STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

AUTO MACHINE AND PARTS CO., INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-2508BID

)

STATE OF FLORIDA, )

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Notice was provided, and on July 25, 1986, in the offices of the Division of Administrative Hearings a formal hearing was held in this cause. Charles C. Adams, hearing officer for the Division of Administrative Hearings, conducted the proceedings. Counsel to the parties were afforded an opportunity to offer proposed recommended orders and associated written arguments in aid of the preparation of this recommended order. Counsel for Petitioner has filed written argument and a summarizing order. These items do not offer specific fact finding as contemplated by Section 120.57(1), Florida Statutes. Counsel for Respondent has offered a proposed recommended order in which specific facts are proposed. All these matters have been considered prior to the entry of the recommended order; however, only the specific facts proposed by the Respondent shall be addressed individually. The conclusion is reached that the Petitioner's written presentation does not contemplate distinguishing fact proposals suggested by that party. An appendix is attached to the recommended order and discussion is given to the proposed facts set forth by Respondent's counsel.

This matter had been consolidated with the case of Precision Machine Service, Inc., Petitioner, vs. State of Florida, Department of Transportation, Respondent, DOAH Case No. 86 2509BID. At the commencement of the final hearing, a letter of dismissal from that Petitioner was received and an order entered closing that file. Other bidders who had responded to the bid solicitation by the Department of Transportation, which forms the basis for this dispute, were provided notice and did not attend the final hearing.

APPEARANCES

For Petitioner: A. Kurt Ardaman, Esquire

FISHBACK, DAVIS, DOMINICK, BENNETT AND OWENS

170 East Washington Street Orlando, Florida 32801

For Respondent: Larry D. Scott, Esquire

Paul J. Martin, Esquire Department of Transportation

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32301

ISSUES

In this case, Petitioner has challenged Respondent's choice of responsive low bidders related to bid solicitation for contracts pertaining to four classes of diesel engine rebuild programs. In particular, Petitioner alleges that in all four classes the low bidder, and in two instances, the second low bidder, in settings in which the Petitioner was second low bidder or third low bidder respectively, have failed to meet specifications and are not entitled to the award of contracts. Petitioner asserts that it can meet the terms of the contract and was prepared to meet those contract terms upon the Respondent's opening of the bids. Petitioner questions Respondent's failure to confirm that each prospective bidder was capable of meeting each specification within the bid solicitation document prior to bid opening or, at the latest, at the point when the bids were opened. Concomitantly, Petitioner contends that it was inherently unfair for the Respondent to confirm the ability of the low bidders to comply with the specifications following bid opening and in the face of challenges to the qualifications of the apparent low bidders offered by unsuccessful bidders.

FINDINGS OF FACT

1. The State of Florida, Department of Transportation, invited bids from forty firms related to a program for rebuilding certain diesel engines owned by the Department. These firms were initially seen to have the necessary expertise to provide the rebuild service. There were 16 specific types of engines which the Department wished to have rebuilt pursuant to separate contracts. There was a seventeenth category which dealt with miscellaneous types of engines described as "others."

   
   

2. The bid document set forth that those individuals who were interested in submitting bids for the diesel engine rebuild program must be able to comply with a number of requirements. Among those requirements was the requirement in the section of the bid documents pertaining to engine rebuild specifications which, under the subsection for parts and services, indicated that "the Contractor must rebuild the engine according to the Original Equipment Manufacturer's (OEM) rebuild procedures and specifications." Furthermore, the bidders were to comply with certain facility requirements, which were:

   
   

   * * *

   The Contractors facility must have the following minimum machine equipment and tools:

   1. Vat-type hot tank for engine block cleaning

   2. Magnaflux machine (minimum 2000 amp hr)

   3. Connecting rod reconditioners

   4. Pin boring machine

   5. Flywheel surfacer

   6. Cylinder boring and honing equipment

   7. Engine block align boring machine

   8. Surfacer for heads and blocks

   9. Dynomometer

   10. OEM specified service tooling for engine series quoted

   11. OEM service manuals for engine series quoted

       
       

       It was noted in the specifications pertaining to necessary facility requirements that the machinery must have the capacity to perform the work on the engines that were specified in the bid solicitation. Finally, it was a requirement that the subcontracting work meet this restriction:

       
       

       All machine and rebuilding work must be performed in the Contractors shop, with the exception of fuel pump and fuel injector rebuilding, and crankshaft and camshaft grinding.

       
       

3. Requirements set forth in the previous paragraph did not indicate whether it was necessary for the bidder to have the service items on hand at the time that the bid responses were offered, at the time the bid opening was conducted, or at the point at which a written contract was entered into between the Department and a successful bidder or before commencing the work. The assumption on the part of the Department employee who was responsible for the bid solicitation process was to the effect that bidders would be considered in compliance with these requirements if they were able to comply with all conditions at the point at which the contract documents were executed between the successful bidder and the Department or before service work commenced. This interpretation was given by Mark Sawicki, who was responsible for arranging to have the Department's diesel engines rebuilt. Sawicki did not feel that any attempt at prequalification by inspection of the forty prospective bidders was in the best interests of the Department. He felt that an attempt at prequalification of forty potential bidders was an extravagance which the Department could not afford. Having described the requirements that the Department had in mind through the bid document, Sawicki assumed that the contractors whom he had preselected without inspecting their facilities could meet specifications if they responded to the bid solicitation.

   
   

4. When the bids were opened on June 17, 1986, eleven separate bidders had responded to the invitation. Some of the bidders responded to each category of engine sought for contract and others responded to select categories.

   Petitioner offered its response to all but one category of engines. It was not the apparent low bidder in any category.

   
   

5. In its protest, Petitioner has questioned the Department's intent to award contracts to the apparent low bidders in the engine classes number 3208, number 1150, number 1160 and the miscellaneous category described as "others."

   
   

6. The apparent low bidder in the engine class number 3208 was Coastal Power. In the miscellaneous class of engines, the apparent low bidder was First Coast Truck. In those two engine classes, the Petitioner was shown to be the second low bidder. In the engine class numbers 1150 and 1160, the apparent low bidder was Coastal Power, the second low bidder in those engine categories was Zabatt and Petitioner was the third low bidder.

   
   

7. Sawicki made an inspection of the facilities of Coastal Power on June 19, 1985, and confirmed that the low bidder had the requisite facility to comply with the requirements of the bid document pertaining to machinery, etc. for the engine classes in dispute. Sawicki also confirmed that the Zabatt facility met

   requirements. Inspection of Zabatt was made on June 19, 1986. Although the Dynomometer available to Zabatt was in a facility next door, the Dynomometer would be operated only by personnel from Zabatt and was accessible to Zabatt routinely. After bids were opened, another employee from the Department made similar efforts at confirmation of the acceptability of the facility at First Coast to rebuild the miscellaneous class of engine. The president of First Coast Truck has also given an indication of its equipment in correspondence addressed to the Department on July 10, 1986. It was not established at what point in time these companies were first able to meet the requirements related to facilities and equipment, whether it be at the point of offering their responses to the bid advertisement, at the point of bid opening or on the day that the facilities were inspected by employees of the Department. Obviously, these bidders could have met the bid requirements for facilities and equipment prior to contracts' being completed between the successful bidders and the Department, in that contracts have not been executed pending the outcome of this hearing.

   
   

8. No competent evidence was presented which identified what equipment Petitioner had on hand to comply with the bid requirements or when the equipment was acquired.

   
   

   CONCLUSIONS OF LAW

   
   

9. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action based upon the language set forth in Sections 120.53 and .57, Florida Statutes.

   
   

10. Chapter 287, Florida Statutes, grants the State of Florida, Department of Transportation the necessary authority to purchase services. This takes into account the ability of Respondent to seek the service of outside vendors in rebuilding the diesel engines which Respondent owns. The process of arranging for the purchase of those services is set forth in Rule 13A-1, Florida Administrative Code. In accordance with this rule, in a bid solicitation arrangement, the Department determines the acceptability or responsiveness of the bids returned and examines qualifications and the responsibility of the bid offerer at the point at which the bid proposals are made known to the public. This point in time is at the opening of the bids. The idea of responsiveness envisions bidders or offerers who are capable of conforming in all material respects with the requirements set forth in the bid document. The successful bidder must also be capable in all respects of performing under the terms of the contract which is contemplated by the bid arrangement. The successful bidder must have the necessary integrity and reliability to assure good faith performance of the contract.

    
    

11. In examining the present invitation to bid with its statement of specifications and requirements, it does not indicate that the Department, as an owner purchasing services, intended to verify or was called upon to verify by visual inspection or otherwise, that the forty bidders who were solicited for bid responses could comply with each and every condition set forth in the invitation to bid when it sought bid responses. It suffices that the person who was responsible for the preparation of the invitation to bid was convinced that the forty firms invited to submit responses were sufficiently qualified to submit bid responses. Eleven of those prospective bidders felt that they were capable of honoring any contract that might be prepared as a result of the requirements set forth in the invitation to bid and submitted bids. Nowhere in the bid document did it require that the bidders accompany their dollar figures related to rebuild cost, manhours and other items set forth on the bid

    tabulation with a statement of inventory of equipment or a general description of their facilities, neither was this degree of information mandated by Rule 13A-1, Florida Administrative Code.

    
    

12. Further, given the preconceived notion by the Department of the acceptability of the forty bidders and the apparent confidence which eleven of those bidders had in their ability to comply with the terms of the invitation to bid, it is not unfair, contrary to public policy or tending to promote a competitive advantage between bidders to allow the bidders to make arrangements for the provision of the equipment up to the point of entering into the contract or commencing to offer the services. It was not necessary to have these items on hand when the bids were opened. The Department has given this interpretation to the statutory and rules requirements for purchasing services necessary to rebuild the diesel engines. It is the interpretation which the Department had in mind when it identified those individuals whom it believed to have the capability to perform under the terms of contracts to rebuild, when it designed the invitation to bid and which it has since confirmed in relation to the four classes of engines which are in dispute. The choice to confirm can not be seen as irregular, anticompetitive or preferential. Nor was it necessary. The choice to confirm the ability of the successful bidders, in these four areas of dispute, to comply with the terms of the invitation to bid does serve to allay any fears which the Petitioner has expressed concerning the inability of those firms to immediately carry out the terms established by the invitation to bid.

    
    

13. Alternatively, Petitioner was the burdened party in this case, and it failed to present any competent evidence which would tend to substantiate its claim that the low bidders were unable to meet the minimum facility requirements and equipment requirements envisioned by the invitation to bid as of the date that the bid responses were opened and made public, which proof is essential to Petitioner's theory of the case. It also failed to show that it had the necessary equipment on the bid opening date. The Department has reasonably exercised its discretion in soliciting bids and in deciding to select the apparent low bidders to provide the services. This process of bid solicitation and selection was not one wrought with arbitrariness and caprice, nor is it in any other respect contrary to law. See Liberty County vs. Baxter's Asphalt and Concrete, 421 So.2d 505 (Fla. 1982) and Capeletti Brothers, Inc. v. State Dept. of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983).

    
    

14. Based upon a consideration of the facts found and the conclusions of law reached, it is,

RECOMMENDED:

That a final order be entered which dismisses the bid protest filed by the Petitioner and which awards the contracts for diesel engine rebuild, engine class numbers 3208, 1160 and 1150 to Coastal Power and the contract for the category described as "others" to First Coast Truck.

DONE AND ENTERED this 14th day of August, 1986, at Tallahassee, Florida.

CHARLES C. ADAMS, 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 14th day of August, 1986.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-2508B1D

Examination of the proposed facts by the Petitioner when contrasted with the facts found in the recommended order shows that those facts have been incorporated into the recommended order with the exception of the facts found at paragraph 3, which are deemed to be unnecessary to the resolution of the dispute.

COPIES FURNISHED:

A. Kurt Ardaman, Esquire FISHBACK, DAVIS, DOMINICK,

BENNETT AND OWENS

170 East Washington Street Orlando, Florida 32801

Larry D. Scott, Esquire Paul J. Martin, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32301-8064

Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301

Docket for Case No: 86-002508BID

Orders for Case No: 86-002508BID