Judges: LINDA M. RIGOT
Agency: Department of Transportation
Latest Update: Nov. 13, 1986
Summary: Petitioner proved it was lowest responsive bidder since cash bond as good as surety bond and petitioner not in existence when pre-bid conference held.
86-3630.PDFSTATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA SWEEPING, )
)
Petitioner, )
)
vs. ) CASE NO. 86-3630BID
) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
) FLORIDA SWEEPING, )
)
Petitioner, )
)
vs. ) CASE NO. 86-3631BID
) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
) FLORIDA SWEEPING, )
)
Petitioner, )
)
vs. ) CASE NO. 86-3632BID
) DEPARTMENT OF TRANSPORTATION, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on September 30, 1986, in Tallahassee, Florida.
Petitioner Florida Sweeping was represented by Barry S. Webber, Esquire, Hollywood, Florida, and the Respondent Department of Transportation was represented by Larry Scott, Esquire, Tallahassee, Florida.
Petitioner is a bidder on three road sweeping projects. Although Petitioner submitted the lowest bid on each of those three projects, Respondent deemed Petitioner's bids to be nonresponsive. Accordingly, Respondent rejected those bids and awarded the three contracts to the second lowest bidder.
Petitioner filed formal protests, and each of these cases involves one of those three projects. Since the issue is the same in all three cases and the evidence in one applies to the others, these cases were consolidated. Accordingly, the issue for determination herein is whether Florida Sweeping is the lowest responsible bidder.
Petitioner presented the testimony of Charles Larry Roberts and Laurel Bryan. No witnesses testified on behalf of Respondent. However, Petitioner's Exhibits numbered 1-3 and Respondent's Exhibits numbered 1-4 were admitted in evidence.
Both parties filed posthearing proposed findings of fact in the form of proposed recommended orders. Petitioner's proposed findings of fact numbered 1-
33 and Respondent's proposed findings of fact numbered 1-8, and 12, have been adopted either verbatim or in substance in this Recommended Order. The remainder of Respondent's proposed findings of fact have been rejected as follows: 9 and 16 as being contrary to the evidence; 10, 11, and 13-15 as being irrelevant to the issues involved herein.
FINDINGS OF FACT
The Department of Transportation sought bid proposals for mechanical sweeping on three road projects identified as Project No. 87906-9175, Project No. 87906-9176 and Project No. 87906-9177, which involve street sweeping in Dade County, Florida.
The contract documents provided that a mandatory pre-bid conference would be held in Miami on August 7, 1986.
The purpose of the pre-bid conference was to answer any questions the contractors might have to assure that the contractors understood the full scope of each of the contracts and to assure the Department that it would receive responsible bids.
Two prospective bidders attended the pre-bid conference: Dave Smith & Company and Power Sweeping Services, Inc.
Charles Larry Roberts attended the pro-bid conference on the three subject projects as the sole representative of Dave Smith & Company.
Florida Sweeping, Petitioner herein, did not exist at the time of the pro-bid conference.
Roberts was in attendance at the pro-bid conference from the beginning until the end of the conference.
The pre-bid conference would not have been conducted in a different manner had Roberts signed in as agent for Petitioner rather than as agent for Dave Smith & Company.
Although there was a mandatory pro-bid conference requirement, the contracts were routine in nature.
Prior to the bids being submitted for the subject contracts, the relationship between Dave Smith & Company and Roberts was terminated.
Other than the attendance by Roberts at the pre-bid conference, Roberts did not participate in the preparation of the bids on behalf of Dave Smith & Company.
After Roberts and Dave Smith & Company terminated their relationship, Roberts chose to submit bids for the contracts himself under the name of Florida Sweeping.
Subsequent to the pro-bid conference, Roberts went to the Department and picked up the bid specifications for the three projects, signing his own name as the party receiving the packages. Laurel Bryan, the District Contracts Coordinator, was aware that Roberts signed his own name in picking up the bid specifications.
In response to the Department's request for bids, bids were submitted on all three projects on behalf of three bidders: Dave Smith & Company, Power Sweeping Services, Inc., and Petitioner. At the time scheduled for bid opening, Roberts delivered to Bryan the three bids on behalf of Petitioner, at which time they were accepted by Bryan who knew that while Roberts had in fact attended the pre-bid conference, he did not attend the conference in the capacity of representative of Petitioner. She also knew that Roberts had previously bid on other similar projects.
At the time the bids were submitted and accepted, they were in sealed envelopes and Bryan was unaware as to which of the three bidders was the low bidder.
At the time of the bid opening, the Department made no inquiry as to whether the Dave Smith & Company bids were prepared with the benefit of Roberts' attendance at the pre-bid conference.
The bids submitted by all three bidders were opened on August 14, 1986, and tabulated, disclosing that Petitioner was the low bidder with respect to all three contracts.
The Department admits that attendance by Roberts at the pre-bid conference as representative of a company other than Petitioner would not affect his ability to bid for and to perform the work under the subject contracts.
On August 18, 1986, the Department of Transportation advised Petitioner that its bid proposals had been declared nonresponsive and irregular for two reasons: (a) Petitioner did not send a representative to the mandatory pre-bid conference; and (b) Petitioner did not present adequate proof of ability to obtain a performance bond.
Part of the bidding specifications included a document entitled "Instructions to All Bidders". Paragraph 4 of "Instructions to All Bidders" reads as follows:
4. IN ACCORDANCE WITH SECTION 1 OF THE MINI-CONTRACT GENERAL: SPECIFICATIONS, ALL BIDS MUST BE ACCOMPANIED BY PROOF OF THE ABILITY TO ACQUIRE A PERFORMANCE BOND.
AS PROOF, ALL BIDS MUST BE ACCOMPANIED BY A NOTARIZED LETTER FROM A BONDING COMPANY, BANK OR OTHER FINANCIAL INSTITUTION STATING THAT THEY INTEND TO ISSUE A BOND IN THE AMOUNT OF YOUR BID, WITHIN THE REQUIRED TIME LIMIT, SHOULD YOUR FIRM BE AWARDED THE CONTRACT.
Petitioner with respect to each contract, submitted a notarized letter dated August 12, 1986, from A. W. Bradshaw & Co., Limited. A. W. Bradshaw & Co., Limited, is a financial institution.
The letter stated that A. W. Bradshaw & Co., Limited, would "cash" bond any contracts awarded to Petitioner by the State of Florida.
Although the Department of Transportation's written requirement concerns a bond from either a surety or insurance company, or from a bank or other financial institution, a cash bond is acceptable to the Department. It is, therefore, not necessary that a bond be provided by a surety.
After rejection of Petitioner's bids, the Department determined that Power Sweeping Services, Inc., was the lowest responsible bidder.
The bid from Power Sweeping Services, Inc., includes a letter from William Douglas & Associates, an independent insurance agent, as the letter intended to comply with the bonding letter requirement of the Instruction to Bidders. That letter states in part:
With regard to Item #1, Qualifying Bonding Company, I have been advised by the present carrier, Southeastern Casualty and Indemnity Company that they do not anticipate any problems in issuing the Payment and Performance Bond in the total aggregate amount of $158,915.70, which consists of the following . . . .
The bond letters submitted with the Power Sweeping Services, Inc., bids are not notarized and do not bind any bonding company, bank, other financial institution or even Southeastern Casualty and Indemnity Company, to issue a bond for Power Sweeping.
The Department accepted the letter from William Douglas & Associates, Inc., as opposed to requiring a letter directly from Southeastern Casualty and Indemnity Company due to the fact that Bryan had prior independent knowledge of the agent as she had dealt with the agent on previous occasions.
If Bryan had any questions about the William Douglas & Associates, Inc., letter, she would have called the agent.
Although Bryan could not read the signature on the letter from William Douglas & Associates, Inc., she felt she could recognize the signature of a Mr. Savoie on behalf of William Douglas & Associates, Inc., by virtue of her previous dealings with him.
The Department rejected Petitioner's letter from A. W. Bradshaw and Co., Limited, for the following reasons: (a) because Bryan could not read the signature of the person who signed it; and (b) because Bryan did not know the cities or countries or islands where the company was located, did not see a recognizable to her address on the letter, and did not see a recognizable to her telephone number with a three digit area code and a seven digit number.
Bryan did not ask Roberts at the bid opening or at any subsequent time where A. W. Bradshaw and Co., Limited, was located, whether A. W. Bradshaw and
Co., Limited, was a financial institution, or how A. W. Bradshaw and Co., Limited, could be contacted by telephone.
The only reasons why Petitioner's bids were rejected were the two specific reasons stated in the letters of August 18, 1986.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.
Petitioner contests the rejection of its bids claiming the action of the Department to be arbitrary and capricious. It is undisputed that the bids of Petitioner were the lowest bids with respect to all three contracts. The sole issue for determination is whether the two bases stated by the Department for rejection of Petitioner's bids were appropriate under the bidding criteria established by the Department or whether such reasons for rejection are arbitrary and capricious.
The first reason given by the Department is Petitioner's failure to send a representative to the mandatory pre-bid conference. The uncontroverted evidence is that the principal of Florida Sweeping and the party who prepared the bids for Florida Sweeping, Charles Larry Roberts, did in fact personally attend the mandatory pre-bid conference for all three projects. At the time of his attendance at the mandatory pre-bid conference, he signed in as a representative of Dave Smith & Company as Petitioner did not exist at that time. It was only subsequent to the pre-bid conference that Roberts' relationship with Dave Smith & Company was severed and Roberts obtained a new set of bidding specifications for the purpose of submitting bids on behalf of Florida Sweeping. At the time the bids were actually submitted by Roberts on behalf of Petitioner, the Department was aware that the bids were being submitted by him on behalf of a bidder who had not attended the mandatory pre-bid conference. The Department had an opportunity at that time to refuse to accept the bids based upon that fact. The Department failed to refuse the bids on that basis and in fact accepted and tabulated the bids of Petitioner. It was only after the bids were tabulated and it was apparent that Petitioner was the lowest bidder on all three contracts that the Department made a determination to reject Petitioner's bids partially on the basis of failure to attend the pre-bid conference. Roberts is the individual that prepared Petitioner's bids, and it is undisputed that he attended the pre-bid conference from beginning to end. The Department also admits that it would not have handled the pre-bid conference in a manner differently than it was handled if Roberts had attended the conference in his capacity as representative of Petitioner instead of as representative of Dave Smith & Company.
The attendance of Roberts at the pre-bid conference effectuated the purpose of the requirement for mandatory pre-bid conferences. The Department admitted that there was nothing particularly unique or unusual about these three contracts. The purpose of the mandatory pre-bid conference was to answer any questions that the contractors may have to assure that they understood the full scope of the contracts so that the Department would thus receive responsive bids. That intent was clearly met by the attendance of Roberts. There was no evidence presented by the Department to indicate that the fact that Roberts attended the pre-bid conference as representative of Dave Smith & Company rather than Florida Sweeping in any way thwarted the intended purpose of the pre-bid conference.
The only damage to the bidding process which might have occurred by virtue of Roberts' separation from Dave Smith & Company prior to submission of the bids could have come from the fact that Roberts did not prepare the bids for Dave Smith & Company. It is, herefore, possible that the Dave Smith & Company bids were prepared without the benefit of the pre-bid conference. The State, however, had no concerns with regard to that issue and did not inquire of Dave Smith & Company if their bids were prepared by Roberts and did not reject the bids of Dave Smith & Company. The rejection of the bids of Florida Sweeping on the basis of non-attendance at the mandatory pre-bid conference is without merit and the bids should not have been rejected on that ground.
The Department's second reason for rejecting Petitioner's bids--that Florida Sweeping did not present adequate proof of ability to obtain a performance bond--is answered by the bid specifications with regard to the performance bond. The bid specification documents appear to be somewhat confusing and possibly conflicting in that they contain various sections which refer to sureties and surety bonds which give the impression that the Department requires proof of ability to obtain a surety bond. It is clear from the testimony, however, that the Department accepts a cash bond as fully meeting the bonding requirements of its contracts and it is not required that a surety provide the bond.
Paragraph 3.2 of the bid specifications requires that within twenty days after the contract has been awarded, the successful bidder must submit executed contracts and the bond. There is no requirement whatsoever in the specifications to indicate the actual bond is to be submitted along with the bid. The bid specifications do require, however, that the bids be accompanied by proof of ability to acquire a performance bond. The "Instructions To All Bidders" which is part of the bid specifications very specifically sets forth the nature and degree of the proof which is required to accompany bids. Having set forth specific requirements for proof, the Department is bound by the criteria it has established. The first element of the proof is that the bid be accompanied by a notarized letter. The letter submitted by Petitioner was notarized. The bids of the second lowest bidder Power Sweeping Services, Inc. (the bidder deemed to be the lowest responsible bidder after rejection of Petitioner's bids), were accompanied by a letter which was not notarized. The fact that Power Sweeping's letters were not notarized did not render the letters unacceptable to the Department, however, due to the fact that Bryan had had previous dealings with the independent insurance agent who had provided that letter. It is noted that the bid specifications for the three contracts in question did not list specific companies or agents who must provide the letters required by paragraph 4 of "Instructions to All Bidders". The specifications furthermore did not list companies or agents who had had prior dealings with the Department and did not advise bidders that letters from certain insurance agents would not need to meet the criteria set forth in the bid specifications.
The next requirement is that the notarized letter be from a bonding company, bank, or other financial institution. The undisputed testimony is that
A. W. Bradshaw and Co., Limited, is a financial institution. On the other hand, the letters submitted with the Power Sweeping bids were not letters from a bonding company, bank or other financial institution, but rather were letters from an insurance agent. It is undisputed that the Department being unfamiliar with A. W. Bradshaw and Co., Limited, did not inquire of Roberts if A. W. Bradshaw and Co., Limited, was a financial institution, where A. W. Bradshaw and Co., Limited, was located or how A. W. Bradshaw and Co., Limited, could be contacted on the telephone although the Department's District Contracts
Coordinator testified that she would contact Power Sweeping's letter-writer Savoie if she had any questions about his letter.
Lastly, the notarized letter is required to state "that they intend to issue a bond in the amount of your bid, within the required time limit." The letter from A. W. Bradshaw and Co., Limited, specifically states that it intends to "cash" bond any contracts awarded to Petitioner. The letter submitted by Power Sweeping from an insurance agent states, however, that "I have been advised by the present carrier, Southeastern Casualty & Indemnity, that they do not anticipate any problems . . . ." The Power Sweeping Services, Inc., letter does not comply with the specific requirement of paragraph 4 that the letter be from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid. The Department has held the letters submitted with the bids of Petitioner and of Power Sweeping Services, Inc., to two different standards. The Department overlooked irregularities in each and every aspect of the requirements of paragraph 4 of "Instructions to All Bidders" as to Power Sweeping Services, Inc.'s, bids but rejected Petitioner's bids which were accompanied by a letter which met each and every requirement of those instructions. The Department's determination to reject the bids of Petitioner on the basis of failure to present adequate proof of ability to obtain a performance bond was arbitrary and capricious.
The Department argues correctly that its acceptance or rejection of bids is discretionary. However, where, as here, the Department rejects a bid which, on its face, is in compliance with all criteria and accepts instead a bid which, on its face, is in compliance with no criteria, then the Department has not properly exercised its discretion but rather has acted arbitrarily and capriciously. The Department also argues that Petitioner's cash-bond letter fails to meet all requirements for a surety-bond letter, specifically, that A.
W. Bradshaw and Co., Limited, did not have a resident agent in the State of Florida at the time Petitioner submitted its bids. This argument is without merit because (1) that general requirement was not included in the special Instructions to All Bidders prepared for the subject property to supplement the Department's "form mini-contract"; (2) that requirement applies to surety bonds and not cash bonds; and (3) that requirement is not one of the reasons the Department rejected Petitioner's bids.
RECOMMENDATION
Based upon the foregoing Findings of Fact and Conclusions of Law, it is,
RECOMMENDED that a Final Order be entered finding the bid proposals submitted by Florida Sweeping with respect to State Project Nos. 87906-9175, 87906-9176 and 87906-9177, to be the lowest responsive bids, accepting those bids, and awarding the three contracts in question to Petitioner.
DONE and RECOMMENDED this 13th day of November 1986, at Tallahassee, Florida.
LINDA M. RIGOT
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 13th day of November 1986.
COPIES FURNISHED:
Thomas Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
Barry S. Webber, Esquire Post Office Box 8549
Hollywood, Florida 33084-0549
Larry D. Scott, Esquire Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
FLORIDA SWEEPING,
Petitioner,
vs. CASE NO. 86-3630BID
DEPAPTMENT OF TRANSPORTATION,
Respondent,
/ FLORIDA SWEEPING,
Petitioner,
vs. CASE NO. 86-3631BID
DEPARTMENT OF TRANSPORTATION,
Respondent.
/ FLORIDA SWEEPING,
Petitioner,
vs. CASE NO. 86-3632BID
DEPARTMENT OF TRANSPORTATION,
Respondent.
/
FINAL ORDER
The record in this proceeding for tree resolution of a contract bidding protest has been reviewed along with the Recommended order of the hearing officer, copy attached. The parties to the proceeding did not file exceptions to the Recommended order.
Prior to the formal hearing before the Division of Administrative Hearing, pursuant to chapter 120 Florida Statutes and Rule 22I-6.006 F.A.C., all bidders including Dave Smith & Co. Inc. are given notice of the instant bid protest proceedings and given notice of an opportunity to intervene. Dave Smith & Co., one of the bidders, did not intervene. On December 3, 1986, Dave Smith & Co., Inc. filed documents related to the instant proceeding. The Department gave notice to the parties of the filing of these documents and invited written responses. Petitioner filed a Response to Objection of Dave Smith & Co. Inc.
Rule 28-5.104 F A. C., defines parties to the proceeding as only petitioners, respondents, or intervenors. Under Rule 28-5.404, F.A.C., only parties are authorized to file exceptions to a recommended order. Consequently, Dave Smith & Co., Inc. is not a party to these proceedings and has no standing to file exceptions to the Recommended Order. Rule 28-5.405 F.A.C. Therefore, the documents filed December 3, 1986 by Dave Smith & Co., Inc. are not considered to be part of the record on review in this case.
The Findings of Fact in the Recommended order are adopted. The Conclusions of Law in the Recommended order are accepted insofar as the Hearing Officer concluded that the subject bid proposals submitted by Petitioners should be accepted as the lowest responsive bids. The Department disagrees with the Hearing officers legal conclusion that the Department acted arbitrarily and capriciously. The purpose of this proceeding was to formulate final agency action, not to review action already taken, Capeletti Brothers v. Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983). The Department acted correctly, within its discretionary authority, in an attempt to reconcile the public contract bonding requirements of 339.18, Florida Statutes, the specifications of mini-contracts, and the Department's Instructions to all bidders. As stated by the Hearing Officer, the instant contracts did not require that the actual bonds be submitted along with the bids. The successful bidder would submit the bonds in conjunction with the executed contracts.
Therefore, it is
ORDERED that Florida Sweeping is the lowest responsible bidder for Florida Department of Transportation Project Nos. 87906-9175, 87906-9176, and 87906- 9177, and the subject contracts are awarded to Florida Sweeping. Pursuant to Section 337.18, Fla. Stat. 1985) the surety on the surety bond shall be a surety company authorized to do business in the state.
DONE and ORDERED this 11th day of February, 1987, at Tallahassee, Florida.
KAYE N. HENDERSON
Secretary
Department of Transportation Haydon Burns Building
605 Suwannee Street
Tallahassee, Florida 32301
Judicial review of agency final order may
be pursued in accordance with Section 120.68, Florida Statutes, and Florid a 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, 605 Suwannee Street, MS 58, Tallahassee, Florida 32301-8064, and with the appropriate District court of Appeal within 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.
Linda M. Rigot, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
Barry S. Webber, Esquire Post Office Box 8549
Hollywood, Florida 33084-0549
Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS 58 Tallahassee, Florida 32399
Dave Smith & Co., Inc. Post Office Drawer 7177
Fort Lauderdale, Florida 33338
Docket for Case No: 86-003630BID
Orders for Case No: 86-003630BID
| Issue Date |
Document |
Summary |
|
Feb. 11, 1987 |
Agency Final Order
|
|
|
Nov. 13, 1986 |
Recommended Order
|
Petitioner proved it was lowest responsive bidder since cash bond as good as surety bond and petitioner not in existence when pre-bid conference held.
|
