Mortenson Company, had offered responsive bids in the project which is the subject of this controversy; (2) whether the bid submitted by the Petitioner, Watkins Engineers and Constructors, Inc., the third apparent low bidder, was responsive; and (3) whether the Respondent, School Board of Pinellas County, Florida, acted appropriately in rejecting the bids of the aforementioned general contractors as being unresponsive and that of Jendoco Construction, described by the School Board as being a responsive bidder which had exceeded the School Board's budget estimate for the project. (In the course of the fact finding
which follows, Batson-Cook Company will be referred to as Batson-Cook; M. A. Mortenson Company will be referred to as Mortenson; Watkins Engineers and Constructors, Inc., will be referred to as Watkins; Jendoco Construction will be referred to as Jendoco; and the School Board of Pinellas County, Florida, will be referred to as the Board.)
Watkins is a corporation, duly organized pursuant to the laws of Florida, which maintains its principal place of business in Tallahassee, Florida, and which engages in business as a general contractor, duly licensed in Florida. The School Board of Pinellas County, Florida, is a public body corporate of Florida, constituted of duly elected representatives who serve as the governing body for the school system of Pinellas County, Florida.
In February 1986, the Board publicly advertised its solicitation for competitive bids to construct a public works project known as New High School EEE. Incidental to soliciting competitive bids for the project, the Board distributed certain bidding documents consisting of instructions to bidders, form of proposal, contract conditions, technical specifications, and design drawings specially prepared by the Board's design consultant for the project.
The Board's bidding documents specified that all bidders must be prequalified by the Board, and that bids would only be accepted from prequalified bidders who had attended the pre-bid conference to be conducted at 9:00 a.m. on March 18, 1986. The Board's bidding documents also specified that the bid opening would be conducted at 2:00 p.m. on March 25, 1986. The Board subsequently amended its bidding documents to change the bid opening to 2:00
p.m. on April 1, 1986. Later, the Board again amended its bidding documents to change the bid opening to 2:00 p.m. on April 8, 1986.
Watkins and three other contractors who were prequalified by the Board attended the March 18, 1986, pre-bid conference. At 2:00 p.m. on April 8, 1986, Watkins and the three other prequalified contractors who attended the pre-bid conference each submitted a sealed bid to the Board. The three other bidders were contractors known as Batson-Cook, Mortenson and Jendoco. All of the bids submitted were on the format of the form of proposal contained in the bidding documents.
During the Board's regularly scheduled meeting on April 9, 1986, it found that the bids submitted by Watkins, Batson-Cook and Mortenson were non- responsive, and that the remaining bid by Jendoco was responsive, but that Jendoco's bid was in an amount that exceeded the Board's budget for the project. The Board then decided to reject all bids and to re-solicit bids for the project. The Board then scheduled the opening of re-solicited bids for 2:00
p.m. on May 5, 1986, and a special meeting on May 7, 1986, to consider the re- solicited bids and award of a contract for the project.
Late in the afternoon of April 9, 1986, Watkins was orally informed by a representative of the Board's design consultant for the project, Bell Associates, of the above described action taken by the Board. At that time Watkins was informed that its bid had been found non-responsive for reason that it had not named the two companies respectively identified in the specifications as the manufacturers of the two alternative thermal storage systems on the form of proposal at the place where the subcontractor to be used to perform the work required for thermal storage was required to be named.
By two letters dated April 10, 1986, one addressed to the director of the Board's purchasing department, and the other addressed to the director of the Board's architectural department, Watkins notified the Board of its intent to protest the Board's action in determining that Watkins' bid was unresponsive and in deciding to reject all bids and re-solicit bids for the project. Both of Watkins' April 10 letters were delivered before noon on April 11, 1986, to each of the respective addresses identified above.
On April 14, 1986, the Board amended its bidding documents for the project and thereby published its decision to reject all bids and re-solicit bids for the project. That amendment to the bidding documents also notified all bidders that a pre-bid conference would be conducted on April 24, 1986, and that the opening of re-solicited bids would be at 2:00 p.m. on May 5, 1986.
Representatives of Watkins and the Board met April 21, 1986, to try to resolve the issue informally, but without success. This refers to the resolution of the dispute over the acceptability of the Watkins bid response in the subject project. On that date, Watkins filed its formal written protest with the Board in the form of a Petition For Administrative Hearing. On April 22, 1986, the Board contacted the Director of the Division of Administrative Hearings (DOAH) and requested the conduct of an expedited final hearing to consider the merits of Watkins' Petition For Administrative Hearing. Watkins' Petition For Administrative Hearing was filed with DOAH on April 23, 1986, and on April 24, 1986, D0AH issued a notice scheduling the final hearing for May 5 and 6, 1986. On April 28, 1986, DOAH forwarded a copy of its notice scheduling the final hearing for May 5 and 6, 1986, to each of the three other bidders in order to afford each of them an opportunity to intervene. None of the other bidders intervened as a party to the final hearing conducted by DOAH.
On May 1, 1986, Watkins filed with DOAH its Amended Petition For Administrative Hearing. The Amended Petition did not substantially change the claims asserted in the initial Petition; thus, the final hearing was conducted on the basis of the Amended Petition For Administrative Hearing. At the outset of the final hearing, several typographical errors in the claims asserted in the Amended Petition were noted and corrected, to wit: the last sentence of paragraph four on page three of the Amended Petition was amended to insert the word "not" following the words . . . Mortenson could . . ."; following the conclusion of paragraph four the Amended Petition proceeds with paragraph six, excluding any paragraph five; and in line two of paragraph 11 on page six of the Amended Petition, the word "its" was inserted following the word ". . . published
Respondent's Motion To Dismiss was then taken up for consideration and, after hearing argument of counsel from the respective parties, the motion was denied.
Within the bidding document is a section entitled "INSTRUCTIONS TO BIDDERS, SECTION ID, BASE BIDS AND ALTERNATE BIDS." This provision states:
2. BASE BIDS
The Base Bids shall be considered as including all work showing the Contract Documents (or reasonably implied) which is not specifically indicated as either (1) Not in the Contract, or (2) Furnished by the Owner, or (3) Furnished under separate
contract, or (4) Set forth as an Alternative Bid below.
The Project will be bid under two (2) separate Base Bids, as follows:
Base Bid 1: Ice Builder Option.
Base Bid 2: Ice Harvester Option.
The Owner reserves the right to select either Base Bid 1 or Base Bid 2 as the Owner's best interest may appear. . . .
In the form of proposal for the bid at page 1 there is this language:
The Undersigned, hereinafter referred to
as "Bidder," having visited the site of the proposed project and become familiarized with all the conditions affecting and governing the construction of the project, hereby proposes to furnish all labor, materials, equipment and other items, facilities and services for the proper execution and completion of:
Project: NEW HIGH SCHOOL "EEE"
North Pinellas County, Florida
In strict compliance with the drawings, specifications, addenda and all other contract documents relating thereto as prepared by and on file in the office of:
Bell Associates, P.A. 1307 US 19 S., Suite 305
Clearwater, Florida 33547
and the office of the School Board Architect, for the following lump sum base bid price:
BASE BID 1; ICE BUILDER OPTION:
Figures: $ (Bid Price) Words: (Dollars)
BASE BID 2; ICE HARVESTER OPTION:
Figures: $ (Bid Price) Words: (Dollars)
The Base Bid 1 and 2 previously referred to relate to alternatives for thermal storage. "SECTION 19005, THERMAL STORAGE REFRIGERATION SYSTEM" is for Base Bid 1, and it states:
PART I GENERAL
WORK INCLUDED
B. The ice storage manufacturer shall prepare and submit bid to General
Contractor. The ice storage manu- facturer shall assume total responsibility for the installation and operation of the system.
QUALITY ASSURANCE
Manufacturer: A firm regularly engaged in manufacture of ice building thermal storage systems of types, sizes and capacities specified, whose products have been successfully used in similar service for not less than five years. Manufacturer: Provide products pro- duced by:
Baltimore Air Coil
Base Bid 2 specifications are found at "SECTION 19010, THERMAL STORAGE ICE HARVESTING SYSTEM" which indicates:
PART I GENERAL
WORK INCLUDED
The ice storage manufacturer shall prepare and submit bid to General Contractor. The ice storage manu- facturer shall assume total responsibility for the installation and operation of the system.
QUALITY ASSURANCE
Manufacturer: A firm regularly engaged in manufacture of ice harvesting thermal storage systems of types, sizes and capacities specified, whose products have been successfully used in similar service for not less than five years.
Manufacturer: Provide products produced by:
Turbo Refrigerating Company
One of the other provisions within the bidding document is a section entitled "DIVISION 17000, FACILITIES MANAGEMENT AND CONTROL SYSTEM" which states:
GENERAL
The facilities Management Control System (FMCS) as herein specified shall be provided in its entirety by the Facilities Management Control System Contractor (FMCSC). The FMCSC shall base his bid on the system as specified . . . . The system is based on a Johnson Controls Inc. JC 85/40. The only other acceptable system, if meeting the full criteria specified
hereinafter, is a Honeywell, Inc. Delta 5200.
Within the bid specifications is found "SECTION 07411-PRE-FORMED METAL ROOFING." That section includes a reference to the products which the owner wishes to utilize in the construction. It does not include a firm known as
A.T.E.C. in that list of acceptable manufacturers.
Within the bid documents there is a requirement that the bidders list the name of certain subcontractors and provide the Florida license numbers for those subcontractors in various categories. Those categories are roofing, electrical, plumbing, HVAC, thermal storage and DIV/17 Controls. The term "subcontractors" is referenced in the definitional section to Section 1B pertaining to instructions to bidders. The specific language of the definition is as found in Article 5 of the general conditions of the contract, which is AIA A201, 1976 Edition. The definition is as follows:
ARTICLE 5 SUBCONTRACTORS
DEFINITION
A Subcontractor is a person or entity who has a direct contract with the Contractor to perform any of the Work at the site. The term Subcontractor is referred to throughout the Contract Documents as if singular in number and masculine in gender and means a Subcontractor or his authorized representative. The term Subcontractor does not include any separate contractor of his subcontractors.
A Sub-subcontractor is a person or entity who has a direct or indirect contract with a Subcontractor to perform any of the Work at the site. The term Sub-subcontractor is referred to throughout the Contract Documents as if singular in number and masculine in gender and means a Sub- subcontractor or an authorized representative thereof.
The bid documents which have been discussed and the form of proposal were prepared by the Board's staff, and subject to modification by the design consultant for the project and were finally approved by the Board for use in the solicitation process.
The specifications related to the "DIVISION 170000 FACILITIES MANAGEMENT CONTROL SYSTEM," and the alternative bid format related to thermal storage at Sections 19005 and 19010 were the product of Mike Nettler, design engineer for Jeffrey A. Jones and Associates, Inc., the mechanical/electrical engineering consultant for the project. His opinion about the responsiveness of the several bidders whose bids were rejected was the crux of the position taken by the Board in not accepting the bids.
Nettler, in trying to establish the specifications for thermal storage in the project, had inquired of various manufacturers. Among those were Turbo Refrigerating Company and Baltimore Air Coil. Nettler discovered that T. J. Green Company acted as exclusive manufacturer's representative for Baltimore Air Coil in the area of Florida in which Pinellas County is located. He also determined that Carroll Air was the authorized marketer for Turbo Refrigerating Company in that part of Florida. Green only sells Baltimore Air Coil equipment.
Carroll Air sells and installs Turbo Refrigerating Company equipment. Neither of these representatives or marketers for the manufacturers are subsidiaries of the manufacturer, nor can they enter into contracts which bind the manufacturers.
As observed by Nettler, Batson-Cook in its bid identified a company known as Astron Mechanical as the subcontractor to be used in the DIV/17 controls work in the project. That company was not one of the companies specified in the bid documents. The bidders could only use Johnson Controls or Honeywell and be in compliance with the requirements for naming subcontractors. Moreover, Astron is not authorized to furnish or install the system available frown either Johnson Controls or Honeywell. Additionally, Batson-Cook, responding to the section on thermal storage, named Carroll Air as the subcontractor. Carroll Air is not authorized to furnish or install equipment for Baltimore Air Coil, the other alternate bid manufacturer necessary to be named in the specifications related to thermal storage. Carroll Air is not a subcontractor as defined in the specifications because the general meaning of subcontractor taken in the context of the need for the thermal storage manufacturers to submit bids to the general contractor and assume total responsibility for installation and operation of the system identifies that manufacturers and subcontractors are synonymous on this occasion. Carroll Air is a sub-subcontractor as defined. Under these circumstances, Batson-Cook failed to respond to the requirements for naming subcontractors for the provision of DIV/17 controls and thermal storage. To be in compliance, Batson- Cook would need to name Baltimore Air Coil and Turbo Refrigerating Company and to name Johnson Controls or Honeywell as the subcontractors. Should Batson-Cook be given the opportunity to make these changes, the risk is presented that some competitive advantage is given to Batson-Cook that is not available to the other bidders.
Nettler believed Mortenson's bid was unresponsive in that Mortenson did not use one of the available subcontractors to perform roofing work as identified in the specifications. Further, that same infirmity was found to exist as it relates to the naming of the subcontractor to do the thermal storage. A.T.E.C. was named as roofing subcontractor. That company is not on the list of approved roofing manufacturers within the specifications. Therefore, if the term "manufacturer" is synonymous with "subcontractor", Mortenson has failed to comply with specifications. In this instance, those terms would appear to be synonymous in that Robertson Company is listed as one of the approved preformed roofing manufacturers and is utilized by the other three bidders in responding to the requirement to name the subcontractors. In failing to name Robertson or one of the other pre-formed roofing `manufacturers depicted in the specifications, Mortenson has failed to respond to the bid
specifications. In addition, Mortenson, in replying to the provision related to thermal storage, named Astron as the thermal storage subcontractor. Astron is not a company which, could serve as subcontractor for Base Bids 1 and 2 in the category of thermal storage.
Again, in order for Mortenson to make its bid responsive, it would have to substitute the name of a subcontractor/manufacturer of preformed roofing and the names of subcontractors who could serve for Base Bids 1 and 2 in the category of thermal storage. This arrangement for change of the bid following the bid opening presents the possibility of competitive advantage to Mortenson that is not available to the other bidders.
Watkins did not name either manufacturer of thermal storage as subcontractors. Therefore it was unresponsive in its bid response.
Alternatively, Watkins failed to identify two other subcontractors for Base Bids
1 and 2, even if firms other than the manufacturers could serve as subcontractors. Carroll Air is authorized to install the thermal storage system manufactured by Turbo Refrigerating Company as sub-subcontractor and was named by Watkins and Carroll Air's Florida license number was provided; however, the base bid constituted of the quotation from Turbo Refrigerating Company was higher in amount than the base bid offered by Baltimore Air Coil. Since the Board desired to use the lowest base bid quotation, a choice which is reasonable, it would be necessary for Watkins to also comply with the requirement of naming the subcontractor for installation of Baltimore Air Coil equipment. In that connection, the name T. J. Green Company was given by Watkins in identifying the subcontractor and the license number was reported as being "pending." In fact, T. J. Green Company cannot serve as the subcontractor in this project and at the time of submission of the Watkins bid, Baltimore Air Coil's choice of a firm to install its equipment had not been decided. Watkins operated on the assumption that T. J. Green Company could do the subcontracting work in the thermal storage part of the project. Although Watkins may have misapprehended the nature of T. J. Green Company's involvement in this process, which involvement was only as a sales coordinator for the manufacturer and not as subcontractor for installation, in the final analysis, at the point of bid opening, Watkins had not responded to the specifications by listing either the manufacturer or some other subcontractor who would perform the installation and be responsible for overseeing the initial operation of the thermal storage equipment. T. J. Green Company did not have a subcontractor's license and does not intend to have a subcontractor's license in the future for purposes of installing the thermal storage equipment. While the consultant to the Board told Tom Green, owner of T. J. Green Company, that it was appropriate to advise Watkins to put the word "pending" in the column related to the subcontractor's license number for thermal storage, this did not relieve Watkins from the requirement of naming the true subcontractor. As with the circumstance of Batson-Cook and Mortenson, it would be inappropriate to allow Watkins to modify its bid response to rectify the problem by listing the manufacturers as subcontractors in the thermal storage part of the bid response. To do so gives unfair competitive advantage over other bidders.
The Batson-Cook, Watkins and Mortenson bids are within the $14,081,250 estimated by the project consultant and recognized as the Board's budget for construction of the project when considering the lower of Base Bid 1 or 2.
While the Board was also desirous of obtaining the alternate bid, related to the auditorium which had been estimated by the consultant to cost $1,887,800, the three lowest bidders in their quotation for the base bid portion of the project and their additional quotation related to the alternate bid, the auditorium, as a sum of those two bid amounts, did not offer bids low enough to allow the project to be built for $14,810,150, when including the base bid and alternate bid. Nonetheless, had the three lowest bidders been otherwise responsive, their bids were proper as it relates to the cost estimating and budget arrangement pertaining to the base bid, without inclusion of the alternate bid for the auditorium. By contrast, Jendoco exceeded the cost estimate and budget in its proposal for constructing the building contemplated by the base bid. It also failed to identify Turbo Refrigerating Company as subcontractor. For those reasons, it was appropriate to discard the response of Jendoco.
In reviewing the overall circumstance of the submissions of the four bidders, the Board did not act in an arbitrary and capricious manner in deciding to reject all bids and begin the process of bid solicitation anew.
CONCLUSIONS OF LAW
The Board is subject to the requirements of Chapter 120, Florida Statutes, in view of the fact that it is an agency of state government. Moreover, in this instance, the Board has chosen to use Section 120.53(5), Florida Statutes, in resolving bid protests. In accordance with that choice, Watkins gave timely notice of protest of the Board's decision to reject all bids. This notification was followed by a timely written protest of the Board's decision. The form and content of the Watkins' notice of protest and formal written protest are in compliance with the requirements of Section 120.53(5), Florida Statutes.
In order for a bid to be considered responsive, it must comply with the requirements of the bidding documents in all material respects. Further, the bidder, once the bid has been submitted, cannot be permitted to correct deviation from the terms of the bidding documents, if a risk is presented of allowing the bidder to gain some form of economic or competitive advantage which is not available to the other bidders. See Harry Pepper & Associates v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977). For reasons as described in the fact finding, each of the four bidders in this project is not responsive to the terms and conditions of the bid documents, and those deviations from the requirements of the bid solicitation are sufficiently material to disallow them. Should any one of the bidders be given the opportunity to correct the errors in the bid response, unfair advantage would be given to that bidder, to the economic and competitive detriment of the other bidders.
In addition to the infirmities set forth in the bid submitted by all bidders, Jendoco has also exceeded the Board's budget allowance in the quotation which Jendoco gave.
In accordance with Section 235.31, Florida Statutes, the Board has discretion to reject the bids and readvertise. In doing so, the Board must act in good faith, that is, the Board must not act in an arbitrary or capricious fashion. See Cianbro Corporation v. Jacksonville Transportation Authority, 473 So.2d 209 (Fla. 1st DCA 1985). Here, the decision to reject all bids was not an abuse of discretion.
There being no responsive bidder, the Board has not breached any form of implied promise to award the contract to the lowest responsive bidder. See Baxter's Asphalt & Concrete, Inc. v. Liberty County, 406 So.2d 461, (Fla. 1st DCA 1981).
Based upon the facts found and the conclusions of law reached, it is: RECOMMENDED
