STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

)

) RANGER CONSTRUCTION )

INDUSTRIES, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 85-0093BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned cases, after due notice, at Tallahassee, Florida on February 5-6, 1985, before Thomas C. Oldham Hearing Officer.

APPEARANCES

FOR PETITIONER: Robert Ervin, Jr., Esquire (Dickerson Florida, Thomas M. Ervin, Jr., Esquire

Inc.) Ervin, Varn, Jacobs, Odom & Kitchen

305 South Gadsden Street Tallahassee, Florida 32301

FOR PETITIONER: Leigh E. Dunston, Esquire (Ranger Construction Jack Aiello, Esquire

Industries, Inc.) Gunster, Yoakley, Criser & Stewart

First National Bank Building Post Office Box 71

West Palm Beach, Florida 33480

FOR RESPONDENT: Mel L. Wilson, Esquire

Larry D. Scott, Esquire Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301-8064

These cases arise as the result of the Respondent's rejection of Petitioners' bids on road projects in Martin County and Palm Beach County which were opened on October 31, 1984. Although the bids of both petitioners on separate projects constituted the apparent low bids, they were rejected for alleged failure to include the requisite bid bend and the parties stipulated to a consolidation of the cases even though they involved separate projects due to the identical issue raised concerning the absence of bid bonds at the same bid opening.

At the hearing, Petitioner Dickerson Florida, Inc., presented the testimony of four (4) witnesses and submitted three (3) exhibits in evidence. Petitioner, Ranger Construction Industries, Inc., presented the testimony of six (6) witnesses and submitted nine (9) exhibits in evidence. Respondent presented the testimony of five (5) witnesses and submitted six (6) exhibits in evidence. The parties in each case also submitted a prehearing statement and stipulation which included agreed facts and issues of law. (Dickerson/DOT Joint Exhibit 1; Ranger/DOT Joint Exhibit 1) The stipulated facts are incorporated in the findings below. In addition, the Prehearing Statement included agreed issues of law.

The parties submitted posthearing proposed recommended orders which have been fully considered. All matters therein have been ruled on directly or indirectly herein, except for proposed findings of fact that have been rejected as subordinate, cumulative, immaterial, or unnecessary.

Pursuant to the direction of the Hearing Officer at the hearing, Respondent submitted a pesthearing exhibit which has been incorporated into DOT Exhibit 6.

FINDINGS OF FACT

1. By Notice To Contractors dated October 4, 1984, Respondent Department of Transportation (DOT) advertised for sealed bids on a number of state road projects for submission by 10:30 A.M. on October 31, 1984. Among the projects were Job No. 97930-9384 in Palm Beach County, and Jobs No. 97890-3323 and 89090- 3513 in Martin County. The Notice to Contractors provided that a proposal guaranty of not less than five percent (5 %) of the total actual bid must accompany each bid in excess of $150,000, and provided that bid bonds shall conform to DOT Form 114-G (Rev. July 1969). It further stated that all work was to be done in accordance with the plans, specifications, and special provisions of the State of Florida, Department of Transportation. (Stipulation, Ranger Exhibit 9, Dickerson Exhibit 3).

   
   

2. Petitioner Dickerson Florida, Inc., (Dickerson) of Stuart, Florida is a contractor that frequently submits bids on DOT road projects. Ted H. Tyson is President of the firm and has participated in some 1,000 to 1,200 bids with DOT since 1960. He and his Vice-President, James R. Widmann reviewed the DOT advertisement of October 4, 1984, and determined to bid on several projects, including the Martin County Job No. 97890-3323 and 89090-3513. Accordingly, Widmann directed his Executive Secretary, Sandy MacCallum, to order the bid packages from DOT and to obtain necessary bid bonds. She proceeded to follow her instructions. The bid bonds were ordered from Surety Associates, Inc., in Jacksonville, Florida, a firm that had done business with Dickerson for some 15 years. Surety Associates mailed two (2) bid bonds, including one (1) for the project in question, to Dickerson on October 16, 1984 and they were received by Dickerson on October 18, 1984. The project documents were received from DOT about October 10 and the Dickerson bid was prepared in Stuart, including the signature of Tyson on the bid bond. Tyson and Widmann took the Dickerson bid

   proposals to Tallahassee on October 30, 1984. They did further work on the bid materials for three (3) projects at their hotel that evening. The next morning, after ascertaining low bids of sub-contractors, they completed work on the bid packages and checked to insure that they were complete, including the fact that the bid bonds were in the envelopes with the three (3) bids. They were then sealed by Widmann and delivered by him at approximately 9:30 A.M. on October 31, to the DOT central administration office. The bid bends had been placed in the bid materials, but not stapled to the other documents. (Stipulation, Testimony of Lynch, MacCallum, Widmann, Tyson, Dickerson Exhibits 1-2).

   
   

3. Ranger Construction Industries, Inc., (Ranger) of West Palm Beach, Florida is a contractor that has submitted bids to DOT in the past, and the firm decided to bid on four (4) projects for the October 31, 1984 bid opening. Bid bends for the proposed projects were ordered by Ranger from the George H. Friedlander Company of Charleston, West Virginia on October 18, 1984. They were issued and mailed to Ranger by that firm on the same date, including one (1) for the project in question, Job No. 97930-9384 in Palm Beach County. On October 30, 1984, the Ranger "Bid Team" consisting of representatives of the firm arrived in Tallahassee where they occupied adjoining rooms at a local hotel. They were joined that evening by George Friedlander whose firm had issued the bid bonds for the four (4) projects on which Ranger intended to bid. They worked during the evening on the bid packages and continued the following morning at which time several independent checks for completeness were made by Friedlander, Leo Vecellio, Jr., President of Ranger, and James M. Slade, Executive Vice-President. They made sure that the bid bonds were placed in the already stapled bid documents in each envelope which were thereafter sealed. It was noted during this process that one (1) bid bond was missing, but it was immediately found in the room and also inserted into the appropriate envelope and sealed. Thereafter, Friedlander and Gene Pearson, a Ranger representative, took the bid envelopes to the basement of the hotel and placed them in a bid box maintained by the Florida Transportation Builders Association as a service to association members. The bid box was in a foyer and a representative of the association was present at all times. Immediately prior to placing the envelopes in the bid box, the envelopes were sealed by scotch tape by Pearson. At about 9:45 A.M., they were taken by an employee of the association to the appropriate location for submission of bids at the DOT building. (Stipulation, Testimony of Slade, Vecellio, Stanchina, Friedlander, Brewton, Ranger Composite Exhibit 1, 5-9).

   
   

4. On October 31, 1984, DOT personnel followed their customary procedures in processing bids submitted on 53 projects. Lee Schroeder was in charge of the bid opening in place of his supervisor, John Ted Barefield, Chief Bureau Contracts Administration, who was absent that day. Schroeder was assisted by Ray Haverty and about eight (8) other DOT employees. At 10:30 A.M., the various bids were opened by the DOT employees, removed from their envelopes, and stacked on tables by project number. There is no evidence that any of the bids were unsealed prior to opening at the appointed time. Haverty and Schroeder checked the bids for addenda. No check was made at this time for the presence or absence of bid bonds. The bids were then stacked by job number and moved to a higher level in the DOT auditorium where Haverty read the pertinent information from the bids regarding the job, name of bidder, and amount of the bid. Dickerson was the apparent low bidder on Job No. 97890-3323 and 89090-3513 with a bid of $1,010,459.35, and Ranger was the apparent low bidder on Job No. 97930- 9384 with a bid of $1,210,323.66. Dickerson's bid was $75,246.49 lower than the next low bidder, and Ranger's bid was $83,365.93 lower than the next low bidder. After reading the pertinent bid information, a rubber band was placed around the bids for each project and placed in a plastic container. After completing the

   bid opening procedure, the four (4) or five (5) plastic containers holding all the bids were covered and placed on a cart where they were taken to the contract administration office. The bid envelopes had also been placed in a cardboard box when the bids were opened and they were taken to the same office on the cart. The envelopes were checked for any contents, but nothing was found. (Testimony of Barefield, Schroeder, Haverty, Stipulation, DOT Exhibit 2).

   
   

5. During the afternoon of the bid letting, several employees of DOT's minority programs office reviewed all of the bids to determine the presence or absence of required documents concerning the disadvantaged business enterprises and good faith effort submittals in this regard. During the course of this review, pertinent documents were photocopied and, in some instances, it was necessary to unstaple the bid packages to perform this function. A trash can was available in the immediate area for the disposal of any peer copies. The trash cans are emptied each evening by custodial personnel. The minority programs employees finished their review the next morning, November 1, 1984. At this point, Ray Haverty customarily stapled any loose bid bends to the back of the front cover of the bid package so that there would be no loose documents when the bids were given to other employees who served as "checkers" of the bid documents. (Testimony of Haverty).

   
   

6. The DOT "checkers" are provided with the bids for one (1) or more projects and they proceed to check the bid documents for appropriate signatures, bends, seals, and the like. The standard procedure is for a checker to write the initials "BB" on the top left side of the front sheet of the bid documents if the bid bend has been included. If not included, the checkers are suppose to clip a note reflecting that fact to the front of the bid package. During the course of checking the bids in question, it was discovered that there were no bid bonds in the Dickerson and Ranger bid packages for the jobs in question. Although different checkers had placed a "BB" on the top front page of each bid package, the specific checkers in question were under the misapprehension that that symbol should be placed there simply because the documents had been checked for bid bonds. The correct procedure is set forth in a checklist that bid checkers are supposed to follow, although the date of inception of its use is unclear. As soon as it was reported to Ray Haverty that the Dickerson and Ranger bonds were missing, he instituted a thorough search of the office, including the minority business programs office, but was unsuccessful in finding the two (2) missing bid bonds. Although it was not precisely established when Haverty was informed of the missing bonds, it was probably on either November 2, or Monday, November 5, 1984. (Testimony of Haverty, Maloy, Daniels, Pilcher, Stipulation, Dickerson Exhibit 2).

   
   

7. On November 5, 1984, Dickerson was advised by telephone call to its Stuart, Florida office from DOT's employee, Lee Schroeder, of the Contracts Administration Division, that the bid bond on the Martin County project could not be located. DOT was told by Dickerson that the bid bond had been included in the sealed envelope with its bid and that a copy of the original bid bond and a replacement bid bond would be promptly secured and submitted to DOT. On November 8, 1984, or shortly thereafter, Dickerson submitted a copy of the original bid bond, a replacement bid bond, and affidavits of Tyson, Widmann, and MacCallum concerning submission of the original bid bond. On November 15, 1984, the DOT Contract Award Technical Review Committee met and determined that Dickerson's low bid be rejected as non-responsive for failure to include a bid bond with its bid, and that the contract be awarded to the next low bidder, Hardrives Company of Ft. Lauderdale, Florida. The notice of DOT's intent to award State Job No. 97890-3323 to Hardrives Company was confirmed in a Mailgram dated November 16, 1984, and the formal notice of intent to award to that firm

   was issued eon December 10, 1984. Dickerson thereafter protested the rejection of its bid. (Testimony of Widmann, Tyson, Parefield, Lynch, Stipulation, DOT Exhibits 3, 6).

   
   

8. Similarly, Ranger was advised by telephone call from Schroeder on November 5, 1984 that its bid bend for Palm Beach County-State Project Job No. 97930-9384 could not be located by DOT. By letter of November 6, 1984, Ranger informed DOT that the requisite bid bend had been present in the sealed bid envelope when submitted to the agency on October 31, 1984, and enclosed a duplicate original of the bend. At the November 15, 1984 meeting of the Contract Award Technical Review Committee, Ranger's low bid on the project was rejected as non-responsive due to the failure to submit a bid bend, and the committee voted to award the contract to Hardrives of Delray. By Mailgram, dated November 16, 1984, DOT advised Ranger that its low bid had been declared "irregular" due to its failure to submit a bid bend and stating that Hardrives of Delray, Inc., was new the apparent low bidder on the project. Ranger thereafter protested the decision by letter of December 10, 1984, and on December 18, filed its formal protest of the proposed award. (Testimony of Slade, Friedlander, Stipulation, DOT Exhibits 3, 6; Ranger Exhibits 2-4).

   
   

9. The DOT 1982 standard specifications for road and bridge construction which are incorporated as a part of the bid proposal, provide pertinently as fellows:

   
   

   SECTION 1: Definition and Terms. 1-29 Proposal Guaranty.

   The security designated to be furnished by the bidder as guaranty that he will enter

   into the contract for the work if his proposal is accepted.

   
   

   SECTION 2: Proposal Requirements and Conditions.

   
   

   1. Rejection of Irregular Proposals.

      
      

      A proposal will be subject to being considered irregular and may be rejected if it shows omissions, . . . or irregularities of any kind. . . .

      
      

   2. Guaranty to Accompany proposals.

   
   

   No proposal will be given consideration unless it is accompanied by a proposal

   guaranty of the character and amount indicated in the Notice to Contractors, and made payable to the Governor of the State of Florida.

   Proposals shall be submitted with the under- standing that the successful bidder shall furnish a contract bond pursuant to the re- quirements of 3-5.

   
   

   SECTION 3: Award and Execution of Contract.

   3-2 Award of Contract. 3-2.1 General:

   The award of the contract, it if be awarded, will be to the lowest responsible bidder whose proposal complies with all the requirements necessary to render it formal. (Testimony of Barefield, DOT Exhibit 5).

   
   

10. It was stipulated by the parties that Ranger and Dickerson meet all requirements for the award of the contracts in question if it is determined that they submitted the required bid bonds to DOT in their bid packages on October 31, 1984.

    
    

11. Based on the foregoing facts, it is further specifically found that both Ranger and Dickerson submitted the requisite bid bonds on the projects in question in their bid packages on October 31, 1984, and that the cause of the apparent loss of the bonds thereafter cannot be determined by the evidence presented at the hearing.

    
    

    CONCLUSIONS OF LAW

    
    

12. Section 337.17, Florida Statutes, provides that DOT shall require a guaranty with each bid, which may be in the form of a bid bond. Section 2-7 of the Standard Specifications for Road and Bridge Construction provides that no proposal will be given consideration unless it is accompanied by a proposal guaranty of the character and amount indicated in the Notice to Contractors. The Notice to Contractors for the projects in question provided that a proposal guaranty of not less than five (5 %) per cent of the actual bid must accompany each bid in excess of $150,000.

    
    

13. The sole basis for the rejection of the Dickerson and Ranger bids on the two projects was their apparent failure to submit the requisite bid guaranty with their bid documents on October 31, 1984. However, the preponderance of the evidence, as heretofore found, establishes that the requisite bid bonds in the appropriate form and amount were delivered to DOT with the ether bid documents. Although their subsequent disappearance has not been explained, such loss is not chargeable to the petitioners herein. They had provided duplicates of the original bid bonds and in all other respects meet the requirements for award of the contracts. Accordingly, it is determined that as low bidders, Dickerson and Ranger are entitled to the contract awards.

    
    

14. In view of the foregoing, it is considered unnecessary to address the additional stipulated issues presented by the parties.

It is therefore Recommended that:

1. Dickerson Florida, Inc., be declared the lowest qualified bidder and awarded the contract for Martin County State Project Job Nos. 97890-3323 and 89090-3513.

   
   

2. Ranger Construction Industries, Inc., be declared the lowest qualified bidder and awarded the contract for Palm Beach County State Project Job No. 97930-9384.

DONE and ENTERED this 19th day of March, 1985 in Tallahassee, Leon County, Florida.

THOMAS C. OLDHAM

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 1985.

COPIES FURNISHED:

Hon. Paul A. Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Robert Ervin, Jr., Esquire Thomas M. Ervin, Jr., Esquire Ervin, Varn, Jacobs,

Odom & Kitchen

305 S. Gadsden Street Tallahassee, Florida 32301

Leigh E. Dunston, Esquire Jack Aiello, Esquire Gunster, Yoakley, Criser & Stewart

First National Bank Bldg. Post Office Box 71

West Palm Beach, Florida 33480

Mel L. Wilson, Esquire Larry D. Scott, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301-8064

Docket for Case No: 84-004342

Orders for Case No: 84-004342