STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

EQUITY RESOURCES, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF REVENUE, )

) CASE NO. 90-5837BID

Respondent, )

)

and )

) FREGLEY, OERTEL, SKELDING ) PARTNERSHIP, )

)

Intervenor. )

)

RECOMMENDED ORDER

This matter came on for hearing in Tallahassee, Florida before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings on October 4, 1990. The Division of Administrative Hearings received the hearing transcript on October 12, 1990.

The parties filed proposed recommended orders on October 22, 1990. The attached appendix addresses their proposed findings of fact by number.

APPEARANCES

For Petitioner: William A. Friedlander, Esquire

424 East Call Street Tallahassee, Florida 32301

For Respondent: Gene T. Sellers, Esquire

Assistant General Counsel Department of Revenue

P.O. Box 6668

Tallahassee, Florida 32314-6668

For Intervenor: M. Christopher Bryant, Esquire

Oertel, Hoffman, Fernandez & Cole, P.A.

2700 Blair Stone Road

P.O. Box 6507

Tallahassee, Florida 32314-6507 ISSUE

Whether petitioner's proposal to lease respondent warehouse space was responsive to respondent's request for proposals for Lease No. 730:0106?

PRELIMINARY STATEMENT

By timely formal written protest, duly foreshadowed by notice of intent to protest, petitioner Equity Resources, Inc. invoked the bid dispute procedures prescribed by Section 120.53(5), Florida Statutes (1989). In its formal written protest, petitioner asks that respondent Department of Revenue not carry out its stated intention to disqualify petitioner's proposal to lease warehouse space to the Department.

The formal written protest does not ask for an award of the lease to petitioner, at this juncture. Instead, petitioner seeks comparative review of its proposal with other, responsive proposals. The parties did not prepare for and agreed at hearing to refrain from litigating the comparative merits of petitioner's proposal and other proposals received in response to request for proposals for lease No. 730:0106.

Piecemeal consideration of bid disputes does not serve the purpose of the expedited procedures established by Section 120.53(5), Florida Statutes (1989). But, in light of the parties' limited preparation, the limited scope of the prayer for relief in the formal written protest (and since neither DOR nor the intervenor pleaded that the award would go to intervenor, even if petitioner's proposal were not disqualified), the present proceeding has been limited, in keeping with the parties' request, to the question whether the petitioner's proposal was responsive.

When the parties were unable to resolve this question by agreement, the Department of Revenue referred the matter for hearing to the Division of Administrative Hearings, in accordance with Section 120.53(5), Florida Statutes (1989). Since the Department of Revenue (DOR) referred the matter to the Division of Administrative Hearings, "the Division has jurisdiction over the formal proceeding." Section 120.57(1)(b)(3), Florida Statutes (1989).

FINDINGS OF FACT

1. As the parties stipulated, DOR "seeks to lease warehouse and office space in the City of Tallahassee in a privately owned building, and issued a request for proposals ('RFP') to seek competitive proposals. Four offerors responded with proposals; three of these were deemed responsive by the Department, and were evaluated by the Department on a variety of weighted evaluation criteria, only one of which was rental rate. . . . The Department proposes to award the lease to the Fregley/Oertel/Skelding Partnership ('F/O/S')."

   
   

   North of Gun Club, South of Springsax

   
   

2. By unrecorded warranty deed dated January 2, 1989, Petitioner's Exhibit No. 1, Richard L. Pelham, individually, conveyed to petitioner Equity Resources, Inc., property fronting on Springhill Road in Tallahassee, Florida, on which a warehouse stands.

   
   

3. The north boundary of petitioner's property inter-sects the western edge of the Springhill Road right-of-way at a point south of the intersection Springsax Street (which is a paved road) forms when it dead ends into Springhill Road. Petitioner's property does not abut the intersection. The distance

   between the northeast corner of petitioner's property and the Springsax Street intersection was variously put at "a few feet," (T.189), 100 feet, 100 to 200 feet, and 335 feet.

   
   

4. The south boundary of petitioner's property intersects the western edge of the Springhill Road right-of-way at a point some distance north of the intersection between Springhill Road and a dirt road known as Gun Club Road.

   
   

   Specifications Disseminated

   
   

5. Richard L. Pelham, who is president of petitioner Equity Resources, Inc., read in the newspaper about respondent's intention to lease office and warehouse space. At his request, Karen Allen, an employee of Universal Equities, Inc., another company with which Mr. Pelham is affiliated, picked up a copy of the request for proposal and bid proposal submittal form at a DOR office.

   
   

6. The request for proposal and bid proposal submittal form package which Ms. Allen picked up included a paragraph describing the geographical boundaries of the service area in which DOR hoped to lease space. The paragraph states:

   
   

   Space to be located within or abutting the boundaries starting at the corner of U.S. 90 W. and Capital Circle Southwest (263) proceed South on Capital Circle to Orange Avenue to Springhill Road, South on Springhill to Springsax, East on Springsax to Northridge Road, South on Northridge to Ridge Road, East on Ridge Road to State Road 61 (Crawfordville Hwy), North on SR 61 to

   U.S. 27, North on U.S. 27 to West Tharpe Street, West on Tharpe Street to Capital Circle NW, south on Capital Circle to Tennessee Capital Boulevard, Southwest on Tennessee Capital Boulevard to U.S. 90 and East on U.S.

   90 to Capital Circle Southwest (263). (See Map Attachment B)

   
   

   Petitioner's Exhibit No. 2, p. 8. Devoid of any markings purporting to represent boundaries, the map attached to the bid package Ms. Allen picked up depicted much of Tallahassee, including large areas outside the boundaries the quoted paragraph specified.

   
   

7. Many of the request for proposal and bid proposal submittal form packages DOR distributed did include maps on which the area described in paragraph 14A on page eight was outlined. The map in the master package showed boundaries, but they had to be replicated manually on copies. For outlining, DOR employee(s) used an implement that leaves a yellow mark which most copying machines do not reproduce.

   
   

8. Mr. Pelham asked Richard Gardner, who may or may not have been at the time an officer or employee of Equity Resources, Inc. (T.62), but who testified he was an officer as of the time of the hearing (T.63), to attend a preproposal conference. Mr. Gardner did attend without, however, taking with him either the request for proposal and bid proposal submittal form package Ms. Allen had obtained or his eyeglasses.

   
   

9. After the conference concluded, he asked for a copy of the request for proposal and bid proposal submittal form package. Michael S. Partin, a senior management analyst for DOR, asked another DOR employee to make a copy. When

   this effort proved unsuccessful (the paper jammed and half pages were produced), he did it himself. After consulting the master bid package, Mr. Partin used a yellow marker to outline on the map he gave Mr. Gardner the area described in the request for proposals.

   
   

   Confusion Feigned

   
   

10. Petitioner's Exhibit No. 4 is a copy of a map included in a bid package as Attachment B to a request for proposals. On it, somebody has drawn, with a yellow marker, a boundary that differs from the boundary drawn on the master map, but only in the vicinity of petitioner's property: instead of tracing Springhill Road south to Springsax Street and turning east, the boundary represented on Petitioner's Exhibit No. 4 proceeds south on Springhill Road, past petitioner's property, to Gun Club Road, and turns east there.

    
    

11. Mr. Gardner testified that Petitioner's Exhibit No. 4 was the map given to him as part of the package he received after the preproposal conference. But Mr. Partin's contrary testimony that Petitioner's Exhibit No. 4 is not the map he gave Mr. Gardner has been credited. The map he gave Mr. Gardner "look[ed] like [Petitioner's] Exhibit No. 5." T.166. Petitioner's Exhibit No. 5 unambiguously depicts the boundary turning east from Springhill Road onto Springsax Street, in complete consonance with the verbal description.

    
    

12. Mr. Gardner also testified that he understood from discussions with Mr. Partin that the boundary went south to Gun Club Road before turning, but this testimony has not been credited. Both Mr. Partin and Barbara Foster Phillips, who was present during the conversation, testified that nothing that was said could reasonably have been understood to mean this. The latter account has been accepted as truthful.

    
    

13. Mr. Pelham's testimony that he relied on (a) map(s) as establishing

    (a) boundar(ies) inconsistent with the boundary clearly described in paragraph 14A on page eight of the request for proposal has not been credited.

    
    

14. After determining the location of petitioner's property, DOR did not evaluate petitioner's proposal further, even though petitioner offered to lease space for significantly less than any other offeror, and even though petitioner's property was closer to other DOR facilities than many points within or abutting the boundaries set out in the request for proposals.

    
    

    Surprise at Hearing

    
    

15. On the master map itself, Petitioner's Exhibit No. 5, because of the width of the marker as it turned the corner from Springhill Road onto Springsax Street, yellow extends down Springhill Road far enough south of Springsax Street that at least some of petitioner's property fronts on the yellowed portion of Springhill Road. Not until final hearing, however, did any bidder see the master map.

    
    

    CONCLUSIONS OF LAW

    
    

16. Since the Department of General Services referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.53(5)(d)2., Florida Statutes (1989), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1989).

    Location Specified

    
    

17. Like the disappointed bidder in Capeletti Bros. Inc. v. Department of Transportation, 499 So.2d 855 (Fla. 1st DCA 1986) (reh. den. 1987), petitioner failed to file a timely protest when proposals were requested, and raised no question about the specifications with which it did not comply, until after the proposals were opened and the agency's intention to award to another property owner was announced.

    
    

18. Because nobody followed "[t]he proper procedure for contesting [a specification] . . . by filing a . . . solicitation protest within

    seventy-two hours of receipt of the project plans and specifications," Capeletti Bros. Inc. v. Department of Transportation, 499 So.2d 855, 857 (Fla. 1st DCA 1986) (reh. den. 1987), questions about the propriety and wisdom of particular specifications are no longer open.

    
    

19. An invitation to bid or a request for proposals sets out specifications which bids or proposals filed in response must meet in substance, in order for the bidder to qualify as a competitor for the contract to be

    let. Because the requirements appear in the specifications and because no timely protest was made to the specifications, they are binding on all proposers and the Department alike. The request for proposals is the standard against which proposals are measured to determine whether they are eligible for consideration.

    
    

    Property Outside Specified Area

    
    

20. Petitioner contends its property is located within the specified area or, alternatively, that "ambiguities with respect to the service area made it difficult or impossible for prospective bidders to determine if their warehouse locations were qualified." Petitioner's Proposed Recommended Order, p. 9. Specifications in requests for proposals, like "[w]ords in [almost] an[y] instrument should be given their natural or most commonly understood meaning." Tropabest Foods, Inc. v. State Department of General Services, 493 So.2d 50, 51-

    2 (Fla. 1st DCA 1986). Petitioner's property does not abut or lie within the boundaries set out in the request for proposals.

    
    

    No Inconsistency

    
    

21. Petitioner claims to have been misled by the concluding words of the paragraph specifying boundaries, viz., "See Map Attachment B." Mr. Pelham testified that he originally assumed that any location depicted on the map was eligible, whether within or without the boundaries described in words. Any such belief would have been unreasonable. Nothing on the map Ms. Allen received would support this assumption, and the words themselves unequivocally limit the area to "within or abutting the boundaries" described in words. See Partnership Properties v. Sun Oil Co., 552 So.2d 246 (Fla. 1st DCA 1986) and People Gas System, Inc. v. City Gas Co., 147 So.2d 334 (Fla. 3d DCA 1962).

    
    

22. Changing his mind when he saw the map Mr. Gardner received, Mr. Pelham testified, he assumed the boundary went along Gun Club Road, rather than, as unambiguously stated in the paragraph on page eight of the request for proposals, along Springsax Street. This belief would also have been unreasonable. First and foremost, the credible testimony established that the map given Mr. Gardner depicted the boundary following Springsax Street.

23. Second, when Mr. Gardner saw Mr. Partin draw the boundary by hand, he had no reason to believe Mr. Partin had any intention (or legal authority) to alter (without comment) the boundaries clearly stated in the paragraph on page eight of the request for proposals. Petitioner's president chose Mr. Gardner to represent the company in its dealings with DOR's Mr. Partin. Mr. Gardner's knowledge (which he misrepresented in his testimony) of circumstances surrounding preparation of the map is chargeable to the corporation.

    
    

24. Petitioner also contends that unspecified "prospective bidders" were in doubt as to their rights. Assuming arguendo petitioner's right to argue jus tertii, the evidence did not show that a single warehouse was so located as to cause confusion or uncertainty on any property owner's part.

    
    

25. The evidence did not show, moreover, any variance between the verbal description of the boundary and a boundary drawn on a map in any materials a prospective bidder actually received. DOR's Mr. Partin did not give Mr. Gardner Petitioner's Exhibit No. 4. The record is devoid of any request for proposal or bid proposal submittal form furnished to any prospective bidder not a party to these proceedings. DOR employees drew boundaries for each package manually.

    
    

    Materiality Not Put in Issue

    
    

26. Potentially at issue in a case involving a nonconforming bid is the materiality of the nonconformity. "Although a bid containing a material variance is unacceptable . . . not every deviation from the invitation is material." Robinson Electrical Co. v. Dade County, 417 So.2d 1032, 1034 (Fla. 3d DCA 1982); Tropabest Foods, Inc., v. State Department of General Services,

    493 So.2d 50, 52 (Fla. 1st DCA 1986); Glatstein v. Miami, 399 So.2d 1005 (Fla. 3rd DCA) rev. den. 407 So.2d 1102 (Fla. 1981). "It is only material if it gives the bidder a substantial advantage over the other bidders and thereby restricts or stifles competition." Tropabest Foods, Inc., v. State Department of General Services, 493 So.2d 50, 52 (Fla. 1st DCA 1986); Harry Pepper & Associates, Inc.,

    v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977).

    
    

27. In the present case, however, petitioner did not plead in its formal written protest or argue in its proposed recommended order that its bid or proposal, although nonconforming, substantially complied with the requirements set out in the request for proposals. Instead, petitioner seems to have manufactured its own requirements, and proven compliance with them. In doing so, petitioner did not establish either that its proposal was responsive to respondent's request for proposals or that the nonconformity was immaterial.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That respondent reject petitioner's proposal for lease No. 730:0106 as nonresponsive.

DONE and ENTERED this 9th day of November, 1990, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 9th day of November, 1990.

APPENDIX

Petitioner's proposed findings of fact Nos. 4 and 13 have been adopted, in substance, insofar as material.

Petitioner's proposed findings of fact Nos. 1, 2, 7, 8, 9, 10 and 12 have been rejected as unsupported by the weight of the evidence.

With respect to petitioner's proposed findings of fact Nos. 5 and 6, no bidder saw the "master map" before the final hearing in the present case. Although the breadth of the marker yellowed Springhill Road below the intersection with Springsax Street, the turn onto Springsax Street is unambiguously depicted on the master map.

With respect to petitioner's proposed finding of fact No. 3, unavailability of the legal description was not proven.

With respect to petitioner's proposed findings of fact Nos. 11 and 14, the lease was to last five, not ten years.

Respondent's proposed findings of fact Nos. 1, 2, 4, 5, 6 through 20, 22, 23, and 25 through 29 have been adopted, in substance.

With respect to respondent's proposed finding of fact No. 3, the evidence did not establish that DOR "determined a boundary area they felt offered the optimum number of properties."

With respect to respondent's proposed finding of fact No. 21, Pelham testified both that the property did and that it did not abut the intersection.

With respect to respondent's proposed finding of fact No. 24, the distance depends on the method of measurement.

With respect to respondent's proposed findings of fact Nos. 30 and 31, Mr. Partin's subjective views are immaterial.

Intervenor's proposed findings of fact Nos. 1 through 4, 7 through 13 and 16 through 24 have been adopted, in substance, insofar as material.

With respect to intervenor's proposed findings of fact Nos. 5 and 6, Mr. Partin's subjective intent is immaterial.

With respect to intervenor's proposed findings of fact Nos. 14 and 15, the distance depends on the method of measurement.

Copies furnished:

Gene T. Sellers, Esquire Department of Revenue Tallahassee, FL 32399-0100

William A. Friedlander, Esquire Equity Resources, Inc.

424 East Call Street Tallahassee, FL 32301

Kenneth G. Oertel, Esquire Oertel/Fregley/Sheldon Partnership 2700 Blairstone Road

Tallahassee, FL 32301

J. Thomas Herndon Executive Director Department of Revenue

104 Carlton Building Tallahassee, FL 32399-0100

William D. Moore, General Counsel Department of Revenue

The Capitol, LL-10 Tallahassee, FL 32399-0250

Docket for Case No: 90-005837BID

Orders for Case No: 90-005837BID