STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

REGENCY ELECTRIC CONTRACTING ) COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 85-2820BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot the assigned Hearing Officer of the Division of Administrative Hearings, on September 5 and 13, 1985, in Tallahassee, Florida.

Petitioner Regency Electric Contracting Company was represented by Ronald W. Brooks, Esquire, Tallahassee, Florida; and Respondent Department of Transportation was represented by Larry D. Scott, Esquire, Tallahassee, Florida.

Petitioner Regency Electric Contracting Company protests the decision of the Florida Department of Transportation which declared the bid of Regency on State Project No. 72190-3530 non responsive and elected to award the contract to Traffic Control Devices, Inc. At issue in this proceeding therefore, is whether the bid submitted by Regency should be rejected as nonresponsive.

Petitioner presented the testimony of Nettie Sims, Randall L. Schecter, and Michael F. Matzen. Respondent presented the testimony of Keith O. Pitchford, Michael F. Matzen, and Tyrone W. Reddish. Additionally, Joint Exhibits numbered 1-6 and Respondent's Exhibit numbered 1 were admitted in evidence.

Both parties submitted post-hearing proposed findings of fact. A ruling on each proposed finding of fact appears in abbreviated form in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. The Florida Department of Transportation (hereinafter "DOT") advertised for bids on State Project No. 72190-3530 in Duval County, Florida, with the bids to be closed on June 19, 1985. The notice to contractors and the special provisions included with the bid package provided that the subcontractor participation goal for the project for firms owned and controlled by Disadvantaged Business Enterprises (hereinafter "DBE") was eight percent and for firms owned and controlled by Women Business Enterprises (hereinafter "WBE") was two percent of the total contract bid for that traffic signal installation and resurfacing project.

   
   

2. In response to that advertisement for bids, Regency Electric Contracting Company (hereinafter "Regency") submitted a bid of $571,561.86 for the project. Mike Hunter, Inc.; Traffic Control Devices, Inc.; and Wiley

   N. Jackson Company also submitted bids for that project. Regency was the apparent low bidder.

   
   

3. The bid submitted by Regency proposed to utilize

   6.21 percent DBE subcontractors and .39 percent WBE subcontractors. Mike Hunter, Inc., proposed to utilize 5.4 percent DBE subcontractors and 2.8 percent WBE subcontractors. Traffic Control Devices, Inc., proposed to utilize 9.8 percent DBE subcontractors and 2.6 percent WBE subcontractors. Wiley N. Jackson proposed to utilize 39.9 percent DBE subcontractors and 2.7 percent WBE subcontractors.

   
   

4. DOT, after reviewing the bids, issued a notice of switch in apparent low bidder for the project based upon the failure of Regency to achieve the DBE/WBE project goals and failure to submit documentation of good faith efforts to achieve those goals. Since Mike Hunter, Inc., (the second lowest bidder), also failed to achieve the project's DBE/WBE goals, DOT declared Traffic Control Devices, Inc. (the third lowest bidder), to be the low responsible bidder with its bid of $660,240.47 which is $88,678.61 more than the bid submitted by Regency.

   
   

5. The 9.8 percent DBE participation proposed by Traffic Control Devices, Inc., was achieved by allocating a portion of the electrical work being performed by Traffic Control Devices, Inc., to a single DBE subcontractor at a

   price which was approximately double that proposed to be charged by Regency utilizing its own forces.

   
   

6. W & T Enterprises, Inc., is the sole DBE subcontractor proposed to be utilized by Traffic Control Devices, Inc. Although W & T is a North Carolina corporation, it is certified by DOT as a DBE subcontractor for participation in contracts awarded by DOT. W & T qualified to transact business in the State of Florida on August 4, 1980, but its permit to transact business in Florida was revoked on December 16, 1981 for failure to file the annual report as required by law. Since that time, W & T has not re-qualified itself to do business in Florida, and W & T cannot now qualify to do business in Florida since there is now a Florida corporation under the name of W & T Enterprises, Inc. which is not affiliated with the North Carolina corporation, so that that name is no longer available in the State of Florida. Further, the North Carolina W & T Enterprises, Inc. is not registered under a fictitious name in Seminole County where it is alleged to maintain an office.

   
   

7. Since Regency's Utilization Form No. 1 reflected that Regency had failed to achieve either the DBE or the WBE goals required for the project, an evaluation was made by DOT's "good faith efforts" review committee of Regency's "good faith efforts" documentation required to be submitted with its bid. In an attempt to evidence "good faith efforts" Regency submitted with its bid a one-page note which lists the DBE and WBE firms contacted by Regency. Regency only contacted a total of ten potential subcontractors and did not contact all of the potential subcontractors in any of the possible areas of subcontracting. The note further fails to indicate when the solicitations were made or that the solicitations were made at least seven days prior to the bid letting.

   Further, the few solicitations that were made were done by telephone and not by certified mail, return receipt requested, or by hand-delivery with a receipt. There is no evidence to indicate what information was given in the solicitations or that Regency offered to assist the firms contacted with preparation of their quotes, with review of the bid package, or with the obtaining of any required bonding or insurance. Lastly, none of the quotes obtained from any of the DBE or WBE firms contacted were attached to Regency's bid.

8. DBE goals and WBE goals are established by DOT on a project-by-project basis. The evidence in this cause indicates that there were a number of facets to the project including, for example, grassing, asphalt/concrete, barricades/signs, guard rails, signalization and striping. Although one of Regency's witnesses who was not qualified as an expert made the statement that there was an insufficient amount of work available for subcontracting in the project, no specifics were offered as to the basis for that opinion other than the fact that Regency did not choose to subcontract any of the signalization work. No evidence was offered to show what portions of the project involved other-than-signalization work what portion of the project involved materials, or why no portion of the signalization should be subcontracted other than that witness's testimony that loop assembly work proposed to be subcontracted to W & T Enterprises Inc., by Traffic Control Devices, Inc., doubled the price of that portion of the work over Regency's estimate of the costs to do the loop assembly using Regency's own forces. Further, two of the four bidders were able to allocate sufficient portions of the project to subcontractors to meet the DBE goals set by DOT for the project, and three of the four bidders met the WBE goals.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.

   
   

10. Section 339.081(4), Florida Statutes, requires that DOT spend at least ten percent of the amounts expended from the State Transportation Trust Fund with small business concerns owned and controlled by socially and economically disadvantaged individuals. Pursuant to that mandate, DOT has adopted Chapter 14-78, Florida Administrative Code, to implement an affirmative action program for participation by women and socially and economically disadvantaged individuals in the performance of contracts awarded by DOT. That chapter further authorizes DOT to establish DBE and WBE goals for each contract.

    
    

11. Section 14-78.03(2)(b)3. and 4. provide as follows:

    1. For contracts with an estimated total dollar amount of $1,000,000 or less, the contract goals shall not exceed 50 percent of the identified potential for DBE and WBE participation. . . .

    2. For all contracts for which DBE and WBE 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 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. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected.

       1. The contractor's bid submission shall include the following information:

          1. The names and addresses of certified DBE and WBE firms that will participate in the contract;

          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.

       2. 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 1) of the specific work the contractor intends to subcontract; 2) that their interest in the contract is being solicited; and 3) 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 or 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.

          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.

          This 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. [Emphasis added.]

          
          

12. Since Regency failed to meet either the DBE or WBE goals established for the project, it was necessary to review the documentation submitted with Regency's bid in order to determine if Regency had made good faith efforts to meet the goals. Regency did not. Regency failed to solicit DBE and WBE subcontractor participation by providing 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 intended to be subcontracted; failed to demonstrate that such notice of solicitation was provided at least seven days prior to the bid letting; failed to show what information was provided to each DBE or WBE subcontractor pursuant to the telephone solicitation made by a person who did not testify at the final hearing herein; failed to submit all quotations received from DBEs or WBEs with Regency's bid; and failed to show whether assistance with the bidding process was offered by Regency to each DBE and WBE firm contacted.

    Both Section 14 78.03 and the bid package documents advised Regency that failure to meet the DBE/WBE solicitation requirements would result in the contractor's bid being deemed nonresponsive and the bid being rejected and further advised Regency that Regency's ability to perform the work with its own work force would not in itself excuse a failure to meet contract goals. Since

    Regency was advised of the procedures required to be followed and of the consequences which would result from failure to follow those procedures, Regency has failed to show that it is the lowest responsible bidder, and Regency's bid should be rejected.

    
    

13. Regency has also failed to prove that DOT was arbitrary or capricious in establishing the DBE and WBE goals for the project in question. Regency offered no evidence to support the statement of one of its witnesses that the goals were not properly established, and that opinion was not an expert opinion. Additionally, two of the four bidders were able to allocate sufficient portions of the project in order to meet the DBE goal and three of the four met the WBE goal. Although Regency may have selected different goals had it been in DOT's position, the fact that Regency's judgment differs from that of DOT falls far short of showing that the goals set by DOT were arbitrary and capricious.

    
    

14. Since Regency has failed to show that it is entitled to receive the bid awards Regency has no standing to challenge DOT's determination as to whether to award the contract in question to any of the other bidders or whether to re-let the bid. Accordingly, it is not necessary to reach the question raised by Regency as to whether Traffic Control Devices, Inc.'s, bid should be rejected by DOT due to its reliance upon W & T Enterprises, a DBE apparently no longer qualified to do business in the State of Florida. Although DOT has the authority to initiate proceedings for revocation of the DBE certification of W & T Enterprises Inc., the North Carolina corporation, that is a matter between DOT and W & T Enterprises, Inc. Regency cannot decertify W & T or force DOT to do so in this proceeding.

    
    

15. Regency further argues that it is the only bidder entitled to receive the bid award in this cause since no other bidder (successful or unsuccessful) intervened and participated as a party in this bid protest proceeding. Unsurprisingly, Regency fails to cite any authority in support of its argument. The other bidders had the option of intervening or of allowing DOT to defend on its own Regency's attempt to obtain through this proceeding a declaration that it remained the lowest responsible bidder. Although it is usual for the intended recipient of a bid award to participate as a party in any protests of that

award, there is no requirement that the intended recipient do so. This argument, accordingly, must also fail.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore,

RECOMMENDED that a Final Order be entered declaring the bid of Regency Electric Contracting Company on State Project No. 72190-3530 nonresponsive, rejecting that bid, and dismissing with prejudice Regency's formal protest of intent to award a contract.

DONE and ORDERED this 1st day of November, 1985, at Tallahassee, Florida.

Hearings

Hearings

LINDA M. RIGOT, 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 November, 1985.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-2820

1. The following proposed findings of fact of Regency Electric Contracting Company have either been adopted verbatim or have been adopted as modified to conform to the evidence: 3-6 and 16-19.

2. The following proposed findings of fact of Regency Electric Contracting Company have been rejected as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 1, 2, 13-15, and 20.

3. The following proposed findings of fact of Regency Electric Contracting Company have been rejected as unnecessary: 7-12.

4. The following proposed findings of fact of the Department of Transportation have either been adopted verbatim or have been adopted as modified to conform to the evidence: 1, 4, 7, and 8.

5. The following proposed findings of fact of the Department of Transportation have been rejected as not constituting findings of fact but as constituting either argument of counsel or conclusions of law: 2, 3, 6, and 11.

6. The following proposed findings of fact of the Department of Transportation have been rejected as unnecessary: 5, 9, and 10.

7. The following proposed finding of fact of the Department of Transportation has been rejected as not being supported by any evidence: 12.

COPIES FURNISHED:

Larry D. Scott, Esquire Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Ronald W. Brooks, Esquire 863 East Park Avenue Tallahassee, Florida 32301

Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building, M.S.-58 Tallahassee, Florida 32301

Docket for Case No: 85-002820BID

Orders for Case No: 85-002820BID