STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

NAPLES BUSINESS EQUIPMENT ) AND SYSTEMS, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 88-0690B1D

) THE SCHOOL BOARD OF LEE ) COUNTY, FLORIDA, )

)

Respondent, ) and )

) OFFICE PRODUCTS CENTRE, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica D. Donnelly, held a formal hearing on February 24, 1988, in Ft. Myers, Florida.

APPEARANCES

For Petitioner: Stephen Emens, President

Naples Business Equipment & Systems, Inc.

859 4th Avenue South Naples, Florida 33940

For Respondent: Harry A. Blair, Esquire

2138-40 Hoople Street

Ft. Myers, Florida 33901

For Intervenor: Richard Foss, Typewriter

Sales Manager

8A-Del Prado Boulevard Cape Coral, Florida 33904

The Petitioner, NAPLES BUSINESS EQUIPMENT AND SYSTEMS, INC., (hereinafter referred to as NAPLES) timely filed a written notice of protest when the Respondent, THE SCHOOL BOARD OF LEE COUNTY, FLORIDA, (hereinafter called the BOARD) made its decision to reject all bids in Bid NO. 3996. The purpose of the BOARD's invitation to bid was to secure and award a bid for the purchase of one hundred and fifty electric typewriters. NAPLES was the low bidder when the bids were opened on January 11, 1988. Upon receipt of the protest, the BOARD sent the case to the Division of Administrative Hearings for a formal hearing.

Pursuant to rule, the BOARD notified other bidders in Bid NO. 3996 of the scheduled hearing and their opportunity to intervene. A petition to intervene was filed by OFFICE PRODUCTS CENTRE, (hereinafter called OFFICE) who participated in the February 24, 1988, hearing.

The parties agreed to the submission of five exhibits which were admitted into evidence. Each party called one witness to testify. An additional exhibit was placed into evidence by Petitioner. No additional evidence was presented by the parties.

The opportunity to submit Proposed Findings of Fact and Conclusions of Law was waived by the parties. A transcript of proceedings was received by the Division of Administrative Hearings on February 29, 1988.

ISSUES

The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?

FINDINGS OF FACT

1. On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day.

   
   

2. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids.

   
   

3. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received.

   
   

4. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date.

   
   

5. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988.

   
   

6. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE

   would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters.

   
   

7. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996.

   
   

8. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits.

   
   

9. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract.

   
   

10. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications.

    
    

11. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties pursuant to Sections 120.53 and 120.57(1), Florida Statutes; National Advanced Systems Corporation v. The School Board of Orange County, 397 So2d 1185 (Fla. 5th DCA 1981).

    
    

13. Pursuant to Section 237.02, Florida Statutes, and Rule 6A-l.012, Florida Administrative Code, the BOARD is required to utilize the competitive bidding process in its purchase of personal property and contractual services such as those described in Bid NO. 3996.

    
    

14. Under the terms of the Invitation to Bid in. Bid NO. 3996 and Rule 6A-l.012(5), the BOARD has the legal authority to reject all bids in this case.

    However, inherent in the authority to reject all bids is the concomitant requirement that the BOARD act in good faith and not arbitrarily or capriciously exercise its discretion. Culpepper v. Moore, 40 So2d 366 (Fla. 1949). Wood- Hopkins Contracting Company v. Roger J. Au & Son, 354 So2d 446 (Fla. 1st DCA 1978).

    
    

15. In Hotel China and Glassware Co. v. Board of Public Instruction of Alachua County, 130 So2d 78 (Fla. 1st DCA 1961), the First District Court of Appeal explained the benefits and obligations in the use of the competitive bidding system in Florida as follows:

    The system confers upon both the contractor and the public authority

    reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer and is guaranteed the contract if his is the lowest and best bid received. The principal benefit flowing to the public authority is the opportunity of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference.

    
    

16. When the BOARD rejected all bids on January 14, 1988, two different reasons were given for the decision on the very same day. The first reason given was that the specifications were being revised. However, the letter sent to the vendors who had submitted bids stated that the reason for the bid rejection was the BOARD's incorrect opening date given to OFFICE. A new bid form was enclosed with the letter and a new opening date was given as February 1, 1988. The BOARD did not revise the specifications.

    
    

17. Although OFFICE would have been the low bidder had its bid been timely submitted, its bid did not meet the technical specifications as set forth in the Invitation to Bid. In addition, the letter enclosed by OFFICE with the bid documents listing purchasing incentives caused a deviation in the bid which destroyed its competitive character. This solicitation gave OFFICE an advantage not enjoyed by the other bidders. As a result, its bid should not have been considered. Harry Pepper and Associates, Inc. v. Cape Coral, 352 So2d 1190 (Fla. 2nd DCA 1977).

    
    

18. In the bid award for electronic typewriters for the previous year, the BOARD sought to reject all bids after NAPLES submitted the low bid. When NAPLES submitted the lowest responsible bid again this year, even after the specification revisions, the BOARD decided to reject all bids in order to again review and possibly revise specifications.

    
    

19. The BOARD's decision to reject all bids two years in a row coupled with the varying reasons given to reject the bids on January 14, 1988, result in the finding that the BOARD is being arbitrary and capricious in its refusal to award the contract to NAPLES. No basis was presented at hearing as to why the definite specifications adopted by the BOARD prior to the solicitation for bids on December 14, 1987 needed revision three days after the bid opening. The decision becomes even more perplexing when the testimony and exhibits reveal that the specifications had been revised between this year's bid and the previous year's contract award.

    
    

20. There is sufficient evidence before the Hearing Officer to conclude that the rejection of all bids in Bid NO. 3996 was arbitrary and capricious. The integrity of the competitive bidding process in the award of public contracts requires that NAPLES not be discriminated against. The company has a right to fair consideration of its offer, and is guaranteed the contract as its bid was the lowest and best bid received. Hotel China and Glassware Co. Therefore, the BOARD cannot reject all bids without cause. As the evidence presented at hearing did not reasonably tend to support the conclusions reached

by the BOARD, there was not a sufficient basis for the rejection of all Bids in Bid NO. 3996. City of Pensacola v. Kirby, 47 So2 533 (Fla. 1950).

RECOMMENDATION

Based on the foregoing, it is RECOMMENDED:

1. That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders.

   
   

2. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES.

DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida.

VERONICA D. DONNELLY

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 30th day of March, 1988.

COPIES FURNISHED:

Stephen Emens, President Naples Business Equipment

and Systems, Inc. 859 4th Avenue South Naples, Florida 33940

Harry A. Blair, Esquire 2138-40 Hoople Street

Ft. Myers, Florida 33901

Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard

Cape Coral, Florida 33904

Karl Engel, Superintendent Lee County Public Schools

The School Board of Lee County 2055 Central Avenue

Fort Myers, Florida 33901

Docket for Case No: 88-000690BID

Orders for Case No: 88-000690BID