STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHEESBRO ROOFING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 85-1348BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in the above case before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on June 7, 1985, in Tallahassee, Florida.

APPEARANCES

For Petitioner: David H. Burns, Esquire

Post Office Box 1694 Tallahassee, Florida 32302

For Respondent: Larry D. Scott, Esquire

Haydon Burns Building, Mail Station

58

Tallahassee, Florida 32301 BACKGROUND

On an undisclosed date, respondent, Department of

Transportation (DOT), gave notice to qualified contractors that it would receive bids for State Job No. 26000-3624 which involved the replacement of a roof on the DOT warehouse in Gainesville, Florida. The sealed bids were to be filed no later than January 23, 1985. Bids were submitted by twelve vendors, including petitioner, Cheesbro Roofing, Inc. (Cheesbro), and Kent Construction Company, Inc. (Kent). Although Cheesbro submitted the lowest dollar bid, it included an alternative bid in its proposal.

Because of this, Cheesbro's proposal was declared to be "irregular" by DOT and was rejected on February 11, 1985.

On March 6, 1985, DOT posted the bids and designated the next lowest bidder, Kent, as the lowest responsive bidder. On March 6, 1985, petitioner filed its notice of protest pursuant to Subsection 120.53(5)(b), Florida Statutes. This was followed by a formal request for a 120.57(1) hearing filed on March 18, 1985. In its protest petition generally alleged that the project specifications for the material were vague, unclear, ambiguous or that they described a material that did not exist, that the specifications were orally modified by a DOT agent, and that DOT specifications authorize but do not require the rejection of alternate bids. The matter was referred to the Division of Administrative Hearings by DOT on April 29, 1985, with a request that a Hearing Officer be assigned to conduct a hearing. By notice of hearing issued on May 15, 1985, the final hearing in this matter was scheduled on June 7, 1985 in Tallahassee, Florida.

At the final hearing petitioner presented the testimony of Gordon P. Cheesbro, Katherine M. Reimer, John

1. Cunningham, Richard L. Bray, Ronnie Kent, James A. Brogdon and Martha Cheesbro. It also offered petitioners' exhibits 1-7. All were received in evidence. Respondent presented the testimony of J. Ted Barefield and Augustus Schrowang.

   
   

   The transcript of hearing was filed on June 12, 1985. Proposed findings of fact and conclusions of law were filed by the parties on June 18, 1985 and have been considered by the undersigned in the preparation of this order. 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.

   
   

   The issue herein is whether Kent Construction Company, Inc. was the lowest and most responsive bidder on State Job No. 26000-3264.

   
   

   Based upon all of the evidence, the following findings of fact are determined:

   
   

   FINDINGS OF FACT

   1. On an undisclosed date, respondent, Department of Transportation (DOT), gave notice to qualified contractors that it would receive sealed bids on State Project Job No. 26000-3624. The job called for removing and replacing the roof on the DOT warehouse at Gainesville, Florida. Such bids were to be filed with the agency no later than January 23, 1985.

      
      

   2. As is pertinent here, the specifications called for the following type of flexible sheet roofing system:

      
      

      
      

      minimum

      Elastomeric sheet material, manufacturer's standard thickness but not less than 42 mils,

      400 psi minimum tensil strength, 250 percent

      
      

      elongation (ASTM D 412), ultraviolet and ozone resistent, low temperature brittleness of -40 F (-40 C)(ASTM D 746), integral

      color white or aluminum.

      
      

   3. W. R. Grace and Company (Grace) is one of several companies who manufacture single-ply roof membranes that are generally compatible with DOT specifications. One of its factory representatives, John Cunningham, reviews all bid notices issued by DOT to determine what materials are required for a given project. The representative then calls DOT approved contractors in his service area who use Grace products and advises them of the requirements for the job. In this particular case, Cunningham read the specification for elastomeric sheet material and was initially confused as to whether DOT wanted a factory finish on the membrane or to have it coated in the field. This confusion arose since the specification called for an "integral color" on the material and a "manufacturer's standard thickness, but not less than 42 mils." Grace manufacturers two single-ply roof membranes, one having a

      40 mil thickness with a factory applied coating (GRM-500), and one having a 50 mil thickness with a field applied coating (GRM-120). When DOT prepared the bid proposal, it was under the impression that the GRM-500 system would meet the specifications. However, if a factory applied coating on the membrane was desired, the GRM-500 system would not meet the specification as to thickness. Because of this, Cunningham contacted a DOT representative who advised that DOT wanted a factory applied coating, and that all bidders should base their bid using the GRM-500 product even though this appeared to be inconsistent with the specifications.

      The representative also told Cunningham it was too late to issue an addendum to clarify the matter.

      
      

   4. Based upon the above representation Cunningham telephoned each qualified contractor in his sales area who used Grace products, including petitioner Cheesbro Roofing, Inc. (Cheesbro), a roofing company located in Ormond Beach, Florida. He told them that DOT apparently wanted a factory applied coating, even though this was inconsistent with the specification as to thickness and that the GRM-500 system should be used. He also advised them that at least one bidder interpreted the specification differently, and was preparing its bid using the GRM-120 product so that the thickness specification as written could be met.

      
      

   5. Cheesbro had never bid a DOT project and was confused as to the type of product to use in preparing its bid. In an abundance of caution, Cheesbro submitted alternate bids, one with prices based on the GRM-500 system and the other using the GRM-120 system. This resulted in bids of $84,560 and $102,661, respectively. The alternate bid (using the GRM-120 product) was typed on the firm's letterhead and inserted in the bid proposal since the bid form did not contain a place to write an alternate bid.

      The $84,500 figure was the lowest dollar bid on the project out of twelve bids submitted.

      
      

   6. At about the same time, a second Grace sales representative, Richard Bray, contacted users of Grace products in his service area including Kent Construction Company, Inc. (Kent) of Chipley, Florida. Bray advised his customers to write their bids using the GRM-500 system. Kent had originally interpreted the specification as requiring the GRM-120 system, but, based upon Bray's representation, it submitted a bid of $86,800 using the

      GRM-500 system. This was the second lowest dollar bid on the project.

      
      

   7. By law DOT cannot design specifications with the object of soliciting products made by a specific manufacturer. Even so, there are only a few other manufactured roofing systems which have a factory applied coating and a thickness of at least 42 mils. However, most of the twelve bidders, including the two lowest, submitted bids using Grace products.

   8. After the bids were filed and reviewed, DOT noted that Cheesbro had submitted alternative bids. Because this is a ground for rejection, the bid was reviewed initially by a DOT technical awards committee which recommended the bid be rejected as being "irregular". That committee's decision was affirmed by the contract awards committee which reached the same conclusion. Accordingly, Cheesbro's bid, although the lowest, was rejected on February 11, 1985 and Kent's bid accepted on March 6, 1985 as being the lowest and most responsible bidder on the project. That prompted the instant proceeding.

      
      

   9. DOT bids are governed by the Standard Specifications for Road and Bridge Construction, 1982 Edition. Section 2 - 6 of that document provides as follows:

      
      

      A proposal will be subject to being consid- ered irregular and may be rejected if it shows omissions, alterations of form, addi- tions not called for, conditional or unau- thorized alternate bids, or irregularities of any kind; also if the unit prices are obvi- ously unbalanced, either in excess of or below the reasonable cost analysis values.

      
      

      DOT has relied upon this section as authority for rejecting Cheesbro's bid. Cheesbro did not read this document before submitting its bid. According to DOT, the purpose of the section is to obtain standard bids from all contractors, and to prevent one bidder from having an unfair advantage over others through the use of alternate bids.

      
      

      CONCLUSIONS OF LAW

      
      

   10. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes.

       
       

   11. Respondent contends that petitioner's bid was rejected because of the unauthorized alternate bid included within its bid package which violated Section 2-6 of the Specifications. That Section provides in part that:

       
       

       An altered, or unauthorized alternate bid would subject the proposal to being consid- ered irregular and the bid may be rejected.

       
       

       Petitioner concedes that its bid violated the above specification, but contends that rejection of an "irregular" bid is permissive, and not mandatory, on the part of DOT, and that its rejection was arbitrary capricious and an abuse of discretion under the circumstances herein.

       
       

   12. An agency can, of course, waive a "relatively minor irregularity", Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982), especially where no competitive advantage accrues to the successful bidder. But here the submission of alternative bids cannot be considered "minor," for it obviously placed Cheesbro in a more favorable position than the others who submitted only one. Therefore, DOT's reliance upon the specification governing alternate bids was proper, and its rejection of Cheesbro's bid appropriate.

       
       

   13. Even though Cheesbro's bid was "irregular," the question of whether the specifications were so vague or unclear as to warrant the rejection of all bids must be addressed. As a general rule, the bidding documents must be "sufficiently specific to assure fair competition to all the bidders." Aurora Pump v. Goulds Pumps, Inc., 424 So.2d 70, 74 (Fla. 1st DCA 1982). Here the record discloses that DOT designed the specifications thinking that a GRS-500 system would meet those criteria. After discovering that the specifications were unclear, and as written would not permit the use of a GRS-500 system, DOT conceded its error but declined to issue an addendum because of the proximity of the filing date for bids. Under these circumstances, the lack of clarity in the specification constitutes sufficient grounds for rejecting all bids. Cf. Capeletti Brothers v. State Department of General Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983). It is noted that even the successful bidder (Kent) was misled by the specification in question until it was advised by a third party to revise its bid using a different system. Therefore, it is concluded the specifications were not sufficiently specific to assure fair competition to all the bidders, Aurora Pump,

424 So.2d at 75, that all bids must necessarily be rejected and the project relet for bids.

RECOMMENDATION

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

RECOMMENDED that all bids on State Job Project No.

26000-3624 be rejected, and the project be relet for bids.

DONE and ORDERED this 1st day of July, 1985, in Tallahassee, Florida.

Hearings

Hearings

DONALD R. ALEXANDER

Hearing Officer

Division of Administrative

The Oakland Building 2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative

this 1st day of July, 1985.

COPIES FURNISHED:

David H. Burns, Esquire

p. O. Box 1694 Tallahassee, Florida 32302

Larry D. Scott, Esquire Haydon Burns Bldg., M.S. 58 Tallahassee, Florida 32301

Docket for Case No: 85-001348BID

Orders for Case No: 85-001348BID