vs. )
and ) CASE NO. 90-4326BID
) CASE NO. 90-5103BID HOLIDAY ISLE RESORT & MARINA, )
Intervenor. )
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 consolidated cases on July 31, 1990, and on September 5, 1990, in Miami, Florida.
For Petitioner: Michael J. Cherniga, Esquire
For Respondent: Susan P. Stephens, Esquire
For Intervenor: James S. Mattson, Esquire
Andrew M. Tobin, Esquire Mattson, Tobin & Vetrick Post Office Box 586
James W. Anderson, Esquire Lewis & McKenna, P.A.
Lauchlin T. Waldoch, Esquire Messer, Vickers, Caparello,
French, Madsen & Lewis, P.A. Post Office Box 1876 Tallahassee, Florida 32302-1876
Whether the subject lease should be awarded and, if so, whether the award should be to Petitioner or to Intervenor.
Respondent, Florida Department of Transportation (FDOT), issued a Request for Proposals (RFP) on March 16, 1990, to which only Petitioner, Red & White Investments, Inc. (Red & White), and Intervenor, Holiday Isle Resort & Marina, Inc. (Holiday Isle), responded. The RFP solicited proposals for the lease of certain highway right-of-way on a portion of State Road 5 (U.S. 1) located on Windley Key, Monroe County, Florida. Holiday Isle submitted two proposals in response to the RFP while Red & White submitted one proposal. On April 20, 1990, at the meeting scheduled for the opening of proposals, Holiday Isle was told by FDOT that it had to select which of its two proposals it wanted FDOT to consider. Holiday Isle thereafter requested that its proposal number two be evaluated.
After receiving the proposals, FDOT suspended the award process, which prompted a protest from Holiday Isle. This bid protest was referred to DOAH and assigned Case No. 90-4326BID. Holiday Isle and FDOT negotiated a settlement of that bid dispute and on June 14, 1990, FDOT notified Holiday Isle and Red & White that the proposals would be evaluated and that its recommendation would be posted on June 19, 1990. (Holiday Isle proposal number one was not evaluated by FDOT.) On June 14, 1990, FDOT posted its recommendation that Holiday
Isle be awarded the lease pursuant to its proposal number two. Thereafter, Red & White filed a timely protest which was referred to DOAH and assigned Case No. 90-4326BID. Following the posting of the recommendation to award the lease to Holiday Isle pursuant to its proposal number two, Holiday Isle did not timely file a protest that FDOT had failed to evaluate its proposal number one. On July 16, 1990, a Petition for Leave to Intervene by Holiday Isle (which contained a certificate of service date of July 9, 1990) was filed with DOAH. On July 24, 1990, Holiday Isle filed what was styled "Intervenor Holiday Isle's Petition". By these pleadings, Holiday attempted to raise as an issue in this proceeding whether FDOT erred in not evaluating Holiday Isle's proposal number one.
Pursuant to notice, all parties convened for the formal hearing in Case No.
90-4326BID as scheduled in Miami, Florida, on July 31, 1990. As a preliminary matter, Holiday Isle moved for an order requiring FDOT to open and consider Holiday Isle's proposal number one. This motion was denied. Thereafter, FDOT announced that it was changing its recommendation and that it would reject all proposals. FDOT moved to dismiss Red & White's bid protest. The hearing was continued to allow the parties time to consider FDOT's action and to discover the reasoning behind this change of position.
After FDOT announced that it was rejecting all proposals, Red & White filed a second bid protest to protest that action. This second protest, referred to DOAH and assigned Case No. 90-5103BID, was consolidated for hearing with Case No. 90-4326BID. Holiday Isle was permitted to intervene in Case No. 90-5103BID.
The consolidated hearing was held September 5, 1990, in Miami, Florida, with all parties present. Petitioner presented the testimony of Robert Cochrane, Stanley Cann, and Paul Brumm. Petitioner's Exhibits 1-11, 13-14, and 16-23 were offered by Red & White and accepted into evidence. FDOT called no witnesses, but offered Respondent's Exhibits 1-4, which were accepted into evidence. Holiday Isle presented the testimony of Craig Miller, Joseph Roth, and Robert Cochrane. Mr. Miller was accepted as an expert witness in the field of transportation engineering. Holiday Isle also presented Intervenor's Exhibits 2, 3, and 5-6, which were accepted into evidence.
A transcript of the proceedings has been filed. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.
State Road 5 (US Highway 1) runs through Windley Key, Monroe County, Florida. Florida Department of Transportation (FDOT) District 6, headquartered in Miami, has direct operational responsibility for this highway and its adjacent right-of-way.
Holiday Isle Resort and Marina, Inc. (Holiday Isle) is a corporation that owns and operates various facilities located adjacent to one another on Windley Key which offer lodging, food, beverages, entertainment, and recreation. These facilities, located easterly of State Road 5, attract a large number of patrons in automobiles.
Because of a lack of parking on the Holiday Isle properties, many people have, over the past few years, parked their vehicles across State Road
5 from the Holiday Isle properties on the right-of-way that was unimproved when the request for proposal was issued. Over this time, FDOT and Holiday Isle had an informal agreement giving Holiday Isle the use of this area for overflow parking. Upwards of 400 automobiles have been parked on this right-of-way area across from the Holiday Isles properties. FDOT knew that Holiday Isle patrons and others were parking on this right-of-way area and was aware that this parking arrangement had created a tremendous traffic hazard. Numerous accidents, including fatalities, have occurred over the years involving motor vehicles pulling on and off State Road 5 and pedestrians crossing the road to and from the Holiday Isle properties.
In an effort to reduce the hazardous conditions in this area, FDOT decided to lease the right-of-way for motor vehicle parking pursuant to the authority given FDOT by Section 337.25, Florida Statutes. This was the first time that District 6 of FDOT had attempted to procure a lease of this type.
On September 23, 1989, FDOT placed an advertisement in appropriate Monroe County newspapers under the heading "Call for Bids". The advertisement advised that sealed bids for the lease of certain described lands would be received by FDOT at 11:00 a.m. on the 29th day of December, 1989. The lands described by the advertisement was for a substantially larger tract of land than the final tract of land described in the Request for Proposal. The advertisement gave notice that "No bid will be considered unless it is submitted on the official Proposal Form provided by the Department of Transportation". The name and address of the person from whom bidders could obtain the forms and information about the project was provided. The advertisement also contained the statement: "The Department reserves the
right to reject any or all bids and to waive technical errors as may be determined best for the interest of the State." This was the only advertisement that was published for this project.
Petitioner Red & White Investments, Inc. (Red & White) is a corporation organized to make investments. Paul Brumm was one of the shareholders of Red & White and was authorized to act on behalf of the corporation in pursuing the lease that is the subject of these consolidated cases.
Joseph Roth was an officer of Intervenor Holiday Isle and was authorized to act on behalf of the corporation in pursuing the lease that is the subject of these consolidated cases
Red & White and Holiday Isle were the only two entities to contact FDOT in response to the advertisement. FDOT determined that the legal description it had. used in its published advertisement was incorrect, advised them of the error, and delayed the issuance of its RFP until after its corrected that erroneous legal description.
In March, 1990, FDOT corrected the legal description and issued its RFP to Red & White and to Holiday Isle. The RFP contained a metes and bounds description and referred to the land to be leased as being "Parcel 6003.B" and as containing 3.596 acres, more or less.
The RFP was a package of three separate documents. The first document was a standard "State of Florida Request for Proposal Contractual Services Acknowledgment Form" (RFP Form) with certain deletions and additions. The second document consists of four pages entitled "Information for Prospective Bidders" (Information Document) and contains information about the subject project and constitutes special conditions applicable to the procurement. The third page is a three-page document headed "Lease Agreement" (Lease Form). Attached to the Lease Form are two exhibits: Exhibit A being a revised legal description of the parcel to be leased and Exhibit B being the page to which the bidder was to attach its conceptual site plan.
The RFP Form contained general and special conditions. Among the general conditions was the following:
As the best interest of the State may require, the right is reserved to reject any and all proposals or waive any minor irregularity or technicality in proposals received. Proposers are cautioned to make no assumptions unless their proposal has been evaluated as being responsive.
There was no restriction stated by the RFP as to the number of proposals a proposer could submit. The RFP Form contained the following statement:
SEALED PROPOSALS: All proposal sheets and this original acknowledgment form must be executed and submitted in a sealed envelope. (DO NOT INCLUDE MORE THAN ONE PROPOSAL PER ENVELOPE.) The
face of the envelope shall contain, in addition to the above address, the date and time of the proposal opening and the proposal number. ...
In the special requirements section of the RFP Form, proposers were required to state the amount being offered to pay for the lease on an annual and on a monthly basis, and were told to submit a "Conceptual Site Plan" as part of the proposal. Proposers were also advised that the land to be leased was vacant and was to be leased "as is", without any representations as to its suitability for any particular use or its qualification for any permits or licenses. All development had to be in conformity with all local, state, and federal laws.
The Information Document constituted special conditions applicable to this procurement. Among the special conditions found in the Information Document are the following:
BID FORMS: The Department of Transportation will not consider a bid to lease subject land unless it is submitted on the official "Request For Proposal - Contractual Services" form provided by the Department of Transportation.
* * *
MINIMUM ACCEPTABLE BID: The minimum
acceptable bid shall be $58,825.00 per annum. (This requirement was subsequently changed as discussed below.)
TERMS: The bid proposal shall specify the amount of monthly rent the bidder is proposing to pay. Payment in full of that amount shall be due and payable at the Lessor's office mentioned above on the first day of May, 1990, and on the first day of each succeeding month for the term of the lease.
* * * SUITABILITY: Subject parcel is leased "as is" and the Lessor makes no representation regarding the suitability of the subject land for any use. It is specifically understood that the Lessor makes no representation, guarantee or warranty that the subject land will qualify for any permits or licenses as may be required by any governmental agency having jurisdiction.
* * * CONCEPTUAL SITE PLAN: Each bidder must submit with his bid documents a conceptual site plan indicating how they will use and develop the site. Such plan must show all proposed modifications, including all entrances and exits, lighting fixtures, pavement, drainage structures, fences and all
other proposed improvements to State Road No. 5, including but not limited to traffic signals. The plan must state that overnight camping will be prohibited by Lessee.
No bid will be considered if a conceptual site plan is not included as part of the proposal. The conceptual site plan document(s) will be referred to as Exhibit "B" of the bid proposal. The conceptual site plan submitted by the successful bidder will be incorporated into the final lease as Exhibit "B".
CONSTRUCTION OF IMPROVEMENTS: It is
specifically understood and agreed that the successful bidder will commence construction of improvements on the leased area, in conformity with the approved Conceptual Site Plan, on or before August 1, 1990.
* * *
PRE-BID CONFERENCE: All prospective bidders are invited to attend a meeting to be held at the Lessor's office listed above at 11:00 A.M. on Friday, April 6, 1990. The purpose of this meeting is to provide prospective bidders an opportunity to present any questions they may have concerning this bid. Representatives of the Lessor will be present to answer such questions.
FORMS: Proposal, contract, and performance bond forms may be secured from this office. Corporate seals are
required on bid proposals where applicable. BID AMOUNT: All bids received will be evaluated on the basis of the rental to
be paid, and (sic) the merits of the conceptual site plan, and the impact on State Road 5.
The RFP required only two specific pieces of information to be generated by the proposer - the statement of rents and the conceptual plan. These were the only portions of the responses evaluated for purposes of awarding the lease.
The RFP does not explain the procurement other than to limit the use of the parcel to parking. Safety problems and the parking needs for the Holiday Isle properties are not specifically addressed by the RFP. However, both Mr. Brumm and Mr. Roth were familiar with the long standing problems that existed in the subject area and knew the purposes of the RFP.
The pre-bid conference was held as scheduled on April 6, 1990, with only Red & White and Holiday Isle attending as interested bidders. One of the purposes of the pre-bid conference was to permit bidders to ask questions and seek clarification. Following discussions with FDOT officials, it was
determined that the legal description included in the RFP package as Exhibit A to the Lease Form was erroneous and that not all of the proposed site was upland or usable as parking. This resulted in a letter from FDOT, dated April 8, 1990, changing the term related to the price by stating that "[u]sable land value for leasing purposes has been determined to be Thirty-Five Cents ($0.35) per square foot per year", and that "[a nominal value for unusable land has been set at One Tenth of One Cent ($0.001) per square foot per year." The legal description of the area to be leased was also changed to encompass 5.190 acres, more or less, rather than the 3.596 acres, more or less, set out in the original proposal package. The revised description included lands closer to the pavement edge of State Road 5 than did Exhibit A to the Lease Form. A portion of the designated area lies within environmentally protected wetlands, contains protected species of vegetation, or is otherwise not suitable for use as a parking lot. FDOT never attempted to calculate how much of the subject property was "usable" or "unusable" and it never instructed the potential bidders as how such calculation should be made.
By its letter of April 8, 1990, FDOT effectively removed the requirement from the RFP that the minimum bid for the lease be $58,825.00. FDOT left it to each proposer to determine the amount of usable land and to apply a minimum rate of $0.35 per square foot for usable land and a minimum rate of
$0.001 per square foot for unusable land.
Red & White timely submitted its proposal, which consisted of a proposal to pay $42,000 per year in rent, a conceptual site plan, a cover letter, a cashier's check in the amount of $4,200 and a copy of a letter, dated April 11, 1990, from Andrew M. Tobin, counsel for Holiday Isle to Mr. and Mrs. Paul Brumm.
Red & White's bid amount was based on its determination that there were 113,150 square feet of usable space, and that the balance of the area was unusable. In comparison, Mr. Cochrane estimated that the value of the lease, using the methodology employed by Red & White, was $40,000. This estimate was derived by Mr. Cochrane and was not an appraised value. There was no evidence that FDOT had performed a formal appraisal of this property.
Holiday Isle timely submitted two proposals in two separately sealed envelopes marked, respectively, "No. 1" and "No. 2".
On April 20, 1990, representatives of both Red & White and Holiday Isle attended at FDOT offices in Tallahassee the opening of the proposals submitted in response to the RFP. At this meeting to open the proposals, Mr. Cochrane, the FDOT employee responsible for the procurement of this project was handed two sealed envelopes on behalf of Holiday Isle. These envelopes were marked "No. 1" and "No. 2", respectively. Mr. Cochrane told Mr. Tobin and Joseph Roth, Holiday Isle's representatives, that he would only open one proposal from Holiday Isle. Holiday Isle's representatives, when asked by Mr. Cochrane which of the two envelopes Holiday Isle wanted him to open, selected the envelope marked "No. 2." FDOT then opened envelope No. 2. The other envelope submitted by Holiday Isle, envelope No. 1, was not opened for the purpose of evaluating the proposal. (At the formal hearing, Holiday Isle requested and received permission to have the previously unopened envelope opened for the purpose of retrieving the cashier's check submitted with the proposal.)
When the proposals were submitted, Monroe County was in the process of conducting a "focal point plan" study, required by the Monroe County
Comprehensive Plan, for a portion of Windley Key designated as the "Holiday Isle Area of Critical County Concern." The area encompassed the Holiday Isle properties as well as the subject right of way.
The focal point planning was to address:
Design and functional character of
U.S. 1 within one-half mile of the area of critical county concern;
The appropriate location,
placement, and functionality of adequate off-street parking for patrons to access the Holiday Isle Resort to avoid stacking of vehicles on U.S. 1; and
c. An ingress and egress plan for
U.S. 1 that limited access to
side roads that have adequate turning, acceleration and deceleration lanes.
Because of the pending focal point. plan activity and objections expressed by the Florida Department of Community Affairs, FDOT, on May 8, 1990, decided to reject both proposals. In doing so, FDOT represented that it would begin a new solicitation process if the focal point plan approved by the County and by the Department of Community Affairs revealed that leasing the subject right-of-way would be appropriate.
Holiday Isle initiated formal administrative proceedings to protest the Department's decision to reject all bids. As the result of negotiations involving Holiday Isle, FDOT and the Department of Community Affairs, Holiday Isle agreed to take over the focal point plan efforts. Holiday Isle also agreed that the conceptual plan it submitted to FDOT as part of its proposal could be used as part of the focal point plan. Thereafter, the conceptual plan that had been submitted by Holiday Isle with its proposal No. 2 was incorporated as part of the focal plan. FDOT agreed to recommence the procurement process. The formal bid protest was dismissed and FDOT notified Red & White and Holiday Isle on June 14, 1990, that it would make its decision as to the award of the lease on June 19, 1990.
FDOT appointed a committee consisting of three of its employees to evaluate the merits of the conceptual site plan submitted by Red & White and the Holiday Isle proposal No. 2. Mr. Cochrane was responsible for doing the economic evaluation of the proposed rents. The evaluation committee that reviewed the conceptual site plans was unaware that the Holiday Isle proposal contained a modified lease agreement but Mr. Cochrane was aware that the lease had been modified.
The Holiday Isle proposal that had been contained in envelope No. 2 was recommended on June 19, 1990, by FDOT to receive the lease. This proposal consisted of a proposal to pay a conditional sum of $60,000, plus 10% of gross revenues per year, a certificate of insurance, a conceptual site plan, a "Holiday Isle Traffic and Parking Study," a lease, a cover letter, and a cashier's check in the amount of $20,000. The proposal did not state how gross revenues would be determined. Mr. Cochrane had not gotten a legal opinion as to the import of the changes made to the lease by Holiday Isle prior to the award being announced. He evaluated the proposed rents upon the annual rental shown
by each proposal. Mr. Cochrane did not consider that the amount of Holiday Isle's proposed rents could be affected by a modification Holiday Isle made to the Lease Form, and he did not know how much money 10% of gross revenue would entail. In evaluating the merits of the respective conceptual plans, the evaluation committee considered that Holiday Isle would run a shuttle service to include the leased area, but that shuttle service was not included in the Holiday Isle proposal.
On June 21, 1990, Red & White filed a timely
protest of FDOT's intended selection of the Holiday Isle proposal. Holiday Isle did not timely protest FDOT's decision to open only one of its proposals.
The lease proposal submitted by Holiday Isle as part of its response to the RFP contained material revisions to the Lease Form contained in the RFP package. Mr. Cochrane, the FDOT employee responsible for procuring the subject lease and for communicating with potential proposers, was of the opinion that the terms of the Lease Form could not be varied. Mr. Cochrane recommended to a representative of Red & White that no changes should be made to the lease form and that a proposer would run the risk of being disqualified if the terms of the lease were revised. Counsel for Holiday Isle was advised by Barbara Hobbs, FDOT counsel, not to revise the lease because FDOT counsel did not have time to review a revised lease. The RFP package does not specifically address whether a proposer may submit a modified lease as part of its proposal. It is clear, however, that Red & White relied on the statement and recommendation of Mr. Cochrane in determining not to make revisions to the lease, while Holiday Isle submitted a lease with revisions that are to its advantage.
The revisions made to the lease by Holiday Isle were not minor irregularities. The changes to the Lease Form are in paragraphs 1, 3, 5, and 6 and deal, respectively with the term of the lease, the time of commencement of improvements, the payment of consideration and the adjustment of the amount of consideration depending on a future determination of usable versus unusable area, and termination. In each instance, the terms of the Lease Form was revised by counsel for Holiday Isle.
Paragraphs 1, 3, 5, and 6 of the Lease Form are as follows:
1. Lessor does hereby lease unto Lessee the lands described in Exhibit "A attached hereto and made a part hereof, for a period of five (5) years beginning with the date of this agreement. Renewal of this Agreement from year to year shall be automatic until such time as terminated.
3. The Lessee hereby agrees that he will commence improvement of the leased area in conformity with the approved Conceptual Site Plan on or before August 1, 1990.
Lessee shall pay the rent to Lessor in advance on the first day of each month, beginning May 1, 1990. When this Agreement is terminated, the unearned portion of any rent payment shall be refunded to Lessee.
This agreement may be terminated by either party upon thirty (30) days written notice to the `other party.
Paragraphs 1, 3, 5, and 6 of the revised lease submitted by Holiday Isle are as follows:
1. Lessor does hereby lease unto Lessee the lands described in Exhibit "A," attached hereto and made a part hereof for a period of five (5) years beginning with the date of this agreement. The term of this Agreement shall be automatically renewed and extended for an additional five (5) year Thereafter, this agreement shall be renewed from year to year unless otherwise provided by law or terminated as provided herein.
* * *
3. The Lessee hereby agrees that it will commence improvement of the leased area in conformity with the approved Conceptual Site Plan on or before August 1, 1990. Because the parties anticipate certain delays for permitting, the parties agree that the commencement date shall be extended provided that Lessee is exercising good faith and due diligence to obtain permits as required by paragraph 13 of this lease. In the event that Lessee fails to exercise good faith and due diligence to secure the
permits, Lessor, at its option, may declare Lessee in default of this agreement.
* * *
5(a). Lessee shall pay to Lessor, as fixed annual rent, the sum of $59,941.90 for 3.860 acres +/- [more or less] of property designated "usable for parking" and $58.10 for 1.330 acres +/- [more or less] of property designated "unusable for parking" for a total annual rent of
$60,000. Annual rent shall be payable to Lessor in equal monthly payments in advance on the first day of each month, beginning May 1, 1990. When this agreement is terminated, the unearned portion of any rent payment shall be refunded to Lessee.
* * *
5(b). In addition to minimum fixed annual rent, Lessee shall pay Lessor a sum equal to 10% of the gross revenues from Lessee's parking lot operation, hereinafter "percentage rent." Payment
of the percentage rent shall be paid on or before the twentieth day of each month for the preceding month's revenue. Lessee shall keep separate and accurate records of the gross revenues and it will give Lessor the right at any and all reasonable times to inspect such records. Beginning on the first anniversary date of this Lease, and on the anniversary date each year thereafter during the term of this Lease and all extensions and renewals, percentage rent shall be increased 1% each year until a maximum of 20% is reached.
* * *
5(c). The parties acknowledge that the designation between "usable" and "unusable" property may be subject to correction based on actual field conditions, biological reports, or Lessee's inability to obtain required permits far part of the property. Either party shall have the right to notify the other of any incorrect designation (between usable and unusable) and to request a correct designation. A detailed and accurate survey showing the basis for the request for correction shall accompany any notification. If property has been incorrectly designated, the parties agree to adjust the annual rent to reflect the corrected designation of property based on $.35 per square foot for "usable" property and $.001 per square foot for "unusable"
6. In the event Lessor is required to utilize all or part of the lands described in Exhibit "A" for construction or additional lanes or for highway expansion, Lessor may terminate that portion required upon thirty (30) days written notice. If less than all of the property is terminated, the rental fee for the remaining property
will be recalculated on a pro rata basis.
The modifications to the lease by Holiday Isle were not contemplated by FDOT and gave Holiday Isle a competitive advantage not enjoyed by Red & White.
On June 28, 1990, FDOT issued a special permit to Holiday Isle to improve the subject right-of-way area to make the right-of-way area safer until the bid dispute could be resolved. Under the auspices of that permit, Holiday Isle has constructed a chain-link fence to control ingress and egress to and from the parking area and has made other improvements to the right-of-way area.
The chain-link fence has different gates far vehicles and pedestrians to pass through. Holiday Isle has placed fill material throughout the area. The Florida Department of Environmental Regulation has determined that the fill material is unauthorized. Holiday Isle has also placed railroad ties to serve as parking abutments and has installed lights. The parking abutments and lighting are not covered under the subject permit.
The permit enables Holiday Isle to control and use the area for the parking needs of the Holiday Isle properties without having to pay rent for the right-of way area. The fence is a permanent improvement that will not necessarily be removed when the permit is terminated by FDOT.
The primary purpose of this project was to make automobile traffic, parking, and pedestrian traffic safer. The RFP stated that proposals would be based on rent, the merits of the conceptual site plan, and the impact to State Road 5. The merits of the conceptual plans were evaluated based on internal circulation of traffic in the parking area, the planned ingress and egress to the parking area, planned pedestrian traffic, and improvements to State Road 5.
The conceptual site plan submitted by Red & White was not prepared by professional engineers and was deficient in several material areas. Red & White's plan shaded the area to be reserved for parking, but it provided no information as to how traffic would circulate within the designated area. Red & White failed to provide information as to how State Road 5 would be impacted
and failed to show what improvements, such as deceleration lanes or turn lanes, would have to be made to State Road 5. Further, Red & White's plan failed to make adequate provision for pedestrian traffic. Red & White's plan proposed two driveways, one into the parking area and one out of the parking area. The proposed exit driveway was unsafe because it was designated as a right turn only and was located too close to Whale Harbor bridge. Red & White conceptual plan provided for uses that were not contemplated by the RFP, such as an area reserved for recycling and the provision of parking areas for not-for profit groups. The conceptual plans were evaluated based on the following criteria: "access management", "internal circulation", and "traffic control litigation" "Access management" considered the location of driveways and the ease of ingress to and egress from the parking area. "Internal circulation" involves the actual development and use of the site, including parking layout and traffic flow within the designated parking area. "Traffic control mitigation" addresses safety considerations for and handling of
cars and pedestrians. Although these criteria were not specified by the RFP, a conceptual site plan meeting minimum transportation engineering standards would have addressed those criteria in detail.
The RFP did not set any minimum standard which would make a proposal "non-responsive" and ineligible for evaluation, and FDOT did not disqualify Red & White's conceptual plan. FDOT contemplated that minor changes could be made to the conceptual plan with its approval after the award of the lease.
On June 19, 1990, FDOT announced its intention to award the project to Holiday Isle. On July 31, 1990, after the formal hearing had been convened in Case No. 90-4326BID, FDOT delivered to the parties a notice that it had decided to reject all bids. This change of position was based, in part, on the determination by FDOT that there had been confusion throughout the bid process and that the overall process was not absolutely fair.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.
Part I of Chapter 287, Florida Statutes, relate to the procurement of contractual services by agencies of the State of Florida.
Section 287.012, Florida Statutes, provides, in pertinent part, as follows:
The following definitions shall apply in this part:
* * *
"Request for proposals" means a written solicitation for sealed proposals with the title, date, and hour of the public opening designated. The request for proposals is used when the agency is incapable of specifically defining the scope of work for which the
... contractual service is required and when the agency is requesting that a qualified offeror propose
contractual service to meet the specifications of the solicitation document.
"Responsive bidder" or "responsive offeror" means a person who has
submitted a bid which conforms in all material respects to the invitation to bid or request for proposals.
Section 120.57(1)(b)3, Florida Statutes, provides that once a matter is referred to the Division of Administrative Hearings, the "... referring agency shall take no further action with respect to the formal proceeding, except as a party litigant, as long as the division has jurisdiction over the formal proceeding. ..." By letter dated July 30, 1990, and delivered July 31, 1990, FDOT advised the parties that it was changing its position as to how this bid dispute should be resolved. Instead of asserting the position that the lease should be awarded Holiday Isle, FDOT advised that it was asserting the position that all bids should be rejected. This change in position could only be as a party litigant in Case No. 90-4326BID and did not serve to divest the Division of jurisdiction of Case No. 90-4326BID nor should it be construed as proposed or final agency action. The case of Caber Systems, Inc. v. Department of General Services, 530 So.2d 325 (Fla. 1st DCA 1988), cited by FDOT for its position that jurisdiction of Case No. 90-4326BID should be relinquished to FDOT is not controlling and does not compel a different conclusion.
Because FDOT's announced decision to reject all bids was nothing more than a statement as to its change of position as a litigant in Case No. 90- 4326BID, that change in position is not subject to challenge in Case No. 90- 5103BID as proposed agency action. Consequently, Case No. 90-5103BID should be dismissed. Even if Case No. 90-5103BID were not dismissed, the disposition
of the issues in that proceeding would be resolved in the same manner and for the same reasons as the issues in Case No. 90-4326BID.
"Minor irregularities" in proposals may be waived by the agency issuing the request for proposals. A minor irregularity is a variation from the provisions of the RFP that does not affect the price of the proposal by giving the proposer an advantage or benefit not enjoyed by the other proposers. Harry Pepper & Associates v. City of Cape Coral, 352 So.2d 1190 (Fla. 2nd DCA 1978). Holiday Isle contends that the revisions that it made to the lease agreement were not prohibited by the RFP package and that the revisions do not give it a competitive advantage over Red & White. Holiday Isle is correct in stating that modifications to the lease agreement are not explicitly prohibited by the RFP package, but it is clear that FDOT intended that there be no changes in the lease agreement that was included in the RFP package. To allow Holiday Isle to revise the lease so as to affect material terms of the lease would be providing it with a competitive advantage not enjoyed by Red & White. This is especially true when Red & White was advised not to make any changes by Mr. Cochrane, the FDOT employee charged with procuring the lease and with communicating with proposers. Consequently, the Holiday Isle proposal should be rejected.
The Red & White conceptual plan was deficient and void of pertinent safety information. For that reason, the Red & White proposal should be rejected. The RFP did not set any minimum standard which would make a proposal "non-responsive" and ineligible for evaluation. Further, the RFP did not disclose that the conceptual plans would be evaluated based on the following criteria: "access management", "`internal circulation", and "traffic control mitigation". Although FDOT did not disqualify Red & White's conceptual plan, it is concluded that a meaningful conceptual plan would have addressed the criteria upon which FDOT based its evaluation and that the deficiencies and lack of detail of Red & White's conceptual plan rendered that plan an insufficient basis upon which to award the lease.
FDOT has taken the position that all proposals should be rejected because of the flawed nature of the bid process.
As asserted by FDOT, there were flaws in this procurement from its inception. Even the opening of the proposals and their evaluation were irregular. Neither Red & White or Holiday Isle has established that FDOT's decision to reject all bids on the basis of those flaws 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).
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 v. Baxter's Asphalt & Concrete, Inc., supra.
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.
Red & White argues that the erection of the fence by Holiday Isle and the inclusion of the Holiday Isle conceptual plan in the focal point plan should be considered as curing the lack of details and the deficiencies of its conceptual plan. Permitting Red & White to add to its conceptual plan in such a manner would give it a competitive advantage not contemplated by the competitive bid laws. The inclusion of the Holiday Isle conceptual plan in the focal point plan and the erection of the fence merely underscores the reasons FDOT has given to rejecting both bids - the confusion in the process and the lack of fairness in the process. FDOT's decision to reject all bids in this proceeding is consistent with the purposes-of the competitive bid laws and is justified by the confusion that was evident throughout the process.
Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered in Case No. 90-4326BID that
rejects the proposal submitted by Intervenor, Holiday Isle, and which further rejects the proposal submitted by Petitioner, Red & White.
IT IS FURTHER RECOMMENDED that a Final Order be entered in Case No. 90- 4326BID that dismisses the bid protest filed by Red & White.
CLAUDE B. ARRINGTON
IN CASE NO. 90-4326BID AND IN CASE NO. 90-5103BID
The following rulings are made on the proposed findings of fact submitted on behalf of Red & White Investments, Inc.
The following rulings are made on the proposed findings of fact submitted on behalf of Florida Department of Transportation:
The following rulings are made on the proposed findings of fact submitted on behalf of Holiday Isle Resort & Marina, Inc.
James S. Mattson, Esquire MATTSON, TOBIN & VETRICK
Michael J. Cherniga, Esquire ROBERTS BAGGETT, LAFACE & RICHARD
Susan P. Stephens, Esquire Senior Litigation Attorney Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street
Ben G. Watts, Secretary Department of Transportation Haydon Burns Building
Tallahassee, Florida 32399-0458 ATTN: Eleanor F. Turner
Robert Scanlan, Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street
James W. Anderson, Esquire Lewis & McKenna, P.A.
Lauchlin T. Waldoch, Esquire Messer, Vickers, Caparello, French, Madsen & Lewis, P.A.
ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. SOME AGENCIES ALLOW A LARGER PERIOD WITHIN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.
