STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
CAPELETTI BROTHERS, INC., )
)
Petitioner, )
and )
)
STATE PAVING CORPORATION, )
)
Intervenor, ) CASE NO. 85-3003BID
)
vs. )
) DEPARTMENT OF TRANSPORTATION and ) JOHN MAHONEY CONSTRUCTION )
COMPANY, INC., )
)
Respondents. )
)
RECOMMENDED ORDER
This matter came on for hearing in Tallahassee, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on September 20, 1985. The Division of Administrative Hearings received the transcript of proceedings on October 21, 1985.
Capeletti Brothers, Inc., and the Department of Transportation, parties to a subsequent rule challenge arising out of the same circumstances, Capeletti Brothers, Inc. v. Department of Transportation, No. 85-3340R, waived the requirements of Rule 28-5.402, Florida Administrative Code, in the present case, in order that the recommended order in the present case could be entered simultaneously with the final order in the rule challenge ease, No. 85- 3340R. Intervenor State Paving Corporation, and respondent John Mahoney Construction Company, Inc. did not join this stipulation.
Tim Smith attended the hearing as an observer for State Paving Corporation. The other parties were represented by counsel:
For Petitioner: F. Alan Cummings, Esquire, and
Harry R. Detwiler, Jr., Esquire Holland and Knight
Post Office Drawer 810 Tallahassee, Florida 32302
For Respondent Larry D. Scott, Esquire Department of Haydon Burns Building Transportation: 605 Suwannee Street
Tallahassee, Florida 32301-5064
For Respondent Gary R. Rutledge, Esquire
John Mahoney Sparber, Shevin, Shapo & Heilbronner,
P.A.
Construction Suite 348, Barnett Bank Building Co., Inc.: 315 South Calhoun Street
Tallahassee, Florida 32301
By formal written protest filed August 10, 1985,
Capeletti Brothers, Inc. (Capeletti), alleged that the Department of Transportation (DOT), in posting notice of intent to award the contract for State Project, Job No. 97860-3319 to John Mahoney Construction Company, Inc. (Mahoney), unlawfully proposes to reject Capeletti's lower bid as unresponsive. The formal written protest also alleges that Mahoney's bid is unresponsive and that Capeletti should be awarded the contract as lowest responsible bidder.
ISSUE
Whether Capeletti demonstrated a good faith effort to meet the Women's Business Enterprise (WBE) goals? Whether Mahoney met the WBE goals? Whether DOT treated the WBE goals as quotas in violation of applicable rules? Whether DOT committees met to evaluate the bids in violation of Section 286.011, Florida Statutes.
FINDINGS OF FACT
By DOT's notice to contractors dated May 30, 1985, prospective bidders were admonished, with respect to bids due June 26, 1985, including bids on State Project, Job No. 97860-3319 (the job): "PLEASE CHECK SPECIAL PROVISIONS FOR SPECIFIC PERCENTAGE OF D.B.E. AND/OR W.B.E. GOAL REQUIREMENTS." Petitioner's Exhibit No. 2, p. 1. The job,
which consists of widening, resurfacing and related work along the Florida Turnpike between Sunrise Boulevard and Oakland Park Boulevard in Broward County, including interchange modifications and construction of a pedestrian overpass, is to be paid for with state, not federal, money, the proceeds of the sale of certain bonds. The specified WBE goal is three percent. Petitioner's Exhibit No. 2, Specifications of May 16, 1985, p. 1. The contract specifications provide:
2-5.3.2 Submittals for Contracts with Goals:
For all contracts for which DBE and/or WBE contract goals have been established, each con- tractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Depart- ment. The DBE and WBE participation informa- tion 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):
The names and addresses of certified DBE and WBE firms that will participate in the con- tract. Only DBEs and WBEs certified by the Department at the time the bid is submitted may be counted toward DBE and WBE goals.
A description of the work each named DBE and WBE firm will perform.
The dollar amount of participation by each named DBE and WBE firm.
If the DBE or WBE goal is not met, suf- ficient information to demonstrate that the contractor made good faith efforts to meet the goals.
2-5.3.3 Submittals for Evaluating Good Faith Efforts:
In evaluating a contractor's good faith ef- forts, the Department will consider:
Whether the Contractor, at least seven days prior to the letting, provided written notice by certified mail, return receipt re- quested, 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.
Whether the Contractor selected econo- mically feasible portions of the work to be performed by DBEs and WBEs, including where appropriate, breaking down contracts or com- bining elements of work into economically fea- sible 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.
Whether the Contractor provided in- terested DBEs and WBEs assistance in reviewing the contract plans and specifications.
Whether the DBE or WBE goal was met by other bidders.
Whether the Contractor submits all quo- tations received from DBEs and 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 low- er quotation from a non-DBE or non-WBE will not in itself excuse a contractor's failure to meet contract goals.
Whether the Contractor assisted inter- ested DBEs and WBEs in obtaining any required bonding, lines of credit, or insurance.
Whether the Contractor elected to sub- contract types of work that match the capabili- ties of solicited DBEs and WBEs.
Whether the Contractor's efforts were merely pro forma and given all relevant circum- stances, could not reasonably be expected to produce sufficient DBE and WBE participation to meet the goals.
Whether the Contractor has on other con- tracts within the past six months utilized DBEs and WBEs.
The above list is not intended to be exclu- sive 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.
4-7.1 General:
The Contractor shall ensure that Disadvantaged and Woman Business Enterprises as defined here- in and certified by the Department will have
the maximum opportunity to participate in the performance of subcontracts. In this regard, the Contractor shall take all necessary and reasonable steps specified herein to ensure that Disadvantaged and Woman Business Enter- prises certified by the Department have the maximum opportunity to compete for and perform subcontracts.
The Department will count DBE and WBE parti- cipation toward meeting DBE and WBE goals as follows:
The total dollar value of the contract to be awarded to the certified DBE or WBE may be counted toward the applicable DBE or WBE goal.
A portion of the total dollar value of a contract, with an eligible joint venture, equal to the percentage of the ownership and control of the DBE or WBE partner in the joint venture may be counted toward the DBE or WBE goal.
Only expenditures to DBEs and WBEs that perform a commercially useful function in the work of a contract may be counted toward the DBE and WBE goal. A DBE or WBE is considered to perform a commercially useful function when it actually performs and manages at least 51 percent of the work subcontracted to it.
To determine whether a DBE or WBE is perform- ing a commercially useful function, the Depart- ment shall evaluate all relevant factors such
as the amount of work subcontracted and industry practices.
Consistent with normal industry practices, a DBE or WBE may enter into subcontracts. If
a DBE or WBE subordinates 50 percent or more of the work of the subcontract, the DBE or WBE shall be presumed not to be performing a com- mercially useful function.
Expenditures for materials and supplies obtained from DBE and WBE suppliers and manufacturers may be counted toward the DBE
or WBE goal, provided that the DBEs or WBEs assume the actual and contractual responsi- bility for the provision of the materials and supplies.
Expenditures to a DBE or WBE manufacturer (i.e., a supplier that produces goods from raw materials or substantially alters them before resale) may be counted toward the DBE or WBE goal.
On non-Federal Aid projects twenty percent of the Contractor's expenditures to DBE or WBE suppliers that are not manufacturers may be counted toward the DBE or WBE goal, provided that the DBE or WBE supplier performs a commer- cially useful function in the supply process.
Also among the materials in the bid package is the following:
Policy: It is the policy of the Department of Transportation that DBE/WBE business enterprises as defined in 49 CFR Part 23, and DOT Rule Chapter #14-78, shall have the maximum oppor- tunity to participate in the performance of contracts financed in whole or in part with Federal funds under this agreement. Conse- quently the DBE/WBE requirements of 49 CFR Part
23 apply to this agreement.
DBE/WBE OBLIGATION: The recipient or its contractor agrees to ensure that DBE/WBE business enterprises as defined in 49 CFR Part
23 have the maximum opportunity to participate in the performance of contracts and subcon- tracts financed in whole or in part with Federal funds provided under this agreement. In this regard all recipients or contractors shall take all necessary and reasonable steps in ac- cordance with 49 CFR Part 23 to insure that DBE/WBE business enterprises have the maximum opportunity to compete for and perform con- tracts. Recipients and their contractors shall not discriminate on the basis of race, color, national origin, or sex in the award and per- formance of DOT-assisted contracts.
DOT's Disadvantaged Business Enterprise (DBE) goal for the job is 8 percent. According to DOT's calculations, Capeletti had subcontracted 9.12 percent of the job to DBEs and 2.15 percent to WBEs, while Mahoney had subcontracted
8.3 percent of the job to DBEs and 3 percent to WBEs. Petitioner's Exhibit No. 4.
Capeletti bid the job at $5,076,630.87, less than any other bid. Mahoney was second lowest at $5,392,743.35 and State Paving Corporation was third lowest at
$5,459,189.19. Mahoney, State Paving Corporation and Pavex Corporation, the only other bidder (Capeletti aside), all met both the WBE and the DBE goals.
Setting the Goals
Tyrone Reddish and Kevin Sweet, two DOT employees met -ith a representative of the Federal Highway Administration and a representative from the Transportation Road Builders Association as the "Goal Setting Committee." (T. 212) Even with respect to projects in which federal money is not used, the committee sets DBE and WBE goals, after "looking at geographics . . . availability of minority contractors and woman-owned companies . . . [and] the type of work that the contract offers." (T. 217)
To determine availability, the committee consults a directory of "goal firms that are currently certified with the Department" (T. 218), without determining whether the firms have conflicting commitments, and without determining, in the first instance, what their capacity is. The committee only evaluates potential subcontracting for DBEs and WBEs, in the aggregate, without breaking down the potential by category.
In setting the goals for this job, the committee consulted the directory and the job specifications and reached a consensus that roughly 13 percent of the job consisted of specialty items that could be subcontracted to minority business enterprises controlled by disadvantaged persons or women. Considering everything that could be subcontracted, specialty job and other work alike, the committee concluded that there was an overall potential of up to 18 percent.
Capeletti's Documentation
Summarizing the contents of Capeletti's "good faith efforts package" and included with it among the supporting documents filed with Capeletti's bid was a letter from W.R. Greenwell, Capeletti's secretary, to Sharon Wynn, DOT's "M.B.E. Liaison Officer," dated June 25, 1985. In the letter, Mr. Greenwell stated:
On June 5, 1985, we placed an advertisement in the Ft. Lauderdale Sun-Sentinel inviting
bids from DBE and WBE firms; this ad ran for seven (7) days commencing on June 9, 1985, and continuing through June 15, 1985. A copy of this ad is enclosed, Marked Exhibit "A".
On June 7, 1985, we placed an advertisement in the Miami Times, the largest black oriented weekly newspaper in South Florida, inviting
earnest-
bids from DBE and WBE firms; this ad was printed in the Miami Times on June 13, 1985, and again on June 20, 1985. A copy of this ad is enclosed, Marked Exhibit "B".
On June 7, 1985, we mailed a letter
ly soliciting quotations and bids from Subcon- tractors and Material Suppliers, together with a copy of our bidding calendar for the month of June, 1985. Our bidding calendar contains a complete description of each project and our letter invited the DBE and WBE firms to submit quotations or bids for furnishing materials and/or performing subcontract work on any of the listed projects for any part(s) of the contract(s). You will note that our letter explains our subcontracting and material pro-
curement policy and also advised the recipients as to where plans and specifications for these projects are available. A copy of our mail-out is enclosed, Marked Exhibit "C".
Letters, with bidding calendars, were mailed via certified Mail, return receipt requested, to all of those DBE and WBE firms that have indicated a desire to work in the South Florida area and to three (3) Associations that represent DBE and WBE organizations.
Our letter and bidding calendar was mailed to a total of two hundred and seventeen (217) firms and organizations. Our list has been compiled over a period of years as a result of our own efforts and by obtaining the names
of certified DBE and WBE firms from directories furnished to us in bid packages by various State and Local Governmental Agencies. One hundred and sixty-one (161) of the firms on
our list are F.D.O.T. certified DBE and WBE companies.
The enclosed Exhibit "D" consists of four
(4) pages of projects we have successfully bid during the past year, which indicates the names of DBE and WBE firms utilized on these projects and the amounts of the subcontracts.
The letter mailed June 7, 1985, to prospective subcontractors was a form letter referring to "projects listed on the enclosed Bidding Calendar." The excerpt of the bidding calendar included in the "good faith efforts package" does not include a description of State Project, Job No. 97860-3319, but it is clear from seven or so of the responses, included in the "good faith efforts package" that these seven, at least, received the bidding calendar description of State Project, Job No. 97860- 3319. The form letter told prospective subcontractors that plans and specifications were available for review at two specified addresses, one in Dade County and one in Broward County.
At hearing, Mr. Greenwell testified that materials had been mailed to 222 DBE and WBE firms. Returned envelopes and return receipts offered at hearing proved approximately this number of mailings.
Capeletti invited WBE (and other) subcontractors to bid on any phase of the job, but did not undertake to break down contracts or combine elements of work into economically feasible units. People in the business are aware that "extra heavy grading" includes "grassing." (T. 128)
The form letter ended with an offer of "help in interpreting the plans and specifications and preparing a quotation." The "good faith efforts package" did not reveal whether such help had been requested or given. On the back of the form letter appeared the following:
2. Performance (including Labor and Material) Bonds will be required on all subcontracted work; Supply (Payment) Bonds will be required on all major material purchases; costs for all bonds must be included in your quotation. Certificates of Insurance confirming coverages stipulated in the principal contract must be furnished prior to our execution of an Agree- ment with you for any subcontracted work.
One DBE subcontractor wrote objecting to the bonding requirements, but Capeletti did not respond. In the past, Capeletti has waived bonding requirements for certain DBE subcontractors.
As part of its "good faith efforts package," Capeletti submitted all WBE quotations it received. Capeletti did not use one or two WBE grassing quotations it obtained. Mr. Capeletti testified without contradiction that the WBE quotations not used, (in cases where the work was not given to another WBE or to a DBE) were 18 to 25 percent higher than quotations from non-WBE firms, but this is not apparent from the materials in the "good faith efforts package." Mr. Greenwell "knew it would be a problem in submitting the reasons why [Capeletti] didn't use any particular . . . WBE . . . [s]o [he] addressed that in [his] cover letter to Ms. Wynn that there would be a lot of last minute quotations." (T. 104)
Mahoney's Documentation
Markings & Equipment Corporation, a WBE, gave quotations for striping to Capeletti, Mahoney and all "prebidders," on this job, quoting each a total of
$29,716.66, including an optional $9,828.00 for temporary highway markings. The DOT has certified Markings and Equipment Corporation as a WBE, but not in any particular area. Apparently it specializes in painting stripes on new or resurfaced roads. Markings and Equipment Corporation is
not in the milling business and is not listed in the DOT directory under "paving asphalt/concrete."
Mill-It Corporation, a DBE, but not a WBE, is in the milling business. It gave identical quotations to all "prebidders" for milling, quoting Capeletti, Mahoney and each of the others $34,650.37. Milling entails removing asphalt pavement, trucking it to an asphalt plant to be remixed, then laying it down again. Milling requires expensive, specialized equipment, which differs from the equipment used for painting stripes. Each milling machine costs $300,000.00. Petitioner's Exhibit No. 1.
Markings & Equipment Corporation's bid for striping, at a maximum of $29,716.66, was never revised in any way, Petitioner's Exhibit No. 1, page 8, yet on its DBE/WBE Utilization Form No. 1, Mahoney has listed Markings & Equipment Corporation as a WBE subcontractor who is to perform work worth $78,200.00, including pavement and milling. Petitioner's Exhibit No. 5. This represents almost half of Mahoney's WBE commitment. If Mahoney had subcontracted only striping from Markings & Equipment Corporation, Mahoney would have fallen below the WBE goal.
The only relationship between Mill-It Corporation and Markings & Equipment Corporation, shown by the evidence, is that one Edward T. Quinn represents both corporations. Mr. Quinn was present in Tallahassee when the job was let. A WBE subcontractor is "allowed to subcontract 49 percent," (T. 246), but must actually perform more than half the work she undertakes herself.
Meeting in the Shade
Tyrone W. Reddish, Keith Owens Pitchford, Ken Sweet, "and a couple of other alternates" serve on DOT's Good Faith Efforts Committee. This committee met to evaluate the bids submitted on State Project, Job No. 97860-3319, produced Petitioner's Exhibit No. 4, and recommended that Capeletti's bid be rejected as
unresponsive. The Technical Review Committee accepted this recommendation and forwarded it to the Contract Awards Committee which met and decided to propose award of the contract to Mahoney. A representative of Capeletti asked to be permitted to attend the meeting of the Contract Awards Committee but was denied permission.
The parties' proposed findings of fact are addressed in an appendix to the recommended order.
CONCLUSIONS OF LAW
Since DOT referred this matter to the Division of Administrative Hearings, as required by Section 120.53(5)(d)(2), Florida Statutes (1984 Supp.), as amended by Ch. 85-180, Laws of Florida (1985), the "division has jurisdiction over the formal proceeding." Section 120.57(1)(b)(3), Florida Statutes (1984 Supp.)
Sunshine Law Claim
Capeletti contends that each of the DOT committee meetings, at which the bidding documents were reviewed to determine whether they complied with WBE requirements, constituted meetings of a "board or commission of any state agency . . . at which official acts [we]re to be taken." Section 286.011(1), Florida Statutes (1983). Capeletti argued that, for this reason, the committee meetings had to be public meetings under the law; and that, since they were not, in fact, open to the public, DOT's proposed disqualification of Capeletti cannot be "binding." Section 286.011(1), Florida Statutes (1983). The short answer to this contention is that neither what DOT staff committees recommended nor what the Secretary himself did afterwards bound anybody, because Capeletti timely filed a notice of protest and a formal written protest, initiating formal proceedings under Section 120.57(1), Florida Statutes (1984 Supp.)
With the institution of formal administrative proceedings, antecedent "free-form" agency action is rendered tentative only, and DOT's proposed action enjoys no presumption of validity. Capeletti Brothers v. State Department of General Services, 432 So.2d 1359, 1363 (Fla. 1st DCA 1983); Couch Construction Co. v. Department of Transportation, 361 So.2d 172, 176 (Fla. 1st DCA 1978). The "official act" of awarding the contract for State Project, Job No. 97860-3319, has not yet occurred.
Capeletti is contending for the invalidity of agency action not yet taken.
When, as here, formal administrative proceedings are invoked, a prehearing delegation of decision-making authority to staff is a legal impossibility. Section 120.57(1), Florida Statutes (1984 Supp.) While it is true that "a review of a decision-making process . . . cannot serve to replace the public right of first-hand access to that process," Wood v. Marston, 442 So.2d 934, 939 (Fla. 1983), administrative hearings like the one in the present case decide questions like those raised here concerning WBE requirements on a de novo basis. Capeletti Brothers v. State Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983). Even the fact-gathering staff function, which is outside the reach of the Sunshine Law, Occidental Chemical Co. v. Mayo, 351 So.2d 336 (Fla. 1977); Bennett v. Warden, 333 So.2d 97 (Fla. 2nd DCA 1976), may, as such, have no bearing on the agency action because of
restrictions on the use of hearsay evidence in formal proceedings set out in Section 120.58(1)(a), Florida Statutes (1984 Supp.)
The DOT committees who evaluated the WBE aspects of these bids had no authority "to reject from further consideration," Wood v. Marston, 442 So.2d 934, 938 (Fla. 1983) a single bid, nor could such authority be delegated, consistently with the Administrative Procedure Act, at least where a formal hearing is elected, as occurred here. In the context of formal administrative proceedings, there is no need to require that all agency staff discussions before the hearing be open to the public, "to prevent at nonpublic meetings the crystallization of secret decisions to a point just short of ceremonial acceptance." News- Press Publishing Co. v. Carlson, 410 So.2d 546, 548 (Fla. 2nd DCA 1982). There is nothing secretive about formal administrative decisionmaking, which proceeds much like a non- jury trial. In such proceedings, whatever decisions may have crystalized in the minds of staff have no legal force and may never even come to the hearing officer's attention. When drafting a final order after receiving a recommended order, the agency "must defend its decision on the basis of what," Couch Construction Company v. Department of Transportation, 361 So.2d 172, 176 (Fla. 1978), is proven at hearing, which may or may not include expert opinion of staff.
WBE Goals
Capeletti contends that it adequately documented good faith efforts to meet the WBE goal for State Project, Job No. 97860-3319. There is no dispute that Capeletti did not meet the three percent goal. At hearing, Capeletti particularized its showing, as regards good faith efforts to meet the WBE goal, by adducing the return receipts to which Mr. Greenwell had referred in the letter accompanying the bid. The specifications require, however, that "sufficient information to demonstrate that the contractor made good faith efforts to meet the" WBE goal accompany the bid, which did not occur here. Capeletti's "WBE package" did not demonstrate that Capeletti had identified the specific work it intended to subcontract, did not demonstrate whether Capeletti had actually assisted anybody in reviewing plans, did not demonstrate why certain WBE bids were rejected, did not demonstrate any assistance to interested WBEs in obtaining bonding, credit or insurance,
and did not demonstrate that Capeletti had decided to subcontract work which matched the capabilities of WBE contractors. For all these reasons Capeletti did not comply with the contract specifications set out in the findings of fact, which incorporated the provisions of Rule 14- 78.03, Florida Administrative Code. See e.g., C. H. Barco Contracting Co. v. State of Florida, Department of Transportation, Nos. 85-0569-71 (DOT; June 26, 1985) and Hobbs Construction and Development, Inc. v. State of Florida, Department of Transportation, 84-3042 (DOT; March 15, 1985).
WBE Rule Challenged
In framing the issues at the prehearing conference, no party to the present proceeding stated the validity of Rule 14- 78.03 as an issue for decision in this substantial interest case. That the validity of the rule should have been omitted as an issue in Section 120.57 proceedings is not surprising. Only after the hearing in the present case had concluded did Capeletti file a challenge to Rule 14-78.03, Florida Administrative Code, under Section 120.56, Florida Statutes (1983). The universal practice is to initiate rule challenge proceedings in order to raise the question of a rule's validity, although there is dicta to the effect that the validity of a rule may be called into question in 120.57 proceedings. State ex rel. Department of General Services v. Willis, 344 So.2d 580, 592 (Fla. 1st DCA 1977).
Assuming bid specifications constitute "notice of the agency decision or intended decision," Section 120.53(5)(b), Florida Statutes (1984 Supp.), the challenged rule provisions, all of which were incorporated as specifications, might have been challenged by Capeletti within 72 hours of receiving them. But DOT has not contended, either in the rule challenge case or in the present case, that Capeletti is precluded from challenging the WBE rule requirements on that account; and the statute may be read to give Capeletti a second point of entry with respect to the specifications, "within 72 hours after the posting of the bid tabulation", Section 120.53(5)(b), Florida Statutes (1984 Supp.), the point of entry of which it availed itself in initiating the present proceedings. Nor are there any pertinent time-restraints on challenges to existing administrative rules. Section 120.56, Florida Statutes (1983).
The record does not reflect service on Mahoney of the rule challenge petition filed by Capeletti. There is apparently no requirement that service be effected, even when a party to a contemporaneous section 120.57 proceeding challenges a governing rule in Section 120.56 proceedings, on the assumption that the outcome of the rule challenge may be determinative in the substantial interest case. If an adverse party files a rule challenge, the agency whose rule is challenged may ordinarily be expected to inform the nongovernmental party with whom the agency is aligned in the 120.57 proceeding.
Capeletti's Bid Not Disqualified
By final order of even date, Rule 14-78.03, Florida Administrative Code, is declared invalid "[t]o the extent . . . [it] purports to authorize respondent to establish and enforce WBE goals on contracts under which no federal monies are expended." Capeletti Brothers, Inc. v. State of Florida, Department of Transportation No. 85-3340R (DOAH; December 31, 1985). In light of the declaration of rule invalidity, there is no basis for DOT's position that Capeletti's bid was not the lowest responsive bid. WBE requirements do not apply to projects financed wholly with state funds as this one is. To the extent Rule 14-78.03, Florida Administrative Code, provides otherwise, it has been ruled invalid. Capeletti's failure to meet the WBE requirements does not disqualify its bid. Nor is it necessary to reach Capeletti's contention that Mahoney also failed to meet the WBE goal.
Capeletti's bid is lower than Mahoney's by some
$316,112.00. The magnitude of the difference is important, because DOT "may award the proposed work to the lowest responsible bidder, or it may reject all bids . . ." Section 337.11(3), Florida Statutes (1984 Supp.) Since the WBE requirement was three percent (and Capeletti subcontracted more than two percent of its total to WBEs), it is impossible to attribute the difference between Mahoney's bid and Capeletti's bid to Mahoney's complying with the WBE goals specifications while Capeletti failed to attain the goal. The difference between the bids amounts to more than six percent of the total Capeletti bid, and almost six percent of the Mahoney bid. There is no reason to believe that rebidding would save any public money and no other good reason not to proceed with an award to
Capeletti, "the lowest responsible bidder," so that the work can go forward without further delay.
Attorney's Fees
Capeletti seeks attorney's fees and costs from DOT. Such an award would be singularly inappropriate. DOT was following a duly promulgated rule, as it was bound to do. Although at one time it was suggested that an agency could deviate from its own rules in "special circumstances," Best Western Travel Inn v. Department of Transportation, 435 So.2d 231 (Fla. 1st DCA 1983), the legislature amended Section 120.68(13), Florida Statutes (1983), by enacting Chapter 84-173, Laws of Florida (1984), to "require that the [reviewing] court remand a case back to an agency for corrective action if it finds that the agency's exercise of its discretion is inconsistent with its own rules." Staff Analysis of the Committee on Governmental Operations of the Florida House of Representatives for Proposed Committee Bill No. 27, p. 27. Agencies are not free to ignore their own rules, and should not be penalized for adhering to them, until and unless they are repealed or invalidated.
Upon consideration of the foregoing, it is RECOMMENDED:
That DOT award Capeletti the contract for State Project, Job No. 97860-3319.
DONE and ENTERED this 31st day of December, 1985, in Tallahassee, Florida.
ROBERT T. BENTON, II
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 31st day of December, 1985.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-3003
Respondents DOT and Mahoney submitted jointly a proposed recommended order which contains proposed findings of fact in twenty-six numbered paragraphs.
Respondents' proposed findings of fact 18 and 20 are immaterial. Respondents' proposed finding of fact 25 is accurate only if formal administrative proceedings are not initiated. Otherwise, respondents' proposed findings of fact are supported by the weight of the evidence.
Petitioner Capeletti also submitted proposed findings of fact. Petitioner's proposed findings 1 through 6, 10, 12, 14, 17 except for the first sentence, which was not proven, 18 and 19 have been adopted, in substance.
Petitioner's proposed findings 7 through 9, 11, 13,
15, and 16 are dealt with in paragraphs 6 through 10 of the proposed recommended order.
Petitioner's proposed findings of fact 20 and 21 are immaterial because they relate to another project not at issue here.
Petitioner's proposed findings of fact 22 through 27, although treated in paragraph 15 of the proposed recommended order, are immaterial for the reasons stated in the conclusions of law in the recommended order at pages 13 through 15.
Petitioner's proposed findings of fact 28 through 32, although treated in paragraphs 11 through 14 of the
recommended order, are immaterial for the reasons explained at page 17 of the recommended order.
COPIES FURNISHED:
Thomas E. Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
A.J. Spalla, Esquire General Counsel
Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
F. Alan Cummings, Esquire Harry R. Detwiler, Jr., Esquire HOLLAND & KNIGHT, P.A.
Post Office Drawer 810 Tallahassee, Florida 32302
Larry D. Scott, Esquire Haydon Burns Building Tallahassee, Florida 32301
Gary R. Rutledge, Esquire
Sparber, Shevin, Shapo & Heilbronner, Suite 348, Barnett Bank Building
315 South Calhoun Street Tallahassee, Florida 32301
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AGENCY FINAL ORDER
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STATE OF FLORIDA DEPARTMENT OF TRANSPORTATION
CAPELETTI BROTHERS, INC.,
Petitioner,
and
STATE PAVING CORPORATION,
Intervenor, CASE NO. 85-3003
vs.
DEPARTMENT OF TRANSPORTATION and JOHN MAHONEY CONSTRUCTION COMPANY, INC.,
Respondents.
/
FINAL ORDER
A complete review of the record has been made in this matter, and the Exceptions to Recommended Order are each addressed in this order. The Findings of Fact are considered to be supported by competent, substantial evidence and are incorporated in this order. Except as specifically rejected herein, the Conclusions of Law of the Recommended Order are adopted and incorporated as part of this order.
Most of the Exceptions address the issue of whether the rule challenge order invalidating in part Rule 14- 78.03, F.A.C., should be retroactively applied to these proceedings. We find that the Exceptions have merit and conclude that the Conclusions of Law set forth in "WBE Rule Challenged" and "Capeletti's Bid Not Disqualified" are
contrary to law and are thereby rejected for the following reasons:
At no time did Capeletti Brothers, Inc. (Capeletti) state that the validity of Rule 14-78.03, F.A.C., was an issue for decision at the 120.57 hearing on its bid protest. Having failed to raise this as an issue in its pleadings and in its statement of issues at the hearing (TR: 42), Capeletti waived the presentation of this issue for consideration by the Hearing Officer when it rested its case at the close of the evidentiary hearing on September 20, 1985. It is axiomatic that a hearing officer may not, in the absence of consent, either express or implied, consider evidence received over objection which is outside the issues and rely on that evidence as a basis for his order. When the issues are narrowed by stipulation, evidence adduced outside the issues may not be used to a party's detriment. Gandy v. Department of Offender Rehabilitation, 351 So.2d 1133 (Fla. 1st DCA 1977).
There is no provision in the statutes or the model rules for reopening the hearing after conclusion of the proceedings. See: Department of Transportation v. J.W.C., Co., 396 So.2d 278 (Fla. 1st DCA 1981). It was improper for the Hearing Officer to consider certain new matters presented at a Section 120.56 hearing and apply them to a previously concluded hearing. This is especially true when all parties were not given notice of the subsequent hearing and thereby were prevented from presenting evidence and cross examining witnesses in a matter which ultimately could affect their substantial interest.
Section 120.53(5), Fla. Stat., and Rule 14-25, F.A.C., have established specific procedures to protest a bid solicitation. The proper point to address the WBE subcontracting goal for this specific project was by filing a bid solicitation protest within 72 hours of receipt of the plans and specifications. Rule 14-25.04(1), F.A.C.
The evidence is clear that Capeletti had the plans and specifications at least two weeks prior to the letting and failed to make any objection to the contract goals. In fact, Capeletti failed to raise the issue in the subsequent bid protest, except as a constitutional challenge.
The clear purpose of the bid solicitation protest provision is to allow an agency to correct or clarify plans and specifications prior to accepting bids in order to save
the expense to the bidders and to assure fair competition among the bidders. A failure to file a timely protest is a waiver of Chapter 120 proceedings. Section 120.53(5), Fla. Stat. See also: The Cone Corporation v. Department of Transportation v. Golden Triangle Asphalt Paving Co., DOAH Case No. 85-2828 (Final Order entered January 24, 1986).
The statement of the Hearing Officer at p. 16 of the Recommended Order that DOT has failed to raise the 72 hour protest limitation, must be disregarded in light of the fact that Capeletti did not raise the validity of 14-78.03, F.A.C., as an issue at the September 20, 1985, hearing. A defense need not be raised to a non-issue.
It is clear that consideration of matters beyond the record by the Hearing Officer is both fundamental procedural error and a denial of due process. Capeletti rested its bid protest case on September 20, 1985, and filed the rule challenge petition subsequent to the close of proceedings. Section 120.57(1)(b)5, Fla. Stat., is very specific as to what constitutes the record. Section 120.57(1)(b)7 restricts the Hearing Officer's consideration to the evidence of record and matters officially recognized. Section 120.61 requires all parties to be notified of requests for official recognition, and be given "an opportunity to examine and contest the material." Here the Hearing Officer has introduced matters which were not even initiated until after the conclusion of the hearing. The error is compounded by the fact that two of the parties to the bid protest proceeding were not made parties in the rule challenge proceeding.
The Florida Supreme Court has clearly addressed the error committed by the Hearing Officer in these proceedings:
The arbitrary selection of this ratio as a "fact" comes from outside the record of the proceeding and plainly violates the notions of agency due process which are embodied in the administrative procedure act. See Section 120.59(2), Florida Statutes (1975), which di- rects that findings of fact shall be explained by reference to "facts of record"; Section 120.57(1)(b)7, which states that findings of fact "shall be exclusively on the evidence of record and on matters officially recognized";
and Section 120.61, which contemplates notice of matters to be officially recognized and the opportunity to contest them.
General Development Utilities v. Hawkins, 357 So.2d 408, 409 (Fla. 1978).
By the language in Section 120.56(3), Fla. Stat., an order invalidating a rule may only have prospective application and not retroactive application. A challenged rule does not become void until "the time for filing appeal expires or at a later date specified in the decision." Therefore the portion of Rule 14-78.03 involved here would still be valid for at least thirty (30) days beyond the date of this Recommended Order. The Hearing Officer's Recommended Order would effectively render the rule invalid on June 26, 1985, by invalidating material bid requirements
- the WBE subcontract goals. Such a retroactive application would be contrary to Section 120.56.
The Hearing Officer's conclusion that a material bid specification can merely be deleted without affecting the competitiveness of the bid is contrary to law. First of all, there was no evidence submitted to explain the difference in bid prices, and any conclusion drawn from the bid totals is strictly conjecture and speculation by the Hearing Officer. Second, any specification which can affect the bid price and competition among the bidders is material and cannot be waived as a technicality. See: Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982), and E. M. Watkins and Company v. Board of Regents, 414 So.2d 583 (Fla. 1982).
The Department specifically adopts the conclusion that Capeletti did not comply with the contract provisions concerning the WBE goals. Under the bid specifications, this finding leads to only one conclusion - the bid of Capeletti is nonconforming and thereby nonresponsive.
Having submitted a nonresponsive bid, Capeletti lacks standing to challenge the award to John Mahoney Construction Company, Inc. (Mahoney). E. M. Watkins and Company, supra, at p. 585.
Since Capeletti's bid is nonresponsive, the propriety of Mahoney's bid has to be addressed as requested in Respondent's Exception No. 1. The record shows that on the face of Mahoney's Form 1, submitted with the bid, the full
WBE goal is met. In fact all the bidders except Capeletti met the contract DBE and WBE subcontracting goals. (TR:
234) The deposition of Edward T. Quinn submitted by Capeletti fails to offer competent, substantial evidence to refute the finding that Mahoney met the goal. The deposition is, at best, inconclusive and was never shown to be relevant. No showing was made as to how the dollar amount indicated on Mahoney's Form 1 was derived, or why the figures are incomplete, inaccurate or improper. Therefore Capeletti has failed to carry its burden to show Mahoney's bid was nonresponsive.
Contrary to Respondent's Exception No. 4, there is competent, substantial evidence to show that there is no federal aid on this project. (TR: 167)
The sole remaining area to be addressed is the Sunshine Law claim. The conclusion of the Hearing Officer is adopted in its entirety; however, the analysis needs to be supplemented. As indicated by the testimony, the Department's estimate of the project's price is one of the key elements discussed at the Technical Review Committee and Contract Awards Committee meetings, since the Department specifically reserves the right to reject all bids if the bids are too high.
Pursuant to Section 337.168, Fla. Sat., "A document or electronic file revealing the official cost estimate of the Department of a project is exempt from the provisions of Section 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration." Obviously the purpose of this statute would be defeated if the estimate for a project were to be discussed at a public meeting with the bidders or potential bidders present.
When Sections 286 and 119 are in conflict, the courts have had to render decisions to give the fullest effect to both laws. The most specific case on point is Marston v. Gainesville Sun Publishing Co., 341 So.2d 783 (Fla. 1st DCA 1976), cert. denied, 352 So.2d 171 (Fla. 1977). The Court resolved the dilemma as follows:
Both Acts embody laudable policies, neither of which is engraved in the Constitution's and it is for the legislature and its electorate to choose between them at the point where they
intersect. Our duty is to regard each Act as embodying a solemn legislative purpose, to per- mit both full reach and, when conflicting policy makes that impossible, to give effect to the later, more specific expression of the legis- lative will.
Id. at p. 786. Since Section 337.168, Fla. Stat., is the more recent expression of legislative intent, it is clear that DOT meetings to discuss the award of competitively bid projects must be exempt from the public meeting law to give full effect to this confidentiality provision.
Having declared the bid of Capeletti Brothers, Inc., to be nonresponsive, Capeletti has no standing to challenge the award of State Project No. 97860-3319 to John Mahoney Construction Company, Inc.
IT IS ORDERED that the protest of Capeletti Brothers, Inc., is hereby dismissed and State Project No. 97860-3319 is awarded to John Mahoney Construction Company, Inc.
DONE AND ORDERED this 10th day of February, 1986.
THOMAS E. DRAWDY
Secretary
Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
The following information is required by law to be included in all Final Orders:
Judicial review of agency final orders may be pursued in accordance with Section 120.68, Florida Statutes, and Florida Rules of Appellate Procedure 9.030(b)(1)(c) and
9.110. To initiate an appeal, a Notice of Appeal must be filed with the Department's Clerk of Agency Proceedings, Haydon Burns Building, MS 58, 605 Suwannee Street, Tallahassee, Florida 32301-8064, and with the appropriate District Court of Appeal within thirty (30) days of the filing of this Final Order with the Department's Clerk of Agency Proceedings. The Notice of Appeal filed with the District Court of Appeal should be accompanied by the filing fee specified in Section 35.22(3), Florida Statutes.
Copies furnished:
Robert T. Benton, II, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
F. Alan Cummings, Esquire Harry R. Detwiler, Jr., Esquire Holland & Knight, P.A.
Post Office Drawer 810 Tallahassee, Florida 32302
Gary R. Rutledge, Esquire
Sparber, Shevin, Shapo & Heilbronner Barnett Bank Building, Ste 348
315 South Calhoun Street Tallahassee, Florida 32301
State Paving Corporation 4300 Ravenwood Street
Ft. Lauderdale, Florida 33312
Pavex Corporation 2501 N.W. 48th Street
Pompano Beach, Florida 33067
Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS 58 Tallahassee, Florida 32301
J. Ted Barfield, Chief Bureau of Contracts Department of Transportation Haydon Burns Building, MS 55 Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Dec. 31, 1985 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 10, 1986 | Agency Final Order | |
| Dec. 31, 1985 | Recommended Order | Woman's Business Enterprise (WBE) goals were not met by low bidder but rule authorizing WBE goals is invalid. Recommended award to low bidder. |
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CHEESBRO ROOFING, INC. vs ORANGE COUNTY SCHOOL BOARD, 85-003003BID (1985)
