STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PALM BEACH GROUP, INC., )

)

Petitioner. )

)

vs. ) CASE NO. 88-2781BID

) DEPARTMENT OF INSURANCE AND ) TREASURER )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Bearing Officer, William J. Kendrick, held a public hearing in the above-styled case on June 20, 1988, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Duncan J. Farmer, Esquire

Moore, Farmer, Menkhaus & Juran, P.A. 5550 Glades Road Suite 400

Boca Raton, Florida 33431

For Respondent: Sharon N. Goldstein, Esquire

Office of Legal Services Department of Insurance 413-B Larson Building

Tallahassee, Florida 32399-0300 PRELIMINARY STATEMENT

These proceedings arose as a result of an invitation to bid (ITB) issued by Respondent, Department of Insurance and Treasurer (Department), whereby the Department sought a 12-month term contract for the purchase of Unisys personal computers, peripheral equipment and accessories. The Department proposed to award the contract to Unisys Corporation, and Petitioner, Palm Beach Group, Inc.

, protested the award.

At final hearing, petitioner called Richard Dea as a witness, and its exhibits 1-4 were received into evidence. Petitioner also offered exhibit 5, which is rejected as not relevant or material.

The Respondent called as witnesses: Ina Boykin, Bruce C. Brown, and H. P. Barker, Jr., accepted as an expert in the procurement of government contracts. Respondent offered no exhibits.

The parties were granted leave until June 22, 1988, to file proposed findings of fact. The respondent elected to file proposed findings of fact and they have been addressed in the appendix to this recommended order.

FINDINGS OF FACT

Background

1. On May 6, 1988, Respondent, Department of Insurance and Treasurer (Department), issued an invitation to bid (ITB), numbered DIT-87/88-26, whereby it sought to establish a 12-month germ contract for the purchase of Unisys personal computers, peripheral equipment and accessories.

   
   

2. On May 9, 1988, Petitioner, Palm Beach Group, Inc., requested a copy of the ITB from the Department, and was mailed a copy of the ITB that day. Petitioner received its copy of the ITB on May 14, 1988, and filed its bid with the Department on May 19, 1988.

   
   

3. By May 20, 1988, the bid opening date, three bids had been filed with the Department. Pertinent to this case are the bids of Unisys Corporation, which bid total unit prices of 140,792.00, and petitioner, which bid total unit prices of 16, 753.002

   
   

4. On May 23, 1988, the bid results were posted by the Department. The bid results revealed that the bid of petitioner had been rejected as nonresponsive to the ITB because it did not include page 13 of the ITB, and therefore did not include a bid on the 14 items listed on that page of the ITB. The bid results further revealed that the Department proposed to award the contract to Unisys Corporation.

   
   

5. Petitioner timely filed its notice of protest and formal protest with the Department.

   
   

6. On May 24, 1988, petitioner submitted to the Department page 13 of its bid, and proposed to supply the 14 items listed on that page at "no charge."

   
   

   The bid documents

   
   

7. The ITB consisted of 18 consecutively numbered pages. Page 1 included the bidder acknowledgment form an some of the general conditions of the bid. Page 2 Included the remainder of the general conditions. Notably, page 1 of the ITB conspicuously provided that it was "Page 1 of 18 pages."

   
   

8. Pertinent to this case, the ITB contained the following general conditions:

   
   

   SEALED BIDS: All bid sheets and this form must be executed and submitted in a sealed envelope....Bids not submitted

   on attached bid form shall be rejected. All bids are subject to the condition specified herein. Those which do not comply with these conditions are subject to rejection.

   * * *

   1. BID OPENING:...It is the bidder's responsibility to assure that his bid is delivered at the proper time and place of the bid opening. Bids which for any

      reason are not so delivered will not be considered....A bid may not be altered after opening of the bids...

   2. PRICES, TERMS, AND PAYMENT

* * *

(c) MISTAKES: Bidders are expected to examine the specifications,

delivery schedule, bid prices, extensions and all instructions pertaining to supplies and services. Failure to do so will be at a bidder's risk....

1. INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No Interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Any actual or prospective bidder who disputes the reasonableness necessity or competitiveness of the terms and conditions of the Invitation to bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006 Florida Administrative Code. Fail to file a protest within

   the time prescribed in Section 120.53(5), Florida statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes.

   
   

   NOTE

   ANY AND ALL SPECIAL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH

   VARY FRONT THESE SPECIAL CONDITIONS SHALL HAVE PRECEDENCE.

   
   

   ATTACHMENTS:

   1. Special Conditions-Page 3

   2. Bid sheets-pages 4-16

   3. Minority Certification-Page 17

   4. Attachment to all bids, etc.-page 18

   
   

2. Among the special conditions which appeared on page 3 of the ITB were the following

   
   

   1. The purpose of this bid is to obtain competitive prices per unit for the purchase of UNISYS personal

      computers, peripheral equipment and

      accessories for the Department of Insurance.

      * * *

      1. No substitutes or equivalents will be acceptable to the Department.

      2. The bid shall be awarded on an "all or none" basis using the low total

      bid price comprised of the total of all sections.

      
      

3. Following the special conditions of the ITB appeared the bid sheets; pages 4-16 of the ITB. These sheets were divided into 10 sections: processors, displays, display controllers, keyboards, diskette drive, hard disk drives, memory, operating systems, miscellaneous devices, and lan options. Under each section the Department listed by part number and description the items that must be bid.

   
   

4. The last page of the bid sheets, page 16, provided space to total the prices bid on sections 1-10. Notably, the following language appeared at the bottom of page 16:

   
   

   NOTE. RETURN ENTIRE UNIT PRICING, SECTION 1 THRU 10, PAGE 4 THRU 15 WITH THIS BID SHEET FOR EVALUATION AND AWARD PURPOSES.

   
   

5. Petitioner did not protest the bid specifications or conditions within

   72 hours after receipt of the ITB, nor did it raise any question or seek any interpretation of the conditions or specifications.

   
   

   The bid protest

   
   

6. At hearing, petitioner contended that it should be excused for failing to include page 13 of the ITB in its bid and to bid those items, because such page was not included In the ITB forwarded to it by the Department or, alternatively, that its to include page 13 and to bid those items was a minor irregularity that could be cured by its submittal, after bid opening, of page 13 with an offer to supply the items on that page at "no charge." Petitioner's contentions and the proof offered to support them are not persuasive.

   
   

7. First, the proof failed to establish that page 13 was not included in the ITB forwarded to the petitioner. Second, there was no ambiguity in the ITB. Rather, the ITB clearly provided as discussed supra, that the bid sheets consisted of pages 4-16, and that the bid sheets must be submitted to the Department for evaluation and award purposes. Under such circumstances, even if page 13 had been missing from the ITB forwarded to the petitioner, petitioner can not be excused for its failure to include page 13 and to bid the items on that page, and the Department's invalidation of petitioner's bid for such failure cannot be deemed arbitrary, capricious, or an abuse of discretion.

   
   

   A minor irregularity?

   
   

8. Minor irregularity is defined by Rule 13A-1.002(10), Florida Administrative Code, as:

   
   

   ...a variation from the invitation

   to bid... which does not affect the price

   of the bid..., or give the bidder... an advantage or benefit not enjoyed by other bidders..., or does not adversely impact the interests of the agency.

   Variations which are not minor can not be waived.

   
   

9. The items listed on page 13 of the ITB were an integral part of this bid, which was to be awarded on an "all or none" basis. Under such circumstances, the deficiency cannot be deemed minor, because it could affect the price of the bid or give petitioner an advantage not enjoyed by other bidders. Succinctly, petitioner could revisit its bid after the bids had been made public and, considering how badly it wanted the contract, bid or not bid the omitted items. If it elected not to bid the items, petitioner could effectively disqualify itself and withdraw its bid. The other bidders who timely submitted their bids would not have an opportunity to revisit their bids to the Items listed on page 13 or to withdraw their bids, but would be held to the provision of the ITB that prohibited such withdrawal for 45 days after bid opening.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

11. As the party challenging the agency's decision to reject its bid, petitioner carried the burden of demonstrating that the agency's action was arbitrary and capricious, or was otherwise improper. See: Capeletti Bros., Inc.

    v. State, Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983). To do this, the challenger must show that the agency was not "proceeding rationally within the bounds of discretion," Couch Construction Co., Inc. v. Department of Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978).

    
    

12. It is well-established that the responsiveness of a bid is determined as of the time the bids are made public Rule 13A-1.001(13), Florida Administrative Code, and a bidder may not change its bid or any provisions therein, after the bids have been opened, except to cure minor irregularities, Harry Pepper & Assoc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977) and Rule 13A-1.002(10), Florida Administrative Code.

    
    

13. Rule 13A-1.002(10), Florida Administrative Code, addresses the issue of minor irregularities a bid as follows:

    
    

    The agency shall reserve the right

    to waive any minor irregularities in an otherwise valid bid....A minor irregularity is a variation from the invitation to bid...which does not affect the price of the bid..., or give the bidder...an advantage or benefit not enjoyed by other bidders..., or does not adversely impact the interests of the agency. Variations which are not minor can not be waived.

    
    

14. Since petitioner's failure to bid the items listed on page 13 of the ITB was a variation from the ITB that could, for the reasons set forth in the

    findings of fact, affect the price of the bid or give it an advantage not

    `enjoyed by other bidders, it is not a minor irregularity, and can not be cured after the bid opening. Harry Pepper & Assoc. v. City of Cape Coral supra, and Saxon Business Products; Inc. v. Department of General Services, 4 FALR 1102-A (1982)

    
    

15. Applying the foregoing principles and findings, is concluded that petitioner has failed to sustain its burden of proving that the agency acted arbitrarily, capriciously or otherwise improperly in rejecting petitioner's bad Indeed, the record demonstrates that, given the deficiency in petitioner's bid, the agency proceeded rationally within the bounds of Its discretion in rejecting the bad and that such rejection was based on facts supporting that decision. Couch Construction Co., Inc., v. Department of Transportation, supra. Once its proposal was submitted, petitioner could not, under the circumstances of this case; change the provisions of its bid to cure its . Harry Pepper & Assoc. v. City of Cape Coral, supra. Therefore, the protest must fail.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the formal protest

filed by Palm Beach Group, Inc.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1988.

WILLIAM J. KENDRICK

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 24th day of June, 1988.

ENDNOTE

1/ Petitioner is a Florida corporation whose offices are located at 7301-A West Palmetto Park Road, #300, Boca Raton, Florida 33433.

2/ The third bidder was American Computer Industries, Inc. Its bid was rejected as not responsive to the ITB.

3/ The evils sought to be avoided by prohibiting the amendment of bids after the bid opening are particularly apparent in the instant case. Here, after the bids had been made public, petitioner evaluated the items on page 13 and made a "business decision" to "no charge" those items because it believed the Department would not order them. Conversely, petitioner conceded that its "decision" to "no charge" the items would have been different had it concluded that the Department would have ordered a substantial number of such items. Were

petitioner permitted to revisit its bid under such circumstances, it would enjoy a distinct advantage not enjoyed by other bidders since it could decide whether and at what price to bid the omitted items, and qualify or disqualify its own bid. The other bidders would not, however, be accorded the same opportunities.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-2781BID

The Department's proposed findings of fact are addressed as follows:

1. Addressed in footnote 1.

2-5. Addressed in paragraph 2.

6-8 & 10. To the extent pertinent, addressed in paragraphs 3, 4 and 6.

Otherwise rejected as not necessary to result reached.

9. Addressed in paragraph 13.

1. Addressed in paragraph 6.

2. Addressed in paragraph 5.

3. Addressed in paragraph 8.

4. Addressed in paragraphs 9 and 11.

5. Addressed in paragraph 8.

6. Addressed in paragraph 12.

17-18. Addressed in paragraph 13.

19-22. Addressed in paragraph 14.

23-29. Addressed in paragraphs 15, 16, and footnote 3.

COPIES FURNISHED:

Duncan J. Farmer, Esquire MOOR, FARMER, MENKHAUS

& JURAN, P.A.

5550 Glades Road, Suite 400 Boca Raton, Florida 33431

Charles R. Holman, Jr., Esquire Regional Counsel

Unisys Corporation Law Department 4151 Ashford

Dunwoody Road, N.E. Atlanta, Georgia 30319

Don Dowdell, Esquire General Counsel State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-033

Sharon N. Goldstein, Esquire Office of Legal Services

413-B Larson Building Tallahassee, Florida 32399-0300

Unisys Corporation

1545 Raymond Diehl Road Tallahassee, Florida 32308

The Honorable William Gunter State Treasurer and

Insurance Commissioner The Capitol, Plaza Level

Tallahassee, Florida 32399-0300

Docket for Case No: 88-002781BID

Orders for Case No: 88-002781BID