STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SECURITY SERVICES, INC., )

)

)

Petitioner, )

vs. ) CASE NO. 90-3411BID

)

THE SCHOOL BOARD OF )

BROWARD COUNTY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on June 15, 1990, at Fort Lauderdale, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. Appearances at the hearing were as follows.

APPEARANCES

For Petitioner: Alice Elizabeth Warwick, Esquire

Sutton, Jamerson & Mullin

Penthouse II - Gables International Plaza

2655 LeJeune Road

Coral Gables, Florida 313134

For Respondent: Robert Paul Vignola, Esquire

Marko & Stephany

1401 East Broward Boulevard Suite 201

Post Office Box 4369

Fort Lauderdale, Florida 33338 STATEMENT OF THE ISSUES

This is a bid protest case in which the main issue is whether the failure of the Petitioner to include certain information with its bid constitutes a material deviation or variance from the requirements of the Invitation to Bid such as to require the bid to be disqualified, or whether such failure is a minor irregularity which can be waived by the Respondent. 1/

PRELIMINARY STATEMENT

Most of the relevant facts in this case were stipulated to immediately prior to this hearing. The parties jointly offered a number of exhibits, and the testimony of five witnesses was presented. Following the hearing, the parties requested and were granted 15 days within which to file proposed recommended orders. On July 2, 1990, both parties filed timely proposed

recommended orders containing proposed findings of fact and conclusions of law. All findings of fact proposed by the parties are specifically addressed in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Findings stipulated to by the parties

   
   

   1. On March 27, 1990, the school district issued an Invitation For Bids, Bid NO. 91-037V for Security Guard Services - Term Contract.

      
      

   2. Special Condition 5 of the bid specifications states as follows:

      
      

      Bidders shall submit evidence with this bid of the following:

      1. The bidder is presently engaged in security services; and

      2. The bidder has an established record of satisfactory performance over the past three

         (3) years and shall furnish names of five (5) organizations for whom the bidder has provided security services during this period. Failure to provide this information with the bid shall result in disqualification of bid submitted. (emphasis furnished)

         
         

   3. The school district received timely bids upon Bid NO. 91-037V from eight bidders, including the Petitioner, Security Services, Inc. Bids were open on April 19, 1990, at 2:00 p.m.

      
      

   4. Six of the eight bidders upon Bid NO. 91-037V submitted with their bids the five (5) references required by Special Condition 5 of the Invitation To Bid. The Petitioner, Security Services, Inc., failed to submit the required five (5) references along with its bid.

      
      

   5. Security Services, Inc.'s, bid of $6.25 per hour constituted the lowest hourly rate contained in any of the bid submittals.

      
      

   6. Universal Security Consultants' bid submittal contained a proposal to render guard services at the rate of $6.88 per hour and constituted the second lowest hourly rate contained in any of the bid submittals. In addition, Universal's bid submittal met all other requirements of the bid specifications and included the five (5) references required by Special Condition 5.

      
      

   7. Prior to issuing a recommendation upon the bid item, the staff of the school district contacted the five references submitted by Universal Security Consultants with its bid, and each reference indicated that Universal had satisfactorily provided security guard services.

      
      

   8. After reviewing and evaluating the bid submittals, the staff of the School Board recommended the rejection of Security Services, Inc.'s bid for its failure to meet the requirements of Special Condition 5 of the Invitation To Bid. It was further recommended that a contract be awarded to Universal Security Consultants under Bid NO. 91-037V. The recommendations and bid tabulations were posted on April 26, 1990, at 3:00 p.m.

   9. On April 27, 1990, the Petitioner, Security Services, Inc., submitted a document entitled "Letter Of Protest -- Bid NO. 91-037V" to the school district. Within the document, Security Services, Inc., notified the school district of its protest of recommendations that were posted on April 26, 1990. The document states that "[w]hile preparing this year's bid package, I [the owner of Petitioner] overlooked the section pertaining to requirement of having to list references." The document requests the school district to reconsider the bid of Security Services, Inc., and lists the following organizations as references:

      
      

      1. The School Board of Broward County, Florida;

      2. WSCV - Ch. 51;

      3. The Lauderhill Mall;

      4. Telemundo Productions, Inc.; and

      5. Midway Club Apartments.

      
      

   10. The Petitioner, Security Services, Inc., had previously been awarded contracts by the school district to provide security guard services. The first contract was dated February 4, 1988. A second contract was awarded to Petitioner on March 1, 1989, and the Petitioner was providing security guard services to the school district under the second contract at the time of the bid proceedings pertaining to Bid NO. 91-037V. The first contract awarded to the Petitioner by the school district arose from Security Services, Inc.'s, bid submission to a certain bid numbered 88-518D. The bid specifications for Bid NO. 88-518B did not require bidders to submit references, and none were provided at that time by Security Services, Inc.

       
       

   11. The second contract awarded to the Petitioner by the school district arose from Security Services, Inc.'s, bid submission to a certain bid numbered 89-368V. The bid specifications for Bid NO. 89-368V contained a requirement to submit references identical to the requirement contained in the bid specifications for Bid NO. 91-037V. Security Services, Inc., did submit five

       1. references along with its bid proposal to Bid NO. 89-368V. The five references listed in the Petitioner's bid submittal to Bid NO. 89-368V were as follows:

          
          

          1. Broward County School Board;

          2. WSCV-Ch. 51;

          3. Lauderhill Mall;

          4. Lauderdale Yacht Basin; and

          5. Woodhue Condominium Association.

       
       

   12. On May 1, 1990, the school district received a formal written Notice Of Protest [dated April 30, 1990] from Security Services, Inc. Within the formal written protest, the Petitioner requested that it be awarded the contract for security guard services on the basis of the Petitioner's work being satisfactory and the lowest bid. The protest asserted that Security Services, Inc., had de facto complied with the requirements of Special Condition 5 as Petitioner had provided this information to the school district in previous years and that such information was on file at the school board. The Petitioner further asserted that the failure to submit the five (5) references was an irregularity that could be waived by the school district or that was correctable after opening of the bids.

   13. The formal written notice of protest filed by Security Services, Inc., states as follows:

       
       

       There was an unintended omission from the Security Services, Inc., Invitation to Bid in that through inadvertence, Security Services, Inc., failed to provide a list of five (5) organizations for whom the bidder has provided security services as required by Paragraph 5B of the Special Conditions.

       
       

   14. On May 15, 1990, the School Board considered the protest filed by Security Services, Inc., and rejected the same. The Petitioner subsequently requested further proceedings in accordance with Chapter 120, Florida Statutes, and these proceedings commenced.

       
       

       b. Additional facts established at hearing:

       
       

   15. The School Board requires the inclusion within its bids of the names of five (5) organizations for whom the bidder has provided security services over the past three (3) years in order to be able to evaluate the present ability of the bidder to perform under a contract awarded under the bid item. The information as to references is evaluated and investigated by the school district as to the apparent low bidder prior to the posting of recommendations for the award of the bid item.

       
       

   16. Security Services, Inc., has satisfactorily performed the two security guard contracts it has previously been awarded by the School Board, and there have been no complaints about the performance of Security Services, Inc., under those two contracts. At the time the bids in this case were opened, the School Board already knew that Security Services, Inc., could perform satisfactorily because it had been doing so for the School Board for two years.

       
       

   17. Over the term of the contract, the difference in cost between the low bid submitted by Security Services, Inc., and the second low bid submitted by Universal Security Consultants, will amount to approximately $50,000.00.

       
       

       CONCLUSIONS OF LAW

       
       

   18. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57, Florida Statutes.

       
       

   19. For over fifty years the Supreme Court of Florida seems to have had the same view of the purpose of competitive bidding on public works projects. In Webster v. Belote, 138 So. 721 (Fla. 1931), and again in Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982), 2/ our highest state court has noted that competitive bidding requirements

       
       

       . . . 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, [and] they remove temptation on the part of public officers to seek private gain at the taxpayer'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.

       
       

   20. In Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190 (Fla. 2d DCA 1977), the court quoted the foregoing language from Webster v. Belote, supra, and then went on to apply it in the following manner, at page 1192:

       
       

       From the above quote it is apparent that the entire scheme of bidding on public projects is to insure the sanctity of the competitive atmosphere prior to and after the actual letting of the contract. In order to insure this desired competitiveness, a bidder cannot be permitted to change his bid after the bids have been opened, except to cure minor irregularities.

       
       

       And at page 1193, the court in Harry Pepper explicated further:

       
       

       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.

       
       

   21. To the same effect, in Robinson Electrical Co., Inc. v. Dade County,

       417 So.2d 1032 (3d DCA 1982), the court, in concluding that not every deviation from an invitation to bid is material, quoted with approval the following from

       10 McQuillan, Municipal Corporations, Section 29.65 (3d Ed. Rev. 1981):

       
       

       In determining whether a specific noncom- pliance constitutes a substantial and hence nonwaivable irregularity, the courts have applied two criteria--first, whether the effect of a waiver would be to deprive the municipality of its assurance: that the contract will be entered into, performed and guaranteed according to its specified requirements, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or by otherwise undermining the necessary common standard of competition.

       In application of the general principles above discussed, sometimes it is said that a bid may be rejected or disregarded if there is a material variance between the bid and the advertisement. A minor variance, however, will not invalidate the bid. In this context a variance is material if it

       gives the bidder a substantial advantage over the other bidders, and thereby restricts or stifles competition.

       
       

       In Robinson Electrical Co., supra, the court concluded by holding that

       
       

       . . . the purpose of competitive bidding is to secure the lowest responsible offer and that the County may waive minor irregularities in effectuating that purpose.

       
       

   22. In the more recent case of Tropabest Foods, Inc. v. State, Department of General Services, 493 So.2d 50 (Fla. 1st DCA 1986), the court, citing to Robinson Electrical Co., supra, concluded that a variance in a bid "is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition."

       
       

   23. Applying all of the foregoing to the facts in this case, the Petitioner's failure to include the list of references with his bid must be viewed as a minor irregularity and, therefore, as a waivable irregularity. The failure to include the list of references did not affect the amount of the Petitioner's bid. The failure to include the list of references did not place the Petitioner in a position of advantage over other bidders, especially not in a position of substantial advantage. The failure to include the list of references did not restrict or stifle competition. Perhaps most importantly, the failure to include the list of references did not deprive the School Board of any material information it needed in order to evaluate and compare the bids, because the sole purpose of the list of references was to facilitate a School Board inquiry into a bidder's ability to perform, and the School Board already knew the Petitioner could perform.

       
       

   24. It is clear from the facts in this case that Security Services, Inc., is a responsible bidder and is the lowest bidder. To reject its bid for failure to include information the School Board did not need, would be to glorify form over substance, and in the process to also lose the benefit of the purpose of competitive bidding; namely, to secure the lowest responsible offer.

RECOMMENDATION

For the foregoing reasons, it is RECOMMENDED that the School Board of Broward County enter a Final Order in this case concluding that the irregularities in the bid submitted by Security Services, Inc., are minor irregularities, that those irregularities are waived, and that Bid NO. 91-037V should be awarded to Security Services, Inc.

DONE and ENTERED this 24th of July, 1990, in Tallahassee, Florida.

MICHAEL M. PARRISH

Hearing Officer

Division of Administrative Hearings The Desoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this day 24th day of July, 1990.

ENDNOTES

1/ All other bidders were advised of the pendency of this proceeding, but none of the other bidders sought to participate in the proceeding.

2/ Webster v. Belote and Liberty County v. Baxter's Asphalt & Concrete, Inc., are also cited with approval in the more recent case of Dept. of Transportation

v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988).

APPENDIX TO RECOMMENDED ORDER IN CASE NO. 90-3411BID

The following are my specific rulings on all proposed findings of fact submitted by the parties.

Facts proposed by Petitioner:

With the exceptions noted below, all facts proposed by the Petitioner have been accepted in whole or in substance.

Paragraph (a) on page 6 is rejected as irrelevant.

Paragraph (c) on page 7 is rejected as repetitious and subordinate and unnecessary details.

The last sentence of Paragraph (d) on pages 7 and 8 has been omitted from the findings of fact because it is an argument or a conclusion of law.

At Paragraph (e) on page 8, the first sentence is rejected as irrelevant and the second as repetitious.

At Paragraph (f) on page 8, the first, third, and last sentences are omitted from the findings of fact because they are arguments or conclusions of law.

Facts proposed by Respondent:

All facts proposed by the Respondent have been accepted in whole or in substance.

COPIES FURNISHED:

Alice Elizabeth Warwick, Esquire Sutton, Jamerson & Mullin

Penthouse II - Gables International Plaza 2655 LeJeune Road

Coral Gables, Florida 33134

Robert Paul Vignola, Esquire Marko & Stephany

1401 East Broward Boulevard Suite 201

Post Office Box 4369

Fort Lauderdale, Florida 33338

Virgil L. Moran Superintendent

Broward County School Board 1320 Southwest Fourth Street Fort Lauderdale, FL 33312

Honorable Betty Castor Commissioner of Education The Capitol

Tallahassee, FL 32399-0400

Docket for Case No: 90-003411BID

Orders for Case No: 90-003411BID