The Hearing Officer took Official Recognition of Chapter 14- 78, F.A.C.
The parties have submitted posthearing proposed 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.
At some point in late 1984 or early 1985, Respondent, DOT, solicited bids for its Project Number 77030-3510 to be accomplished in Seminole County, Florida. Three bids were submitted. The bid by Petitioner, Macasphalt, was in the amount of $186,367.05. The two other bidders were Martin Paving Company, whose bid was for $196,391.99 and Orlando Paving whose bid was in the amount of $213,054.56. Petitioner's bid was the lowest by approximately $10,000.00. This particular project required the contractors to meet certain goals in the area of Disadvantaged Business Enterprises (DBE) and Women-Owned
Business Enterprises (WBE). The goals for this project were 7% for DBE and 3.05% for WBE.
In its bid, Macasphalt showed that it would award 20.14% of the contract to DBE's but only 2.01% of the contract to WBE's. Martin Paving Company, on the other hand, whose bid was approximately $10,000.00 higher, indicated that it would award 19.19% of the contract to DBE's and 3.04% of the contract to WBE's. Orlando Paving, which was the highest bidder, showed 2.4% WBE.
As a result of the fact that Petitioner failed to achieve 3% WBE, whereas the second lowest bidder exceeded the 3% WBE goal, Respondent declared Petitioner's bid nonresponsive for failure to meet the WBE goal and recommended award of the contract to the second lowest bidder, Martin Paving, even though Martin's bid was approximately $10,000.00 higher.
The goals set by DOT must be met at the time of letting of the contract. If a contractor cannot meet these goals, he must submit satisfactory evidence of his good faith efforts to meet them in order to be considered responsive.
In regard to the goals, DOT issues a monthly list of certified DBE/WBE contractors listed by the type of work they are qualified to do and the geographical area in which they operate.
According to Mr. LaLonde, Macasphalt routinely sent out letters to a majority of the subcontractors they feel could do the work generally and a follow-up letter is sent monthly to those subcontractors who do the type of work needed in a particular contract. These letters are sent monthly because Macasphalt bids frequently on DOT contracts and bid lettings are done on a monthly basis. This procedure gives, they feel, DBE's and WBE's information on jobs on which the Petitioner is bidding and keeps them informed.
In the instant case, to solicit WBE's, on January 9, 1985 Petitioner sent out letters by certified mail to 47 DBE/WBE's requesting bids on several projects including the one in question here and naming areas in which it anticipated issuing subcontracts. Items to be subcontracted on the instant project included.
barricades and signs
guard rails
landscaping
painting and striping
trucking, and
concrete.
No solicitation was made of DBE/WBE's for quotes on asphalt work because that is Petitioner's prime business and it is, in the opinion of its officers, not feasible to subcontract work they do themselves.
When it became obvious that Petitioner could not achieve the 3.05% WBE goal, Petitioner, pursuant to the terms of the contract documents, submitted a summary of its good faith efforts to achieve the WBE goals with the contract bid. The Petitioner's summary of good faith effort includes a "remarks" sheet on which the following comments exclusively are made:
"We have exceeded DBE goal with a total of 20.14%. However, have only attained 2.01% FBE goal. All subcontract items except guardrail were reflected in DBE or FBE quotes received. No DBE or FBE quote was received for guardrail item."
In addition, Petitioner submitted a form letter entitled, "Good Faith Efforts" apparently used in numerous contracts, which requires only the insertion of two numbers and two dates and copies of two different letters in blank sent to subcontractors on apparently a routine basis. In addition to the above, Petitioner submitted two copies of DOT's DBE/WBE Directory, one dated September, 1984 and the other dated January, 1985 in which various subcontractors are identified with check marks, the explanation for which is contained in the form letter referenced above. No explanation was made as to why some WBE's were not solicited.
Upon receipt of Petitioner's bid with the good faith explanation included, it was submitted to Respondent's Good Faith Efforts Review Committee. This committee deals only with an analysis of the good faith efforts made by bidders. It has been in operation since its creation in August, 1984 and applies the standards established in Rule 14-78, F.A.C.
Here, the committee evaluated Petitioner's good faith effort as outlined in the material submitted with the bid and, based on Petitioner's submission, concluded that Petitioner was non-responsive because its good faith efforts, as documented,
were insufficient. The committee based its conclusion on the following considerations:
Petitioner did not meet the seven day requirement for notice by certified mail. The sample letter indicated "certified mail" but no copies of receipt showing it was sent by certified mail or to whom it was sent by certified mail were included.
All potential subcontractors (WBE's) were not contacted.
The ability of the contractor to do the work himself "asphalt) will not justify failing to achieve the goal.
Whether or not other bidders met the goal.
The remarks sheet was inaccurate and inadequate.
The explanation about failing to solicit from those subcontractors who did not do business in Seminole County is inconsistent. Some were solicited and some were not. One contractor (Fran) who operates in three categories and who works statewide, was not solicited by the Petitioner in any category.
The criteria as set forth in Rule 14-78 are not exclusive or necessarily determinative. There is no specific definition of good faith efforts. The committee is given the latitude to make a judgment measure of the bidder's efforts opposed to the criteria set forth in the rule. Mr. Pitchford, Chairman of the committee, indicated that after the committee had been in operation for a while, the approach taken toward looking at the criteria set forth in the rule was more strictly and severely applied. No notice of this change in approach was set to any bidder, however Petitioner contends that this was misleading and that it submitted them on a previous successful demonstration of good faith efforts. In October, 1984 it submitted a bid on a contract which did not meet the DBE goal. Nonetheless, the evidence of good faith which it submitted at that time was not questioned and Petitioner was awarded the contract. This good faith information was the same kind of information as submitted here which was considered inadequate. No documentation to
support any of this was forthcoming, however. Since each case must be taken and considered on its own merits, even if true, this is not necessarily inconsistent.
Petitioner readily admits that it did not submit requests for bids to al; DBE/WBE subcontractors in the directory. However, it does claim that for the most part, it submitted solicitations to every WBE listed in the directory that worked in the specialty needed and in the geographical area of the project. Petitioner defends its exclusion of potential subcontractors on the basis that, for example, they had no experience with those subcontractors and were not familiar with them. In most cases, Petitioner left out companies that were not known to it. Mr. LaLonde could not be sure whether Petitioner solicited any potential subcontractor not solicited by Petitioner previously. He is certain, however, that Petitioner did solicit all subcontractors on the list who had been solicited previously. In any event, it is important to the Petitioner to know the subcontractors and how they perform because Petitioner, as the prime contractor, is responsible for the work whether it or its subcontractor accomplishes it. It is for this reason, the lack of familiarity with a subcontractor and its performance, that it did not solicit some WBE's which operate statewide.
Petitioner has used many WBE's before and has never failed, it claims, to meet WBE goals prior to this occasion. It has previously failed to meet DBE goals, however, but still was awarded the contract if it was the low bidder. It is apparent, then, that if the above is true, Petitioner's demonstrated good faith efforts were considered satisfactory on those occasions. Based on that experience, Petitioner felt that the procedures used here which it claims had previously been demonstrated to be satisfactory, were again sufficient.
It is significant to note that while the fact of the bid submissions reflects a difference of approximately
$10,000.00 between Petitioner's bid and that submitted by the next lowest bidder, a computer analysis run on this solicitation reflects a different figure. On the computer analysis, Martin Paving's bid is listed at slightly over $203,000.00 as opposed to the bid face of slightly over $196,000.00. If the
$203,000.00 figure is used, the 3.05% goal would not be met.
This discrepancy was explained by Mr. Haverty who indicated that the initial figure submitted by the contractor on the bid form is used to assess whether the DBE/WBE goals are
met. The issue of good faith effort is raised at a later date. Where, as here, it is determined that the original price is in error and the actual price means that the bidder has failed to meet the goal, if the error is less than 10%, the bid may still be considered responsive.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of these proceedings.
Section 339.981, Florida Statutes, provides for DOT to expend at least 10% of its Transportation Trust Fund monies with DBE/WBE's. In an effort to comply with this legislative mandate, DOT promulgated Rule 14-78, F.A.C. which, inter alia, authorizes DOT to establish DBE and WBE goals for each construction contract let in this State.
Rule 14-78 contains the requirement that a bidder meet or demonstrate that despite its good faith efforts, it could not meet the goals set by the Department. Good faith efforts are to be submitted with the bid proposal that does not meet the goal. At subparagraph A iv., the rule states that the bid submission include:
iv. If the DBE or WBE goal is not met, sufficient information to demonstrate that the contractor made good faith efforts to meet the goal.
Specific criteria are listed in the Rule against which these efforts are measured.
Petitioner contends that the information it submitted as evidence of its good faith efforts, which, it says, was the same type of information submitted previously in successful bid efforts, was rejected here because of a change in DOT's interpretation of the criteria set out for bid evaluation (in Rule 14-78) and that this change was not communicated to Petitioner or other bidders.
It well may be true, as even Respondent admits that it hardened its interpretation and failed to notify prospective bidders. Nonetheless, Petitioner presented no evidence of its prior submission for comparison and it is clear that its submission in the instant bid action was totally inadequate.
Other criteria (considerations) in contest here are whether Petitioner properly solicited the available DBE's and WBE's prior to the letting whether Petitioner made sufficient provision for sub-contracting portions of the project to DBE's and WBE's: whether the goal in question here was met by others whether Petitioner sufficiently explained its failure to use DBE's or WBE's which submitted bids to it on this project and whether Petitioner's good faith efforts were sincere or pro forma only.
At the hearing, and in its bid submission, Petitioner indicated it notified and solicited bids from a goodly number of those sub-contractors listed in Respondent's Directory of qualified DBE/WBE's. The information as to good faith efforts submitted with the bid was not at all informative, however.
Its explanation as to lack of knowledge may justify failure to solicit from some WBE's but not to the degree as shown here.
Petitioner properly contends that its failure to submit bids for asphalt work, its own prime business, should not be determinative of its good faith efforts or the lack thereof. Asphalt paving is Petitioner's primary business and it makes no sense practically or legally to require it to sub-contract its own specialty. Conceding that point, however, does not release Petitioner from its obligation to subcontract a certain percentage of the total contract to DBE/WBE contractors or, at the time of submitting the bid, also present sufficient evidence of its good faith efforts to do so that DOT personnel can adequately evaluate these efforts from the information submitted. Clearly, Petitioner failed to do this here. Its package, insofar as it pertained to good faith efforts to meet DBE/WBE goals, was insufficient.
Petitioner also raises the question of whether other bidders met the goals set out -- a consideration listed in Rule 14-78. The evidence clearly shows that the bid submitted by Orlando Paving did not. The evidence also shows that the bid by Martin Paving Company, utilizing the initial face amount of the bid, met and exceeded the WBE goal as well as that for the DBE. However, when the bid is scrubbed and subsequently refined, and the accurate pricing is arrived at, it appears that Martin also missed the goal for WBE by a slight amount. Respondent's uncontroverted evidence, the testimony of Mr. Haverty, shows that the goal/good faith effort determination is based on the
original, unrefined submission and it is DOT policy to hold that if, as here, there is an error subsequently determined, if that error is less than 10%, the bid may still be considered responsive.
Both parties cite Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So. 2d 505, 507 (Fla. 1982) for the proposition that DOT has broad discretion to solicit and accept bids for public improvements and that a decision by the public body, based on an honest exercise of that discretion, will not be overturned even if reasonable persons disagree. If the bidding process promotes fair competition upon equal terms to all bidders, it will be sustained.
Petitioner contends that Respondent's requirement to show good faith efforts to meet DBE and WBE goals when such are not met, violates the bidding statute. That is simply not the case. The public policy of this State incorporates a requirement to set aside a portion of the State's business for DBE's and WBE's. In furtherance of that policy, DOT has set certain goals for these set-asides. Realizing, however, that these goals will not be met in all instances, in its duly promulgated rules, it has set out certain considerations which it will utilize in evaluating the effort made by bidders to meet these goals. If the evidence submitted by the bidder who fails to meet these goals nonetheless shows a bonafide, sincere, good faith effort to meet them was made, an otherwise unresponsive bid may still be held responsive. A bidder must make that sincere effort and document it sufficiently for the authorities to be able to evaluate it. This is neither an onerous or improper burden on bidders and gives all bidders adequate guidelines within which to formulate their bids. When, as here, the evaluation is fairly made and is neither arbitrary nor capricious, it will stand.
