STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DICKERSON FLORIDA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-6296BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William J. Kendrick, held a formal hearing in the above-styled case on January 3, 1989, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Robert N. Ervin, Esquire

Wilfred C. Varn, Esquire Ervin, Varn, Jacobs, Odom

& Ervin

305 Gadsden Street Tallahassee, Florida 32301

For Respondent: J. Marleen Ahearn, Esquire

Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32399-0458

PRELIMINARY STATEMENT

These proceedings arose as a result of an invitation to bid (ITB) issued by Respondent, Department of Transportation (Department), for road work on SR-76 (Kanner Highway) in Martin County, Florida (State Project No. 89060-3523). The Department proposed to reject the bid of petitioner, Dickerson Florida, Inc. (Dickerson), the apparent low bidder, as non-responsive for failure to achieve the disadvantaged business enterprise (DBE) goal, and to award the contract to Ranger Construction Industries, Inc. (Ranger), the next apparent low bidder.

Dickerson protested the Department's proposed action.

At final hearing, Dickerson called as witnesses: James R. Widmann, John

1. Barfield, and Dennis F. Davis. Dickerson's exhibits 1-17 were received into evidence. The Department called as witnesses: Donnie Alford, Brant L. Hargrove, Aldric Borders Keith O. Pitchford, and Thomas Kindred. The Department's exhibits 1 and 2 were received into evidence.

   The transcript of hearing was filed January 18, 1989, and the parties were granted leave until January 30, 1989, to file proposed findings of fact. The parties' proposals have been addressed in the appendix to this recommended order.

   
   

   FINDINGS OF FACT

   
   

   Background

   
   

   1. In September 1988, Respondent, Department of Transportation (Department), issued an invitation to bid (ITB), State Project NO. 89 060-3523, for road work on SR-76 (Kanner Highway) in Martin County, Florida. By October 26, 1988, the bid opening date, four bids had been filed with the Department.

      
      

   2. On December 5, 1988, the bid results were posted by the Department. The bid results revealed that Petitioner, Dickerson Florida, Inc. (Dickerson), was the lowest bidder at $1,057,464.71 and that Ranger Construction Industries, Inc. (Ranger) at $1,145,177.61 was the second lowest bidder. The bid results further revealed that the bid of Dickerson had been rejected as non-responsive because it purportedly did not achieve the disadvantaged business enterprise (DBE) goal of 12 percent established by the ITB, and that the Department proposed to award the contract to Ranger.

      
      

   3. Dickerson timely filed a written notice of protest and formal written protest contesting the Department's decision, and the matter was referred to the Division of Administrative Hearings for formal hearing.

      
      

      The Bid Documents

   4. Pertinent to this case, the ITB contained the following provisions: SPECIAL PROVISIONS

      DISADVANTAGED BUSINESS ENTERPRISES

      
      

      2-5.3.2 Submittals for Contracts with Goals:

      
      

      For all contracts for which DBE contract goals have been established, each contractor shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the

      Department. The DBE participation information shall be submitted with the Contractor's bid proposal. Award of the Contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals.

      
      

      The Contractor's bid submission shall

      include the following information (Submitted on Forms Nos. 275-020-002-DBE Utilization

      Affirmative Action Certification, 275-020-003- DBE Utilization Summary and 275-020-004-DBE Utilization Form):

      
      

      1. The names and addresses of certified DBE firms that will participate in the contract. Only DBEs certified by the Department at the time the bid is submitted may be counted toward DBE goals.

      2. A description of the work each named DBE firm will perform.

      3. The dollar amount of participation by each named DBE firm.

      4. If the DBE goal is not met, suffi- cient information to demonstrate that the contractor made good faith efforts to meet the goals. (Emphasis added)

         
         

   5. Accompanying the ITB were three DBE utilization forms which, pertinent to this case, provided the vehicle for complying with the foregoing special provisions, and which the bidder was required to complete and include in its bid. Among these was form 275-020-004, the DBE Utilization Form, which required, consistent with the special provisions, that the bidder provide the name, address, and telephone number of the DBE subcontractor, as well as the item number and description of the work the subcontractor was to perform. One utilization form, signed by the bidder (prime contractor), was to be submitted for each DBE utilized on the project. Significantly, the utilization form to be signed by the bidder contained the following provision:

      
      

      (Signature and submission with the prime contractor's bid signifies acceptance of the quote and an obligation to subcontract the work to the DBE as indicated).

      
      

   6. The other two DBE utilization forms that were to be included in the bid were form 275-020-003, the DBE Utilization Summary, and form 275-020-002, the DBE Utilization Affirmative Action Certification. The DBE Utilization Summary provided the vehicle for the bidder to submit the dollar amount of participation by each DBE firm, and to derive a DBE percentage participation for the total project. It also requested that the bidder provide the following information:

      
      

      Number of DBE Utilization Forms attached NOTE: Sign and attach all Utilization

      Forms which you are using toward the DBE goal.

      
      

      By submittal of the DBE Utilization Form and the DBE Utilization Summary, the bidder could comply with the special provisions of the ITB regarding DBE utilization.

   7. The final DBE utilization form that was to be included in the bid, the DBE Utilization Affirmative Action Certification, required the bidder to certify the existence of an approved DBE Affirmative Action Program Plan or that it was submitting a plan for approval with its bid. The certification form, which was to be signed by the bidder, contained the following conspicuous notation:

      
      

      The Florida Department of Transportation requires the Disadvantaged Business Enterprise Utilization Form(s) to accompany the bid documents....

      FAILURE TO SUBMIT THE DISADVANTAGED BUSINESS ENTERPRISE UTILIZATION FORM(S) REFLECTING FULL COMPLIANCE WITH THE CONTRACT GOAL, OR IF THE DISADVANTAGED BUSINESS ENTERPRISE UTILIZATION FORM(S) DO NOT REFLECT FULL COMPLIANCE WITH THE CONTRACT GOAL, FAILURE TO SUBMIT SUFFICIENT DOCUMENTATION TO DEMONSTRATE GOOD FAITH EFFORTS TO MEET THE GOAL WILL BE JUST CAUSE TO CONSIDER THE BID NONRESPONSIVE AND TO REJECT THE BID. THESE DOCUMENTS MUST BE SUBMITTED WITH THE BID PROPOSAL.

      
      

      Dickerson's Bid

      
      

   8. The bid submitted by Dickerson included the DBE Utilization Affirmative Action Plan Certification and a DBE Utilization Summary evidencing a DBE percentage participation for the total project of 13.39 percent. As submitted, the utiliza- tion summary listed Dickerson's DBE subcontractors and the amount of their participation as follows:

      
      

      A. Highway Valets, Inc.	--	$ 6,473.35
      B. Temple's Heavy Hauling	--	$44,536.25
      C. Highway Valets, Inc.	--	$ 6,730.00
      D. Pary, Inc.	--	$ 5,264.00
      E. Siboney Contracting Co.	--	$45,938.55
      F. Advance Barricades and
      Signing, Inc.	--	$32,599.80

      
      

   9. Accompanying Dickerson's bid were DBE Utilization Forms for Highway Valets, Inc. and Temple's Heavy Hauling, signed by the DBE subcontractor and Dickerson, which contained the item number and description of the work to be performed by those subcontractors, as well as a DBE Utilization Form for Siboney Contracting Company, signed only by Dickerson, which contained the item number and description of the work to be performed by that subcontractor. No DBE Utilization Form was submitted for Pary, Inc. or Advance Barricades and Signing, Inc., and Dickerson's bid contained no information to demonstrate the item number or work those firms were to perform on the project.

      
      

   10. Upon noting the absence of any DBE Utilization Forms for Pary or Advance Barricades, or any other documentation from which the item numbers and work description for these DBE's could be ascertained, the Department reduced the dollar value of Dickerson's DBE participation by the amount allocated to these firms, and recalculated a DBE percentage for Dickerson of 9.8 percent, well below the DBE goal of 12 percent. Thereafter, upon concluding that Dickerson's failure to include the item number and description of the work to be performed by the DBE's was not a minor irregularity that could be waived, discussed infra, and that Dickerson had submitted no documentation with its bid

       to demonstrate that it could not in good faith achieve the goal, the Department proposed to reject Dickerson's bid as non-responsive for its failure to achieve the DBE goal of 12 percent established by the ITB. 1/

       
       

   11. On December 12, 1988, some seven days after the Department posted the bid result, Dickerson submitted to the Department a DBE Utilization Form for Pary and Advance Barricades which contained the item number and description of the work to be performed by those firms. Notably, neither form was signed by Dickerson, as required by the ITB, and the quotation of Advance Barricades was for $53,208, some $20,618.20 more than the participation allotted to that firm in the utilization summary submitted with Dickerson's bid.

       
       

       A Minor Irregularity?

       
       

   12. 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.

       
       

       In the instant case, the proof demonstrated that Dickerson's failure to include a description of the work Pary and Advance Barricades were to perform on the project would adversely affect the interests of the agency.

       
       

   13. The Department has experienced significant problems in the past in its administration of the DBE program, particularly in the reliability of the DBE participations contained in bid documents. The purpose of the special provisions of the ITB, which parrot Rule 14-78.003(2)(b)3, Florida Administrative Code, relating to the name, amount of participation, and work to be performed by the DBE subcontractors are designed to assist the Department in achieving the goals established by the DBE program by increasing the reliability of the bid documents.

       
       

   14. Historically, bids have been submitted to the Department with inflated DBE participations and with the names of DBE's who had never been contacted by the prime contractor to perform any work on the project. Absent a description of the work the DBE subcontractor had agreed to perform, the Department has been frustrated in its efforts to confirm, post bid, that the DBE subcontractor is doing the type and amount of work for which it contracted. Consequently, DBE participation on a project has frequently differed significantly from that stated in the bid documents, and as contemplated by the Department

       
       

   15. By requiring compliance with the special provisions of the ITB, and its rule, the Department essentially forces the solidification of a contract between the prime contractor and the DBE subcontractor, and gains reliability in the DBE participation specified in the bid documents, and achieves a binding commitment that can be verified post bid. Under such circumstances, a bid's failure to include a description of the work a DBE subcontractor is to perform on the project is a variation that would adversely impact the interests of the agency and cannot be waived.

       CONCLUSIONS OF LAW

       
       

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

       
       

   17. Section 120.53(5), Florida Statutes, and Rule 14- 25.024(1), Florida Administrative Code, establish specific procedures to protest a bid solicitation requirement. The proper procedure for contesting the special provisions of the ITB that required the bidder to include a description of the work each named DBE firm was to perform on the project as part of its bid, as well as the provision that failure to include such a description would result in disqualification of the bid, was by filing a bid solicitation protest prior to the date the bids were to be received. Rule 14-25.024(1), Florida Administrative Code. Since Dickerson did not file a timely protest of the ITB, it has waived its right to a Chapter 120 proceeding to contest the propriety of these provisions. Section 120.53(5), Florida Statutes, and Capeletti Bros., Inc. v. Department of Transportation, 499 So.2d 855 (Fla. 1st DCA 1986). 2/

       
       

   18. Notwithstanding its waiver of any right to protest the propriety of these provisions, Dickerson contended at hearing that its bid was responsive to the ITB even though it did not include a description of the work to be performed by Pary and Advance Barricades. The gravamen of Dickerson's contention is that by naming Pary and Advance Barricades on its Utilization Summary, along with the dollar amount of their participation, it had submitted a "quotation" to the Department that conformed with existing law, and that any rule or ITB requirement that its bid include a description of the work these subcontractors were to perform was unenforceable.

       
       

   19. Pertinent to this case are the provisions of Section 337.125, Florida Statutes, and Rule 14-78.003(2)(b)3, Florida Administrative Code. Section

       337.125 provides:

       
       

       1. Any form documenting the utilization of certified socially and economically

       disadvantaged business enterprises by a prime contractor shall be signed by the socially and economically disadvantaged business enterprise and the prime contractor. In lieu thereof, the prime contractor shall submit the written or oral quotation of the socially and economically disadvantaged business enterprise, and the department shall confirm the contents of the submission by contacting the socially and economically disadvantaged enterprise.

       
       

       1. The department shall promulgate rules for implementing the directives contained in this section.

          
          

          Implementing section 337.125 is Rule 14-78.003(2)(b)3, Florida Administrative Code. That rule provides:

          
          

          For all contracts for which DBE contract

          goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE

          participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected.

          1. The contractor's bid submission shall include the following information:

             1. The current names, telephone numbers, and addresses of certified DBE firms that will participate in the contract;

             2. A description of the work each named DBE firm will perform;

             3. The dollar amount or participation by each named DBE firm;

             4. Any documentation required by the contract or applicable rules as evidence of DBE participation.

             5. If the DBE goal is not met, suffi- cient information to demonstrate that the

             contractor made good faith efforts to meet the goals.

          2. In order to count the DBE subcontract amount toward the DBE goal, the documents confirming utilization shall be signed by both a representative of the DBE firm and the prime contractor. In lieu thereof, the prime contractor shall submit the quotation and the Department will attempt to confirm the contents of the submission by contacting the DBE firm by telephone or by certified letter, return receipt requested, within two workdays after the date of the letting. (Emphasis added)

       
       

   20. Dickerson contends that its inclusion of the names of Pary and Advance Barricades, along with the dollar amount of their participation, on its Utilization Summary constituted the submission of an "oral quotation" of a DBE which, pursuant to section 337.125, Florida Statutes, the Department was obligated to confirm. So reasoning, Dickerson contends it was not obligated to submit a description of the work the subcontractors were to perform, and that any ITB requirement or rule to the contrary is unenforceable. Dickerson's contention is unpersuasive.

       
       

   21. Contrary to Dickerson's contention, there are no inconsistencies between the statute and the rule. The term "quotation" is not defined by section 337.125, and is therefore to be accorded its commonly accepted meaning. See e.g. Gardner v. Johnson, 451 So.2d 477 (Fla. 1984). In commerce, a "quotation" or "quote" is to state the price of something. Webster's New Twentieth Century Dictionary, Unabridged, Second Edition, 1979. By requiring the bidder to submit with its bid a description of the work each DBE subcontractor is to perform and the dollar amount of participation by each DBE

       subcontractor, the rule is therefore consistent with the statute it implements because it requires the submittal of a "quotation."

       
       

   22. Dickerson's failure to include a description of the work Pary and Advanced Barricades were to perform on the project, an essential element of any quotation, compels the conclusion that it failed to submit a "quotation". Under the circumstances, the Department had no "quotation" to confirm, and it properly excluded Pary and Advanced Barricades when computing Dickerson's DBE participation. Rule 14-78.003(2)(b)3, Florida Administrative Code.

       
       

   23. In reaching this conclusion I have not overlooked the fact that the Department could have called the subcontractors and, perhaps, ascertained from them what work they had agreed to perform on the project for the stated price. It is not, however, the Department's obligation to compile quotations, but to confirm them. It is the bidder's obligation to submit a binding quotation that is capable of verification.

       
       

   24. Dickerson further contends that its failure to include a description of the work the subcontractors were to perform was a minor irregularity that should be waived by the Department. Again, Dickerson's contentions are not persuasive.

       
       

   25. Rule 13A-1.002(10), Florida Administrative Code, addresses the issue of minor irregularities in 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 cannot be waived.

       
       

   26. Since Dickerson's failure to include a description of the work to be performed by the DBE subcontractors was a variation from the ITB that could, for the reasons set forth in the findings of fact, adversely impact the interests of the agency, such failure is not a minor irregularity and is not subject to waiver.

       
       

   27. Dickerson's attempt to "supplement" its bid after the bid opening did not and cannot cure its failure to comply with the ITB. Rule 13A-1.001(13), Florida Administrative Code, provides:

Valid Bid/Proposal - a responsive offer in full compliance with the bid/proposal specifications and conditions by a responsible person or firm. The responsiveness of the bid ... will be determined as of the time the bids/proposals are made public. (Emphasis added).

See: Palm Beach Group v. Department of Insurance and Treasurer, 10 FALR 5627 (1988)

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 Dickerson Florida, Inc.

DONE and ENTERED in Tallahassee, Leon County, Florida, this 17th day of February, 1989.

WILLIAM J. KENDRICK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of February, 1989.

ENDNOTES

1/ The Department has in place a multi-stage review process to evaluate the responsiveness of bids. After the bids are opened, the DBE certification coordinator determines whether the DBE goal has been obtained. To ascertain whether the DBE goal has been met, the coordinator reviews the Utilization Summary to ascertain the dollar participation of each DBE subcontractor and the relationship the total DBE participation bears to the bid price. The coordinator then reviews the DBE Utilization Form or equivalent documentation to assure that the prime contractor and the DBE subcontractor have agreed to the work to be performed for the price indicated on the Utilization Summary. If any of the DBE utilization forms have not been signed by the DBE, the coordinator will contact the DBE to confirm that it has agreed to perform the work indicated at the stated price. Where, as here, the bid contains no utilization form or equivalent documentation to delineate the work the subcontractor is to perform, the coordinator does not contact the DBE because there is no quotation or agreement accompanying the bid which can be confirmed, recalculates the DBE participation without such DBE firms and ascertains whether the bid then meets the DBE goal. If it does not meet the DBE goal, as recalculated, the coordinator refers the matter to the Good Faith Efforts Review Committee to ascertain whether the bid contains documentation to excuse the bidder's failure to meet the DBE goal. Here that committee found no such documentation, recommended that the bid be declared non- responsive, and referred the matter to the Technical Review Committee to ascertain whether Dickerson's failure to include the DBE utilization forms or equivalent documentation for Pary and Advance Barricades was a minor irregularity that could be waived. The Technical Review Committee concluded, for reasons discussed in further findings of fact, that such failure was not a minor irregularity and could not be waived. On review of the work performed by the Good Faith Efforts Committee, the Contract Award Committee agreed with their conclusions and declared the bid of Dickerson to be non-responsive for failure to meet the DBE goal.

2/ Although Dickerson's formal protest did not raise the issue, it did raise at hearing the constitutionality of those portions of Chapter 337, Florida Statutes, relating to DBE participation goals or quotas. Since jurisdiction to determine the validity of a state statute under either the United States Constitution or the Constitution of the State of Florida is not vested in the Division of Administrative Hearings, that issue will not be resolved by this order, nor will the timeliness of Dickerson's contention be addressed.

APPENDIX

Dickerson's proposed findings of fact are addressed as follows: 1-3. Addressed in paragraph 1.

4-5. Addressed in paragraph 2.

6-9. Addressed in paragraph 10 and footnote 1.

1. Addressed in paragraph 2.

2. To the extent necessary, addressed in paragraph 3.

12 Addressed in paragraph 8.

1. Addressed in paragraphs 8 and 9.

2. Addressed in paragraph 10 and footnote 1.

3. Addressed in paragraph 11.

4. To the extent necessary, addressed in paragraphs 1 and 10.

5. Accepted, but not necessary to result reached.

6. Not relevant.

7. Not relevant.

8. Addressed in footnote 1.

9. Not relevant. Dickerson was accorded a Section 120.57(1), Florida Statutes, hearing.

10. To the extent pertinent, addressed in paragraphs 4-7, and 12-15.

11. To the extent pertinent, addressed in paragraph

    7. Otherwise rejected as not relevant.

12. Addressed in paragraph 3.

The Department's proposed findings of fact are addressed as follows: 1-3. Addressed in paragraphs 1 and 2.

4-7. Addressed in paragraph 10 and footnote 1.

1. Addressed in paragraph 9.

2. Addressed in paragraph 5.

3. To the extent pertinent, addressed in paragraphs 4-9.

4. Addressed in paragraphs 12-15. 12-13. Addressed in paragraphs 4-7. 14-15. Addressed in paragraph 10.

1. Addressed in paragraphs 10, 12-15 and footnote 1.

2. Not necessary to result reached or not relevant.

3. Not relevant.

COPIES FURNISHED:

ROBERT M. ERVIN, ESQUIRE WILFRED C. VARN, ESQUIRE ERVIN, VARN, JACOBS, ODOM

& ERVIN

305 GADSDEN STREET TALLAHASSEE, FLORIDA 32301

J. MARLEEN AHEARN, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 605 SUWANNEE STREET TALLAHASSEE, FLORIDA 32399-0458

KAYE N. HENDERSON, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 605 SUWANNEE STREET

TALLAHASSEE, FLORIDA 32399-0458

THOMAS H. BATEMAN, III, ESQUIRE GENERAL COUNSEL

DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 605 SUWANNEE STREET

TALLAHASSEE, FLORIDA 32399-0458

Docket for Case No: 88-006296BID

Orders for Case No: 88-006296BID