STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BERGERON LAND DEVELOPMENT, )

INC., )

)

Petitioner, )

)

vs. )

) STATE OF FLORIDA, DEPARTMENT ) OF GENERAL SERVICES, )

)

Respondent. )

) CASE NO. 82-2705BID

CARPELETTI BROTHERS, INC., )

)

Petitioner, )

)

vs. )

) STATE OF FLORIDA, DEPARTMENT OF ) GENERAL SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William E. Williams, held a public hearing in this cause on October 25, 1982, in Tallahassee, Florida.

APPEARANCES

For Petitioner Michael E. Zealy, Esquire Bergeron Land 6191 Southwest 45th Street Development, Inc.: Davie, Florida 33314

For Petitioner Kenneth G. Oertel, Esquire Capeletti 646 Lewis State Bank Building Brothers, Inc.: Tallahassee, Florida 32301

For Respondent, Thomas M. Beason, Esquire General Services: General Counsel and

Sylvan Strickland, Esquire Room 452, Larson Building Tallahassee, Florida 32301

By Petition for Formal Hearing dated September 1, 1982, Petitioner, Capeletti Brothers, Inc. ("Capeletti") protested the proposed award of a contract for the rough site preparation and grading for the proposed Reception Center and Correctional Institution in Dade County, Florida, to Bergeron Land Development, Inc. ("Bergeron"), which notice had been issued by the Department

of General Services ("DGS"). Subsequently, by letter of September 22, 1982, DGS accepted Capeletti's argument, and notified all bidders, including Bergeron, that it intended to reject all bids for the proposed project due to an alleged mistake of material fact concerning access to the job site. Subsequently, Bergeron timely filed a Petition for Formal Hearing seeking award of the contract.

By Request for Assignment of Hearing Officer and Motion to Expedite dated October 4, 1982, DGS forwarded the petitions of Capeletti and Bergeron to the Division of Administrative Hearings for assignment of a Hearing Officer and the conduct of a formal hearing pursuant to Section 12O.57(1), Florida Statutes.

Final hearing in this cause was scheduled for October 25, 1982, by Notice of Hearing dated October 7, 1982.

At a pre-hearing conference held on October 15, 1982, counsel for all parties stipulated that Bergeron would occupy the position of "Petitioner" at final hearing, and would, therefore, bear the ultimate burden of persuasion.

At the final hearing, Bergeron called Robert D. Watkins, Ronald C. Gillman, and Albert Bass as its witnesses. Bergeron offered Petitioner's Exhibits 1 through 7, which were received into evidence. Capeletti called Walter Greenwell as its only witness, and offered Exhibits 3 through 8, which were received into evidence. DGS called William A. Scaringe as its only witness, and offered DGS Exhibits 1 through 15, inclusive, each of which was received into evidence.

Counsel for each of the parties to this proceeding have submitted proposed findings of fact for consideration by the Hearing officer. To the extent that those proposed findings are not included in this Recommended Order, they have been specifically rejected as being either irrelevant to the issues involved in this proceeding, or as not having been supported by evidence of record.

FINDINGS OF FACT

On June 21, 1982, DGS issued specifications and contract documents as a basis for competitive bidding on a building construction project entitled "Rough Site Preparation and Grading for a Reception Center and Correctional Institution, Dade Co., Project No. DC-8037/8135," for the State of Florida, Department of Corrections. The specifications and contract documents were prepared by DGS' consulting architect/engineer ("A/E")

Paragraph B-10 of the specifications provided that requests for correction or interpretation of the meaning of drawings and specifications or other bidding documents should be in writing, addressed to the A/E, and that all such interpretations and supplemental instructions would be in the form of written addenda to the bidding documents. In addition, subparagraph B-3 of the specifications for the project provided that each ". . . bidder is required to be familiar with all Federal, State and Local laws, ordinances, rules and regulations that in any manner affect the work. Ignorance on the part of the bidder will in no way relieve him from responsibility." Further, subparagraph B-

11 of the specifications provides as follows:

Bidders are required, before submitting their proposals, to visit the site of

the proposed work and completely familiarize themselves with the nature and

extent of the work and any local conditions that may in any manner affect the

work to be performed and the equipment, materials and labor required. They

are also required to examine carefully the Drawings, Specifications and other Bidding Documents to inform themselves

thoroughly regarding any and all conditions

and requirements that may in any manner affect the work.

By letter of July 6, 1982, Capeletti, as a prospective bidder, called to the attention of the A/E that an existing road near the north boundary of the property on which the project is to be constructed, which was designated on the site location plan drawing as Northwest 41st Street, was not a public road, but was, instead, a private road on private property. In fact, the road depicted as Northwest 41st Street on the plans and specifications is owned by Florida Power and Light Corporation, and has not been dedicated for public use. Capeletti has been granted an exclusive right-of-way by Florida Power and Light Corporation for use of that road. A fence with a gate installed by Capeletti at some time in the past blocks access to the road, and a sign on the gate advises visitors that the roadway is under private ownership. In its letter to the A/E Capeletti inquired whether another access road would be provided to the bidder ultimately awarded the contract. The A/E did not issue a written addendum in response to Capeletti's letter, nor were any prospective bidders notified in writing by the A/E of the absence of a public access road.

Both Bergeron and Capeletti submitted bids on the project. Bids were opened on July 14, 1982, and the apparent low bidder was Bergeron, whose bid totaled $1,985,000. The amount of the second lowest bid was $2,390,000, and Capeletti's bid totaled $2,565,000, or $585,000 more than Bergeron's bid. The estimated DGS project budget for this project was established at $2,400,000 prior to the opening of the bids. Bergeron's bid was, therefore, $415,000 below the DGS estimate of the cost to do the project.

By letter dated August 19, 1982, DGS gave notice to all bidders of its intent to award the contract to Bergeron. Within 72 hours after receipt of DGS' notice, Capeletti filed a Notice of Protest pursuant to Section 120.53(5), Florida Statutes, and within ten days thereafter filed its Petition for Formal Hearing. Capeletti's petition requested that the contract be awarded to Capeletti, since it was the only bidder having legal access to the project site, or, alternatively, that all bids be rejected and the project rebid.

By letter dated September 22, 1982, DGS notified Bergeron and Capeletti that it was rejecting all bids, and further advised them that:

We have determined that the specifications contained a mistake of material

fact concerning access to the job site. Although there is no public road adjacent to the site and the state

did not otherwise have access, the drawings indicated that a public street, Northwest 41st Street, adjoined the site on our north boundary.

This was a misleading representation.

When access is obtained, it may be

at a different location and may affect the amount of the bid. The Department

desires to give bidders an equal opportunity to bid on the project with knowledge of the access location after it is obtained.

The Department proposes to rebid the project in the near future, combining the rough site preparation and

the buildings into a single project, and you will be notified of the date when' specifications will be available. (Emphasis added.)

After receipt of the DGS letter of September 22, 1982, Bergeron timely filed a Notice of Protest and its Petition in this cause, protesting the rejection of bids. The Capeletti and Bergeron petitions were consolidated for hearing purposes and for entry of a Recommended Order in this proceeding.

Subparagraph B-22 of the specifications, entitled "Rejection of Bids," provides as follows:

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 the Owner determines is not in a position to perform the Contract. . .

At the time bids for the proposed project were invited, opened and rejected, there was no existing public road that contractors could use to gain access to the building site, and there was no private road adjacent to the state-owned property. That situation remained the same at the time of final hearing in this cause on October 25, 1982.

DGS apparently knew, however, prior to the filing of Capeletti's protest that there was no public access to the job site. The DGS Chief of Construction for the Bureau of Construction testified that, prior to the filing of the Capeletti protest:

. . . it was my understanding that the Department of Corrections had worked with . . . [Dade] county, and the county was going to provide the access and make arrangements

for the access along the road designated as the Florida Power and Light

private road and the A. J. Capeletti private road and along Northwest 41st Street.

As required by the contract documents, Bergeron, prior to submitting its bid, visited the site of the proposed project and observed the aforementioned gate blocking what was delineated on the project drawings as an extension of Northwest 41st Street. Upon further inquiry, Bergeron determined that the roadway depicted on the project drawings as an extension of North West 41st Street adjacent to the north boundary of the project was in fact not publicly

dedicated. As a result, Bergeron, in formulating and submitting its bid, contemplated the construction of a temporary haul road of approximately 4,200 feet in order to access the project site. Bergeron apparently factored into its bid amount approximately $155,000 to $160,000 for the cost of building this temporary haul road. The project specifications did not call for the construction of either a temporary or permanent access road into the project area. Bergeron does not have definitive plans for the location of any such temporary haul road, and has indicated only that it would attempt to obtain permission from adjacent private property owners to use their property for that purpose. There is no evidence of record in this proceeding from which it can in any way be concluded that such an arrangement cannot be accomplished.

The State of Florida, Department of Corrections, is under a federal court mandate to have the entire facility, of which this contract is merely a part, available for use in the near future. There is, however, no evidence of record from which the exact date of such required availability can be determined, nor any indication that accepting Bergeron's bid would adversely affect that availability.

The contract documents provide for delay damages payable to the contractor in case of a delay for reasons other than changes in the work of 10 percent of the contract price per day, divided by the number of days in the contract period. One of the reasons advanced by DGS for rejecting all bids is that failure to do so could result in claims for damages by Bergeron in the event of any delay in obtaining access to the job site. This fear would seem unfounded for two reasons. First, although the contract is a 150-calendar-day contract, the contract time does not begin to run until DGS issues a Notice to Proceed.

No contractual provision sets an exact time in which any such notice should issue. Accordingly, it may well be that either DGS or Bergeron can solve any access problem before issuance of the Notice to Proceed. Secondly, Bergeron submitted its bid with full knowledge that there was no public access available, planning instead to furnish its own method of accessing the site. Indeed, Bergeron still contended in this proceeding that it was willing to perform the obligations of this contract at the price it had bid, including providing its own access to the site. Under these circumstances, it would seem improbable that any claim for delay concerning access could be deemed meritorious.

The contract drawings show an entrance road running in a north-south direction from the buildings to be constructed on the project site to the northern boundary of the property. The bid drawings show the length of the entrance road to be built on the site as actually 103 feet less than will be necessary to join that access road to any improved roadway which would run east- west to connect with the current termination point of North West 41st Street.

There is no showing in the record that this discrepancy in the plans in any way affected the amount of any bid on the project, and, as such, is not considered to be a "material error.

DGS has also contended that re-letting the bids on this project may result in a cost-saving by combining with it certain other portions of the overall project. Only one witness was offered by DGS on this point, and his testimony regarding potential cost-savings is not persuasive, primarily because it appears to be based entirely on speculation, and was offered without any record showing of design criteria for any such revised project upon which to base such a conclusion.

The testimony in this case reveals that DGS has been involved in siting and designing this project since 1974. DGS has failed to establish that it is in the best interest of the State of Florida, at this late date, to reject a bid that was directly responsive to the bidding documents, in an amount $415,000 below DGS' own project estimate, on the basis of speculation that some apparently hypothetical change in project plans might possibly result in a cost- saving.

CONCLUSIONS OF LAW

1. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. Section 120.57(1) , Florida Statutes.

   
   

2. DGS is authorized both by the contract documents in its' cause, and by generally accepted legal principles to reject any and all competitive bids so long as the exercise of this discretion in this regard is not arbitrary, unreasonable or capricious. Wood-Hopkins Contracting Company v. Roger J. Au and Son, Inc., 354 So.2d 446, 450 (Fla. 1 DCA 1978).

   
   

3. As pointed out by the court in Hotel China and Glassware Company v. Board of Public Instruction, 130 So.2d 78, 81 (Fla. 1 DCA 1961):

   
   

   Competitive bidding statutes are enacted for the protection of the public. They create a system by which goods or services required by public authorities may be acquired at the

   lowest possible cost. The system confers upon both the contractor and the

   public authority reciprocal benefits, and exacts from each of them' reciprocal obligations. The bidder is

   assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received. The principal benefit flowing to the public authority is the opportunity of purchasing the goods and' services required by it

   at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders,

   or make the award on the basis of personal preference.

   
   

4. As indicated above, it was agreed between the parties to this proceeding that Bergeron would bear the ultimate burden of persuasion in this case to establish its entitlement to the award of the contract in question. In the context of this case, Bergeron's prima facie burden is simple. It must establish that its bid was in fact the lowest responsive bid, that it is willing to perform the obligations of the contract in the amount of its bid, and that the provisions of the specifications in question were not misleading. Bergeron met its burden on each of these points, and neither Capeletti nor DGS have adduced competent evidence sufficient to overcome Bergeron's showing. Representatives of only two direct bidders and one subcontract bidder testified

concerning the bidding documents in this case. It is apparent from the record in this proceeding that none of the parties were misled by the depiction of the road at the northern boundary of the project site as North West 41st Street.

DGS knew that it was not a public road, the A/E knew that it was not a public road, Capeletti knew that it was not a public road, and Bergeron, through the exercise of the diligence required of a bidder by the contract documents, also knew that it was not a public road. To simply infer from the face of the documents themselves that this representation was in any way misleading to the other bidders, none of whom were called to testify, would require the rankest form of speculation. It is, therefore, concluded, as a matter of law, that the contract documents did not contain a mistake of material fact concerning access to the job site; indeed they contained no representation concerning access at all.

Neither does the record support DGS' contention that Bergeron cannot perform the contract because of lack of access to the job site. Bergeron has acknowledged in the course of this proceeding that it is its responsibility to obtain that access, and that it is willing to abide by the time requirements of the contract in performing its obligations notwithstanding this fact. In the face of this commitment, DGS' fear of potential claims for delay damages would appear unfounded.

Finally, the error concerning the length of the entrance road to be built on the project site is not a material misrepresentation, in that no evidence was adduced to show that this mistake in any way affected the amount of any bid submitted in response to the invitation to bid.

Accordingly, it is RECOMMENDED

That a final order be entered by the Department of General Services awarding the contract as bid to Bergeron Land Development, Inc.

DONE AND ENTERED this 10th day of November, 1982, at Tallahassee, Florida.

WILLIAM E. WILLIAMS

Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301 904/488-9675

Filed with the Clerk of the Division of Administrative Hearings this 10th day of November, 1982.

COPIES FURNISHED:

Michael E. Zealy, Esquire 6191 Southwest 45th Street Davie, Florida 33314

Thomas Brown, Executive Director Department of General Services Room 115, Larson Building Tallahassee, Florida 32301

Kenneth G. Oertel, Esquire 646 Lewis State Bank Building Tallahassee, Florida 32301

Thomas M. Beason, Esquire General Counsel

and

Sylvan Strickland, Esquire Room 452, Larson Building Tallahassee, Florida 32301

Docket for Case No: 82-002705

Orders for Case No: 82-002705