The Invitation to Bid contains instructions for the preparation and submission of bids. Item 4 on page 6 specifically provides as follows:
Each bid submitted shall be signed by the owner(s), corporate officers, or legal representative(s). The corporate, trade, or partnership title must be either stamped or
typewritten beside the actual signature(s). If the Bid Submittal is signed by an Agent written evidence from the owner of record of his/her authority must accompany the proposal. ALL BID SUBMITTAL SIGNATURES MUST BE ORIGINAL SIGNATURES AND MUST BE NOTARIZED. FAILURE TO NOTARIZE SIGNATURES WILL DEEM THE BID NON-RESPONSIVE. [Emphasis
appears in the Invitation to Bid.)
The Invitation to Bid also contains requirements for bidders to submit bids. Item 1 on page 3 specifically provides as follows:
Control of Property - This pertains to both the structure(s) and proposed parking areas. To submit a responsive bid, a prospective lessor must provide evidence of one of the following qualifications with the bid:
a.) Be the owner of record of the facility and parking areas (copy of deed).
b.) Be the lessee of space being proposed and present with bid, a copy of lease with documentation of authorization to sublease the facility and parking areas though the term of the base lease and all renewal option periods.
c.) Submit documentation of an option to purchase the facility and/or parking areas
) Submit documentation of an option to lease the facility with authorization to in- turn, sublease. Any lease must encompass the entire time period of the basic lease and any renewal option periods as required by the state.
) Submit documentation of notarized letter of agency detailed trust agreement.
[Emphasis appears in the Invitation to Bid.]
The Bid Submittal Form of Coliseum Lanes, Inc., was signed by Pamela A. Stewart. She represented her title to be Property Coordinator, Coliseum Lanes, Inc.
Stewart has never been an officer or director of Coliseum Lanes, Inc. She has never been employed by that company, and Coliseum Lanes, Inc., has never paid any monies to her.
Stewart is employed by Custom VP. Custom VP is a joint venture. The joint venture partners are Vine-Peal, Inc., and Custom Land, Inc. Coliseum Lanes, Inc., is not a partner of the joint venture.
Custom VP is a tenant at the Coliseum building, the property which is the subject of Coliseum Lanes, Inc.'s, bid submittal. Custom VP is somehow involved in renting space at the Coliseum. No written agreement between Custom VP and Coliseum Lanes, Inc., was submitted with Coliseum's bid or offered in evidence at the final hearing.
The bid submitted by Stewart on behalf of Coliseum Lanes, Inc., did not include any written evidence from Coliseum Lanes, Inc., the owner of the subject property, authorizing Stewart to act as the agent of that corporation or authorizing Stewart to submit a bid and/or enter into a lease on behalf of Coliseum Lanes, Inc. No such written authorization exists. Stewart had only been given written authorization to act on behalf of Coliseum Lanes, Inc., on one occasion involving a break-in at the Coliseum.
No corporate resolution was passed by Coliseum Lanes, Inc., authorizing Stewart to act as its agent, to submit a bid to the Department, to enter into a lease with the Department, or to commit Coliseum Lanes, Inc., to any financial obligations regarding such a lease agreement.
After the bids were opened, one of the Department's employees telephoned Stewart and requested her to provide something in writing setting forth her relationship with Coliseum Lanes, Inc. She typed a letter and had it delivered to the Department by courier later that same day. The entire body of that letter reads as follows: "To clarify my position with Coliseum Lanes, Inc., owners of the Coliseum. I am employed by Coliseum Lanes in their development venture, as the Property Coordinator for the Coliseum." This time, she identified her title under her signature as being the Property Administrator. The stationary on which she wrote that letter is not the stationary of Coliseum Lanes, Inc.; rather, it is stationary used by Custom VP in its marketing efforts on behalf of Coliseum Lanes, Inc.
That letter does not establish an agency relationship between Stewart and Coliseum Lanes, Inc. Likewise, that letter does not establish authorization for Stewart to submit a bid on behalf of Coliseum Lanes, Inc., or to bind that corporation to enter into any contracts. Even if it did, it was provided after the opening of the bids and is not part of Coliseum Lanes, Inc.'s, bid submittal.
Stewart did not submit a copy of the deed to the Coliseum property with her bid submittal, as required by the Invitation to Bid for a bid to be responsive. The only document submitted by Stewart to show ownership of the property forming the subject matter of the bid was a copy of a tax bill for 1989 real property taxes. A tax bill does not constitute proof of ownership.
Caroline Weiss is the President of Intercontinental Properties, Inc. However, Intercontinental Properties, Inc., is not the owner of the Intercontinental Building, the property which is the subject of the bid submittal of Intercontinental Properties, Inc. The Intercontinental Building is owned by Royal Trust Tower, Ltd., a Florida general partnership. Weiss is one of the general partners.
As part of her bid submittal, Weiss attached a Management Agreement between Intercontinental Properties, Inc., and Royal Trust Tower, Ltd., whereby Royal Trust Tower, Ltd., employed Intercontinental Properties, Inc., to manage the premises of the Intercontinental Building.
That Management Agreement contains restrictions on the authority of Intercontinental Properties, Inc., to bind Royal Trust Tower, Ltd., the owner of the Intercontinental Building, as follows:
- It is further mutually agreed that:
* * *
(c) The OWNER expressly withholds from the AGENT, any power or authority to make any structural changes in any building or to make any other major alterations or additions in or to any such building or equipment therein or to incur any expense exceeding $500.00, chargeable to the OWNER other than expenses related to the exercising of the expressed powers stated herein, without the prior written consent of the OWNER, except such emergency repairs as may be required because of danger to life or property or which are immediately necessary for the preservation and safety of the premises or the safety of the tenants and occupants thereof, or are required to avoid the suspension of any necessary services to the premises.
* * *
- The OWNER hereby expressly gives authority to the AGENT to sign and execute leases on behalf of the OWNER for the rental of space to tenants in the subject premises. Said authority, given by the OWNER to the AGENT, is limited to the execution of form leases substantially similar to the form that is attached to this Agreement and which has been previously approved by the OWNER. Said authority is further limited with regard to the minimum amount of rent and with regard to the duration of the lease which said minimum amount of rent and minimum duration of lease are attached hereto and have been previously approved by the OWNER. In addition to the foregoing, the AGENT'S authority to sign leases on behalf of the OWNER, where said leases require the OWNER to expend certain sums to finish the premises for the tenant, is limited to those expenses as attached to this Agreement and have been previously approved by the OWNER. In the event that a lease is presented to the AGENT for signature on form that is not substantially similar to the form attached to this Agreement, or at a rate per square foot that is less than the minimum specified on the attachments to this Agreement, or for a duration of time that is less than that specified herein or which obligates the OWNER to finish the premises for the tenant
at a cost which exceeds that of previously approved herein, then, in that event, prior written approval of the OWNER is necessary before the AGENT has the authority to execute any such lease.
None of the attachments to the Management Agreement was included with Intercontinental Properties, Inc.'s, bid submittal.
Accordingly, the Management Agreement prohibits Intercontinental Properties, Inc., from incurring expenses in excess of $500 for structural changes and major alterations without the prior written consent of the owner. The alterations and changes required to be made to the structure of the Intercontinental Building attendant to this bid award will cost in excess of
$450,000. Weiss did not include, as part of her bid submittal, written authorization from the owner to incur such expenses on behalf of the owner related to this bid submittal, and no evidence was offered that any such prior written consent exists.
Similarly, the Management Agreement authorizes Intercontinental Properties, Inc., to execute leases on behalf of the owner using only the specific lease form previously approved by the owner. Yet, the Invitation to Bid requires that the bidder will execute a lease form utilized by the Department, which will also incorporate the bid submittal form. No prior written approval of the owner authorizing Intercontinental Properties, Inc., to execute the Department's required lease or to change the terms of the lease approved by Royal Trust Tower, Ltd., was submitted by Weiss as part of her bid submittal package. Further, no evidence was offered that any such prior written consent exists.
There is no writing authorizing Intercontinental Properties, Inc., or Caroline Weiss to submit the bid she submitted or to bind the owner of the Intercontinental Building to the terms of her bid submittal.
At the time of the final hearing in this cause, the Intercontinental Building property was the subject matter of a foreclosure proceeding.
Both the bid submitted by Coliseum Lanes, Inc., and the bid submitted by Intercontinental Properties, Inc., failed to include written authorization from the owner of the property for which the bid was submitted authorizing the person submitting the bid to do so on behalf of the owner. Failure of an agent to show that the agent has written authority to bind that agent's principal in submitting the bid for the lease of real estate and in entering into an extended lease for the rental of real estate is not a minor irregularity. Such failure to show agency sufficient to bind the principal legally is a material deficiency and makes those bids non-responsive.
The Management Agreement submitted as part of the bid submittal of Intercontinental Properties, Inc., specifically prohibits Intercontinental Properties, Inc., from signing the lease required by the Department and from making the alterations required by this bid award without prior written consent of the owner. Such prior written consent does not exist. That deficiency is not a minor irregularity but is a material defect. Accordingly, the bid of Intercontinental Properties, Inc., is non-responsive for this additional reason.
Only a copy of a tax bill was submitted as proof of ownership of the subject property to be leased pursuant to the bid submitted by Coliseum Lanes, Inc. A copy of a tax bill is not proof of ownership. Further, the Invitation to Bid specifically requires a copy of the deed to prove ownership. Failure to prove ownership is not a minor irregularity but is, rather, a material defect. That failure makes the bid submittal of Coliseum Lanes, Inc., non-responsive for that additional reason.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes (1990).
The Notice of Protest and the formal protest in this cause were filed by Caroline Weiss on behalf of Petitioner, Intercontinental Properties, Inc. The formal protest raised as issues in this proceeding the allegations that
Coliseum Lanes, Inc.'s, bid was non-responsive for failure to prove ownership or control of the property to be leased and for failure to prove that the person who submitted the bid was authorized to do so on behalf of the corporate owner of the property. The formal protest alleged that since the bid of Coliseum Lanes, Inc., was non-responsive and the bid of Intercontinental Properties, Inc., was responsive, then the bid should be awarded to Intercontinental Properties, Inc., as the lowest and best responsive bidder.
After this cause was transmitted to the Division of Administrative Hearings, Petitioner's Motion for Leave to Amend the Formal Protest was granted, and the allegations were expanded to allege additional defects in the bid submittal of Coliseum Lanes, Inc. Prior to the commencement of the final hearing in this cause, Petitioner filed a Motion for Leave to File a Second Amendment to the Formal Protest, this time raising the allegations that the Department had failed to comply with the statutes and rules regulating its issuance of the Invitation to Bid since it had never obtained prior approval of the Department of General Services to lease privately-owned space and to issue the Invitation to Bid. That amendment was granted at the commencement of the final hearing.
The Chief of the Bureau of Property Management of the Department of General Services testified in this proceeding, verifying that the Department of Health and Rehabilitative Services had failed to comply with State statutes and regulations prior to issuing the subject Invitation to Bid; and further testifying that the Department of General Services had given after-the-fact approval only because the Department of Health and Rehabilitative Services had already awarded the bid; that if the Department of Health and Rehabilitative Services had not already awarded the bid, it would have been ordered to reject all bids for its failure to comply with statutory mandates which in turn prevented the State-approved list of vendors from receiving notice that a lease for privately-owned space was being solicited; that ownership of real property can only be proven by a copy of the deed; that a failure to provide a copy of a deed makes a bid non-responsive; that failure to provide written proof of agency when a bid is submitted by an agent and not by the owner makes a bid non- responsive; and, that a bid submitted by a corporation must be properly executed by the appropriate corporate officers or must be accompanied by a written authorization of the person so signing. By the conclusion of the final hearing, Petitioner dismissed most of its claims in this proceeding, including the claims that the Department of Health and Rehabilitative Services had acted without authority. Accordingly, the only claims remaining were that Coliseum Lanes,
Inc.'s, bid submittal was non-responsive since it did not include proof of ownership or control of the property being bid, and was not accompanied by authorization from the corporation allowing Pamela Stewart to submit a bid on behalf of the corporation and bind the corporation to the terms of that bid. Petitioner therefore argues that since the bid of Coliseum Lanes, Inc., was non- responsive and the bid of Intercontinental Properties, Inc., was responsive, then Intercontinental Properties, Inc., remains the only responsive bidder and must be awarded the bid in question.
The burden of proof in this proceeding is on Petitioner, the protestant of the bid award, to prove that the winning bidder was non-responsive and that the protestant's bid was responsive and is the lowest and best responsive bid. Petitioner has met its burden of proving that the bid submitted by Coliseum Lanes, Inc., was non-responsive because no proof of ownership was submitted as part of the bid submittal and no written agency authorization of the person submitting the bid was included in the bid submittal. The Invitation to Bid specifically provides that in order for the bid to be responsive the prospective lessor, if it alleges that it is the owner of record of the facility and parking areas, must provide a copy of the deed. No copy of the deed accompanied Coliseum Lanes, Inc.'s, bid submittal, and no authority has been cited for the proposition argued by Coliseum Lanes, Inc., that a copy of a tax bill is as good as a deed. The Invitation to Bid is unequivocal in its requirement that ownership be proven by providing a copy of the deed.
Further, the bid submittal of Coliseum Lanes, Inc., was not signed by the owner of that property; rather, it was signed by an employee of a different legal entity, Custom VP. No agreement between Coliseum Lanes, Inc., and Custom VP was included in the bid submittal to show that an employee of Custom VP was authorized to bind the corporate owner of the Coliseum. Although the Department attempted to assist Coliseum Lanes, Inc., in amending its bid by seeking that written authorization after the bid opening, such cannot be done legally, and the letter submitted after-the-fact by Pamela Stewart does nothing to establish an agency relationship even if an agency relationship could be created by the agent only. While it is undisputed, as Coliseum Lanes, Inc., argues, that Coliseum Lanes, Inc., is the owner of the Coliseum, that is not the issue in this proceeding. The issue is whether the bid submitted by Coliseum Lanes, Inc., was responsive by including those documents required by the Invitation to Bid to be included at the time that the bid was submitted. Coliseum Lanes, Inc.'s, bid submittal did not include all of those things required to be included and was, therefore, non-responsive.
Although Petitioner has proven that Coliseum Lanes, Inc.'s, bid was non-responsive, Petitioner has failed to prove that its bid was responsive and that it is, therefore, entitled to the award of the bid. Petitioner's own arguments as to why Coliseum Lanes, Inc.'s, bid was non-responsive also apply to Petitioner. Petitioner's bid was not submitted by the owner of the property but rather was submitted by an agent of the owner. The proof of agency to submit the bid is alleged to be contained in the Management Agreement between Royal Trust Tower, Ltd., the owner of the Intercontinental Building, and Intercontinental Properties-Inc., the rental agent of that building. Unfortunately for Petitioner, that Management Agreement itself contains language that specifically prohibits Intercontinental Properties, Inc., from making the structural changes and alterations necessary too comply with the bid award and further prohibits Intercontinental Properties, Inc., from entering into the lease form required by the Department without the prior written consent of the owner. No such written prior consent was submitted as part of Intercontinental Properties, Inc.'s, bid
submittal, and there is no evidence that any such written consent exists. Accordingly, Intercontinental Properties, Inc., has also submitted a bid which is non-responsive.
This proceeding conducted pursuant to Section 120.57(1), Florida Statutes, is a de novo proceeding. The evidence is undisputed that subsequent to the bid opening in June of 1990 and prior to the final hearing in this cause in November, 1990, the Intercontinental Building became the subject of a foreclosure proceeding. This change in circumstances between the bid submittal and the de novo final hearing must be considered in determining whether Intercontinental Properties, Inc., should be awarded a bid. Although no final judgment of foreclosure had been entered by the time of the final hearing in this cause, Intercontinental Properties, Inc.'s and Royal Trust Tower, Ltd.'s, ability to enter into a lease for the Intercontinental Building is certainly questionable.
The Department and Coliseum Lanes, Inc., argue that the failure of the agent to provide written proof of agency and authorization to submit the bid and enter into a lease and the failure to prove ownership or control of the building which is the subject of the lease are minor irregularities and are therefore waivable by the Department. The bids submitted in this cause were offers to enter into a contract, a lease for up to 15 years. It is difficult to imagine any more essential components to an offer to lease real estate than a showing that the person offering to lease that real estate owns it or controls it and is authorized by the owner to enter into a lease. Since neither of the subject bids proves the ability of the person submitting the bid to lease the property pursuant to a bid award, it cannot be reasonably argued that such deficiencies in the bid submittals were minor irregularities. The submittal of a bid by someone who has no authority to bind the owner of the property does adversely impact the interest of the Department since it could not enforce its bid award against the principal who did not properly authorize the agent. Such a bid submittal does give the bidder an advantage or benefit not enjoyed by other bidders since the bid would not be enforceable if the bidder determined it did not wish to go forward.
Harold Vineberg is the President of Coliseum Lanes, Inc., has an ownership interest in that corporation, and is on the board of directors. He also has an unidentified interest in Custom Land, Inc., and Vine-Peal, Inc., the two corporate partners which form the joint venture known as Custom VP. Although he testified that "we" authorized Pamela Stewart to submit the bid on behalf of Coliseum Lanes, Inc., no one ever asked him who the "we" was. Further, the evidence is clear that there is no written authorization from Coliseum Lanes, Inc., authorizing Pamela Stewart or authorizing Custom VP to submit a bid on its behalf. Moreover, the Invitation to Bid requires written proof of authorization, and any oral authorization by unidentified persons is not sufficient to fulfill the terms of the Invitation to Bid.
Since the Department received three bids in response to its Invitation to Bid, one of which was declared non-responsive by the Department at the outset and two of which have been proven to be non-responsive as a result of this bid protest proceeding, then the Department has in effect received no responsive bids to its Invitation to Bid. The receipt of non-responsive bids presents a legally different situation than the situation wherein the Department receives bids which may or may not be responsive but exercises its discretion to reject all bids. The Department has not rejected bids relative to this bid
solicitation process. Accordingly, the arguments of the parties regarding the proper exercise of the Department's discretion when it rejects bids do not apply to this situation.
The Department and Coliseum Lanes, Inc., argue that the copy of the tax bill submitted by Coliseum Lanes, Inc., should be considered to be as good as a deed to prove ownership since one of the Department's employees allegedly telephoned an employee of the Department of General Services who said that. The employee who allegedly made the telephone call did not testify, and the employee who allegedly received the telephone call did not testify. That evidence is double hearsay, and no finding of fact can be based on it. Further, that evidence is contrary to the direct testimony given during the final hearing of the Chief of the Bureau of Property Management for the Department of General Services who testified that the Department of General Services would not accept a tax bill as proof of ownership and would only accept a copy of a deed, is contrary to the terms of the Invitation to Bid which specifies that failure to include a copy of the deed to prove ownership would deem the bid to be non- responsive, and is without any legal support.
