STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WILEY N. JACKSON COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 84-4459BID

) DEPARTMENT OF TRANSPORTATION, ) STATE OF FLORIDA, and )

DICKERSON FLORIDA, INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a public hearing in the above-styled case on May 2, 1985, at Tallahassee, Florida.

APPEARANCES

For Petitioner: David T. Knight, Esquire

Shackleford, Farrior, Stallings, and Evans, P.A.

Post Office Box 3324 Tampa, Florida 33601

For Respondent, Larry D. Scott, Esquire

Department of Florida Department of Transportation Transportation: Haydon Burns Building, Mail Station 58

Tallahassee, Florida 32301

For Respondent Robert M. Ervin, Esquire Dickerson Thomas M. Ervin, Jr., Esquire

Florida, Inc.: Ervin, Varn, Jacobs, Odom & Kitchen

Post Office Drawer 1170 Tallahassee, Florida 32302

PRELIMINARY STATEMENT

Petitioner, Wiley N. Jackson Company, timely filed a protest from the decision of the Department of Transportation (DOT) which declared Petitioner's bid non-responsive and proposed to award the contract to Respondent, Dickerson Florida, Inc. (Dickerson). At issue is whether DOT acted arbitrarily and capriciously by rejecting Petitioner's bid because Petitioner's bid documents failed to meet the established 10 percent disadvantaged business enterprise (DBE) goal and failed to demonstrate good faith efforts to meet the DBE goal.

At final hearing Petitioner called Curtis R. Lucado, Sharon Wynn, Keith Pitchford, Lemon Neal, and H. S. Thompson, as witnesses. Petitioner offered Exhibits 1-8, and they were received into evidence. Respondent, DOT, called

Tyrone Reddish and Sharon Wynn, as witnesses. DOT offered Exhibits 1-5, and they were received into evidence. Respondent, Dickerson, called Ted Tyson, as a witness.

The parties have submitted proposed findings of fact and conclusions of law, and they have been reviewed and considered. To the extent that any proposed findings have not been adopted in this Recommended Order, they have been rejected as being subordinate, cumulative, immaterial, or unnecessary, or as being contrary to the facts as found in this Recommended Order.

FINDINGS OF FACT

1. Respondent, Florida Department of Transportation (DOT), is required by state and federal law to ensure that 10 percent of state and federal funds available for construction, design and consulting service-contracts be provided as an opportunity to small business concerns owned and controlled by socially and economically disadvantaged individuals (DBE). DBE contract goals are established by DOT for each construction contract. Every bidder must submit a form to DOT which either documents compliance with the DBE contract goal or, if compliance is not met, must provide sufficient information to demonstrate that good faith efforts were made by the bidder to meet the goal.

   
   

2. Prior to June 1984, DOT's practice allowed contractors ten days after the bid letting to correct their DBE forms or to submit their good faith effort documentation. However, effective May 23, 1984, DOT adopted Rule 14- 78.03(2)(b), F.A.C., which provides in pertinent part:

   
   

   4. For all contracts for which DBE . . . contract goals have been established, each bidder 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 . . . participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE . . . 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. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive

   and the bid being rejected. (Emphasis supplied.)

   
   

3. In August 1984, subsequent to the adoption of Rule 14.78.03(2)(b)4., F.A.C., DOT sent a "Notice to All Contractors" which advised

   
   

   . . . all submittals for evaluating Good Faith Efforts in meeting DBE/WBE goals must be submitted with the bid proposal in order to be considered for award of the contract. Failure to submit the Good Faith Effort documentation with the bid may result in rejection of the bid.

   Petitioner, Wiley N. Jackson Company, acknowledges receipt of the "Notice to All Contractors."

   
   

4. By notice dated August 30, 1984, contractors were advised that sealed bids would be received until 10:30 a.m., September 26, 1984, on various road projects. The bid documents advised that the DBE goal for Job Number 89095-3411 was 10 percent. The specifications for Job Number 89095-3411 contain extensive provisions with regard to compliance with the DBE contract goals. Among these provisions is the following language contained in Section 2-5.3.2.

   
   

   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 Contractor's 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 Contractor's bid submission shall include the following information (Submitted on Form No. 141-12 - DBE/WBE Utilization Form No. 1):

   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.

   2. A description of the work each named DBE and WBE firm will perform.

   3. The dollar amount of participation by each named DBE and WBE firm.

   4. If the DBE or WBE goal is not met, sufficient information to demonstrate that the Contractor made good faith efforts to meet the goals. (Emphasis supplied.)

      
      

      The specifications list, as grounds for disqualification of bidders, failure to satisfy the requirements of Section 2-5.3.

      
      

5. Further, Section 2-5.3.3 of the specifications advised bidders that:

   
   

   In evaluating a contractor's good faith efforts, the Department will consider:

   1. 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.

   2. Whether the Contractor selected economically feasible portions of the work to be performed by DBEs and 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.

   3. Whether the Contractor provided interested DBEs or WBEs assistance in reviewing the contract plans and specifications.

   4. Whether the DBE or WBE goal was met by other bidders.

   5. 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.

   6. Whether the Contractor assisted interested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance.

   7. Whether the Contractor elected to subcontract types of work that match the capabilities of solicited DBEs or WBEs.

   8. 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.

   9. 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.

6. Sections 2-5.3.2 and 2-5.3.3 are drawn directly and literally from Rule 14-78.03(2)(b). Consequently, all bidders were apprised by rule and bid specifications that if the DBE contract goal could not be met, sufficient information had to be submitted with their bid to demonstrate their good faith efforts to meet the goal, and the criteria that would be utilized to evaluate their efforts.

   
   

7. On September 26, 1984, Petitioner submitted the low bid in the amount of $7,688,271.91 for Job Number 89095-3411. Attached to the bid was Form 141-12

   - DBE/WBE Utilization Form No. 1, indicating that Petitioner's proposed utilization of DBEs was 0.2 percent of the total contract amount; $15,385 on a total bid of $7,688,271.91. Accompanying Petitioner's bid was a handwritten letter which stated:

   
   

   Gentlemen:

   To demonstrate good faith effort prior to the bid date for this project, we submitted seventy-three registered letters to prospective D.B.E. Subcontractors.

   On the major items we propose to sublet, comparative D.B.E. and non-D.B.E. quotations were received as follows:

   
   

   Box Culvert -

   J. E. Hill (D.B.E.) - 505,762.00

   Shelton & Son - 369,092.00

   Difference - $136,670.00 Fencing -

   Mikell (D.B.E.) - 55,727.00

   Cyclone - 46,833.00 Difference - $ 8,894.00

   Grassing -

   Mikell (D.B.E.) - 91,919.00

   Agricultural Land - 63,198.00 Difference - $28.721.00

   In view of the above, we are unable to meet the D.B.E. Goal and, at the same time, submit a realistic and competitive bid.

   Copies of pertinent quotations are attached and copies of D.B.E. solicitations (registered letters) and responses are available for your review.

   
   

   Quotations reflecting one unaccepted DBE proposal, and one accepted non-DBE proposal, in each of three areas--concrete, fencing and grassing--were attached to the letter. In each instance the DBE proposal exceeded the non-DBE proposal by more than one percent. No other documentation was submitted with Petitioner's bid to demonstrate its good faith efforts to meet the DBE contract goal.

8. Respondent, Dickerson Florida, Inc. (Dickerson), was the second low bidder with a bid of $7,926,819.49. Dickerson's bid reflected a DBE participation of 10.8 percent.

   
   

9. Upon the closure of bidding, Petitioner's bid was submitted to the Good Faith Effort Committee at DOT to evaluate the information contained in the bid to determine whether Petitioner's documentation evidenced a good faith effort to meet the DBE goal. That committee found Petitioner's bid documentation failed to demonstrate a good faith effort to meet the DBE goal, and recommended that Petitioner's bid be declared non-responsive and be rejected. DOT declared Petitioner's bid non-responsive and rejected its bid. DOT proposed awarding the contract to Dickerson.

   
   

10. Petitioner's bid documentation failed to demonstrate a good faith effort to meet the DBE contract goals. The documentation failed to demonstrate that: (1) Petitioner, at least seven days prior to letting, had provided written notice to all certified DBEs, or, of what the DBEs had been informed,

    (2) Petitioner had selected economically feasible portions of the work to be performed by DBEs, (3) Petitioner had provided interested DBEs with assistance in reviewing the contract plans and specifications, and (4) Petitioner had selected for subcontract types of work that matched the capabilities of the solicited DBEs. Further, Petitioner's documentation did not include all quotations received from DBEs.

    
    

11. Job Number 89095-3411 included several categories of work: box culverts, signs, landscaping, guardrail, fencing, traffic striping, trucking, paving, grading and miscellaneous concrete. The bid documentation submitted by Petitioner did not indicate the items it attempted to subcontract, nor what efforts, if any, it had expended to solicit DBE participation beyond "a letter" it had mailed, at an indeterminate date, to some 73 unidentified "prospective DBE subcontractors." Facially, Petitioner's documentation evidenced a pro forma effort.

    
    

12. Subsequent to the bid closing, Petitioner forwarded to DOT copies of the 73 letters it had mailed to "prospective DBE subcontractors," together with the certified mail return receipts. Petitioner was in possession of these documents prior to the close of bidding, and could have submitted them with its bid.

    
    

13. DOT's Good Faith Effort Committee declined to consider Petitioner's postbid submission. The committee interpreted Rule 14-78.03, F.A.C., to require the DBE participation information be submitted with the bid proposal, and to preclude consideration of postbid submissions. DOT has at all times acted consistently with this interpretation.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

15. DOT has apparently followed the rulemaking requirements of the Administrative Procedure Act and has given notice to all affected persons that bids which fail to contain and comply with the pertinent DBE requirements will be deemed non-responsive and will be rejected. Rule 14.78.03(2)(b)4., F.A.C. This rule was adopted on May 23, 1984, and was in effect during the subject bid

    letting. The bid specifications also clearly inform the bidder that documentation regarding DBE compliance must be submitted with the bid. It is difficult to imagine a situation where an affected person has been placed on more notice of agency requirements than in the instant proceedings.

    
    

16. The evidence establishes that since May 23, 1984, DOT has consistently rejected as non-responsive those bids failing to comply with the DBE requirements at the time of bid submittal. DOT's interpretation of Rule 14.78.03(2)(b)4, F.A.C., to preclude consideration of postbid submittals, is clearly reasonable. Accordingly DOT's refusal to consider Petitioner's postbid submittals to demonstrate its good faith effort to meet the DBE contract goal was proper. Petitioner's postbid submittals are irrelevant, and have not been considered by the Hearing Officer in entering this Recommended Order.

    
    

17. Petitioner's bid, as submitted, failed to meet the 10 percent DBE contract goal established for Job Number 89095-3411 and failed to demonstrate a good faith effort to meet the DBE contract goals. DOT did not act arbitrarily and capriciously by rejecting Petitioner's bid as non-responsive.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered by the Department of

Transportation rejecting the bid submitted by Petitioner, Wiley N. Jackson

Company, on State Project No. 89095-3411, Martin County, Florida, and awarding the contract to Respondent, Dickerson Florida, Inc.

DONE and ENTERED this 31st day of May, 1985, at Tallahassee, Florida.

WILLIAM J. KENDRICK

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 31st day of May, 1985.

COPIES FURNISHED:

David T. Knight, Esquire Shackleford, Farrior,

Stallings and Evans, P.A. Post Office Box 3324 Tampa, Florida 33601

Larry D. Scott; Esquire Department of Transportation Haydon Burns Building, M.S. 58 Tallahassee, Florida 32301-8064

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

Ervin, Varn, Jacobs, Odom & Kitchen Post Office Drawer 1170 Tallahassee, Florida 32302

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

Docket for Case No: 84-004459

Orders for Case No: 84-004459