STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TEL-STAR SYSTEMS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-4595BID

) BROWARD COUNTY SCHOOL BOARD, )

)

Respondent, )

)

and )

)

E. J. WARD, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This cause was heard by William R. Dorsey, Jr., the Hearing Officer assigned by the Division of Administrative Hearings, on August 13, 1990, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Norris J. DeVoll, President

Tel-Star Systems, Inc. Post Office Box 791753

San Antonio, Texas 78279-1753

For Respondent: Edward J. Marko, Esquire

Marko & Stephany

Suite 201 Victoria Park Centre 1401 East Broward Boulevard Post Office Box 4369

Fort Lauderdale, Florida 33338

For Intervenor: John K. Featherston

Vice President

E. J. Ward, Inc.

6410 Southwest Boulevard

Suite 224

Fort Worth, Texas 76109 STATEMENT OF THE ISSUE

The issue is whether the protest filed by Tel-Star Systems, Inc., to the notice that the School Board of Broward County intended to award bid number 90- 579T for the purchase of a computerized fuel system, with trade-in, to E. J. Ward, Inc., should be upheld.

PRELIMINARY STATEMENT

This matter was forwarded to the Division of Administrative Hearings by the School Board of Broward County on July 27, 1990. The final hearing was scheduled for August 13, 1990. E. J. Ward, Inc., the successful bidder, was permitted to intervene as a party. Both Tel-Star and the School Board submitted unilateral prehearing stipulations. At the final hearing, the School Board introduced four exhibits, consisting of the invitation to bid, the recommended bid tabulation, a two-page memorandum from Arlin Vance to Arthur Hanby, and the deposition of James Beck. Tel-Star introduced two exhibits, both of which are product brochures. The School Board presented the testimony of Arlin Vance, Arthur Hanby, Norris DeVoll and John Featherston. Tel-Star Systems offered the testimony of Mr. Busbee and Mr. DeVoll. The School Board and Tel-Star submitted proposed recommended orders. A post hearing statement of position was filed by

1. J. Ward, Inc. Rulings on proposed findings of fact are made in the Appendix to this Recommended Order.

   
   

   FINDINGS OF FACT

   
   

   1. On March 21, 1990, the School Board of Broward County issued an invitation to bid, No. 90-597T (ITB). The ITB sought to purchase a computerized fuel system, less trade-in. The general conditions of the ITB are common to all purchasing by the School Board and are contained on a single green cover sheet; the remainder of the ITB is made up of the special conditions applicable to the specific purchase. According to page 3, paragraph 1 of those special conditions, the School Board solicited bids on a "new on-line automated fuel dispensing and accounting system, less trade-in." The bidders were required to include in their proposals "all software, hardware (except an IBM Series/1 computer, if used), installation, labor, and training to complete the following objectives:"

      1. improve the efficiency and control of the Board's existing automated fuel system;

      2. improve fuel inventory management by intergrating in-tank monitoring and leak detection into the automated fuel dispensing system. Monitoring and leak detection devices were to be completely integrated using the same communication lines and computer hardware;

      3. record the acquisition, transfer and disposal of equipment;

      4. automate the collection and transfer of data to the Board's equipment management and financial accounting systems in the same format as the Board's current data and require no additional support or action by the Board;

      5. make appropriate reports available to user departments, and

      6. schedule and notify remote sites when preventive maintenance is due for a vehicle.

      
      

   2. Specifications for the system begin at page 10 of the ITB. Section I of the Specifications is a General System Description which fills pages 10-13 of the ITB. Section II at the bottom of page 13, describes a Fuel Dispensing Procedure. Section III, on page 14 describes Operating Procedures. Section IV on pages 15 and 16 specifies Hardware; the system is to include a computer, remote terminals, and actuator cards, installation criteria are also given for power and wiring. Section V, at pages 16-22 of the ITB, specifies Software and Programming. Its subsection I describes tank level monitors and says:

      
      

      The system will provide for in-tank level monitoring devices which are fully incorporated into the system. The tank level system will be as follows:

      The fuel island terminal will monitor the tank sensoring devices and generate and send a separate transaction each time it calls the Central Control Processor. This transaction will include fuel in inches and in gallons (gaged balance), water level in inches and temperature in degrees Fahrenheit. The most current readings will be stored in the system and will be available on the fuel inventory and receipts report.

      
      

      The calculated balance will continue to be the "primary balance."

      
      

      The Central Control Processor will generate a special transaction (unique transaction code) indicating sudden loss when the gauged balance drops more than the calculated balance by 1%.

      
      

      A special transaction or flag will be generated when more than 1/2 inch water exists in the tank (high water).

      
      

      Deliveries will be captured through the fuel monitor at sites so equipped. All/any manual delivery input will be recorded and flagged, but will not change the tank files. At sites without the monitor, manual readings will still be accepted. The PFR report will show water level, temperature, sudden loss and low inventory (re- order point).

      
      

      The fuel island terminal will also be equipped to monitor hydro-carbon wells. When hydro-carbon is detected the Fuel Infringement Circuit (FIR) will open and the pumps will be shut down. A FIR transaction will also be generated and sent to the Central Control Processor. Hydro-carbon probes will be included for all listed monitoring wells.

      
      

   3. The School Board received bids from three bidders which were open on April 26, 1990, at 2:00 p.m.. According to the bid tabulation, Tel-Star Systems bid $59,616, Cherokee group bid $882,924 and E. J. Ward, Inc. bid $106,816.

      
      

   4. Although Tel-Star was the low bidder, board staff believed that its bid did not meet the minimum advertised specifications. Staff intended to solicit bids for hardware for automatic in-tank fuel level monitoring and hydro-carbon well monitoring (i.e., leak monitoring) capabilities, and all software necessary to perform these functions. In reviewing the literature which accompanied Tel- Star's bid, staff had found no mention of hardware to automatically monitor the level of the fuel tanks or to monitor hydro-carbon wells. The marketing director for Tel-Star told staff that the necessary hardware for in-tank fuel level monitoring or hydro-carbon well monitoring was not included in the bid because Tel-Star did not interpret the ITB to require that hardware. Board staff determined the bid should be awarded to E. J. Ward, Inc., as the lowest bidder who met all advertised specifications.

   5. To companies dealing in computerized fuel systems, a computerized fuel dispensing and accounting system is separate from a system which provides in- tank monitoring and leak detection, although these two functions can be and are commonly integrated. No single manufacturer makes a system which will provide both computerized fuel dispensing, and in-tank monitoring and leak detection. Separate systems from different manufacturers can be combined to achieve both functions.

      
      

   6. The sales manager for Tel-Star Systems, Inc., who first reviewed the ITB noted the very brief reference to tank level monitors and hydro-carbon well monitors on page 22 of the ITB. He was unsure whether the bid called for that type of hardware. He discussed the matter with the president of Tel-Star, Mr. DeVoll. It was determined that because the reference to the in-tank monitoring and leak detection (hydro-carbon monitoring) was made only in the portion of the ITB dealing with Software and Programming (Part V), the School Board only wanted an automated fuel system which was capable of being integrated with fuel tank monitors and leak detection (hydro-carbon well) monitors.

      
      

   7. Based upon the structure of the ITB, this interpretation by Tel-Star and its officers was reasonable. It is also consistent with an objective reading of the bid made by one of Tel-Star's competitors, which also received the Board's invitation to bid and contemplated submitting a bid. According to Mr. Busbee, had he submitted a bid on behalf of his firm, based on the language of School Board's ITB, he would not have included hardware for in-tank level monitoring or leak detection (hydro-carbon well) monitoring.

      
      

   8. The bid from E. J. Ward, Inc., did include hardware for in-tank monitoring and leak detection, but this was not the result of the wording of the ITB. E. J. Ward, Inc., is the manufacturer of the present fuel dispensing system which the School Board of Broward County uses. Through servicing the account, representatives of E. J. Ward knew exactly what the School Board of Broward County had on site, and what it sought to acquire through its ITB.

      While E. J. Ward enjoyed no undue advantage by reason of its long association with the School Board, it was able to read the ITB with the gloss of its own experience, and knowledge of what staff intended to procure through the ITB. Its response to the ITB was not solely the product of a reading of the special conditions.

      
      

   9. The School Board believes that Tel-Star should have taken steps to determine whether the ITB was intended to include fuel level monitoring and leak detection monitoring, and points to page 7 of the Special Conditions, paragraph

      30 which states:

      
      

      Any questions by prospective bidders concerning this Invitation to Bid should be addressed to Mr. George Toman, Buyer, Purchasing Department, (305) 765-6119, who is authorized only to direct the attention of prospective bidders to various portions of the Bid so they may read and interpret such for themselves.

      Neither Mr. Toman nor any employee of the School Board of Broward County is authorized to interpret any portion of the bid or give information as to the requirements of the Bid in addition to that contained in the written Bid Document. Interpretations of the Bid or additional information as to its requirements, where necessary, shall be communicated to bidders only by written addendum.

      Section 8 of the General Conditions states:

      
      

      Any questions concerning conditions and specifications should be submitted in writing and received by the Department of Purchasing no later than three (3) working days prior to the Bid opening.

      
      

   10. Tel-Star and its officers made no inquiry of Mr. Toman to attempt to determine whether the Board expected bids responding to the ITB to include hardware for in-tank monitoring and leak detection. Under the wording of paragraph 30, however, it is doubtful that any such inquiry would have been enlightening. Nothing in that paragraph states that if an inquiry is made, anyone at the School Board will attempt to interpret the bid or provide additional information which all bidders will receive through a written addendum. It merely advises potential bidders should any interpretation of the ITB be made by the School Board, it will be communicated through a written addendum. Paragraph 30 does not describe a procedure which Tel-Star should have followed in order to receive a clarification of what the School Board wished to purchase through its ITB. Paragraph 8 also fails to state that requests for interpretations will be answered, or that failure to submit a written question precludes a bidder from relying on the structure and language of an ITB. The references to hardware for monitoring are found only in the specifications for software. The interpretation made by Tel-Star, that its equipment would have to be capable of integration with monitoring hardware which would be separately procured was reasonable.

       
       

       CONCLUSIONS OF LAW

       
       

   11. The Division of Administrative Hearings has jurisdiction over this matter. Sections 120.53(5) and 120.57(1), Florida Statutes.

       
       

   12. The invitation to bid distributed by the School Board for the purchase of its computerized fuel system contains latent ambiguities. The bid title on the general condition sheet, "Computerized Fuel System, less trade-in," and on page 3 of 23 "New On-Line Automated Fuel Dispensing and Accounting System, Less Trade-In" do not give notice that the School Board staff also intended that bidders should include the hardware required for in-tank level monitoring and leak detection (hydro-carbon well monitoring) in their bids. The documents are constructed so that exhaustive detail is given with respect to the automatic fuel dispensing and accounting aspects of the system, including in Section IV of the ITB a specification of the types of hardware to be provided which does not include hardware for monitoring.

       
       

   13. It was reasonable for bidders not already familiar with the School Board's system or informally knowledgable about what the School Board hoped to obtain through its ITB to assume that the references made in Section V of the bid on software and programming, Subsection I, required no more than that the vendor's system be one which could be integrated with a separate hardware system providing in-tank fuel monitoring and hydro-carbon well monitoring.

       
       

   14. Although staff at the School Board knew that they wished to purchase, as part of an integrated whole, not only fuel dispensing but in-tank fuel monitors and hydro-carbon well monitors, the invitation to bid which they structured did not communicate that intention.

   15. The First District Court of Appeal explained the purpose of competitive bidding in Hotel China & Glassware Co. v. Board of Public Instruction, 130 So.2d 78,81 (Fla. 1st DCA 1961), in the following way:

       
       

       Competitive bidding statutes are enacted for the protection of the public. They create a system by which goods or services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations. The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best bid received.

       The principal benefit flowing to the public authority is the opportunity of purchasing the goods and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference.

       
       

   16. Competitive bidding statutes should be construed to advance their purpose and to avoid their being circumvented. Webster v. Belote, 103 Fla. 976, 138 So. 721 (1931).

       
       

   17. The case of Department of Transportation v. Groves-Watkins, 530 So.2d 912 (Fla. 1988) is not apposite because the wide discretion accorded to the decisions of public agencies to reject all bids and re-bid a project is not at issue here.

       
       

   18. Due to the latent ambiguity in the special conditions for the ITB, Tel-Star Systems did not receive fair consideration of its offer. The special conditions should be re-written to make clear to all bidders that the School Board expects the vendors responding to the ITB not only to provide the ability to interface with tank level monitoring equipment and hydro-carbon well monitoring equipment, but to provide that hardware as part of their bids.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the School Board of Broward

County upholding the protest of Tel-Star Systems, Inc., rejecting all bids for the computerized fuel system less trade-in, Bid No. 90-597T, ordering that the bid specifications be clarified, and that a new invitation to bid be circulated.

DONE and ENTERED this 13th day of September, 1990, at Tallahassee, Florida.

WILLIAM R. DORSEY, JR.

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 13th day of September, 1990.

APPENDIX TO RECOMMENDED ORDER

Rulings on the proposed findings by the School Board of Broward County:

1. Adopted in Finding 1.

2. Adopted in Finding 3.

3. Implicit in Finding 4.

4.-5. Rejected as unnecessary. No party disputes that Tel-Star Systems, Inc., followed the appropriate protest procedures.

1. Discussed in Findings 6 and 7.

2. Rejected as recitation of testimony rather than a finding of fact.

3. Adopted in Finding 9.

4. Discussed in Finding 6.

5. Generally adopted in Finding 10.

Copies furnished:

Norris J. DeVoll, President Tel-Star Systems, Inc.

Post Office Box 791753

San Antonio, Texas 78279-1753

Edward J. Marko, Esquire Marko & Stephany

Suite 201 Victoria Park Centre 1401 East Broward Boulevard Post Office Box 4369

Fort Lauderdale, Florida 33338

John K. Featherston Vice President

E. J. Ward, Inc.

6410 Southwest Boulevard

Suite 224

Fort Worth, Texas 76109

Virgil L. Morgan, Superintendent Broward County School Board

1320 Southwest 4th Street

Fort Lauderdale, Florida 33312

Honorable Betty Castor Commissioner of Education The Capitol

Tallahassee, Florida 32399-0400

Sydney H. McKenzie, General Counsel Department of Education

The Capitol, PL-08

Tallahassee, Florida 32399-0400

Docket for Case No: 90-004595BID

Orders for Case No: 90-004595BID