STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WAYNE BLACKWELL AND COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 79-1486BID

)

DEPARTMENT OF HEALTH AND )

REHABILITATIVE SERVICES and )

M. D. FORSYTHE CONSTRUCTION )

COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

This matter came on for hearing in Miami, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Robert T. Benton, II, on February 5, 1980. At the hearing, the parties were represented by counsel:

APPEARANCES

For Petitioner: Louis L. LaFontisee, Jr., Esquire

200 South East First Street, Suite 802 Miami, Florida 33131

For Respondent: Leonard Helfand, Esquire Department of 401 North West 2nd Avenue Health and Room 1040

Rehabilitative Miami, Florida 33128 Services

For Respondent: Richard Morgentaler, Esquire

M.D. Forsythe 1600 North East Miami Gardens Drive Construction North Miami Beach, Florida 33179 Company

Petitioner Wayne Blackwell and Company, Inc. (Blackwell), contends that respondent Department of Health and Rehabilitative Services (HRS) should have awarded the contract for construction of the forensic services building at South Florida State Hospital, account code 1-595-0278, to Blackwell instead of to respondent M. D. Forsythe Construction Company (Forsythe).

On March 21, 1979, Blackwell telegraphed (and mailed) HRS its protest against Forsythe's bid. By letter dated April 3, 1979, HRS denied Blackwell's protest on the ground "that there was confusion in the marketplace regarding the intent of Alternate No. 1," and advised Blackwell that it was "entitled to request a hearing pursuant to Chapter 120.57(2) [sic], Florida Statutes,. .

.wherein you may offer written or oral evidence in opposition to this agency's action. . ." By letter dated April 9, 1979, Blackwell "request[ed] that a

hearing pursuant to Chap[t]er 120 Paragraph .57(2). . .be arranged at [HRS'] earliest convenience." On May 10, 1979, HRS entered an "ORDER" giving Blackwell "twenty (20) days from the date of rendition of this order in which to submit to the Office of General Counsel a brief or memorandum of law in support of his position. . ."

Blackwell's counsel prepared such a memorandum on June 5, 1979, in which he wrote "there is a factual issue as to whether confusion in the marketplace existed." On July 16, 1979, HRS entered a second "ORDER" providing:

[T]his case file shall be submitted to the Department of Administration's Division of Administrative Hearings for a determination as to whether a disputed issue of material fact exists. If the Division of Administrative Hearings finds no disputed issue of material fact, the case shall be referred back to the Department for a Final Order.

Accordingly, notice of hearing issued on August 1, 1979, in which the issue was framed as follows:

Whether there was such confusion in the marketplace as to give [HRS] cause to delete bid alternative No. 1 from the bid [documents] in letting a contract for the Forensic Services Building at South Florida State Hospital. . .

At the ensuing hearing, on October 23, 1979, Blackwell's counsel took the position that Blackwell was entitled to the award of the contract and/or money damages.

After listening to argument of counsel, the Hearing Officer ruled that no further proceedings should be had until Forsythe was given notice; and that the parties were entitled to a hearing under Section 120.57(1), Florida Statutes (1979), on the broad issue of whether HRS should have awarded the contract to Blackwell rather than to Forsythe; but advised HRS' counsel that HRS could enter an order before the hearing reconvened, in the event the agency head decided either to hear the matter himself pursuant to Section 120.57(1), Florida Statutes (1979), or that the matter should be disposed of pursuant to Section 120.57(2), Florida Statutes (1979). No order having been entered by HRS in the interim, the hearing reconvened on February 5, 1980, pursuant to revised notice issued on October 29, 1979.

FINDINGS OF FACT

1. As project architect under contract to HRS, Greenleaf/Telesca Planners, Engineers, Architects, Inc. (Greenleaf) prepared a project manual (manual). The manual invited contractors to bid on a contract for construction of the forensic services building at the South Florida State Hospital in Pembroke Pines, Florida, project No. HRS-0278. The manual contained specifications for a base contract covering construction of the building itself, and for four alternate additive bids, covering various equipment and furnishings. The first alternate called for installation of mess hall tables and seats. For the first alternate, the manual specified tables and seats manufactured by Folger Adam Company, their model number 522, or "upon prior approval" the equivalent. From the floor plan

   it is clear that 24 tables and corresponding seats would be required. The language of the manual describing alternate No. 1 presents no particular ambiguity or difficulty. The Folger Adam Company is well known in the construction business.

   
   

2. Harold Wayne Blackwell, petitioner's president, used the manual in preparing Blackwell's bid for the contract. Blackwell bid on the base contract and on each of the four alternates. There are seven or eight contract hardware suppliers in Dade and Broward Counties, all of whom have access to Folger Adam Company products. Folger Adam Company does not have exclusive distributors. To determine the price of the tables, Mr. Blackwell telephoned several contract hardware suppliers, including Christensen Hardware Services, Inc. (Christensen). Christensen quoted Blackwell a price of ten thousand eight hundred dollars ($10,800.00) for twenty-four sets of Folger Adam model number 522 tables and seats. Blackwell submitted a bid of eleven thousand dollars ($11,000.00) on alternate No. 1. Forsythe bid on the base bid but did not bid on alternate No. 1, because Forsythe failed to obtain a quote on the tables and seats, before preparing its bid.

   
   

3. Richard B. Solomon, Greenleaf's project manager for the forensic services building, opened the bids on March 20, 1979. As tabulated by Greenleaf, the bids were:

   
   

   	Base Bid	Alt. No. 1	Alt. No. 2	Alt. No. 3	Alt. No. 4
   M.D. Forsythe Construction Co.	$375,000	$ ---	$50,842	$27,220	$33,020
   Porfiri Construction Co.	406,200	7,000	45,534	25,315	44,130
   Wayne Blackwell
   and Co., Inc. 397,735		11,000	47,000	25,000	35,000
   Ed Ricke & Sons, Inc. 405,000		14,900	52,000	28,300	47,650
   McKee Construction Co. 407,000		---	45,000	28,000	---
   L.G.H. Construction Corp. 524,176		18,014	43,464	24,712	35,048
   Creswell Construction Co. 394,000		41,000	43,000	23,000	33,000

   
   

   Petitioner's exhibit No. 2.

   
   

   On the base bid, Forsythe was lowest, Creswell Construction Company next lowest, and Blackwell third lowest. Among contractors who bid on the base bid and all alternates, Blackwell's combined bids were lowest for the base bid plus alternate No. 1, the base bid plus alternates Nos. 1 and 2, the base bid plus alternates Nos. 1, 2 and 3, and the base bid plus alternates Nos. 1, 2, 3 and 4.

   
   

4. Mr. Solomon was aware of two telephone calls received by Greenleaf during the time for preparation of the bids, inquiring about the price of the

   tables and seats. In examining the bids, he noticed that two contractors had not bid on alternate No. 1, and that the base bids as well as the bids on alternates Nos. 2, 3 and 4 were "pretty tight" as compared to the range of bids on alternate No. 1. From looking at the bids on alternate No. 1, it was hard for Mr. Solomon to tell what a reasonable price for the tables and seats was.

   Mr. Solomon recommended to HRS that the bids on alternate No. 1 be thrown out.

   
   

5. Charles Robert Yates, an architect employed by HRS, concurred in Mr. Solomon's recommendation. He was under the impression that funding for the project would not be available unless the contract was let before April 1, 1979. Mr. Yates could not recall such diversity among bids in his thirty-year career, yet he had no difficulty learning what the tables and chairs cost when he called architectural firms to find out.

   
   

6. After the bids were opened, Blackwell promptly protested Forsythe's bid. Under the heading of alternates, the manual states:

   
   

   If the Base Bid is within the amount of funds available to finance the construction contract and the Owner wishes to accept alternate additive bids, then contract award will be made to that responsible Bidder submitting the low combined bid, consisting of the Base Bid plus alternate additive bids (applied in the numerical order in which they are listed in the Bid Form). Petitioner's exhibit No. 1, Paragraph B-9, Alternates.

   
   

   HRS wrote Blackwell on April 3, 1979, denying Blackwell's protest and stating, as reasons:

   
   

   1. M.D. Forsythe Construction Co., Inc. did not ignore Alternate No. 1, but completed that section of their bid by stating "No bids received on this item."

      
      

   2. Proposals for Alternate No. 1 ran the gamut for "No Bid" to prices extending from

      $7,000 to $41,000.

      
      

   3. The Department holds, as concurred in by the attached letter from our consultants, that there was confusion in the marketplace regarding the intent of Alternate No. 1, as attested to by the disparity among the proposals, and therefore we choose not to consider Alternate No. 1. Provisions for this deletion include Sections B-17, B-22 and B-24 of the Contract Documents.

      
      

      Petitioner's exhibit No. 3.

      
      

      HRS then awarded the base contract and additive alternates Nos. 2 and 3 to Forsythe, and gave orders to proceed with construction on May 7, 1979. After construction began, Mr. Solomon wrote Forsythe to inquire what Forsythe would charge to install the tables and seats called for by additive alternate No. 1. Forsythe eventually agreed to do it for eleven thousand dollars ($11,000.00),

      after first quoting a higher price. On August 1, 1979, Greenleaf prepared a change order at HRS' behest, directing Forsythe to install the tables and seats originally called for by additive alternate No. 1, at a price of eleven thousand dollars ($11,000.00).

      
      

7. Other provisions of the manual relied on by the parties include the following:

   
   

   B-17 PREPARATION AND SUBMISSION OF BIDS

   
   

   Each Bidder shall copy the Proposal Form on his own letterhead, indicate his bid prices thereon in proper spaces, for the entire work and for alternates on which he bids. Any erasure or other correction in the proposal may be explained or noted over the signature of the Bidder. Proposals containing any conditions, omissions, unexplained erasures, alternations, items not called for or irregularities of any kind may be rejected by the Owner. . .

   
   

   1. DISQUALIFICATION OF BIDS

      
      

      Any or all proposals will be rejected if there is reason to believe that collusion exists among the Bidders and no participants in such collusion will be considered in future proposals for the same work. Proposals in which the prices obviously are unbalanced will be rejected.

      
      

      Falsification of any entry made on the Contractor's bid proposal will be deemed a material irregularity and will be grounds, at the Owner's option, for rejection.

      
      

   2. REJECTION OF BIDS

      
      

      The Owner reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the proposal of a Bidder who is not in position to perform the contract.

      
      

   3. AWARD OF CONTRACT

   
   

   The contract will be awarded as soon as possible to the lowest qualified Bidder provided his bid is reasonable and it is in the best interest of the Owner to accept it. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner.

   
   

   The lowest bidder will be determined by adding to the Base Bid such alternates, in

   numerical order, as available capital funds will allow.

   
   

   The Agreement will only be entered into with responsible contractors, found to be satisfactory by the Owner, qualified by experience, and in a financial position to do the work specified.

   
   

   Each Bidder shall, if so requested by the Owner, present additional evidence of his experience, qualifications, and ability to carry out the terms of the contract, including a financial statement.

   
   

   Petitioner's exhibit No. 1.

   
   

   At no time did Forsythe attempt to influence the award of the contract improperly. At the time of the final hearing, the project was approximately 95 percent complete.

   
   

   CONCLUSIONS OF LAW

   
   

8. In its proposed recommended order, petitioner contends that "the only effective relief available. . .would be an award of damages for its anticipated loss of profits on the Project." It may be that, on review of these proceedings pursuant to Section 120.68, Florida Statutes (1979), the reviewing court will exercise its "judicial power to enforce. . .contractors' money claims against state agencies which have groundlessly denied them." Graham Contracting, Inc.

   v. Department of General Services, 363 So.2d 810, 814 (Fla. 1st DCA 1978), cert. den. 373 So.2d 457 (Fla. 1979). Until and unless this occurs, respondent HRS has no legal obligation to pay petitioner any sum, especially since petitioner adduced no proof in the present proceedings as to the extent of lost profits, if any.

   
   

9. In its proposed recommended order, respondent HRS suggests that its "awarding of the contract could be considered final agency action which would take petitioner's grievance out of the purview of Chapter 120, Florida Statutes, proceedings." If HRS deemed the award of the contract final agency action, HRS should have denied Blackwell's petition for a hearing pursuant to Section 120.57, Florida Statutes (1979). It is now too late for HRS to be heard to argue that the award of the contract to Forsythe is final agency action, as a technical, legal matter.

   
   

10. As a practical matter, however, the project is almost completed. When petitioner sought a hearing on the propriety of the award of the contract, HRS would have done well to throw out all bids and begin anew or withhold the award pending a hearing, as it was ordered to do in the case of Solar Energy Control, Inc. v. State of Florida Department of Health and Rehabilitative Services, 377 So.2d 746 (Fla. 1st DCA 1979) (reh. den. 1980). In the present posture of the case, there is simply no effective way to enforce compliance by HRS with paragraph B-9 of the instructions to bidders.

RECOMMENDATION

Upon consideration of the foregoing, it is

RECOMMENDED:

That, in the future, HRS adhere to the letter of language like that contained in paragraph B-9 of the manual whenever such language is used in an invitation for bids.

DONE and ENTERED this 6th day of March, 1980, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301

(904) 488-9675

COPIES FURNISHED:

Louis L. LaFontisee, Jr., Esquire

200 South East First Street, Suite 802 Miami, Florida 33131

Leonard Helfand, Esquire

401 North West 2nd Avenue Room 1040

Miami, Florida 33128

Richard Morgentaler, Esquire

1600 North East Miami Gardens Drive North Miami Beach, Florida 33179

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WAYNE BLACKWELL AND COMPANY, INC.,

Petitioner,

vs. CASE NO. 79-1486BID

DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES and

M. D. FORSYTHE CONSTRUCTION COMPANY,

Respondents.

/

FINAL ORDER

The Department of Health and Rehabilitative Services, upon review of the Recommended Order, hereby accepts and adopts the findings of fact set out in the attached Recommended Order entered in this cause on March 6, 1980; however, the Department rejects the Conclusions of Law for the reasons stated below.

Petitioner contends that the Department should have awarded a contract for construction of a forensic services building at South Florida State Hospital, Account Code 1-595-0278, to Blackwell instead of co-respondent M. D. Forsythe Construction and/or money damages. However, by the time the hearing was held on October 23, 1979, the contract between the Department and Forsythe had been executed (May 7, 1979), construction was underway and the project was approximately 95 percent complete.

The execution of the contract is agency action as defined by section 120.54(2). Petitioner did not seek a stay of contract execution or judicial review of that action pursuant to section 120.68 and the Florida Rules of Appellate Procedure. The contract execution ripened to final agency action and a section 120.57 proceeding cannot be employed to collaterally attack the validity of prior final agency action. The contract execution is either an order or the equivalent of an order and, while a section 120.57 proceeding is available to question an agency's position when that agency attempts to subsequently enforce prior final agency action, a section 120.57 petition attacking the validity ad initio of prior final agency action constitutes an impermissible collateral attack. State of Florida Department of Health and Rehabilitative Services v. Barr 359 So.2d 503 (Fla. 1st DCA 1978). It is of no consequence that the Department did not deny Blackwell's petition for hearing pursuant to section 120.57 as the hearing officer so states in his Recommended Order. Such a perceived failure does not convert final agency action into another classification of agency action authorizing Petition to engage in a collateral attack upon the validity ab initio of prior final agency action.

The Department further finds that the hearing officer's recommendation that the Department "adhere to the letter of language like that contained in paragraph B-9 of the manual whenever such language is used in an invitation for bid" exceeds the hearing officer's authority to issue a recommendation as to the facts of a particular cases and the application of the facts to the applicable law. The hearing officer's recommendation here is in futuro and does not address a course of action with respect to the parties in this particular proceeding. The hearing officer simply should have concluded as a matter of law that there is no relief which may be afforded to Petitioner.

Wherefore, for the reasons stated above, the Recommended Order is hereby modified by this Final Order of the Department.

Done and Ordered this 4th day of April, 1980, in Tallahassee, Florida.

/s/ David H. Pingree DAVID H. PINGREE

Secretary

Copies furnished to:

Robert T. Benton, II Louis L. LaFontisee, Jr. Leonard Helfand, Esq.

Richard Morgentaler, Esq.

Docket for Case No: 79-001486

Orders for Case No: 79-001486