction in the capital outlay millage rate) has required Respondent to eliminate or scale back various planned projects. The FHS Project is among the projects that have been scaled back.
As the parties stipulated in Admitted Fact 31, "[p]rior to, during and subsequent to its negotiations with [Petitioner], [Respondent] determined on several occasions that the project scope of the [FHS Project] needed to be further adjusted, ultimately resulting [in] the following project scope [with strike-throughs and underlining indicating, respectively, deletions and additions]":
Concurrent Replacement in two phases to include: Demolish existing swimming pool (buildings 15 and 16). Demolish existing tennis courts and replace with 6 tennis courts. Demolish Buildings 1, 2, 3, 4, 11,
12, 13, and 14. Construct basketball courts. Construct Regional Athletic Facility. Construct (2) 3-story buildings (1 – Administration & 1 - Classroom) of approximately 68,940 GSF combined to include Administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4-classroom ESE suites, 1 Business Technology lab, 1 Family and Consumer Science (ProStart) lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage, and Student, Staff and Public Restrooms.
Remodel Renovate existing Science Building (building 8). Construct Parent Drop Off and Pick Up area and Staff/Visitor Parking.
Resurface Student Parking. Construct New Student parking area on the West side of the site to increase parking capacity by 92 spaces. Modify existing temporary bus loop
to meet SREF code and ADA standards; modifications will include barricades and covered sidewalk. Redesign courtyard to meet current ADA standards.'
As the parties further stipulated in Admitted Fact 31, "[t]he project scope was revised five (5) times between October 7, 2008 and December 2, 2009[,] [and Petitioner] was notified of the changes in scope and acknowledged the same."
"[R]evis[ions]" have also been made to the project's budget.
Respondent's "5-Year Plan" allocates funding for all costs (including, but not limited to, construction costs4) associated with each of Respondent's funded capital projects. As the parties stipulated in Admitted Fact 32, "[Respondent] adopts and revises its 5-Year Capital Improvement Plan ('5-Year Plan') each year." As the parties further stipulated in Admitted Fact 33:
[Respondent's] 5-Year Plan adopted for Fort Lauderdale High School for Fiscal Years 2009-10 to 2013-14 eliminated the
$39,491,259 previously budgeted as "Capacity Additions" . . . . Instead, the 2009-10 to 2013-14 Five Year Plan provided $21,050,000 for Capacity Additions . . . .
Respondent's current "5-Year Plan" (for the Fiscal Years 2010- 2011 to 2014-2015), which was adopted on September 7, 2010, allocates $22,366,085 to the FHS Project (as scaled back).
The dour economic conditions responsible (in part) for the drop in tax revenues available to fund Respondent's capital projects have also led to increased competition in the construction industry and a resultant decline in construction prices. This increased competition is particularly pronounced "in the procurement area of hard bidding." During "the peak of the construction boom," before the downturn in the economy, it was not atypical for Respondent, when it "hard bid" a construction project, to get just one or even no bids in response to the solicitation. Now, Respondent "expect[s] to see between half a dozen [and] a dozen or more bidders." Moreover, recently, winning bids on "hard bid" projects have been, on average, well below these projects' advertised proposed construction budgets. Respondent has not experienced the same overall cost-savings results when it has used the "Construction Management at Risk delivery method."
Given the market conditions that exist today, Respondent estimates that the construction costs for the FHS Project (as scaled back) would be no more than $16,950,000 and possibly as little as approximately $13,000,000 (if a "hard bid" were used). These amounts are considerably less than the "Proposed Construction Budget of $29,150,340" that had originally been "advertised." There are prequalified firms (including W. G. Mills) which were not eligible to be awarded
the contract under the RFQ (as revised) because their "[p]er [p]roject [l]imit" was less than $29,150,340, but which would now be able to bid on a scaled-back FHS Project were it to be readvertised (with a proposed construction budget of
$16,950,000).
Another (and perhaps the most significant) difference between the circumstances existing at present and those that existed two years ago (vis-à-vis the FHS Project) is that the design of the project (as scaled back) has advanced to the point that, with a few revisions,5 the construction documents for the project will be 100 percent complete.6 As a result, Respondent no longer has a need for most, if not virtually all, of the "pre-design" and "design" services, described in Articles 3.2 and 3.3 of the Sample Contract, that, back in 2008, it had wanted a construction manager to perform.
In April 2010, Respondent's Office of the Chief Auditor issued a report (April 2010 Audit Report) critical of Respondent's use of the "Construction Management at Risk delivery method" in connection with 14 projects "which were included in the Construction Management at Risk Kitchen/Cafeteria RFQ No. 2006-12-FC." The report read, in pertinent part, as follows:
The projects included in RFQ No 2006-12-FC were sufficiently completed by the Architect/Engineer firm(s) prior to being
advertised as CM at Risk construction projects. The inability [of] any CM firm to provide "professional services" and scheduling of both design and construction phases represents a deviation from the intent of Florida Statutes, SREF and the School Board's CM at Risk contract.[7] In nearly every executed CM at Risk agreement in the Kitchen/Cafeteria program, the Pre- Design and Design phase responsibilities of the CM were stricken from the contract.
That is a further representation that the input required by a prospective CM to qualify for the committee selection process was not, nor was it intended to be provided.
F.S. 1013.45(1)(c) also states that the use of the CM at Risk delivery method " . . . shall not unfairly penalize an entity that has relevant experience in the delivery of construction programs of similar size and complexity by methods of delivery other than program management." All of the projects in the Kitchen/Cafeteria program were originally intended to be "hard-bid" but were changed to the CM at Risk delivery method. One project was removed from the group prior to the due date of submittals for RFQ No. 2006-12-FC. That hard bid project, Margate ES, cost approximately $5.6 million, including nearly $466,226 in change orders, which was approximately $3.3 million less, on average, than the fourteen (14) projects that remained in RFQ No. 2006-12- FC. Due to the change in delivery method, general contracting firms could have been "unfairly penalized" by the decision to use the CM at Risk delivery method, as many local general contractors have the relevant experience in the delivery of construction programs of similar size and complexity by methods other than the CM at Risk delivery method.
RECOMMENDATION
We recommend that Facilities & Construction Management discontinue developing construction procurement packages (i.e. RFQ and RFP) for award of CM at Risk agreements when construction management services requested are associated with reused, prototypical or otherwise sufficiently developed construction documents.
Kitchen/Cafeteria program data indicates that the benefits associated with the CM at Risk delivery method were not realized using prototypical designs, as the program resulted in over $24 million in avoidable fees while circumventing applicable laws and regulations.
On May 10, 2010, Mr. Herrmann sent a letter to Respondent's General Counsel requesting, in light of the April 2010 Audit Report, a "legal opinion related to the award of a Construction Manager at Risk Agreement (CM) to [Petitioner] and whether such an award would comply with Chapter 1013.45(1)(c),
S. and State Requirements for Educational Facilities 1999 (SREF)," given that the FHS Project (as scaled back) was then "in the design phase and Phase III 100% Construction Documents [were] being prepared." The concluding paragraph of the letter read as follows:
In this project, The Weitz Company has been selected by the board and we intend to recommend award of a contract within several months. An award of a CM agreement in this case would not violate the specific audit recommendation and we believe such an award does not violate statute or SREF. Please advise whether you concur.
Mr. Herrmann has since changed his opinion. He now believes (reasonably so, in the undersigned's view) that "award of a CM agreement" in the instant case would be inconsistent with the "audit recommendation" inasmuch as the FHS Project (as scaled back) now has "sufficiently developed construction documents."
On May 18, 2010, Mr. Herrmann sent another letter to Respondent's General Counsel. This letter read as follows:
This is to provide you with additional information relating to a request for a legal opinion regarding the award of a Construction Manager at Risk Agreement (CM) to The Weitz Company. Please also refer to the attached memos dated 10/14/09, 11/16/09 and 5/10/10. In summary, we have requested opinions based on the following:
Whether such an award would comply with applicable statutes, SREF, and board policy given the extent of the changes to the scope and budget.
Whether such an award would comply with Chapter 1013.45(1)(c), F.S. and State Requirements for Educational Facilities 1999 (SREF).
We have recently revised the construction cost estimate as a result of current market conditions, and the project consultant, Manuel Synalovski [Associates], LLC agrees with the revised estimate. The change in the cost estimate is as follows:
In the RFQ: $29,150,340
October 2009 (Change in scope): $21,770,000 November 2009 (Market conditions):
$18,297,367
May 2010 (Market conditions) $16,950,000
Please advise whether we should proceed with the award or reject all bids.
Respondent's General Counsel responded to neither of these May 2010, letters from Mr. Herrmann.
As the parties stipulated in Admitted Fact 34, "[o]n June 15, 2010, [Respondent] approved Item J-15 during its
June 15, 2010, Regular Meeting." The "Requested Action" and "Summary Explanation and Background" section of the Agenda Request Form for this agenda item (J-15) provided as follows:
REQUESTED ACTION
Approve the change in the delivery method from Construction Management at Risk to Design/Bid/Build and the First Amendment to the Professional Services Agreement with Manuel Synalovski Associates, LLC (MSA) for Fort Lauderdale High School, Phased Replacement Project No. 095-27-01, dated February 12, 2008.
SUMMARY EXPLANATION AND BACKGROUND
Scope of Work: Basic Services Amended 6/15/10: This item changes the delivery method from Construction Management at Risk to Design/Bid/Build. Demolish existing Swimming pool (Buildings 15 and 16); demolish existing tennis courts; demolish Buildings 1, 2, and 3; construct two 3-story
buildings (1 administration and 1 classroom) of approximately 68,940 gross square feet combined to include administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4 ESE classroom suite, 1 business technology lab,
1 family and consumer science (ProStart) lab, 1 health occupations lab, 1 pre-law
public service education lab, custodial spaces, textbook storage, and student, staff, and public restrooms. Remodel existing science building (Building 8). Construct new parent drop off and pick up areas and staff/visitor parking. Construct new student parking area on the west side of site to increase parking capacity by 92 spaces. Modify existing temporary bus loop to meet SREF, Florida Building Code and ADA Standards. ADA modifications will include barricades and covered sidewalk. Remodel existing courtyard for ADA access to gym and auditorium.
MSA and the Superintendent's Negotiations Committee negotiated a total reduction in [architectural] fees from the February 12, 2008 Board approved amount of $2,021,000 to
$1,683,650. This decrease in the Basic Services Fees totals $337,350 and is decreased as follows: Phase IV (Bidding and Award) by $54,357, Phase V (Construction Administration) by $269,250, and Phase VI (Warranty) by $13,743. This fee reduction is as a result of a reduction of the original scope as per Attachment 2 to the First Amendment. This First Amendment also reduces the Fixed Limit of Construction Cost (FLCC) from $29,150,340 to $16,950,000 as a
result of the reduction in scope and construction costs resulting from current market conditions.
The Risk Management Department and the Office of the Chief Auditor have reviewed this First Amendment. The School Board Attorney has approved this First Amendment as to form and legal content.
As the parties stipulated in Admitted Fact 35, on
June 30, 2010, "[Respondent] posted its Revised Recommendation[] and Tabulation for [the FHS Project, which] set forth the following recommendation":
Per Article VII.A of the RFQ, based upon the recommendation of the Qualification Selection Evaluation Committee, the Facilities and Construction Management Division intends to recommend that The School Board of Broward County, Florida, at the School Board meeting on July 20, 2010, reject all responses received for Fort Lauderdale High School Project No. P.000687. The original, intended scope of work as set forth in the original RFQ is substantially and materially different than the revised scope of work and budget in the proposed contracts and such work should be re- advertised and re-bid.
This decision to "reject all responses" and "re- advertise[] and re-bid" was based on an honest and good faith exercise of discretion, intended, ultimately, to allow Respondent to receive (in the words of Mr. Herrmann) "more bang for [its] buck."
As the parties stipulated in Admitted Facts 39 through 41, Petitioner timely protested Respondent's intended "reject[ion] [of] all responses."
As the parties stipulated in Admitted Facts 42 through 44, after the parties had unsuccessfully attempted "to resolve the protest by mutual agreement," Respondent, at Petitioner's request, referred the matter to DOAH on August 23, 2010.
CONCLUSIONS OF LAW
"Purchases . . . by school districts . . . [must] comply with the requirements of law and rules of the State Board of Education." § 1010.04(1)(a), Fla. Stat.
These "requirements of law" include the Legislature's directives in Section 1011.06(1), Florida Statutes, that "[e]xpenditures [by a district school board] shall be limited to the amount budgeted" in its annual budget8 and that "[t]he school board shall endeavor to obtain maximum value for all expenditures." A component of the annual budget within which a district school board must operate is its capital outlay budget, which identifies "capital outlay expenditures by project for the year from all fund sources." A district school board "may not expend any funds on any project not included in the budget."
§§ 1011.012(1) and 1013.61, Fla. Stat.
Among the other "requirements of law" with which district school boards must comply in making purchases are those set forth in Section 1013.45, Florida Statutes, which is entitled, "Educational facilities contracting and construction techniques," and provides, in pertinent part, as follows:
(1) Boards may employ procedures to contract for construction of new facilities, or for additions, remodeling, renovation, maintenance, or repairs to existing facilities, that will include, but not be limited to:
Competitive bids.
Design-build pursuant to s. 287.055.
Selecting a construction management entity, pursuant to s. 255.103 or the process provided by s. 287.055, that would be responsible for all scheduling and
coordination in both design and construction phases and is generally responsible for the successful, timely, and economical completion of the construction project. The construction management entity must consist of or contract with licensed or registered professionals for the specific fields or areas of construction to be performed, as required by law. At the option of the board, the construction management entity, after having been selected, may be required to offer a guaranteed maximum price or a guaranteed completion date; in which case, the construction management entity must secure an appropriate surety bond pursuant to s. 255.05 and must hold construction subcontracts. The criteria for selecting a construction management entity shall not unfairly penalize an entity that has relevant experience in the delivery of construction projects of similar size and complexity by methods of delivery other than construction management.
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(4) Except as otherwise provided in this section and s. 481.229, the services of a registered architect must be used for the development of plans for the erection, enlargement, or alteration of any educational facility. . . . A district school board shall reuse existing construction documents or design criteria packages if such reuse is feasible and practical. If a school district's 5-year educational facilities work plan[9] includes the construction of two or more new schools for students in the same grade group and program, such as elementary, middle, or high school, the district school board shall require that prototype design and construction be used for the construction of these schools. Notwithstanding s. 287.055, a board may purchase the architectural services for the design of educational or ancillary facilities under an existing
contract agreement for professional services held by a district school board in the State of Florida, provided that the purchase is to the economic advantage of the purchasing board, the services conform to the standards prescribed by rules of the State Board of Education, and such reuse is not without notice to, and permission from, the architect of record whose plans or design criteria are being reused. Plans shall be reviewed for compliance with the State Requirements for Educational Facilities.
Rules adopted under this section must establish uniform prequalification, selection, bidding, and negotiation procedures applicable to construction management contracts and the design-build process. . . . Except as otherwise provided in this section, the negotiation procedures applicable to construction management contracts and the design-build process must conform to the requirements of s. 287.055.
A board may not modify any rules regarding construction management contracts or the design-build process.
Sections 255.103 and 287.055, Florida Statutes, the statutory provisions referenced in the first sentence of Section 1013.45(1)(c), Florida Statutes, provide, in pertinent part, as
follows:
§ 255.103. Construction management or program management entities
As used in this section, the term "governmental entity" means a . . . school district . . . .
A governmental entity may select a construction management entity, pursuant to the process provided by s. 287.055, which is to be responsible for construction project scheduling and coordination in both preconstruction and construction phases and
generally responsible for the successful, timely, and economical completion of the construction project. The construction management entity must consist of or contract with licensed or registered professionals for the specific fields or areas of construction to be performed, as required by law. The construction management entity may retain necessary design professionals selected under the process provided in s. 287.055. At the option of the governmental entity, the construction management entity, after having been selected and after competitive negotiations, may be required to offer a guaranteed maximum price and a guaranteed completion date or a lump-sum price and a guaranteed completion date, in which case, the construction management entity must secure an appropriate surety bond pursuant to s. 255.05 and must hold construction subcontracts. . . .
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§ 287.055. Acquisition of professional architectural, engineering, landscape architectural, or surveying and mapping services; definitions; procedures; contingent fees prohibited; penalties
Short title. --This section shall be known as the "Consultants' Competitive Negotiation Act."
Definitions. --For purposes of this section:
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(l) "Negotiate" or any form of that word means to conduct legitimate, arms length discussions and conferences to reach an agreement on a term or price. For purposes of this section, the term does not include presentation of flat-fee schedules with no alternatives or discussion.
Public announcement and qualification procedures.
1. Each agency shall publicly announce, in a uniform and consistent manner, each occasion when professional services must be purchased for a project the basic construction cost of which is estimated by the agency to exceed the threshold amount provided in s. 287.017 for CATEGORY FIVE or for a planning or study activity when the fee for professional services exceeds the threshold amount provided in s. 287.017 for CATEGORY TWO, except in cases of valid public emergencies certified by the agency head. The public notice must include a general description of the project and must indicate how interested consultants may apply for consideration.
2. Each agency shall provide a good faith estimate in determining whether the proposed activity meets the threshold amounts referred to in this paragraph.
Each agency shall encourage firms engaged in the lawful practice of their professions that desire to provide professional services to the agency to submit annually statements of qualifications and performance data.
Any firm or individual desiring to provide professional services to the agency must first be certified by the agency as qualified pursuant to law and the regulations of the agency. The agency must find that the firm or individual to be employed is fully qualified to render the required service. Among the factors to be considered in making this finding are the capabilities, adequacy of personnel, past record, and experience of the firm or individual.
Each agency shall evaluate professional services, including capabilities, adequacy of personnel, past record, experience, whether the firm is a certified minority business enterprise as defined by the Florida Small and Minority Business Assistance Act, and other factors determined by the agency to be applicable to its particular requirements. When securing professional services, an agency must endeavor to meet the minority business enterprise procurement goals under s. 287.09451.
The public must not be excluded from the proceedings under this section.
Competitive selection.
For each proposed project, the agency shall evaluate current statements of qualifications and performance data on file with the agency, together with those that may be submitted by other firms regarding the proposed project, and shall conduct discussions with, and may require public presentations by, no fewer than three firms regarding their qualifications, approach to the project, and ability to furnish the required services.
The agency shall select in order of preference no fewer than three firms deemed to be the most highly qualified to perform the required services. In determining whether a firm is qualified, the agency shall consider such factors as the ability of professional personnel; whether a firm is a certified minority business enterprise; past performance; willingness to meet time and budget requirements; location; recent, current, and projected workloads of the firms; and the volume of work previously awarded to each firm by the agency, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not
violate the principle of selection of the most highly qualified firms. The agency may request, accept, and consider proposals for the compensation to be paid under the contract only during competitive negotiations under subsection (5).
* * *
Competitive negotiation.
The agency shall negotiate a contract with the most qualified firm for professional services at compensation which the agency determines is fair, competitive, and reasonable. In making such determination, the agency shall conduct a detailed analysis of the cost of the professional services required in addition to considering their scope and complexity. For any lump-sum or cost-plus-a-fixed-fee professional service contract over the threshold amount provided in s. 287.017 for CATEGORY FOUR, the agency shall require the firm receiving the award to execute a truth- in-negotiation certificate stating that wage rates and other factual unit costs supporting the compensation are accurate, complete, and current at the time of contracting. Any professional service contract under which such a certificate is required must contain a provision that the original contract price and any additions thereto will be adjusted to exclude any significant sums by which the agency determines the contract price was increased due to inaccurate, incomplete, or noncurrent wage rates and other factual unit costs.
All such contract adjustments must be made within 1 year following the end of the contract.
Should the agency be unable to negotiate a satisfactory contract with the firm considered to be the most qualified at a price the agency determines to be fair, competitive, and reasonable, negotiations
with that firm must be formally terminated. The agency shall then undertake negotiations with the second most qualified firm.
Failing accord with the second most qualified firm, the agency must terminate negotiations. The agency shall then undertake negotiations with the third most qualified firm.
Should the agency be unable to negotiate a satisfactory contract with any of the selected firms, the agency shall select additional firms in the order of their competence and qualification and continue negotiations in accordance with this subsection until an agreement is reached.
* * *
(11) Construction of law. --Nothing in the amendment of this section by chapter 75-281, Laws of Florida, is intended to supersede the provisions of ss. 1013.45 and 1013.46.
The "rules of the State Board of Education" governing district school board purchases include Florida Administrative Code Rules 6A-1.007, 6A-1.012, and 6A-2.0010.
Florida Administrative Code Rule 6A-1.007 provides that "[i]t shall be the duty of the superintendent of schools and district school board to take whatever action is necessary during the fiscal year to keep expenditures and obligations within the budgeted income."
Florida Administrative Code Rule 6A-1.012 requires each district school board to "establish purchasing rules"10 consistent with, among other things, the following:
Definitions:
The term "competitive solicitation" shall be defined for the purposes of this rule to include purchasing made through the issuance of an invitation to bid, request for proposals and invitation to negotiate. .
. .
"Invitation to bid" shall be defined for the purposes of this rule as a written solicitation for competitive sealed bids. The invitation to bid is used when the district school board is capable of specifically defining the scope of work for which a contractual service is required or when the district school board is capable of establishing precise specifications defining the actual commodity or group of commodities required. A written solicitation includes a solicitation that is publicly posted.
"Invitation to negotiate" shall be defined for the purposes of this rule as a written solicitation for competitive sealed replies to select one or more vendors with which to commence negotiations for the procurement of commodities or contractual services. The invitation to negotiate is used when the district school board determines that negotiations may be necessary for it to receive the best value. A written solicitation includes a solicitation that is publicly posted.
* * *
"Request for proposals" shall be defined for the purposes of this rule as a written solicitation for competitive sealed proposals. The request for proposals is used when it is not practicable for the district school board to specifically define the scope of work for which the commodity, group of commodities, or contractual service is required and when the district school board is requesting that a responsible
vendor propose a commodity, group of commodities, or contractual service to meet the specifications of the solicitation document. A written solicitation includes a solicitation that is publicly posted.
The term "superintendent" shall be defined for the purposes of this rule to mean "superintendent or designee."
The superintendent may be authorized to purchase commodities or contractual services where the total amount does not exceed an amount prescribed by the school board, and does not exceed the applicable appropriation in the district budget. Assistants
functioning under the superintendent's direction may be authorized to perform these purchasing tasks. No person, unless authorized to do so under the rules of the district school board, may make any purchase or enter into any contract involving the use of school funds; no expenditures for any such unauthorized purchase or contract shall be approved by the district school board.
Before making any purchase of commodities or contractual services which the superintendent is authorized by the district school board to make or before recommending any purchase to the district school board, the superintendent shall, insofar as possible, propose standards and specifications. He or she shall see that the commodities or contractual services conform to those standards and specifications, and shall take such other steps as are necessary to see that the maximum value is being received for any money expended.
* * *
Except as authorized by law or rule, competitive solicitations shall be requested from three (3) or more sources for any
authorized commodities or contractual services exceeding $50,000. . . .
The district school board shall have the authority to reject any or all proposals submitted in response to any competitive solicitation and request new proposals or purchase the required commodities or contractual services in any other manner authorized by this section.
* * *
In accordance with Florida Administrative Code Rule 6A-1.012, Respondent has adopted "purchasing rules," including those set forth above in the "Findings of Fact" section of this Recommended Order.
Florida Administrative Code Rule 6A-2.0010 incorporates by reference "the Department of Education publication titled 'State Requirements for Educational Facilities 2007 and the 2009 Supplement to the State Requirements for Educational Facilities,'" and it provides that "[a]ll educational and ancillary facilities constructed by a school board . . . shall comply with 'State Requirements for Educational Facilities 2007 and the 2009 Supplement to the State Requirements for Educational Facilities.'" Section 4.1(1) of the "State Requirements for Educational Facilities 2007" addresses the "[p]requalification of [c]ontractors for [e]ducational [f]acilities [c]onstruction." It "prescribes
uniform and consistent requirements for prequalification of all construction services contractors," and provides that:
Contractors shall be prequalified by a board on the basis of the following criteria and such other criteria as the local board adopts:
Proof that the contractor holds a valid contractor's license that authorizes the contractor to supervise the work within the scope of the construction project.
Evidence that the applicant has financial resources to start up and follow through on projects and to respond to damages in case of default as shown by written verification of bonding capacity equal to or exceeding the amount of any project for which the contractor seeks prequalification. The written verification must be submitted by a licensed surety company rated excellent ("A-" or better) in the current A.M. Best Guide and qualified to do business within the State. In the absence of such written verification, the board can require the applicant to submit any audited financial information necessary to evaluate an applicant's financial ability to perform the project and to respond to damages in the event of default.
Evidence of experience with construction techniques, trade standards, quality workmanship, project scheduling, cost control, management of projects, and building codes for similar or less cost or scope projects as shown by the successful completion within the past five (5) years of at least two (2) other projects of similar size.
Evidence of satisfactory resolution of claims filed by or against the contractor asserted on projects of the same or similar size within the five (5) years preceding the
submission of the application. Any claim against a contractor shall be deemed to have been satisfactorily resolved if final judgment is rendered in favor of the contractor or any final judgment rendered against the contractor is satisfied within ninety (90) days of the date the judgment becomes final.
Type of work for which the contractor is licensed.
Section 120.57(3), Florida Statutes, sets forth the "procedures applicable to protests to contract solicitation[s] or award[s]" by an "agency," as that term ("agency") is defined in Section 287.012(1), Florida Statutes, which provides that "'agency' means any of the various state officers, departments, boards, commissions, divisions, bureaus, and councils and any other unit of organization, however designated, of the executive branch of state government."11 See § 120.57(3)(g), Fla. Stat. ("For purposes of this subsection, the definitions in s. 287.012 apply."). The parties are in agreement that this statutory provision governs the instant protest proceeding.
Section 120.57(3), Florida Statutes, provides as follows:
Agencies subject to this chapter shall use the uniform rules of procedure,[12] which provide procedures for the resolution of protests arising from the contract solicitation or award process. Such rules shall at least provide that:
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), Florida Statutes, or failure to post the bond or other security required by law within the time allowed for filing a bond shall constitute a waiver of proceedings under chapter 120, Florida Statutes."
Any person who is adversely affected by the agency decision or intended decision[13] shall file with the agency a notice of protest in writing within 72 hours after 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, awarding 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 days 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 facts 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.
Upon receipt of the formal written protest that has been timely filed, the 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
solicitation or contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare.
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.
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.
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 [DOAH] for proceedings under subsection (1).
Upon receipt of a formal written protest referred pursuant to this subsection, the director of [DOAH] shall expedite the hearing and assign an administrative law judge who shall commence a hearing within 30 days after the receipt of the formal written protest by [DOAH] 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, whichever 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 waived upon stipulation by all parties.[14]
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 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. 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.[15]
For purposes of this subsection, the definitions in s. 287.012 apply.
An intended "reject[ion] [of] all . . replies" is not "arbitrary," within the meaning of Section 120.57(3)(f), Florida Statutes, merely because it "may appear erroneous" or because "reasonable persons may disagree" with the taking of such
action. Groves-Watkins Constructors, 530 So. 2d at 913, quoting, with approval, from Liberty County v. Baxter's Asphalt
and Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982). Only if "'it is not supported by logic or the necessary facts,' [or] if it is adopted without thought or reason or is irrational'" will it be deemed "arbitrary." Hadi v. Liberty Behavioral Health
Corp., 927 So. 2d 34, 38-39 (Fla. 1st DCA 2006); 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."); 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 person would use to reach a decision of similar importance, it would seem that the decision is [not] arbitrary."); and Agrico Chemical Co. v. State Department of Environmental Regulation,
365 So. 2d 759, 763 (Fla. 1st DCA 1978)("An arbitrary decision is one not supported by facts or logic, or despotic."). Where an agency, in deciding to "reject all . . . replies," has engaged in an honest, lawful, and rational exercise of the "wide discretion [it has been granted] in soliciting and accepting bids for public improvements," its decision will not be overturned. Groves-Watkins Constructors, 530 So. 2d at 913,
quoting, with approval, from Baxter's Asphalt and Concrete, Inc., 421 So. 2d at 507.
The instant protest filed by Petitioner is one "contesting an intended agency action to reject
all . . . replies."
Petitioner is challenging this "intended agency action" on the grounds that it contravenes Section 287.055, Florida Statutes, and is therefore "illegal"; that it is "arbitrary"; and that it is "dishonest."
To prevail on its protest, Petitioner was required, at the final hearing in this case, to support its claims by a preponderance of the evidence. See Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So. 2d 412, 415 (Fla. 4th DCA 1974)("'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.'"); Spinella Enterprises v. Department of Environmental Protection, Inc., No. 08-3380BID, 2008 Fla. ENV LEXIS 129 **14-15 (Fla. DOAH October 2, 2008)(Recommended Order)("As the protesting party, Spinella must sustain its burden of proof by a preponderance of the evidence."); School Food Service Systems, Inc. v. Broward
County School Board, No. 01-0612BID, 2001 Fla. Div. Adm. Hear. LEXIS 2647 *41 (Fla. DOAH March 31, 2001)(Recommended Order)("Pursuant to Section 120.57(3)(f), Florida Statutes, the burden of proof rests with the party opposing the proposed agency action. School Food must sustain its burden of proof by a preponderance of the evidence.")(citation omitted); and § 120.57(1)(j), Fla. Stat. ("Findings of fact shall be based on a preponderance of the evidence, except in penal or licensure disciplinary proceedings or except as otherwise provided by statute. ").
Petitioner's evidentiary presentation came up short.
It failed to demonstrate that Respondent's "intended agency action" was tainted by either illegality, arbitrariness, or dishonesty.
Given the changed circumstances (discussed above) since "[Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had," Respondent's decision, two years later, to reject all responses to the RFQ (as revised) and to "hard bid" the FHS Project (as scaled back), rather than complete contract negotiations with Petitioner (or negotiate with another proposer), makes perfect sense. It was the product, not of dishonesty, but of a sincere and well-reasoned desire to promote competition and save taxpayers money. Arbitrary it was not.
"There is a very strong public interest in favor of saving tax dollars in awarding public contracts." Intercontinental
Properties, Inc. v. Department of Health and Rehabilitative Services, 606 So. 2d 380, 386 (Fla. 3d DCA 1992); see also Miami-Dade County School Board v. J. Ruiz School Bus Service, Inc., 874 So. 2d 59, 62 (Fla. 3d DCA 2004)("[C]ompetitive bidding statutes were enacted for the benefit of
taxpayers . . . ."); Paul J. Sierra Construction, Inc. v. Southwest Florida Water Management District, No. 02-3790BID, 2002 Fla. Div. Adm. Hear. LEXIS 1532 **11-12 (Fla. DOAH
December 4, 2002)(Recommended Order)("[T]he Committee's decision to reject all proposals was not arbitrary in any sense. While it is true that the precise amount of savings to be realized cannot be quantified, the greater weight of evidence shows that some savings can be achieved, and that the Committee's decision was based on facts, sound reasoning, and logic."); Smith and
Thompson, P.A. v. Department of Health and Rehabilitative Services, No. 92-6440BID, 1992 Fla. Div. Adm. Hear. LEXIS 6853 824 *24 (Fla. DOAH December 17, 1992)(Recommended Order)("HRS's interest in 'saving tax dollars in awarding public contracts' by implementing an in-house pilot program was likewise not arbitrary . . . ."); DGS Contract Service, Inc. v. United States,
43 Fed. Cl. 227, 238 (Fed. Cl. 1999)("[T]he court finds that the CO conducted these discussions to level the playing field and
promote competition, and as such, her actions were not arbitrary and capricious."); and Conway v. Kerr, 51 A.D.2d 758, 759 (N.Y. App. 1976)("Such a plan to save taxpayers' money is not arbitrary or capricious. It is an exemplary exercise of discretion.").
Furthermore, nothing in Section 287.055, Florida Statutes, or in any other statute or rule, prohibits Respondent from appropriately exercising its authority, under Florida Administrative Code Rule 6A-1.012(8), "to reject any or all proposals submitted in response to any competitive solicitation," as Respondent has announced it intends to do in the instant case. Indeed, if anything, it might arguably be "illegal" (in derogation of its obligation under Section 1011.06(1), Florida Statutes, "to obtain maximum value for all expenditures") for Respondent not to exercise this authority (and instead enter into a "Construction Management at Risk Services" contract for the FHS Project (as scaled back)).
In view of the foregoing, Petitioner's protest cannot be sustained.
RECOMMENDATION
Based on the foregoing Findings of Fact and Conclusions of Law, it is
RECOMMENDED that the Broward County School Board reject Petitioner's protest.
DONE AND ENTERED this 20th day of October, 2010, 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 SUNCOM 278-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 20th day of October, 2010.
ENDNOTES
1 Unless otherwise indicated, all references to Florida Statutes in this Recommended Order are to Florida Statutes (2010).
2 After the issuance of Addendum No. 7, the RFQ itself stated that there would be but a single "3-story Administration Classroom Building of 68,940 GSF." Therefore, to the extent that the Revised Public Announcement indicated that the RFQ provided otherwise (by using the plural, "Buildings"), it was inaccurate. The architect's drawings at the time, however, in fact "showed two [three-story] buildings."
3 Article 6 provided, in pertinent part, as follows:
ARTICLE 6
GUARANTEED MAXIMUM PRICE FOR CONSTRUCTION
6.1 The Construction Manager shall submit a written Guaranteed Maximum Price (GMP) for Construction to the Owner when the Construction Documents are 100%
complete . . . The GMP shall guarantee the maximum price for the construction cost of the project or designated part thereof, for phased projects, and shall be approved by the Owner. Such Guaranteed Maximum Price will be subject to modifications for changes in the project as provided in Article 27 of the general conditions. However, the actual price paid for the Work by the Owner shall be the actual cost of all Work subcontracts, supply contracts, direct labor costs, direct supervision costs, and direct job costs as defined under Article 26 of the general conditions, plus the Construction Manager's fees or the GMP, whichever is less when the Work is complete. OWNER SHALL NOT BE LIABLE NOR SHALL IT PAY CONSTRUCTION MANAGER ANY SUMS IN EXCESS OF THE GUARANTEED MAXIMUM PRICE. CONSTRUCTION MANAGER AGREES THAT ANY AND ALL SAVINGS BELONG AND/OR REVERT BACK TO THE OWNER.
* * *
6.4 IF THE GMP PROPOSAL IS UNACCEPTABLE TO THE OWNER, OWNER MAY TERMINATE THE CONSTRUCTION MANAGER AS SET FORTH IN ARTICLE
36 OF THE GENERAL CONDITIONS.
4 As a general rule, 75 to 80 percent of a capital outlay project's total funding is "designated for construction costs." The remainder is used to pay for such things as "architectural services, maintenance support, testing services, furniture, fixtures, equipment, software, textbooks and other supplies."
5 The specific revisions that need to be made to obtain a permit have been identified by the permitting authority.
6 As Petitioner points out in its Proposed Recommended Order, during contract negotiations, it made various suggestions and recommendations that ultimately were incorporated in these construction documents. That it did so, however, has no bearing on the outcome of the instant case. (Furthermore, any costs Petitioner may have incurred in coming up with these suggestions and recommendations are noncompensable pursuant to Article
of the RFQ (as revised), which (as noted above), provides, in pertinent part, that "[a]ll costs incurred in the . . . participation in this RFQ process shall be borne by the proposers."
7 The report contained the following excerpt from the website of the Construction Management Association of America answering the question, "What is Construction Management?":
"At risk" CM is a delivery method which entails a commitment by a construction manager to deliver the project within a Guaranteed Maximum Price (GMP). The construction manager acts as consultant to the owner in the development and design phases, but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager also protects him/herself.
8 Section 1011.01(3), Florida Statutes, mandates that "[e]ach district school board . . . shall prepare, adopt, and submit to the Commissioner of Education for review an annual operating budget."
9 District school boards are required, pursuant to Section 1013.35(2), to prepare and adopt a "district educational facilities plan," which must "include a financially feasible district facilities work program for a 5-year period." This five-year "work program" must, according to Subsection (2)(b) of the statute, contain the following:
A schedule of major repair and renovation projects necessary to maintain the educational facilities and ancillary facilities of the district.
A schedule of capital outlay projects necessary to ensure the availability of satisfactory student stations for the projected student enrollment in K-12 programs. . . .
The projected cost for each project identified in the district facilities work program. . . .
A schedule of estimated capital outlay revenues from each currently approved source which is estimated to be available for expenditure on the projects included in the district facilities work program.
A schedule indicating which projects included in the district facilities work program will be funded from current revenues projected in subparagraph 4.
A schedule of options for the generation of additional revenues by the district for expenditure on projects identified in the district facilities work program which are not funded under subparagraph 5. Additional anticipated revenues may include effort index grants, SIT Program awards, and Classrooms First funds.
Subsection (5) of the statute provides that "[t]he first year of the adopted district educational facilities plan shall constitute the capital outlay budget required in s. 1013.61."
10 See also § 1010.04(2), Fla. Stat. ("Each district school board . . . shall adopt rules to be followed in making purchases.").
11 A district school board is an "agency," as that term is used elsewhere in Chapter 120, Florida Statutes (other than in Section 120.57(3), Florida Statutes). See School Board of Palm Beach County v. Survivors Charter Schools, Inc., 3 So. 3d 1220, 1231 (Fla. 2009)("No one disputes that a school board is an 'agency' as that term is defined in the APA."); Volusia County School Board v. Volusia Homes Builders Association, 946 So. 2d 1084, 1089 (Fla. 5th DCA 2006)("[T]he School Board is an agency subject to the Administrative Procedure Act."); Sublett 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."); and Witgenstein v. School Board of
Leon County, 347 So. 2d 1069, 1071 (Fla. 1st DCA 1977)("It was obviously the legislative intent to include local school districts within the operation of Chapter 120."). It is not, however, an "agency," as that term is used in Section 120.57(3), Florida Statutes, since, as a constitutionally-created entity, it does not meet Section 287.012(1)'s definition of "agency." See Dunbar Electric Supply v. School Board of Dade County, 690 So. 2d 1339, 1340 (Fla. 3d DCA 1997)("School boards are constitutional entities created by Article IX, Section 4 of the Florida Constitution. School boards do not fall within the executive branch of the state government."); see also Dealer Tag Agency, Inc. v. First Hillsborough County Auto Tag Agency, Inc.,
14 So. 3d 1238, 1240 (Fla. 2d DCA 2009)("We find, however, that the Tax Collector is a constitutional entity created by article VIII, section 1(d) of the Florida Constitution and is not a 'state agency' that is part of the executive branch of the state government. The fact that the Tax Collector is described as an 'authorized agent' of the DHSMV for the provisions of section
320.03 does not make it a state agency for the provisions of chapters 287 and 120."); and First Quality Home Care, Inc. v. Alliance for Aging, Inc., 14 So. 3d 1149, 1152 (Fla. 3d DCA 2009)("Furthermore, Alliance is not a state 'agency' under Florida's procurement statute. Section 120.57(3), Florida Statutes (2008), provides for additional procedures applicable to protests to contract solicitations or awards. Subsection 120.57(3)(g) states that '[f]or the purposes of this subsection, the definitions in s. 287.012 apply.' Part I of chapter 287 governs public procurement of contractual services. Section 287.012(1) provides that 'agency' 'means any of the various state officers, departments, boards, commissions, divisions, bureaus, and councils and any other unit of organization, however designated, of the executive branch of state government.' Alliance does not fall within this definition as it is not a listed entity. In addition, Alliance is not 'any other unit of organization' because the express language of the statute limits that designation to units of 'the executive branch of the state government.' Clearly, Alliance -- a private corporation -- is not a 'unit of organization' of the State's executive branch. Accordingly, we hold that Alliance is not a state agency pursuant to the definitions of 'agency' as provided in the APA or in the procurement statute."). Accordingly, but for its incorporation in Part VIII of Respondent's Policy 3320, Section 120.57(3) would not be applicable in the instant case.
12 These "uniform rules of procedure" are found in Florida Administrative Code Rule Chapter 28-110.
13 "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, 755 (Fla. 1st DCA 1998).
14 In the instant case, the parties stipulated that the undersigned would have 30 days from the date of the last filed proposed recommended order to issue his recommended order.
15 This last sentence of Section 120.57(3)(f), Florida Statutes, represents a codification of the holding in Department of Transportation v. Groves-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, illegally, 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.)
COPIES FURNISHED:
Vincent F. Vaccarella, Esquire
401 Southeast 12th Street, Suite 300 Fort Lauderdale, Florida 33316
Robert Paul Vignola, Esquire School Board of Broward County
K. C. Wright Administration Building 600 Southeast Third Avenue, 11th Floor Fort Lauderdale, Florida 33301
James F. Notter Superintendent of Schools
K. C. Wright Administration Building 600 SE Third Ave
Fort Lauderdale, Florida 33301
Deborah K. Kearney, Department of Education
Turlington Building, Suite 1244
325 West Gaines Street Tallahassee, Florida 32399-0400
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
10 days from the date of this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 18, 2011 | Agency Final Order | |
| Oct. 20, 2010 | Recommended Order | Petitioner failed to establish that School Board's rejection of all responses to Request for Qualifications (from construction management firms) was arbitrary, illegal, or dishonest, as alleged in the Petitioner's protest. |
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