STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PIONEER CONTRACTING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-2862BID

)

BROWARD COMMUNITY COLLEGE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on May 23, 1990, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Eric L. Dauber

Beyer & Dauber, P.A.

2101 West Commercial Boulevard Suite 5300

Fort Lauderdale, Florida 33309

For Respondent: James D. Camp, III, Esquire

Broward Community College

225 E. Las Olas Boulevard

Fort Lauderdale, Florida 33301 STATEMENT OF THE ISSUES

Whether Petitioner's bid was improperly disqualified by Respondent.

PRELIMINARY STATEMENT

Petitioner was the apparent low bidder on a construction project that was let for bids by Respondent. Following its review of all bids, the bid submitted by Petitioner was disqualified by Respondent on three grounds. The first reason cited by Respondent was that Petitioner failed to return the entire Addendum 3 as required. The second reason was that Petitioner did not initial a correction to a quoted price figure. The third reason was that Petitioner did not include the unit price structure as required in Addendum 3. Petitioner contends that all three deficiencies are minor and should be waived by Respondent.

Additionally, Petitioner contends that Respondent's agents told Petitioner's employees that it was not necessary to include the unit price structure as required in Addendum 3, but that the information could be provided later.

Respondent contends that the deficiencies are not minor and that Petitioner's bid was properly disqualified.

At the hearing Petitioner presented the testimony of three witnesses and offered three documentary exhibits which were accepted into evidence.

Respondent presented the testimony of two witnesses and offered three documentary exhibits which were accepted into evidence.

A transcript of the hearing has been filed. Rulings on the proposed findings of fact submitted by the parties may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On February 28, 1990, Respondent issued an invitation to bid (ITB) on a construction project referred to as Florida Atlantic University Modulars. The ITB required a base bid and bids on five alternates to the base project. Each bidder was instructed that it must bid on the base project and on each alternate for its bid proposal to be considered responsive.

   
   

2. On March 19, 1990, Addendum 1 to the ITB was issued to all prospective bidders. This was an informational addendum and advised the date, time, and location of the posting of the award recommendation. Addendum 1 was not required to be returned by the bidder as a part of the response to the ITB.

   
   

3. On March 21, 1990, Addendum 2 to the ITB was issued to all prospective bidders. This was also an informational addendum and advised as to a non- mandatory, pre-bid conference to be held March 27, 1990. Addendum 2 was not required to be returned by the bidder as a part of the response to the ITB.

   
   

4. On March 30, 1990, Addendum 3 to the ITB was issued to all prospective bidders. This addendum advised that the date and time for the bid opening had been changed to April 9, 1990, at 2:00 p.m. Addendum 3 also contained modifications, explanations and corrections to the original drawings and specifications which impacted the cost and scope of the project. Immediately above the signature line on the cover page of Addendum 3 was the following:

   
   

   This document must be returned in it's [sic] entirety with the bid. Please sign below to verify that you have read and understand all the changes.

   
   

5. Item 2 on page ADD-1 of Addendum 3 required each bidder to submit its per unit price structure with its response to the ITB and provided, in pertinent part, as follows:

   
   

   ... The unit price shall not be included in Base Bid. Submit a separate sheet with bid package.

   
   

6. The following instructions are given in Paragraph 1(c) of the Instructions to Bidder:

   
   

   NO ERASURES ARE PERMITTED. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it.

   Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids or corrections not initialed will not be tabulated.

7. The instructions are repeated in Paragraph 1 of the General Conditions of the ITB:

   
   

   1. EXECUTION OF BID: ... No erasures are permitted. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it. Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids, or corrections not initialed will not be tabulated.

      
      

8. The following is contained as part of the Instructions to Bidder:

   
   

   Failure to complete, sign, seal and return the required documents will result in rejection of your bid. Any questions should be directed to Susan Kuzenka, (305) 761-7460, Purchasing Department, Broward Community College. (Emphasis in the original.)

   
   

9. Paragraph 8 of the General Conditions portion of the bid package provided, in pertinent part, as follows:

   
   

   8. AWARDS. As the best interest of Broward Community College may require, the right is reserved to reject any and all bids and to waive any irregularity in bids received ...

   
   

10. On April 9, 1990, Petitioner submitted a bid to Respondent in response to the ITB. Petitioner had received the complete bid package, including all instructions and addenda to the bid package.

    
    

11. At the pre-bid conference held March 27, 1990, an employee of Respondent emphasized to the attendees that it was necessary for the bidders to return Addendum 3 in its entirety. Petitioner did not attend the non-mandatory, pre-bid conference.

    
    

12. The base bid submitted by Petitioner was $1,085,790.00. The base bid of Double E Construction Co., the next low bidder and the bidder to whom Respondent intends to award the contract, was $1,113,300.00. Petitioner's bid for each of the alternates was lower than that of Double E Construction Co.

    
    

13. Petitioner failed to return the entire Addendum 3 as instructed. On page four of the bid package Petitioner acknowledged that it had received Addendum 3, and it signed and returned the cover sheet to Addendum 3 under the language quoted in the foregoing Paragraph 4. Respondent considered this an important requirement because it wanted to prevent a bidder from later claiming that it had not received Addendum 3 or that it had received information different than that contained in Addendum 3.

    
    

14. Petitioner made a correction to its bid for Alternate Number 3 found on page 5 of 13 of Petitioner's bid. Petitioner's bid for this alternate was

    $88,000. In the space for the written amount of the bid, Petitioner's president inserted by hand the words "Eighty-eight Thousand". In the space for the numerical insertion of the bid he initially wrote the sum $125,000 (which was the amount of Petitioner's bid for Alternate 4). He struck through the figure

    $125,000 and wrote above the stricken figure the figure $88,000. He did not initial his change. Respondent has never accepted changes to price quotations

    which were not initialed because it is concerned that uninitialed corrections on bids may result in challenges to the integrity of the bid process and may expose its staff to charges of collusion from a disgruntled bidder.

    
    

15. Pioneer did not include a unit price structure in its bid as required by Addendum 3. The unit price structure is an informational item that is not separately considered by Respondent to determine the lowest bidder on this project. On April 6, 1990, Petitioner's estimator on this bid telephoned Susan Kuzenka regarding the unit price structure sheet to inquire as to the format that should be followed in submitting the unit price structure. Ms. Kuzenka is named in the Instructions to Bidder as the person in Respondent's purchasing department to whom questions about the bid process should be directed. Petitioner's estimator was told that the unit prices would be required to be submitted by the successful bidder at the pre-construction meeting after the bids were opened, but that the unit price structure need not be submitted with the bid. Petitioner's president verified this information on April 9, 1990, prior to the bid opening, during a telephone conference with the project engineer employed by Respondent for this project. In reliance on the information that was supplied by Respondent's agents, Petitioner did not submit its unit price structure sheet with its bid.

    
    

16. Following its examination of all bids, the bid of Petitioner was disqualified on three grounds. The first reason cited by Respondent was that Petitioner failed to return the entire Addendum (3) as required. The second reason was that Petitioner did not initial a correction to a quoted price figure. The third reason was that Petitioner did not include the unit price structure as required in Addendum (3).

    
    

17. Petitioner thereafter timely protested its disqualification and the intended award of the contract to Double E Construction Co. Petitioner contends that the reasons cited by Respondent for its disqualification are minor irregularities that should be waived by Respondent. Additionally, Petitioner contends that the third reason should not disqualify it because Petitioner acted in reliance upon the instructions of Respondent's agents in not submitting the unit price structure along with its bid package. This proceeding followed.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Sections 120.53(5) and 120.57(1), Florida Statutes.

    
    

19. Since Petitioner has conceded that its bid response contained deficiencies, it has the burden of establishing that Respondent's decision to disqualify its bid on the basis of those deficiencies was arbitrary, capricious, or illegal action or that the disqualification violated Respondent's established procedures. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981); Liberty County v. Baxter's Asphalt & Concrete, Inc.,

    421 So. 2d 505 (Fla. 1982); Capeletti Brothers, Inc. v. State Department of General Services, 432 So.2d 1359 (Fla. 1st DCA 1983).

    
    

20. An agency has wide discretion in soliciting and accepting bids, and its decision, if based on an honest exercise of this discretion, will not be overturned even if reasonable persons may differ with the outcome. C. H. Barco Contracting Co. v. State, Dept. of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986); Liberty County, supra.

21. Respondent, in the exercise of its duties, placed a clear requirement on the cover sheet to Addendum 3 that each bidder return the entire addendum as part of the bidder's response to the ITB as modified by Addendum 3. The requirement that each bidder return the entire Addendum 3 was designed to protect the integrity of the bid process by preventing a bidder from later claiming that its bid was based on erroneous or incomplete information. Respondent inserted this requirement to establish with certainty that each bidder received Addendum 3 and to establish with certainty the information each bidder received as Addendum 3. Respondent has consistently enforced this requirement in the past and was acting within its discretion in refusing to waive Petitioner's failure to comply with this procedural safeguard.

    
    

22. The second basis for Petitioner's disqualification was its failure to follow the clear bid instructions, which were stated in two separate places, that corrections had to be initialed by the person signing the bid. This requirement may also be considered a procedural safeguard designed to protect the integrity of the bid process and is one Respondent has consistently enforced in the past. Several valid purposes are served by the requirement that corrections be initialed. If the bidder initials the change, it is more difficult for someone to later claim that the bidder did not make the uninitialed change, a claim that would disrupt the bid process. The requirement would also act to protect Respondent's staff from charges that a member of the staff acted in collusion with a bidder in making uninitialed changes.

    Respondent was acting within its discretion in refusing to waive Petitioner's failure to comply with this procedural safeguard.

    
    

23. The third reason cited by Respondent for Petitioner's disqualification was its failure to include the unit price structure along with its response to the ITB as amended by the addenda. The unit price structure requested by Respondent was not a factor it considered in making the award, rather, it was an informational item to be used in the event Respondent later wanted to expand the scope of the project. Petitioner was justified in relying on the instructions given it by Respondent's agents that the unit price did not have to be included in the bid response but that it could be presented by the successful bidder at a pre-construction conference. Respondent should not disqualify Petitioner's bid for this reason under the facts of this case, and its action in doing so is contrary to fundamental fairness and is arbitrary and capricious. This is particularly true where the bid specification is unclear and there is no instruction in the ITB as to how a bidder is to obtain clarification of bid requirements other than the instruction to call Respondent's agent. See, Baxter's Asphalt & Concrete, Inc. v. Liberty County, 406 So. 2d 461 (Fla. 1st DCA 1981), reversed on other grounds, Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982).

    
    

24. The purpose of the competitive bidding laws has been discussed by the Florida Supreme Court in Wester v. Belote, 103 Fla. 976, 138 So. 721, at 724 (Fla. 1931) as follows:

    
    

    ... [T]hey thus serve the object of protecting the public against collusive contracts and prevent favoritism toward contractors by public officials and tend to secure fair competition upon equal terms to all bidders, they remove temptation on the part of public officers to seek private gain at the taxpayers's expense, are of highly remedial character, and should receive a construction always which will fully effectuate and advance their true intent and purpose

    and which will avoid the likelihood of same being circumvented, evaded, or defeated.

25. The term "minor irregularity" has often been discussed in cases dealing with disputed bids. The definition of the term contained in Rule 13A- 1.001(35), Florida Administrative Code, accurately states the commonly accepted definition as follows:

    
    

    Minor irregularity- A variation from the invitation to bid/request for proposal terms and conditions which does not affect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.

    
    

26. The requirement that bidders initial changes and the requirement that all bidders return the entire addendum 3 are procedural safeguards that Respondent inserted to protect the sanctity of the bid process. Petitioner's failure to follow these procedural safeguards are not "minor irregularities" because such failures, if routinely excused, would undermine the integrity of the bid process and would adversely impact the interests of the agency.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Broward Community College, enter a final order

which denies the bid protest of Petitioner, Pioneer Contracting, Inc.

DONE AND ENTERED this 29th day of June, 1990, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

Hearing Officer

The DeSoto Building 1230 Apalachee Parkway

Tallahassee, Florida 32399-1550 904/488-9675

Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1990.

APPENDIX TO THE RECOMMENDED ORDER

The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioners.

1. The proposed findings of fact in paragraphs 1, 2. 6 and 7 are adopted in material part by the Recommended Order.

   
   

2. The proposed findings of fact in paragraph 3 are rejected as being subordinate to the findings made in paragraph 10.

3. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order. The proposed findings in the last sentence of paragraph 4 are rejected as being unnecessary to the conclusions reached because of the clear instructions contained in Addendum 3.

   
   

4. The proposed findings of fact in paragraph 5 are adopted in part by the Recommended Order. The proposed findings in the last two sentences of paragraph

5 are supported by the evidence, but are not adopted as findings of fact because they are unnecessary to the conclusions reached.

All proposed findings of fact submitted on behalf of the Respondent are adopted in material part.

Copies furnished:

Eric L. Dauber, Esquire Beyer & Dauber

Suite 5300

2101 W. Commercial Boulevard Ft. Lauderdale, Florida 33309

James D. Camp III, Counsel Broward Community College Fort Lauderdale Center

225 East Las Olas Blvd.

Fort Lauderdale, Florida 33301

Janet Rickenbacker Director of Purchasing Broward Community College Fort Lauderdale Center

225 East Las Olas Blvd.

Fort Lauderdale, Florida 33301

Docket for Case No: 90-002862BID

Orders for Case No: 90-002862BID