vs. ) CASE NO. 84-3042BID
Respondent. )
On October 22, 1984, a formal hearing was held to resolve the matters in dispute in this action. The hearing was conducted by Charles C. Adams, Hearing Officer. The location of the hearing was 605 Suwannee Street, Tallahassee, Florida. This Recommended Order is being entered following the receipt and review of the proposed recommended orders of the parties, the last of which was filed with the Division of Administrative Hearings on November 19, 1984. In preparing the recommended order, those proposals have been utilized to some extent. Where the proposals have not been utilized, it is because of their lack of relevance, materiality, for reason that the facts were subordinate to other facts found, or due to the cumulative nature of the proposed facts.
For Petitioner: Larry A. Bodiford, Esquire
For Respondent: Mel L. Wilson, Esquire
Florida Department of Transportation Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32301
The issues in this cause are presented through a bid protest filed by Hobbs Construction questioning the notice of the Florida Department of Transportation which rejected all bids on State Project No. 49010-3543, Franklin County, Florida, in which Hobbs was the apparent low bidder. In particular, Hobbs challenges the rejection of its bid, wherein the Department has claimed that Hobbs has failed to meet the Disadvantaged Business Enterprise contract requirements.
On June 14, 1984, Hobbs Construction and Development, Inc., submitted an application for recognition by the State of Florida, Department of Transportation, to perform work for the department in an additional work class for which Hobbs had not previously qualified. On June 22, 1984, this request for qualification was approved as evidenced by the correspondence of that date from J. Ted Barefield, Chief of Bureau of Contracts Administration, Department of Transportation, addressed to Hobbs. A copy of that correspondence may be found as Petitioner's exhibit number two admitted into evidence. The Notice of Qualification was received by Hobbs on June 26, 1984.
Having been recognized in the new classification, Hobbs was entitled to qualify as a bidder on Budget Item 3112655, which is also known as State Project No. 49010-3543, Franklin County, Florida. (Prior to the new classification or qualification of Hobbs, Hobbs was entitled to purchase the plans for the aforementioned job, but was not entitled to receive the actual bidding documents [specifications] related to the job.) On June 26, 1984, the date that Hobbs was informed of its qualification to pursue the subject job in Franklin County, it obtained the bid packet, job specifications, from the Department of Transportation.
Even before qualification, Hobbs being interested in the Franklin County job made attempts on June 21, 1984, to contact Disadvantaged Business Enterprise subcontractors, known as DBE subcontractors, realizing that the contract called for participation by a DBE subcontractor(s). Glen Powell Contracting, Inc., Lynnhaven, Florida, and Bryan L. Therman Contractors, Inc., of Chipley, Florida, were among the DBE subcontractors which Petitioner was interested in and attempted to contact. It was contemplated that those contractors would perform the installation of rip rap which constituted a high percentage of the project work. Oglesby and Hugg, a DBE subcontractor, was also contacted about installation of rip rap and indicated that they were not interested in the project. The contact with Therman was by talking to someone in hips office, leaving a message for Therman to call the Hobbs representative. The Therman group did not make a return call. Glen Powell and another official within the Glen Powell corporation, reviewed the project with officials of Hobbs' Construction Company and indicated that Powell would not be able to give a quote for the subcontracting rip rap work given the nearness of the time to submit the bid. Powell had been reached on June 25, 1984, and made the assessment of the bid materials on June 26, 1984, at which point he declined to give a price quote for the subcontracting rip rap work. Several DBE grassing subcontractors were also contacted by Hobbs and declined to perform work given the location of the project and the small amount of grassing to be installed. When the bid was submitted by Hobbs, the only DBE subcontractor that was listed was Black Olive Nursery and Landscaping of 21053 N.W. 37th Court, Miami, Florida. That class of work was landscaping in the amount of 9,599.30, which is approximately .6 percent of the Hobbs bid proposal in the amount of
$1,585,170.30.
Hobbs submitted the bid on the Franklin County project in time to meet the June 27, 1984, bid opening. When the bids were opened, Hobbs bid reported above was the apparent low bid for the project. As was the custom of the Department of Transportation, its Contracts Awards Committee met to determine the acceptability of the bids for the Franklin County project and to decide whether to go forward with the project in the face of the bids offered. At that time, the committee being of the belief that Hobbs and the second low bidder both failed to meet DBE participation requirements of the contract and being
persuaded of the need to modify the plans and revise the specifications related to the installation of rip rap it was decided to reject all bids. That decision was by unanimous vote of the Contracts Award Committee of the Department of Transportation and this advice was accepted by the agency head. A copy of the minutes of that committee, which reflects the decision of the committee, may be found as Department's exhibit number two.
On July 24, 1984, Hobbs was noticed of the Department's intent to reject all bids for reason that the Department desired to revise the plans and specifications and in view of the fact that, according to the Department, Hobbs had failed to meet the DBE contract requirements. A copy of this Notice of Bid Rejection may be found as Petitioner's exhibit number one admitted into evidence. That notice affords an opportunity for Hobbs to challenge the bid rejection through request for a Chapter 120, Florida Statutes hearing. Hobbs timely availed itself of that opportunity leading to the formal hearing which is the subject of this recommended order.
To meet the DOE requirements of the contract, it was necessary for Hobbs to designate 2 percent of the contract amount for DOE subcontractor participation. In the alternative, if Hobbs was unable to achieve that goal, it was necessary for Hobbs to provide sufficient information to show that it had made a good faith effort to meet the goal. The issues joined in this case concern whether Hobbs timely provided its explanation of its good faith efforts to obtain DBE participation in the project and if that explanation was provided in a timely fashion, whether it was sufficient information to demonstrate good faith compliance.
Within the specifications, a copy of which is found as joint exhibit number one, there are found Supplemental Special Provisions dating from May 31, 1984. Subarticles 2-5.3.2 and 2-5.3.3, deal with the question of DBE participation and the need to submit good faith efforts. The language of those provisions is as follows:
2-5.3.2 Submittals for Contracts with Goals:
For all contracts for which DBE and/or WBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE and WBE participation information shall be submitted with the Contractors bid proposal. Award of the Contract shall be conditioned upon submission of the DBE and WBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals.
The Contractors bid submission shall include the following information (Submitted on Form No. 141-12 - DBE/WBE Utilization Form No. 1):
The names and addresses of certified DBE and WBE firms that will participate in the contract. Only DBEs and WBEs certified by the
Department at the time the bid is submitted may be counted toward DBE and WBE goals.
A description of the work each named DBE and WBE firm will perform.
The dollar amount of participation by each named DBE and WBE firm.
2-5.3.3 Submittals for Evaluating Good Faith- Efforts:
If the DBE or WBE goal is not met, sufficient information to demonstrate that
the Contractor made good faith efforts to meet the goals shall be submitted.
In evaluating a contractor's good faith efforts, the Department will consider:
Whether the Contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt requested, or hand delivery, with receipt, to all certified DBEs and WBEs which perform the type of work which the Contractor intends to subcontract, advising the DBEs and WBEs (a)
of the specific work the Contractor intends to subcontract; (b) that their interest in the contract is being solicited; and (c) how to obtain information about and review and inspect the contract plans and specifications.
Whether the Contractor selected economically feasible portions of the work to be performed by DBEs or WBEs, including where appropriate, breaking down contracts or combining elements of work into economically feasible units. The ability of a contractor to perform the work with its own work force will not in itself excuse a contractor's failure to meet contract goals.
Whether the Contractor provided interested DBEs or WBEs assistance in reviewing the contract plans and specifica- tions.
Whether the DBE or WBE goal was met by other bidders.
Whether the Contractor submits all quotations received from DBEs or WBEs, and for those quotations not accepted, an explanation of why the DBE or WBE will not be used during the course of the contract. Receipt of a lower quotation from a non-DBE or non-WBE will not in itself excuse a contractor's failure to meet contract goals; provided, however, a contractor's good faith efforts obligation does not require a contractor to accept a quotation from a DBE or WBE which exceeds
the lowest quotation received from any subcontractor by more than one percent.
Whether the contractor assisted interested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance.
Whether the contractor elected to subcontract types of work that match the capabilities of solicited DBEs or WBEs.
Whether the Contractor's efforts were merely pro forma and given all relevant circumstances, could not reasonably be expected to produce sufficient DBE and WBE participation to meet the goals.
Whether the Contractor has on other contracts within the past six months utilized DBEs and WBEs.
The above list is not intended to be exclusive or exhaustive and the Department will look not only at the different kinds of efforts that the Contractor has made but also the
quality, quantity, and intensity of these efforts.
These provisions are under the general heading of Preparation of Proposals related to Articles 2 through 5. Subarticle 2-5.3.2 indicates that the bidder shall establish its participation information related to DBE subcontractor with the bid proposal or if the goals are not met, demonstrate that good faith efforts were made to meet the goals. The contract is awarded upon condition that the DBE participation goals are met, or upon establishing that good faith efforts were made to meet the goals and that the goals were not attainable. The form known as the DBE Utilization Form No. 1 was provided in this instance. It contemplates information as to success in meeting the DBE goals. A copy of that form may be found as part of the joint exhibit one. It contains no specific place to explain the good faith efforts that were made by the Petitioner to achieve those goals, in view of the Petitioner's lack of success in meeting the goals and Hobbs didn't submit good bid information with its bid. The bid was also submitted under the ausnices of Rule 14-78.03, Florida Administrative Code (May 1984).
The first effort which Hobbs made at describing his alleged good faith efforts to employ the assistance of DBEs came on August 29, 1984, in correspondence of its project manager. This correspondence is found as State of Florida, Department of Transportation's exhibit number three and is correspondence directed to another official within Hobbs Construction. This statement of efforts to obtain minority or DBE participation in the project was along the lines of testimony given in the course of the hearing. No information, related to compliance, was given to the Department of Transportation prior to its notice of intent to reject the bid of July 24, 1984. Having no obligation to request that information from Hobbs, the Department of Transportation did not attempt to stir Hobbs into action on the issue of indication of good faith, prior to its notice of intent to reject Hobbs bid. Hobbs' explanation was eventually advanced ate the final hearing.
Factually, even if one were to assume that the Petitioner could submit its prebid letting efforts at good faith compliance with the DBE goals, at a time beyond the filing of its bid proposal, the efforts do not comport with the concept of good faith as described in Subarticle 2-5.3.3 of the bid proposal and Section 14-78.03, (2)(b) 4.b., Florida Administrative Code related to an
assessment of the efforts at good faith compliance. In this sense, Hobbs failed to afford sufficient time for DBE subcontractors to provide responses to the opportunity to offer quotations for the subcontracted work. The Subarticle and Rule contemplate seven days notice prior to the bid letting. The contracts made by the Petitioner were less than seven days prior to the letting of June 27, 1984. This left the one subcontractor who expressed some interest in the project, Powell, inadequate time to offer its price quote. Petitioner tries to explain its position on the question of the timeliness of its attempt by stating that it only became qualified five days before the bid letting and was only informed of that qualification one day before th opening. Given the fact that the Petitioner made application for such qualification on June 14, 1984, only thirteen days before the bid letting, its tardiness did not leave adequate time to afford potential DBE subcontractors the opportunity to respond to the work opportunity envisioned in this project. Finally, given the close proximity in time between the efforts of the Petitioner to seek DBE participation and the bid letting date and the problem related to the Petitioner's late expression of an interest in qualification for this class of job, Petitioner cannot be said to have offered much in the way of quality and intensity in the efforts to enlist DBE subcontractors for this project, as envisioned by the Subarticle and Rule provisions describing good faith efforts at compliance.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action pursuant to Section 120.57, Florida Statutes.
Section 339.081, Florida Statutes, establishes the requirement for the State of Florida, Department of Transportation to spend an amount of not less than 10 percent of the Transportation Trust Fund with small businesses which are owned and controlled by the socially and economically disadvantaged, unless the requirement is reduced to a lesser percentage. This statutory provision is put into effect by Chapter 14-78, Florida Administrative Code, through the establishment of an affirmative action program to promote participation in these Department of Transportation contracts by women and socially and economically disadvantaged individuals. Section 14-78.03(2)(b), Florida Administrative Code, speaks to the issue of the establishment of contract goals through subcontract opportunities for Disadvantaged Business Enterprises, also known as DBEs. In the Franklin County project, which is at issue, that goal was 2 percent. According to Section 14-78.03(2)(b)4.a., Florida Administrative Code, the Petitioner was to indicate compliance with that DBE requirement or in the alternative offer sufficient information to demonstrate that the contractor had made good faith efforts to meet the goal when the bid was submitted. The Petitioner did not meet the participation goal in its bid submission. No information related to good faith effort at compliance was offered with the bid submission.
By failing to offer its explanation of good faith effort to achieve DBE goals for the project with its bid submission, Hobbs violated the subject rule related to the provision of good faith information and acted contrary to the Subarticle 2-5.3.2 of the contract terms. This failure is sufficient reason to reject Hobbs bid. As envisioned by Section 14-78.03(2)(b)4., Florida Administrative Code, Hobbs having failed to meet the DBE participation goal.
Subarticle 2-5.3.2, which was in effect at the time of the submission of the bid proposal, can be read, according to Petitioner, to not require demonstration of good faith efforts within the bid blank provided in response to
the bid opportunity. Nonetheless, the bid would not be awarded to the Petitioner without such demonstration of good faith effort, in the absence of success in achieving the DBE participation goal. Therefore, it is a fair inference that the bid documents contemplated that the Petitioner would submit that good faith information with the bid proposal. In addition, Section 14- 78.03,(2)(b)4.a.IV., Florida Administrative Code in effect at the time of the submission of that bid proposal, required that bidders such as Petitioner, shall include within the bid submission, where the contract goals for DBE were not met, "...sufficient information to demonstrate that the contractor made good faith efforts to meet the goals.", given the fact that this language is found within the Subsection dealing with what shall be submitted with the bid. 1/
This is unlike the circumstance in Subarticles 2-5.3.2 and 2-5.3.3 where submission of good faith information language is separated from Subarticle 2-
5.3.2 into Sutarticle 2-5.3.3, Supra, possibly giving rise to Petitioner's belief that good faith demonstration could be made after its bid submission. Finally, it is recognized that the Department of Transportation, in correspondence of August 22, 1984, from J. Ted Barefield, copy of which is Petitioner's exhibit three admitted into evidence; by the Supplemental Special Provisions related to a project in Palm Beach County, a copy of the lead page being Petitioner's exhibit four, admitted into evidence, dated August 27, 1984, and through the revised DBE Utilization Form No. 1, of August, 1984, a copy of which is Petitioner's exhibit number five, has more particularly indicated that good faith efforts must be demonstrated at the time of the bid submission, this serves to emphasize the requirement as contrasted with establishing a new requirement.
Its oversight was exacerbated by the fact that Hobbs had still failed to offer its explanation of good faith efforts at the time of notice of bid rejection on July 24, 1984. That explanation was only forthcoming in the course of the final hearing in this cause and was not timely. 2/
Should it be hold that the explanation in the course of the de novo hearing, on the topic of the efforts made by Hobbs to employ DBE subcontractors in the Franklin County project, is timely presented, the explanation does not demonstrate good faith as contemplated by Section 14-78.03(2)(b)4.b., Florida Administrative Code and Subarticle 2-5.3.3, in effect at the time of the bid submission and at the bid letting. By waiting until June 14, 1984, to attempt to qualify to bid for this project, thereby causing a last minute effort to employ DBE assistance in preparation of the bid document, Hobb's has not acted in good faith as contemplated by the Rule and Subarticle. Therefore, the bid of Hobbs may be rejected for failure to demonstrate good faith effort at gaining the participation of DBEs in the project.
If Hobbs is not entitled in law to be awarded the project for reasons as described in the previous paragraphs, it may not be heard to complain on the topic of the Department of Transportation's rejection of all bids using the exercise of its discretion, in keeping with the authority of Section 337.11(3), Florida Statutes. Even if Hobbs could be heard on the matter of rejection of all bids, here, rejection of all bids not being an arbitrary act, is appropriate.
Based upon a consideration of the facts found and the conclusions of law reached, it is
That a final order be entered which rejects the bid of Hobbs Construction pertaining to Budget Item No. 3112655, referred to as State Project Job Number 49010-3543, Franklin County and all other bids related to that project.
DONE and ENTERED this 22nd day of January, 1985, at Tallahassee, Florida.
CHARLES C. ADAMS
Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 1985.
1/ a. The contractor's bid submission include the following information:
2/ Reference by Petitioner to a former version of Section 14-78.03, Florida Administrative Code, not in effect at the time of this dispute, which version allowed submission of participation information about MBE, here DBE, within 10 days of the bid of the bid opening is neither legally nor factually relevant to this case.
Paul A. Pappas, Secretary Department of Transportation Haydon Burns Bldg., MS-58 Tallahassee, Florida 32301
Robert I. Scanlan, Esquire Mel Wilson, Esquire Department of Transportation Haydon Burns Bldg., MS-58 Tallahassee, Florida 32301
Larry A. Bodiford, Esquire American National Bank Building
