STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KELLY SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 88-3768BID

)

SCHOOL BOARD OF BAY COUNTY, )

)

Respondent, )

and )

)

ARGUS SERVICES, INC., and )

M&O SANITATION, INC., )

)

Intervenors. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on August 12, 1988, in Panama City, Florida, before the Division of Administrative Hearings,, by its designated Hearing Officer, Diane K. Kiesling.

APPEARANCES

For Petitioner: Jeffrey P. Whitton

Attorney at Law

Post Office Box 1956 Panama City, Florida 32402

For Respondent: Franklin R. Harrison

Attorney at Law

304 Magnolia Avenue

Panama City, Florida 32401

For Intervenor,

Argus Services, Inc.: Scott W. Clemons

Attorney at Law Post Office Box 860

Panama City, Florida 32402

For Intervenor,

M&O Sanitation, Inc.: No Appearance

ISSUE

The issue is whether Kelly Services is the lowest responsive bidder on Bid No. 89-23 and should be awarded the bid.

BACKGROUND AND PROCEDURAL MATTERS

At formal hearing, a Petition to Intervene was filed by Argus Services, Inc., (Argus) and a Motion to Intervene was filed by M&O Sanitation, Inc., (M&O). Both requests ware granted. M&O was not represented by an attorney or a qualified representative and no officer or stockholder of the corporation was present at the hearing. Accordingly, M&O was not permitted to participate in the hearing.

Kelly services presented the testimony of John Harrison and Robert Wilson.

The school Board of Bay County (The Board) presented the testimony of John Harrison. Argus presented the testimony of G. E. Webb. Joint Exhibits 1 and 2 were admitted in evidence.

Proposed findings of fact and conclusions of law were timely filed by all parties except M&O. All proposed findings of fact and conclusions of law have been considered. A specific ruling on each proposed finding of fact has been made in the Appendix attached hereto and made a part of this Recommended Order.

FINDINGS OF FACT

1. On June 2, 1988, the School Board of Bay County issued Bid Request No. 89-23 for garbage collection services at thirteen locations. A quotation sheet was included in the bid package. The quotation sheet indicated the thirteen locations with a blank next to each location and a dollar sign in front of each blank where each bidder was to indicate its average monthly total charge for each location. There was also a quotation schedule where the bidder was to indicate the calculations which went into the total bid for each location.

   
   

2. The bid request provided:

   
   

   The Board reserves the right to waive formalities and to reject any and all bids or to accept any bid or combination of bids deemed in the Board's best interest and the decision of the Board will be final. Bidders desiring that their bid be considered on an all-or-none basis, either in whole or part, shall so indicate.

   
   

   It is the intent of this bid request to secure prices and establish contracts for garbage collection services for the twelve schools specified herein and the District Maintenance Department. Awards will be made by location and will be based on an average monthly total charge as calculated on the quotation sheet.

   
   

3. The bids were opened at 10:00 am., June 13, 1988, at the offices of the Bay County School Board. Three completed bid packages were submitted. Kelly Services, Argus and M&O each submitted a completed bid quotation sheet containing the bid for each location. M&O also submitted a letter which stated:

   
   

   We would like to submit this bid on an all- or-nothing basis as specified in paragraph

   four of the cover letter to the bid. For an estimated cost of $3,391.84.

   
   

4. The quotation sheet and quotation schedule submitted by M&O did not reflect the all-or-nothing bid amount. Instead, the quotation sheet and quotation schedule showed a total bid of $3,738.24 when calculated by location.

   
   

5. Based on the bids submitted by each bidder as shown on the quotation sheet add quotation schedules, Kelly Services was low bidder on five locations (Callaway, Tyndall, Waller, Southport, and Cedar Grove) ; Argus was low bidder on six locations (Parker, Hiland, Haney, Mosley, Beach and Merritt Brown); and M&O was low bidder on two locations (West Bay and the District Maintenance Department).

   
   

6. Prior to the deadline for submitting bids, John Harrison, Purchasing Agent for the Board, responded to an inquiry from M&O by advising M&O that it could submit two bids, one as specified in the Bid Request by location and one as an all-or- nothing bid. No other bidders were advised that they could submit two bids.

   
   

7. At the bid opening, M&O did not submit a quotation sheet or schedule for its all-or-nothing bid.

   
   

8. A bid which did not have a breakdown per dump per container per facility would not be acceptable to the Board and does not meet the specifications in the Bid Request. The breakdown per dump per container per location is necessary to verify proper invoicing for specific locations on months when there is a change in the number of dumps or containers at that location.

   
   

9. After opening the bids, the Board compiled the low bid for each location and then totaled that list. That total of $3,606.09 was greater than the all-or-nothing bid by M&O.

   
   

10. Because M&O's all-or-nothing bid failed to meet the specifications by not having a location breakdown the Board contacted M&O to determine if its "estimated" bid was firm and to request a breakdown on the quotation schedule form for the all- or-nothing bid.

    
    

11. On June 15, 1988, two days after the bid opening, M&O submitted a letter to the Board clarifying that its all-or- nothing bid was a firm bid for each location and M&O submitted a quotation schedule for each location per dump per container (see page 7 of Joint Exhibit 1 and the last page of Joint Exhibit 2). The charge for each location in this quotation schedule is different than the quotation schedule submitted by M&O at the bid opening and is for the most part lower per location than either M&O's first quotation schedule or the low bids taken from the quotation schedules submitted at the bid opening.

    
    

12. Based on the letter and all-or-nothing quotation schedule filed by M&O on June 15, 1988, the Board determined to award the bid for garbage collection services to M&O for the all- or-nothing bid of $3,391.84.

    
    

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction of the parties to and subject matter of these proceedings. Section 120.57(1), Florida Statutes.

14. The purpose of the bidding process is set forth in the seminal case, Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (1931):

    
    

    [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.

    
    

    Quoted with approval in Harry Pepper & Associates, Inc., et al v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 1st DCA 1977), rehearing denied Dec. 16, 1977,

    and Jan. 5, 1978.

    
    

15. It is well settled that in order to insure the desired competitiveness, "a bidder cannot be permitted to change his bid after the bids have been opened, except to cure minor irregularities. Harry Pepper, supra at page 1192.

    
    

    The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by the other bidders.

    
    

    Id at 1193. See also Tropabest Foods, Inc., v. State Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986), and Robinson Electrical Co., Inc.,

    v. Dade County, 417 So.2d 1032 (Fla. 3rd DCA 1982).

    
    

16. In this context, it is ineluctably clear that M&O was permitted to change its bid after the bids were opened and that the changes that were permitted gave M&O an advantage or benefit not enjoyed by the other bidders. The deviation between M&O's original bid and the bid which was ultimately accepted by the Board is material and affects the amount of the bid. In fact, M&O's all-or-nothing bid submitted on June 13, 1988, was unacceptable and did not meet the requirements of the Bid Request because it did not include a firm bid or a quotation schedule. Hence it was unresponsive and should have been rejected. The irregularities in the all-or-nothing bid were material and were not waivable.

    
    

17. The irregularities were the result of ambiguities in the Bid Request. It is unclear from the Bid Request whether two bids can be submitted by each bidder--one per location and one all-or-nothing. Under such circumstances and because one purpose of the bidding process is "to secure the best value for the [Board] at the lowest possible expense," it is most appropriate to reject all bids and relet the Bid Request. In Harry Pepper, supra, the court made clear that when the agency is faced with a substantially nonconforming bid, it has "two proper alternatives: to award the contract to the next lowest bidder who

met the specifications, or to reject all bids and readvertise for new ones." For the reasons mentioned above, the best alternative here is to relet the bid.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that The School Board of Bay County enter a Final Order

rejecting all bids and readvertising the bid request for garbage collection

services as specified in Bid Request No. 89-23.

DONE and ENTERED this 13th day of September, 1988, in Tallahassee, Florida.

DIANE K. KIESLING

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 September, 1988.

APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-3768BID

The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case.

Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Kelly Services:

1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3); 4-6(3); 7-11(7-11); and 12 (9)

Specific Rulings on Proposed Findings of Fact Submitted by Respondent, School Board of Bay County:

1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(2); 3(10&11); and 5(8).

2. Proposed findings of fact 6, 7, and 9 are irrelevant.

3. The first sentence of proposed finding of fact 2 is unsupported by the competent, substantial evidence. The remainder of proposed finding of fact 2 is adopted in substance as modified in Finding of Fact 3.

4. Proposed finding of fact 4 is rejected as being unsupported by the competent, substantial evidence.

5. The last sentence of proposed finding of fact 5 is rejected as being argumentative, conclusory and unsupported by the competent, substantial evidence.

6. Proposed finding of fact 8 is unnecessary.

Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Argus Services, Inc.:

1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1-3); 6-8(5); 9 & 10(6) 11(3); and 12(11).

2. Proposed findings of fact 1 and 5 are unnecessary.

3. Proposed findings of fact 13-17 are rejected as constituting argument and not findings of fact.

School Board of Bay County Post Office Drawer 820

Panama City, Florida 32402-0820

M&O Sanitation, Inc.

266 N. Star Avenue

Panama City, Florida 32404

Docket for Case No: 88-003768BID

Orders for Case No: 88-003768BID