STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EXPLOSIVE AND DIVING )

SERVICES, INC., )

)

Petitioner, )

)

vs. ) CASE NO: 84-3792BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Consistent with the Notice of Hearing furnished the parties by the undersigned on December 6, 1984, a hearing was held in this case before Arnold

1. Pollock, a Hearing Officer with the Division of Administrative Hearings, in Tallahassee, Florida, on January 28, 1985. The issue for consideration was whether the Department of Transportation may properly reject all bids on State Project No: 76929-3515.

   
   

   APPEARANCES

   
   

   For the Petitioner: Gail S. Wood, President

   Explosive and Diving Services, Inc., Post Office Box 200

   Clarksville, Florida 32430

   
   

   For the Respondent: Larry D. Scott, Esquire

   Department of Transportation

   Haydon Burns Bldg., Mail Station 58 Tallahassee, Florida 32301

   
   

   BACKGROUND INFORMATION

   
   

   By letter dated August 16, 1984, the Department of Transportation, (DOT), notified Petitioner herein, and all other bidders on this same project, that it was rejecting all bids on this project and returning the bid guarantee submitted. Thereafter, on August 23, 1984, Petitioner submitted a letter to DOT requesting reconsideration of the decision to reject all bids. This letter requesting reconsideration was considered by the Department to be a protest and request for hearing and the matter was referred to the undersigned to conduct a formal hearing in accordance with Section 120.57, Florida Statutes.

   
   

   After the file was referred to the undersigned, DOT forwarded a list of the other bidders on this project who had, inadvertently, not been advised of the protest and that the file had been forwarded. Thereafter on November 28, 1984, the undersigned sent letters to each of the six other bidders advising them that a hearing would be held in this matter and notifying them of their right to intervene in the matter. None of the other bidders requested to intervene.

   At the hearing petitioner called Gail S. Wood, President of Explosive and Diving Services, Inc., (EDS), and presented Petitioner's Exhibit 1. Respondent presented the testimony of Thomas J. George, mini-contracts administrator for DOT's District V, and introduced Respondent's Exhibits A and B.

   
   

   The parties have submitted posthearing findings of fact pursuant to Section 120.57(1)(b)(4), Florida Statutes. A ruling on each proposed finding of fact has been made either directly or indirectly in this Recommended Order, except where such proposed findings of fact have been rejected as subordinate, cumulative, immaterial, or unnecessary.

   
   

   FINDINGS OF FACT

   
   

   1. At some time prior to August 2, 1984, DOT issued bid blanks for a mini- contract for State Project No: 76020-3515, for work consisting of cleaning and guniting a concrete box culvert located on State Road 19, in Putnam County, Florida, approximately one mile south of the Cross Florida Barge Canal.

      
      

   2. The bid package, signed by C. A. Benedict, District Engineer, for the DOT, specifically reserved the right to reject any and all bids.

      
      

   3. The bid package broke the work down into three item numbers. The first was mobilization and called for one pricing unit. The second item called for maintenance of traffic at the work site and called for one pricing unit as well. The third area called for restoration of spalled areas (gunite) and called for approximately 437 cubic feet to be priced. In this regard, the plans furnished with the bid package and the bid package itself, in at least three separate locations, called for the bid as to the last item to be priced and paid for on a unit price basis.

      
      

   4. Petitioner submitted the lowest bid of seven bidders. It was determined to be faulty, however, in that though it properly priced the first two items, it failed to submit a unit price for the third item per unit, submitting instead a total price for the third item based on the entire cubic footage. Petitioner's bid indicated 437 cubic feet priced at a total of

      $17,832.00. Simple arithmetic permits a division which results in a unit price for each of the 437 cubic feet of $40,805. This last unit price, however, is not reflected on the bid submitted by Petitioner.

      
      

   5. Petitioner's bid is the only bid of the seven submitted which did not contain a unit price for each of the units in the third item.

      
      

   6. EDS has been in business since 1980. It performed one previous contract for DOT and is familiar with DOT's rules regarding bidding. It had ample opportunity to examine the plans and the bid blank before submitting its bid and admits that the unit price, though required, was omitted. Petitioner contends, however, that the omission is not a material variance and can be waived by Respondent.

      
      

   7. Respondent contends, on the other hand, that the failure to list the unit price in the third item is material. This determination is based on the fact that since the bid package calls for payment on a unit basis, the odd one- half cent per unit does not permit even money payment and requires rounding off. Even with this being true, the maximum difference would be one- half cent to be rounded off either upwards or downwards.

   8. At some point after opening, at least one of the unsuccessful bidders found out that Petitioner's bid failed to technically conform to the terms of the bid blank and at this point the second lowest bidder, Vann's Sandblasting, whose bid was $4,000.00 higher than that of Petitioner, and who had done several contracts for Respondent in the past, indicated that if petitioner's bid were not rejected, he would file a protest.

      
      

   9. The one-half cent variance, itself, is not material. Considering all factors, however, the failure to state the unit price may, under certain circumstances, be.

      
      

      CONCLUSIONS OF LAW

      
      

   10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.

       
       

   11. Substantial discretion is left with an agency head to control the award of contracts within his procurement activity to insure that the state gets the best possible return for its money, that a contract is not let for a sum greater than the available funds, and that there is an actual competitive area of bidding on a particular proposal. However, this discretion is not without limits. The exercise of discretion by she agency must not be arbitrary, unreasonable, or capricious. Wood-Hopkins Contracting Company v. Roger J. Au & Son, Inc. 354 So.2d 446, 450 (1 DCA Fla 1978).

       
       

   12. Where there are no rules which stipulate the circumstances wherein the agency may reject all bids, to justify doing so, the decision must be made rationally, within the bounds of agency discretion, and not arbitrarily. Couch Construction Company, Inc., v. Department of Transportation, 361 So.2d 172 (1 DCA Fla 1978). Further, the decision must not be tainted by personal considerations. Solar Energy Control, Inc., v. State of Florida. Department of Health and Rehabilitative Services. 377 So.2d 746 1 DCA Fla. 1979).

       
       

   13. Section 14-25.08(3), Florida Administrative Code, provides that if all bids are to he rejected, all bidders shall be notified by certified mail, return receipt. This was done in the instant case. However, nowhere in the rules of this agency are there listed any acceptable reasons for rejecting all bids. The general rule is that this may be done when to do so is in the best interest of the agency. The reason given for rejecting all bids here was that, as to the Petitioner, the unit price for one portion of the procurement was not set forth in the bid even though all information necessary to reasonably and easily derive the unit price was included. As to the other bidders, the bids submitted substantially exceeded the Department's cost estimates. While this may well stand as adequate justification for rejecting the six higher bidders, it does not, nor, in fact, did Respondent present any evidence at all to justify rejecting Petitioner's bid save the one given; i.e. the failure to reflect the unit price. The threat of a protest by Vann's Sandblasting is totally inadequate as justification for rejection.

       
       

   14. It is difficult to perceive how the failure to itemize unit cost in this case, where the sole result of failing to do so would be to adjust by one- half cent the price paid on approximately 437 units, can be considered a material deviation or variance from the requirements of the contract. As was stated above, the total number of units involved and the total price to be charged was included on the bid and a mere simple division exercise would provide the required answer. In addition to this factor is the very real possibility raised by Petitioner that now all bidders are aware of the low bid

here. Petitioner claims, and it is certainly a reasonable possibility, that to re-bid at this juncture because of that factor, would work to Petitioner's detriment unfairly, because other potential bidders would have access to the details of its bid and would, thereby, gain an advantage. This was not the intent of the bid process and can reasonably be considered to be an arbitrary and unreasonable action on the part of the agency.

If Respondent is concerned over the possibility of protests by other unsuccessful bidders, it should not labor at length under these concerns. Prior to this hearing, all other bidders were notified of the pendency of this hearing and given an opportunity to intervene and participate herein. None chose to do so.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is, therefore:

RECOMMENDED THAT Petitioner, EXPLOSIVE AND DIVING SERVICES, INC., be

awarded the contract for State project No 76020-3515.

RECOMMENDED this 27th day of February, 1985, at Tallahassee, Florida.

ARNOLD H. POLLOCK

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 27th day of February, 1985.

COPIES FURNISHED:

Gail S. Wood, President

Explosive and Diving Services, Inc. Post Office Box 200

Clarksville, Florida 32430

Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301

Paul Pappas, Secretary Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301

Docket for Case No: 84-003792

Orders for Case No: 84-003792