vs. ) CASE NO. 85-
Respondents. )
On June 20, 1985, a formal hearing was conducted in this case at West Palm Beach, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. The parties were represented at the hearing as follows:
FOR COX & PALMER: John R. Young, Esquire
FOR WATER MGT. DIST.: Stanley J. Niego, Esquire
FOR BOOTH: Kevin F. Richardson, Esquire Clyatt & Richardson
This is a bid protest case in which the Petitioners challenge the agency's proposed action to award a bid for certain construction. All parties are interested in an expedited resolution of this matter and to that end all parties waived formal notice of hearing and agreed to the hearing being conducted on June 20, 1985. All parties also agreed to an accelerated schedule for the submission of proposed findings of fact and proposed conclusions of law. At the beginning of the hearing a representative of Overland Construction Company, Inc., announced that Overland did not intend to pursue its petition in this case or participate as a party because it realized that even if the bid of Booth Construction, Inc., were to be invalidated the contract would not be awarded to Overland because even in that event Overland would not be the low bidder.
Subsequent to the hearing all parties except Overland filed proposed findings of fact and proposed conclusions of law. These proposals have all been carefully considered in the formulation of this Recommended Order.
Based on the stipulations and admissions of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at hearing, I make the following findings of fact.
The South Florida Water Management District (hereinafter "District") advertised for bids on Contract No. M-0137, Bid No. B-85-91, for the construction of a structure maintenance facility. The Specifications and Contract Documents for the project required that bidders submit a "Base Bid," which related to the essential components of the project, and three "add alternates," which related to additional items that the District might contract for over and above the Base Bid. The Notice To Contractors regarding this project included the following language:
The right is reserved, as the interest of the District may require, to reject any or all proposals, to waive any informality in the
proposal, or to readvertise for other or future proposals.
Paragraph 2 of the Instructions To Bidders includes the following language: "The intent of the Proposal Form is to secure a price, based on unit prices, for the work described in the Contract. . . ." (emphasis added)
Paragraph 4 of the Instructions To Bidders reads as follows:
The District reserves the right to reject any and all proposals (i) when such rejection is in the interest of the District; (ii) if such proposal is void per se; or (iii) if the proposal contains any irregularities, PROVIDED, however, that the District reserves the right to waive any irregularities and to accept the lowest responsible bidder's proposal determined by the Engineer on the basis of the gross sum for which the work will be performed, arrived at by a correct computation of the base bid plus the alternate bid item or items selected by the District. Bid items will be considered by the District on the has is of budgetary capability. (First emphasis in original; second emphasis added.)
Paragraph 5 of the Instructions To Bidders reads as follows:
Proposals will be considered irregular if they show omissions, unauthorized alterations
of form, additions not called for, conditional or unauthorized alternate bids, or other irre- gularities of any kind; also if the unit prices are unbalanced either in excess of or below the reasonable cost analysis values, or incomplete in any manner, including failure
to bid on all items on the bid form.
Paragraph 8 of the Instructions To Bidders reads as follows:
No proposal can be withdrawn after it is
filed unless the Bidder makes his request in writing to the District prior to the time set for the opening of bids, or unless the District fails to accept it within sixty (60) days after the date fixed for opening bids.
Paragraph 10 of the Instructions To Bidders reads as follows:
No interpretation of the meaning of the Plans, Specifications or other Contract Documents will be made to any Bidder orally. Every request for such interpretation should be in writing addressed to the Engineering & Construction Division, South Florida Water Management District, 3301 Gun Club Road, Post Office Box V, West Palm Beach, Florida, zip code 33402, and to be given consideration must be received at least Ten (10) calendar days prior to the date fixed for the opening of bids. Any and all such interpretations and any supplemental instructions will be in the form of written Addenda to the Specifications which, if issued, will be mailed by registered mail to all prospective bidders (at the respective addresses furnished for such purposes) not later than Five (5) calendar days prior to the date fixed for the opening of bids. Failure of any bidder to receive any such Addendum of interpretation shall not relieve any bidder from any obligation under his bid as submitted. All addenda so issued shall become part of the Contract Documents.
The bid items are described in Section 01021 of the Specifications and Contract Documents. Subsection 1.01 of that Section describes what is included in the Base Bid as follows:
The Base Bid includes all work shown on the plans and called for in the specifications for:
Structure Maintenance Facility, complete.
Building utilities including all rough-in required for alternate bid items whether or not alternate bids are accepted.
Site work including utilities.
All other costs of the project not attributable to Items 1 thru 3 above or Alternate Bid Nos. 1 thru 3 below.
Subsection 1.02 of Section 01021 describes what is included in Alternate Bid No. 1 as follows:
In the Base Bid all structural supports to receive the monorail trolley beams and hoists are included. Alternate No. 1 includes all work shown on the plans and called for in the specifications for two 15 ton capacity monorail hoists and trolley beams complete and operational. Work includes all final utility connections to points indicated on drawings, shipping, unloading at site, installation and final check-out and instruction to owner on operation of equipment as well as all other costs not attributable to items previously mentioned.
Subsection 1.03 of Section 01021 describes what is included in Alternate Bid No. 2 as follows:
In the Base Bid all mechanical and electrical rough-in is to be provided for the two offices and the toilet and locker rooms above.
Alternate No. 2 includes all costs over the Base Bid for completing the offices, toilets and locker rooms including all plumbing and lighting fixtures, partitions, lockers finishes, structure and metal stair as indicated and specified in the applicable sections of these specifications.
Subsection 1.04 of Section 01021 describes what is included in Alternate Bid No. 3 as follows:
The Base Bid includes all site grading to finish elevations indicated. Alternate No. 3 includes all costs over the Base bid for providing subsurface preparation and
asphaltic concrete paving to finish elevations indicated as described in Section 02513 for all areas where asphaltic concrete paving is shown.
In September of 1984 the District had received bids for a similar project. Similar contract documents and bid forms were used for the project. Cox & Palmer Construction Company, Overland Construction Company, Inc., and Booth Construction, Inc., all submitted bids on the September 1984 project. All of the bids submitted on the September 1984 project, including the Booth bid, were submitted on an add alternates" basis. All of the September 1984 bids were rejected.
A total of seven bidders submitted bids on the instant project. With the exception of Booth Construction, Inc., all of the bidders on the instant project calculated their bids on an "add alternates" basis. It was the clear intent of the architecture firm that prepared the Specifications and Contract Documents that the bids should be submitted on an add alternates" basis.
There were no irregularities in the bidding process regarding the instant project prior to the opening of the first bid.
At the duly appointed time a representative of the District began the process of opening and announcing the amounts of the bids. The first bid to be opened was the bid submitted by Overland Construction Company, Inc. The amounts bid by Overland were as follows:
Base Bid |
| $ 378,800 |
Alternate | No. 1 | 64,000 |
Alternate | No. 2 | 18,000 |
Alternate | No. 3 | 11,200 |
Immediately after the announcement of the amounts bid by Overland, Mr. York, the Director of the District's Engineering and Construction Division, asked, "Is that an add-on or deduct?" Someone in the audience answered that it was an "add-on" bid. Mr. Gerachi, on behalf of Booth, promptly stated that the alternates should have been bid as "deducts". A general discussion ensued among members of the audience regarding whether the alternates should have been bid as "add-on" or "deducts." In order to continue with the bid opening process and to restore order in the room, a representative of the District announced that the matter would be resolved when the bids were tabulated and
another representative of the District began the process of opening the rest of the bids.
The bid submitted by Booth Construction, Inc., was the fourth bid to be opened. The amounts written on the Booth bid were as follows:
Base Bid | $ 396,586 |
Alternate No. 1 | 54,072 |
Alternate No. 2 | 14,597 |
Alternate No. 3 | 9,185 |
Immediately after the amounts of the Booth bid were announced, Mr. Alvin Booth, president of Booth Construction, Inc. stood up and stated that the Booth bid had been calculated on the basis of "deduct" alternates. The essence of his statement was that in calculating the amount of his company's Base Bid he had added to the base bid the sum of the three alternate bids with the understanding that the amounts shown for any of the three alternates would be deducted from his Base Bid if the District decided not to award a contract for one or more of the alternates. This statement following the opening of the Booth bid was the first time that anyone on behalf of Booth had made a specific unambiguous statement to representatives of the District responsible for this bidding process regarding the manner in which the Booth bid was calculated. 1/
The bid submitted by Cox & Palmer Construction Company was opened after the Booth bid. The amounts bid by Cox & Palmer were as follows:
Base Bid | $ 392,225 |
Alternate No. 1 | 38,770 |
Alternate No. 2 | 19,200 |
Alternate No. 3 | 11,456 |
The bid submitted by Booth Construction, Inc., was prepared by both Vincent Gerachi, an estimator and project manager employed by Booth Construction, Inc., and by Alvin Booth, president of Booth Construction, Inc. Mr. Gerachi has been an estimator on construction projects for approximately 12 years. Mr. Booth has been in the construction business for approximately 30 years and has had his own construction company for about 18 years. Both Mr. Gerachi and Mr. Booth were uncertain whether the
alternate bids were supposed to be bid as "add-ons" or as "deducts." Neither of them attempted to do anything to resolve their uncertainty until the morning of the very day on which bids were to be submitted. On that morning Mr.
Gerachi called a representative of the District to ask whether the bid should be prepared with the alternate bids calculated as "add-ons" or as "deducts." Mr. Gerachi spoke to Mr. Brown at the District, who suggested that Mr.
Gerachi call the architecture firm that had prepared the Specifications and Contract Documents. Notwithstanding the provisions of Paragraph 10 of the Instructions To Bidders (see paragraph 6 of these findings of fact, above), it is a customary practice of the trade for bidders to communicate directly with project architects to resolve any uncertainties in the Specifications and Contract Documents. Indeed, it is generally understood in the trade that it is the duty of the bidder to communicate with the project architect to seek resolution of any ambiguities.
Mr. Gerachi tried to reach the project architect by telephone, but was unable to reach him because the architect had already left his office to drive to the bid opening. Mr. Gerachi did not have an opportunity to talk to the architect prior to filing the Booth Construction bid because the architect did not come into the bid opening room until about one minute after 2:00 p.m. Mr. Gerachi talked to Mr. and Mrs. Booth before turning in the Booth bid. Mr. Gerachi prepared the Booth bid with the alternate bids calculated as "deducts" from the Base Bid. In other words, the amount of the Base Bid on the Booth bid included the sum of the three alternate bids, which alternate bids were also separately stated on the Booth bid. Alvin Booth participated in the preparation of the bid and was aware of the manner in which the Booth bid was calculated before the bid was submitted to the District.
Even though the Base Bid on the Booth bid is in the amount of $396,586, it was the intention of Booth Construction, Inc., to bid $318,732 for the work described as being within the scope of the Base Bid. The reason for the higher amount being entered for the booth Base Bid is that Vincent Gerachi and Alvin Booth misinterpreted the Specifications and Contract Documents and added to the Booth Base Bid the sum of the Booth bids on each of the three Alternate Bids. 2/ This misinterpretation of the Specifications and Contract Documents was caused by the
culpable negligence or willful inattention of Vincent Gerachi and Alvin Booth.
After all of the bids were opened a representative of the District announced that the District would consider the matter and notify all bidders of its decision at a later date. Thereafter the District, having concluded that Booth Construction, Inc., had acted in good faith and that the irregularities in the form of its bid were "minor irregularities," decided to treat the oral statements by Mr. Gerachi and Mr. Booth as amendments to the Booth bid, to treat the Booth Base Bid as being
$318,732, and to award a contract to Booth Construction, Inc., for the Base Bid and Alternate No. 1 in the amount of
$372,804, calculated as follows:
$318,732 | (Amended Booth Base Bid) |
54,072 | (Booth Alternate No. 1 Bid) |
$372,804 | (Total Contract) |
Booth Construction, Inc., has the ability to perform the contract and can perform the contract for the proposed contract amount of $372,804. Booth Construction, Inc., is a responsible bidder.
The District estimate of the cost of the work covered by the Base Bid and Alternate No. 1 was $329,000.
There are no irregularities in the bid submitted by Cox & Palmer Construction Company. Cox and Palmer Construction Company is a responsible and responsive bidder. The bid submitted by Cox & Palmer is the lowest responsive bid for the combination of the Base Bid and Alternate No. 1. 3/
The foregoing findings of fact include the substance of the majority of the findings proposed by the parties, although I have rejected a number of unnecessary details and editorial comments in the parties' proposals. Any proposed findings which are not incorporated in the foregoing findings are rejected on the grounds of not being supported by competent substantial evidence or as being contrary to the weight of the persuasive evidence.
CONCLUSIONS OF LAW
Based on the foregoing findings of fact and on the applicable statutes, rules, and court decisions, I make the following conclusions of law.
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sec. 120.57, Fla. Stat.
By reason of the election of Overland Construction Company, Inc., not to pursue its petition and not to participate as a party, the petition of Overland Construction Company, Inc., should be regarded as abandoned. Further, due to the fact that the Cox & Palmer bid is lower than the Overland bid and that Cox & Palmer is a responsible and responsive bidder, Overland Construction Company, Inc., lacks standing in this proceeding. See Preston Carroll Company, Inc. v. Florida Keys Aqueduct Authority, 400 So.2d 524 (Fla. 3d DCA 1981).
The Hearing Officer's examination of the Florida case law has not revealed any Florida case dealing with a factual situation quite like the one in this case, nor have any of the parties brought such a case to the attention of the Hearing Officer. Nevertheless, there is guidance to be had from a number of Florida cases which establish some basic concepts to be applied in the resolution of competitive bidding disputes, as well as from some Florida cases which address analogous situations.
For over fifty years the Supreme Court of Florida seems to have had the same view of the purpose of competitive bidding on public works projects. In Wester v. Belote, 138 So.721 (Fla. 1931), and again in Liberty County
v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982), our highest State court has noted that competitive bidding requirements
serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, [and] they remove temptation on the part of public officers to seek private gain at the taxpayer's expense, are of highly remedial character, and should receive a construction always which will fully effectuate and
advance their true intent and purpose and which will avoid the likelihood of same being circumvented, evaded, or defeated.
In Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977), the court quoted the foregoing language from Webster v. Belote, supra, and then went on to apply it in the following manner, at page 1192:
From the above quote it is apparent that the entire scheme of bidding on public projects is to insure the sanctity of the competitive atmosphere prior to and after the actual letting of the contract. In order to insure this desired competitiveness, a bidder cannot be permitted to change his bid after the bids have been opened, except to cure minor irregularities.
And at page 1193, the court in Harry Pepper explicated further:
The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by the other bidders.
In the Harry Pepper case, supra, the issue before the court was whether a city has legal authority to accept a bid which, at the time of its submission, is facially nonconforming as to acceptable materials and components, but which is subsequently amended (after all bids were opened), prior to acceptance, to conform to the specifications as stated in the original proposal. The court resolved the issue as follows at 352 So.2d 1193:
Faced with Gulf's [the low bidder's] substantially nonconforming bid, the City had but two proper alternatives: to award the contract to the next lowest bidder who met the specifications, or to reject all bids and readvertise for new ones. The City exceeded its authority by allowing Gulf to bring its bid into conformity with the specifications and then accepting it.
To similar effect, and somewhat closer to the instant case on the facts, is Graham v. Clyde, 61 So.2d 656 (Fla. 1952). There a bidder sought recession of a contract on the ground of a unilateral mistake made in computing items of his bid. The court said, at pages 657 and 658:
... equity will not relieve against the mistake of one guilty of culpable negligence, neither will it relieve against a mistake that could have been avoided by caution. If the one seeking relief could have avoided his mistake-by reasonable care or diligence, a court of equity will not relieve him. In other words, if one's mistake is due to his own negligence and lack of foresight and there is absence of fraud or imposition, equity will not relieve him. ... After all, the most that can be said is that appellee is
seeking relief from a clerical error that he alone was responsible for. It is not contended that an honest unilateral error in reference to a material fact relative to the contract was made. If errors of this nature can be relieved in equity, our system of competitive bidding on such contracts would in effect be placed in jeopardy and there would be no stability whatever to it. It would encourage careless, slipshod bidding in some cases and would afford a pretext for the dishonest bidder to prey on the public.
More recently, in Lassiter Construction Company
v. School Board For Palm Beach County, 395 So.2d 567 (Fla. 4th DCA 1981), the court followed Graham v. Clyde, supra, and denied relief to a bidder who made a $100,000 mistake in his bid calculation. The facts in Lassiter are described as follows at page 568:
Immediately after the bids were opened, James D. Lassiter, appellant's president, recalculated appellant's bid. Mr. Lassiter discovered that he had made an errors of
$100,000 in the preparation of the concrete bid figure. The error was caused when Mr. Lassiter transposed the $346,695 figure for concrete costs from the bid worksheet as
$246,695 onto the final bid summary sheet. Mr. Lassiter personally prepared both documents.
Mr. Lassiter immediately notified the School Board through its attorney of the error. Mr. Lassiter was given the opportunity to withdraw his company's bid but Mr. Lassiter did not request to do so.
On December 18, 1978, Mr. Lassiter appeared at the School Board's meeting explained the error, and requested that the Board increase
the construction price by $100,000. The Board voted to accept appellant's bid without the requested increase. At its meeting of January 17, 1979, the School Board failed to reconsi- der Mr. Lassiter's request to increase the bid.
Appellant argues that because of an honest unilateral mistake, it would be unconscionable and inequitable to require Lassiter to perform the contract in accordance with its bid.
Application of the legal principles in the cases cited above to the facts in this case compels a conclusion that the irregularity in the Booth Construction, Inc., bid was not a "minor irregularity," and may not properly be waived by the District. First, the amount of the irregularity is not minor. To the contrary, the effect of permitting Booth to amend its bid would be to allow Booth to make a change to the tune of $77,854 in the amount of its base bid. Second, there is nothing minor about the effect that curing the irregularity would have on other bidders. To the contrary, a waiver of the irregularity would turn Booth's losing bid into a winning bid arid would deprive the bidder who is actually the lowest responsive and responsible bidder of its rightful entitlement to be awarded the contract. The tone of the argument on behalf of the Respondents is that this is just a small matter of the meaning of a couple of words like "add alternates" and "deduct alternates" and that surely the misapprehension of a couple of industry "buzz-words" is a minor thing that can be overlooked by the District; a mere quibble over semantics, if you will. But this is not a small matter, because by not paying attention to the words in the Specifications and Contract Documents, Booth Construction, Inc., made a $77,854 mistake in its bid.
On the strength of the decision in State Board of Control v. Clutter Construction Corporation, 139 So.2d 153 (Fla. 1st DCA 1962), cert. denied, 146 So.2d 374 (Fla. 1962), Booth Construction, Inc., argues that its irregularity can be excused even if it is more than a minor irregularity. The argument fails for two reasons. First, Booth Construction, Inc., does not meet all of the criteria set forth in the Clutter Construction case. Specifically, Booth's error was the result of culpable negligence and willful inattention. Second, by reason of Alvin Booth's participation in the preparation of the bid and his knowledge of the manner in which it had been prepared before it was submitted, this case is distinguishable from the Clutter Construction case, supra, and is more analogous to the decisions in Graham v. Clyde, supra, and Lassiter Construction Company v. School Board For Palm Beach County, supra.
As a final matter it should be noted that a waiver of the irregularities in the Booth Construction, Inc., bid would go a long way toward undermining public confidence in the District's bidding process. One bidder has already voiced its concern in this regard over the proposal to award the contract to Booth and it is reasonable to expect that there would be additional manifestations of concern if the contract were to be so awarded. Notwithstanding the discretion than public agencies are vested with in the bidding process, it is essential to the integrity of the process, and to public confidence in the process, that any such discretion be exercised in a manner which excludes any reasonable doubt as to the fairness of the process. As the Supreme Court of Minnesota said in Coller v. City of Saint Paul, 223 Minn. 376, 26 N.W.2d 835, 842 (1947):
If officials charged with the letting of public contracts should be permitted in their discretion to permit bids to be changed after they have been received and opened, it would open the door to the abuses which it is the purpose of the requirements of competitive bidding to prevent and suppress.
Based on all of the foregoing, I recommend that the South Florida Water Management District enter a Final Order to the following effect:
DONE AND ORDERED this 9th day of July, 1985, at Tallahassee, Florida.
MICHAEL M. PARRISH
Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1985.
1/ Much of the testimony about the statements made immediately after the opening of the Overland bid was somewhat general and vague. Consideration of all of that testimony supports a finding only that at that time Mr.
Gerachi expressed the view that the alternate bids should have been "deducts." The persuasive testimony does not support a finding that at that time anyone on behalf of Booth made a clear unequivocal statement regarding the manner in which the Booth bid was prepared. With regard to any such statements by Booth representatives prior to any bids being opened, there are conflicts in the testimony as to whether any such statements were made. I have resolved the conflicts in favor of a finding that there were no such statements before the opening of the bids and that the first unambiguous statement of how the Booth bid was calculated was made immediately following the opening of the Booth Bid.
2/ $318,732 + $54,072 + $14,597 + $9,185 = $396,586.
3/ Select, Inc., submitted a bid which was lower than the Cox & Palmer bid for the combination of the Base Bid and Alternate No. 1, but the Select bid was rejected as not responsive due to the fact that it had an inadequate bid bond. Select, Inc., did not protest the rejection of its bid.
John R. Young, Esquire James & Young
Stanley J. Niego, Esquire Office of Counsel
Kevin F. Richardson, Esquire Clyatt & Richardson
Bryan M. 0'Connell, Esquire O'Connell & O'Connell
John R. Wodraska, Executive Director South Florida Water Management District Post Office Box V
vs. CASE NO. 85-2044BID
Respondents.
This cause, having come before the Governing Board of the South Florida Water Management District (hereinafter the District), pursuant to the Recommended Order of the Hearing Officer assigned by the Division of Administrative Hearings, attached here to as Exhibit A; having considered oral exceptions to said order pursuant to the expedited schedule agreed to by the parties hereto and being otherwise fully advised in the premises herein, finds and it is thereupon ordered as follows:
DONE and SO ORDERED at a Public Hearing in West Palm Beach, Florida, this 12th day of July, 1985.
James R. Young, Esquire Kevin Richardson, Esquire Brian M. O'Connell, Esquire
