STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RON A. ROYAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-2233B1D

)

SCHOOL BOARD OF )

SARASOTA COUNTY, )

)

Respondent, )

and )

) BARTON-MALOW SOUTHERN, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was held in this cause on July 3, 1986, in Sarasota, Florida, before Diane A. Grubbs, a hearing officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: William A. Dooley, Esquire

Brenda S. Hibbeln, Esquire 1605 Main Street, Suite 610

Sarasota, Florida 33577

For Respondent: Robert L. Moore, Esquire

Post Office Box 1767

227 Nokomis Avenue, South Venice, Florida 34284-1767

For Intervenor: James C. Clark, Esquire

2055 Wood Street, Suite 110

Sarasota, Florida 33577

Norman Vaughn-Birch, Esquire 720 South Orange Avenue Sarasota, Florida 33578

ISSUES

Whether the Barton-Malow Southern, Inc., deviated from the bid requirements, and if so, whether such deviation consists of a minor deviation which may be waived by the respondent, or whether Ron A. Royal, Inc., should be awarded the elementary school "C" project as the lowest responsive bidder.

BACKGROUND

The School Board of Sarasota County, Florida, (Board) solicited bids for an elementary school project known as elementary school "C". Barton-Malow Southern, Inc., (Barton Malow) submitted the lowest bid and Ron A. Royal, Inc., (Royal) submitted the second lowest bid. On June 3, 1986, the Board voted to waive any irregularities in the Barton-Malow bid and to award the construction contract to Bartow-Malow. Thereafter, Royal filed a formal protest and a Petition for Formal Hearing. The Petition alleges that Barton-Malow failed to comply with the bid requirements by listing multiple subcontractors in certain areas and listing the general contractor in areas where Barton Malow knew it would ultimately use subcontractors on the "List of Subcontractors", submitted with the bid and thereby gained a benefit or advantage not enjoyed by other bidders.

The Board referred the Petition to the Division of Administrative Hearings on June 20, 1986. By order dated June 23, 1986, counsel for the respondent was directed to notify all bidders other than the petitioner of the proceeding and to advise such bidders that if they wished to participate as a party, they would have to file a petition to intervene. Counsel for respondent filed a notice of compliance with attached receipts showing that all bidders had been served with notice on June 25, 1986. On June 30, 1986, Barton-Malow filed a petition to intervene which was granted on July 1, 1986.

At the hearing, petitioner presented the testimony of Ron A. Royal; Walter

1. Mills, a general contractor doing business as W. G. Mills, Inc.; Charles E. Collins, the Capital Project Administrator for the Sarasota School Board; Edward Earl Shrum, the owner of B & H Steel Company; Lawrence William Derryberry, the architect for the Elementary School "C" Project; Frank David Malcolm Thomas, Executive Vice President of Barton-Malow; and Milton Polso, Vice-President of Operations for Barton-Malow. Petitioner's exhibits 1-7 were admitted into evidence. Respondent presented the testimony of Charles E. Collins.

   
   

   All parties have timely filed proposed findings of fact and conclusions of law, and a ruling on each proposed finding of fact has been made in the appendix to this order.

   
   

   FINDINGS OF FACT

   
   

   1. On April 20, April 27, and May 4, 1986, the Board advertised its Notice of Call for Sealed Bids, soliciting bids for the construction of Elementary School "C". The notice advised that the contract to be awarded would require approval of subcontractors by the Board and stated that the Board "reserves the right to reject any and all bids received and to waive any and all informalities in regard thereto."

   2. A pre-bid conference was held on May 15, 1986, at which time the potential bidders were advised that page 14 of the bid documents entitled "List of Subcontractors" would be deleted and addendum #1 would include a more specific list of subcontractors to be completed by the bidder. The original list of subcontractors stated:

      
      

      The undersigned, hereinafter called "Bidder", list below the names of all the subcontractors who will perform under the Bidder. Any work item (Trade) not included will be assumed by the owner as being performed by the Bidder's own forces."

      
      

   3. A space was provided for the bidder to state the work item and the name of the subcontractor who would perform the work.

      
      

   4. Addendum #1 instructed the bidders to delete the original page C.14 and insert the enclosed sheet C.14 (addendum #1) "List of Subcontractors" for submission with the sealed bids.

   5. The substituted list of subcontractors provided as follows: The undersigned, hereinafter called "Bidder",

      lists below the names of the subcontractors

      who will perform under the Bidder.

      
      

      In the event the general contractor will perform one of the phases listed with his own personnel, he shall state by "general contractor".

      
      

      The form listed 20 specific areas of work, such as site work, iron and steel work, roof decks, and electrical, and provided a space for the bidder to fill in the firm name and address of the subcontractor for each specific area.

      
      

   6. Bids were submitted to the Board by nine (9) general contractors. The lowest bid by $310,000, was submitted by Barton-Malow; the second lowest bid was submitted by Royal.

      
      

   7. On the list of contractors submitted with Barton Malow's bid, Barton- Malow listed "G.C". (General Contractor) for the work areas described as site work, concrete work, masonry work iron and steel work, and lathing and plastering. Barton-Malow listed a subcontractor and "G.C." for phases described as hard tile and electrical. For the work areas described as "roof decks" and "roofing and sheet metal" three (3) subcontractors were listed for each of the areas. The list submitted by Royal with its bid provided that the concrete work would be performed by the general contractor and listed a single subcontractor for each of the other 19 areas of work specified. Barton-Malow was the only bidder who listed multiple subcontractors for a specified work area. In the blanks provided for the subcontractors' addresses, Royal listed the city where each subcontractor was located; Barton-Malow did not provide any addresses bout stated at the top of the column "will be advised upon request." None of the bidders provided street addresses for the subcontractors, however, only one bidder other than Barton Malow failed to provide the city in which the subcontractor was located.

   8. Immediately after the bids were opened and read, 1/ the meeting was adjourned and Mr. Derryberry, Mr. Collins, and two other people reviewed the bids. Mr. Derryberry concluded that the Barton-Malow bid was not in compliance with the bid requirements due to the manner in which Barton-Malow had filled out the subcontractor list. Mr. Derryberry therefore recommended to the Board that the Barton-Malow bid be rejected because of the perceived irregularities and the bid of Royal be accepted. The recommendation of the architect was adopted as the recommendation of the school administration and presented to the Board at a public meeting on June 3, 1986. The Board received the report of the architect and the administration, heard from the attorneys and representatives of Barton- Malow and Royal, and then voted to waive any irregularities and accept the Barton-Malow bid.

      
      

   9. The original page C.14 was approved by the Board in about 1980 and used since that time. However, there had been some difficulty with that form on two different jobs within the last six months, and therefore it was decided to clarify the purpose of the form by specifically listing all the major subcontracting areas. The intent was to require all bidders to list the primary subcontractor in each of the major work areas, and thus prevent bid shopping after the bids were opened. The architect, Mr. Derryberry, prepared and included the amended form C.14 as part of Addendum #1 to the bid documents. Although the Board never formally approved the amended form, Mr. Derryberry had the authority to clarify any of the bid documents by addendum.

      
      

   10. Page C.14 (Addendum #1) lists 20 major subcontracting areas; however, in almost all of the areas it would be possible for more than one subcontractor to perform the designated work, and in several areas it would be unlikely that one subcontractor would perform all the required work. For example, site work includes paving, earth moving, culvert work, fencing, and irrigation, and one subcontractor would not normally do the work in all those areas. The amended page C.14 does not state that only one subcontractor should be listed for each specified work area. The bidders were not advised at the pre-bid conferences or subsequent thereto, that only one subcontractor should be listed in each category. The only information the bidders received regarding the list of subcontractors was the information contained on the revised page C.14. In other words, the bidders were simply directed to list "the names of the subcontractors who will perform under the Bidder", and to list general contractor when "the general contractor will perform one of the phases listed with his own personnel."

       
       

   11. In the subcontractor list submitted with their bid, Barton-Malow listed "Batten Electric Co./G.C." for the subcontract "Electrical", and listed "Bauer & Assoc./G.C." for the "Hard Tile" subcontract. The listing of a subcontractor and the general contractor in these areas is not a deviation from the bid requirements. There is no indication on the list submitted by Barton- Malow that the listing of a subcontractor and the general contractor in the hard tile and electrical categories meant anything other than both the subcontractor and the general contractor would perform the work required in those areas, and there was no evidence presented at the hearing that would require a different conclusion. 2/

       
       

   12. Categories 5 and 6 on the subcontractor list are "roof decks" and "roofing and sheet metal." Although listed as two separate categories, the same subcontractor would have to perform both due to the bid requirements. Further only one subcontractor can perform the roofing work; it is not an area that is divisible into subcategories that can be performed by different subcontractors. For categories 5 and 6, Barton-Malow listed "H. H. Robertson/Architectural

       Exteriors/Commercial Roof Decks." As admitted by Barton-Malow, that all three subcontractors "will perform" the subcontract is an impossibility. 3/ From the list submitted by Barton-Malow it cannot be determined who will perform and be responsible for the roofing work. When asked at the hearing who was going to perform the roofing work for Barton Malow, the vice-president of operations for Barton-Malow responded, "One of those three would have done it." He indicated that a submission would have been made to the Board designating the subcontractor.

       
       

   13. By listing three subcontractors for the two roofing categories, Barton-Malow deviated from the bid requirements. The subcontractor list contained one basic requirement, that the subcontractors listed "will perform." By listing three subcontractors for the roofing, when only one subcontractor could performs Barton-Malow would be able to bid shop for subcontractors after the bid submission. This would give Barton Malow a definite advantage over the other bidders who complied with the bid requirements and listed only the one contractor who would perform the work. The other bidders would be bound to use the subcontractor listed and therefore, would be unable to negotiate for a better price after obtaining the contract. However, by listing multiple subcontractors, Barton-Malow would be able to negotiate for a better price because it had not committed itself to any one subcontractor.

       
       

   14. In five categories, site work, concrete work, masonry work, iron and steel work, and lathing and plastering, Barton Malow listed general contractor. About an hour after bid opening, Mr. Derryberry called Mr. Polso, the Vice- President of Operations for Barton-Malow, to inquire about the bid because it was so much lower than the other bids. Mr. Polso assured Mr. Derryberry that there had been no mistake in the amount bid. Mr. Derryberry then asked about the listing of general contractor for the iron and steel work because he had never known of a general contractor doing that type of work. Mr. Polso stated that he had not had time to determine the low bidder in that category and was still getting prices. He also said that Barton-Malow would not be doing the lathing and plastering. However, when Mr. Derryberry advised that he was recommending that the bid be disqualified due to the incompleteness of the subcontractors form and asked whether Barton-Malow wished to withdraw its bid, Mr. Polso stated that Barton-Malow had no intention of withdrawing its bid. Subsequently, Mr. Polso met with Mr. Derryberry and Mr. Collins at the school offices and advised them that Barton-Malow had every intention of performing the work where general contractor had been listed.

       
       

   15. Barton-Malow is a wholly owned subsidiary of Barton Malow Company and has the resources of Barton-Malow Company available when necessary. In 1985, Barton-Malow did between 60 and 70 million dollars of construction work; Barton- Malow Company had a dollar volume of 600 million dollars. Barton-Malow has the capacity to perform work in the areas where it listed general contractor.

       Barton-Malow prepares its bid by estimating the value of the total project and the value of the majority of the specific trades involved. If Barton-Malow does not receive a bid from a subcontractor that it feels is competitive in a particular trade area, it performs that work itself.

       
       

   16. The C.14 (Addendum #1) form permitted a bidder to list "general contractor" in any or all subcontract areas in which it would perform the work with its own personnel. Once the bids are opened, the bidder cannot unilaterally substitute a subcontractor for the general contractor. The general contractor would be required to do the work unless it received authorization to substitute a subcontractor based upon a showing of good cause. The evidence does not support a finding that Barton-Malow was incapable of performing the

       work in the areas in which it listed "general contractor." Therefore Barton- Malow did not deviate from the bid requirements by listing "general contractor" in five of the twenty specified areas.

       
       

   17. Although Baron-Malow deviated from the bid requirements by failing to list any addresses on its subcontractor list, this was a minor irregularity which did not give Barton-Malow any competitive advantage over the other bidders.

   18. In Division C, Article 5, Section 5.3.1., the bid documents provide: It is the intent of the owner to award a

       Contract to the lowest responsible Bidder provided the Bid has been submitted in accordance with the requirements of the Bidding Documents....The Owner shall have the right to waive any informality or irregularity in any Bid or Bids received and accept the Bid or Bids which in his judgment, is in his own best interests.

       
       

       CONCLUSIONS OF LAW

       
       

   19. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.

       
       

   20. Section 235.31(1)(a), Florida Statutes, requires the School Board to award the contract for a building or improvements to the "lowest responsible bidder." Section 255.0515, Florida Statutes, prohibits a contractor who is awarded the bid for construction of a school from removing or replacing subcontractors listed in the bid subsequent to the list being made public at the bid opening, except with the permission of the School Board for good cause shown.

       
       

   21. In E. M. Watkins & Company, Inc. v. Board of Regents, 414 So.2d 583 (Fla. 1st DCA 1982), the low bidder failed to list three (3) of the five (5) major subcontractors required to be listed by the bid documents, but submitted a supplemental list of subcontractors upon being advised of the omission after the bids were opened. The Board of Regents concluded that the failure to submit the required subcontractors by the time of bid opening rendered Watkins bid nonresponsive and incomplete. On appeal, the court held that a bidder could not submit subcontractor information subsequent to bid opening because that would directly contravene Section 255.0515,Florida Statutes. The court determined that one of the major purposes of the Legislature in enacting Section 255.0515 was to prevent bid shopping by contractors after the bid was awarded. The court found "implicit in Section 255.0515" the policy reasons for requiring a subcontractor list to be completed prior to bid opening. These are to "prevent competitive advantage, insure the quality of the subcontractors, insure public confidence in the bidding process, and encourage future competition." 414 So.2d at 557.

       
       

   22. The listing of multiple subcontractors for the same work is essentially the same as listing no subcontractor at all. In both cases, the bidder may designate the subcontractor who will actually perform the work subsequent to the bid opening. To permit a bidder to do this would contravene the intent of Section 255.0515, Florida Statutes, and subvert the bidding

       process. In Harry Pepper & Assoc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2d DCA 1977), the court stated:

       
       

       The purpose of the bidding process, as asserted in the early landmark case of Wester v. Belote 103 Fla. 976, 135 So. 721, 723-24

       (1931); is:

       
       

       [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in its various forms; to secure the best values for the county at the lowest possible expense; and to afford an equal advantage to all desiring to do business with the county, by affording an opportunity for an exact comparison of bids.

       * * *

       
       

       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.

       
       

   23. In this case, Barton-Malow listed three subcontractors as performing the roofing work. Only one subcontractor can perform the roofing work under the terms of the bid documents. By failing to list the subcontractor who "will perform" the roofing work, Barton-Malow failed to submit its bid in accordance with the requirements of the bidding documents. Because this deviation would give Barton-Malow a competitive advantage over the other bidders, it cannot be considered a minor irregularity that can be waived by the Board. A bid containing a material variance is unacceptable, and a variance is material if it gives the bidder a substantial advantage over other bidders. Robinson Electrical Co. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982).

       
       

   24. Although a public body has wide discretion in soliciting and accepting bids when acting in good faith, none of the cases cited by respondent or intervenor have held that a public body may exercise its discretion in a manner which will provide a competitive advantage to one bidder not enjoyed by the other bidders. In Liberty County v. Baxter's Asphalt & Concrete, 421 So.2d 505;

       507 (Fla. 1982), the court specifically found that the low bidder's deviation from the bid requirement was a "relatively minor irregularity in the technical bidding requirements" and that the low bidder did not gain an economic benefit because of his bid deviations. In Culpepper v. Moore, 40 So.2d 366 (Fla. 1949), the court held that the county board of public instruction had the discretion to reject the low bid on a school construction project and award the contract to a

       higher bidder because the decision was based upon facts reasonably supporting the board's conclusion that the low bidder was not the "lowest responsible bidder."

       
       

   25. Because Barton-Malow's deviation from the bid requirements is a material variance and not a minor irregularity which can be waived by the Board, it is

RECOMMENDED:

That the School Board of Sarasota County reject the bid of Barton-Malow Southern, Inc. and award the contract for the Elementary School "C" Project to Ron A. Royal, Inc., the lowest responsive bidder.

DONE and ENTERED this 19th day of August, 1986, in Tallahassee, Florida.

DIANE A. GRUBBS

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of August, 1986.

ENDNOTES

1/ Upon request of one of the participants at the meeting, the list of subcontractors submitted by Barton-Malow was also read.

2/ The categories on the subcontract list correlate "to some degree" to the divisions contained in the colored pages of the bid document which set forth the technical specifications prepared by the architect. Division 16, Electrical, includes concrete pads, supports, and encasement. Barton-Malow listed G. C. on the electrical subcontractors list because it intended to do the concrete work required.

3/ The roofing portion of the project is defined as a single source of responsibility. H. H. Robinson is a manufacturer and installer of steel panels. Merchants and Evans manufactures the aluminum panels which Commercial Roof Decks installs. The materials had to be provided either by H. H. Robinson and installed by them or by Merchants and Evans and installed by Commercial Roof Decks with Merchants and Evans taking responsibility for the work.

Architectural Exteriors could not do the work because it failed to submit the required specifications for approval.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2233B1D

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the petitioner to this case.

Rulings On Proposed Findings of Fact Submitted by the Petitioner

1. Accepted in paragraph 1.

2. Accepted in paragraph 4.

3. Accepted in paragraphs 3 and 5.

4. Accepted in paragraph 5.

5. Accepted in paragraph 6. 5.(a) Accepted in paragraph 3.

5.(b) Accepted generally in paragraph 12.

5.(c) & (d) Rejected for the reasons set forth in paragraphs 13 and 14, and as unnecessary to the resolution of the case. However it is agreed that Barton-Malow's actions subsequent to bid opening can be considered as evidence in determining whether it is a "responsible" bidder.

6 -7. Accepted in paragraph 6.

1. Accepted in paragraph 11.

2. Accepted in paragraph 12.

3. Accepted generally in paragraphs 3 and 11.

4. Accepted in paragraph 5.

5. Accepted in paragraph 7.

13.-14. Accepted generally in paragraph 11.

15.-16. Accepted to the degree relevant in paragraph 12.

1. Rejected for the reasons set forth in paragraph 11 and because an intent alone cannot provide a competitive advantage.

2. Rejected for the reasons set forth in paragraph 9.

Rulings On Proposed Findings of Fact Submitted by the Respondent

5. Accepted in paragraphs 3 and 7. 6.-8. Accepted in paragraph 7.

9.-11. Accepted in paragraph 3.

12.-13. Accepted in paragraph 4.

14.-17. Accepted in paragraph 5.

18.-19. Accepted in paragraph 6.

20.-21. Rejected. Although Mr. Derryberry stated the Board could waive the irregularities under the terms of the bid documents, his recommendation was that Royal receive the bid.

1. Accepted in paragraph 6.

2. Accepted in paragraph 7. 24.-25. Accepted in paragraph 8.

1. Rejected as not supported by competent evidence as set forth in paragraph 11.

2. Accepted generally in paragraph 13.

3. Accepted generally in paragraph 9 and footnote 2.

4. Accepted in paragraph 10. 30.-32. Accepted in footnote 3. 33.-34 Rejected as irrelevant.

1. Accepted generally in paragraph 14.

2. Accepted in paragraph 15.

3. Accepted generally in paragraph 14.

4. Accepted generally in paragraph 9.

39.-40. Rejected as not supported by competent evidence.

41. Rejected as a conclusion of law.

Rulings On Proposed Findings of Fact Submitted by the Intervenor

1. Accepted in paragraphs 1 and 16.

2. Accepted in paragraph 9.

3. Accepted in paragraph 5.

4. Accepted in paragraph 14.

5. Accepted to the degree set forth in paragraph 7.

6. Accepted in paragraph 15. 16.-17. Accepted in paragraph 12.

1. Accepted generally in paragraph 9 and footnote 2.

2. Accepted generally in footnote 2.

3. Accepted as true, but rejected as a finding as unnecessary.

4. Accepted in paragraph 10. 22.-23. Accepted in footnote 3. 24.-26. Rejected as irrelevant.

1. Rejected as not supported by competent substantial evidence.

2. Rejected in that it is a conclusion of law.

COPIES FURNISHED:

William A. Dooley, Esquire Brenda S. Hibbeln, Esquire 1605 Main Street, Suite 610

Sarasota, Florida 33577

Robert L. Moore, Esquire

P. O. Box 1767

227 Nokomis Avenue, South Venice, Florida 34284-1767

James C. Clark, Esquire 2055 Wood Street, Suite 110

Sarasota, Florida 33577

Norman Vaughn-Birch, Esquire 720 South Orange Avenue Sarasota, Florida 33578

Dr. Charles W. Fowler Superintendent

School Board of Sarasota County 2418 Hatton Street

Sarasota, Florida 33577

Docket for Case No: 86-002233BID

Orders for Case No: 86-002233BID