STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

SOUTHEAST ROOFING AND SHEET ) METAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-2820BID

)

SCHOOL BOARD OF LEON )

COUNTY, FLORIDA, )

)

Respondent. )

)

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 May 17, 1991.

APPEARANCES

For Petitioner: Fred C. Isaac, Esquire

Lewis, Paul & Isaac, P.A. 2468 Atlantic Blvd.

Jacksonville, Florida 32207

For Respondent: C. Graham Carothers, Esquire

Ausley, McMullen, McGehee, Carothers & Proctor

Post Office Box 391 Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

Whether respondent should award the contract for the reroofing of Rickards High School, Project No. LCS-33016, to petitioner or reject petitioner's bid as unresponsive because it was not accompanied by a specimen copy of a manufacturer's roofing system guarantee?

PRELIMINARY STATEMENT

In response to notice posted by the Leon County School Board (School Board) of its intention to award the disputed contract to the second lowest bidder, petitioner Southeast Roofing and Sheet Metal, Inc. (Southeast) gave concededly timely notice of intent to protest and subsequently filed its written notice of protest, also timely according to respondent's witness.

Because the parties were unable to resolve the matter informally within the time provided by Section 120.53(5), Florida Statutes (1990 Supp.), the School Board referred the formal written protest to the Division of Administrative Hearings for proceedings in accordance with Section 120.53(5)(d), Florida

Statutes (1990 Supp.) Both parties agreed to proceed under Section 120.57(1), Florida Statutes (1990 Supp.), even in the absence of a dispute as to material fact.

At the hearing, petitioner offered seven exhibits, but called no witnesses. Respondent called a single witness, Paul Byrd, but offered no exhibits. The parties made several stipulations on which fact findings have been predicated.

At the close of the hearing, counsel for both parties waived the right to submit proposed recommended orders in the interest of expediting resolution of the bid dispute.

FINDINGS OF FACT

1. By advertisement to bid prepared after February 8, 1991, and before March 21, 1991, the School Board advised prospective bidders where they could find drawings and specifications for reroofing James S. Rickards High School, Project No. LCS-33016. Petitioner's Exhibit No. 5.

   
   

2. The advertisement to bid announced the bid deadline and stated that the School Board

   
   

   reserves the right to waive irregularities and/or information in any Bid and to reject any or all Bids in whole or part, with or without cause, and/or accept the Bid that in its judgment will be for the best interest of the School Board.

   
   

   Petitioner's Exhibit No. 5. The invitation to bid, Section B, 7., also addressed rejection of bids, stating:

   
   

   1. The Bidder acknowledges the right of the Owner to reject any or all bids and to waive any informality or irregularity in any bid received. In addition, the bidder recognizes the right of the Owner to reject a bid if the bidder failed to furnish any required bid security, or to submit the data required by the bidding document, or if the bid is in any way incomplete or irregular; to reject the bid of a bidder who is not in a position to perform the contract; and to readvertise for other or further bid proposals.

   2. The Owner reserves the right to reject any or all bids when such rejection is in the interest of the Owner, and to reject the Bid of a Bidder who is not in a position to perform the Contract, or whose List of Subcontractors is improperly prepared, or not included in the Bid proposal.

   3. Failure to complete the Form PUR 7068 Sworn Statement under Section 287.133(3)(a), Florida Statutes on Public Entity Crimes and submit it with your bid or proposal will

   result in immediate disqualification of your bid or proposal.

   
   

   Petitioner's Exhibit No. 7. Only the failure to submit a completed Form PUR 7068 was identified as grounds for automatic rejection of a bid.

   
   

3. The invitation to bid specified three different types of shingles that would meet the School Board's requirements. All three (including GAF 75) are of a premium grade, and guaranteed by their manufacturers for 20 years. The invitation to bid, Section Q, 4., entitled "Guarantees and Warranty," states:

   
   

   4.01 Upon completion of the work, and before final payment, contractor shall furnish owner an unlimited ROOFING SYSTEM GUARANTEE with flashing endorsement covering all workmanship and materials issued by the roofing materials manufacturer for a period of 20 years from date of substantial completion.

   
   

   Petitioner's Exhibit No. 7. Earlier on, the invitation to bid, Section B, 3.05, states:

   
   

   (d) Contractor shall submit with his bid, proposal or quotation a specimen copy of the ROOFING SYSTEM GUARANTEE with flashing endorsement applicable to the project.

   
   

   Petitioner's Exhibit No. 7. According to Paul Byrd, respondent's Director of Construction, the purpose of requiring a specimen copy beforehand is twofold: the primary reason is to permit the evaluation of exclusion clauses, and, of less significance, he said, a specimen warranty shows that the bidder has a relationship with a manufacturer of roofing materials.

   
   

4. Eight roofing contractors bid on the job, including Register Contracting Co., Inc. (Register). Petitioner Southeast's bid was low at

   $644,400, and Register was second low at $655,000. Petitioner's Exhibit

   No. 3. Southeast was the only one of the eight bidders who did not include a specimen copy of a manufacturer's roofing system guarantee with its bid.

   Register submitted two such specimens, one from Manville Products Corporation and one from GAF Building Materials Corporation (numbered 10446 9/88.)

   
   

5. The LCS-33016 bid form proposal executed by Southeast and Register alike recites that the bidder has "examined carefully the . . . specifications .

   . . and if awarded the contract . . . will contract . . . to furnish all necessary . . . materials." Petitioner's Exhibits Nos. 1 and 2. The successful bidder may elect to use GAF 75, the Johns-Manville, or a third shingle specified in the invitation to bid.

   
   

6. Well after the deadline for submitting bids, petitioner furnished the School Board a specimen copy of GAF Building Materials Corporation's guarantee, Petitioner's Exhibit No. 4, another form 10446 9/88 with wording identical to the copy Register submitted on time. Warranties differ depending on the grade of shingle, but this is the manufacturer's current form for all GAF 75 shingles. The form has blanks for "TYPE OF GUARANTEE," "PERIOD OF COVERAGE," "TYPE OF FLASHING," "AREA OF ROOF" and the like, none of which either Register or Southeast filled in.

7. Form 10446 9/88 sets out exclusions from coverage and states that the guarantee "becomes effective only when bills for installation and supplies have been paid in full to the roofing contractor and materials suppliers, and the Guarantee charge has been paid to GAF. . . . [and] upon the satisfactory completion of the roof and GAF's execution of the Guarantee." Petitioner's Exhibit Nos. 2 and 4. The form also states, "The roofing contractor is NOT an agent of GAF." Id. (Emphasis is in original.)

   
   

8. Mr. Byrd testified at hearing that the exclusion clauses in Form 10446 9/88 might be consistent with the unlimited guarantee required by the invitation to bid, Section Q, 4.01, but that he had not determined that they were consistent. On the other hand, he also testified that Register's bid is responsive and that, if Register is awarded the contract, Register will be free to use GAF 75 shingles, upon approval of submittals.

   
   

   CONCLUSIONS OF LAW

   
   

9. Since the School Board referred petitioner's hearing request to the Division of Administrative Hearings, in accordance with Section 120.53(5)(d)2., Florida Statutes (1990 Supp.), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1990 Supp.).

   
   

10. In Department of Transportation v. Groves-Watkins Contractors, 530 So.2d 912 (Fla. 1988), the Court held that an agency's decision to reject all bids must stand, in the absence of proof that "the agency acted fraudulently, arbitrarily, illegally or dishonestly." 530 So.2d 914. The School Board argues that the Groves-Watkins standard of review should be extended to apply to situations where an administrative agency elects to choose among competing bidders, and let the contract.

    
    

11. But it is one thing to defer to an agency's judgment that budgetary constraints, a reordering of agency priorities or external economic conditions make it wise for the agency to defer or forgo goods or services; see Couch Construction Co. v. Department of Transportation, 361 So.2d 172 (Fla. 1st DCA 1978); Willis v. Hathaway 95 Fla. 608, 117 So. 89 (1928); and it is another to strip the Division of Administrative Hearings of its traditional role in formulating agency action on the basis of fact, policy and law established in a neutral forum, when the question is which of two (or more) competing bidders is entitled to the award. See Capeletti Brothers v. Department of Transportation,

    499 So.2d 855 (Fla. 1st DCA 1986); McDonald v. Department of Banking & Finance, 346 So.2d 569 (Fla. 1st DCA 1977).

    
    

12. Here the evidence is devoid of so much as a hint of fraud or dishonesty. But petitioner's claim boils down to a contention that rejecting its bid for failure to attach a manufacturer's blank form guarantee is arbitrary (and therefore unlawful), where the contents of the form are out of the bidder's control and cannot vary from bidder to bidder. Among other things, the School Board argues that there is too much laxity in the conduct of public business in general and that requiring bidders to comply exactly with bid specifications would have a salutary effect.

    
    

13. But the rule is that noncompliance must be material to justify rejection of a bid. An invitation to bid sets out specifications which bids filed in response must meet in substance, in order for the bidder to qualify as a competitor for the contract to be let. The invitation to bid is the standard against which bids are measured to determine whether they are eligible for consideration. Specifications in invitations to bid, 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).

    
    

14. "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 and Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977).

    
    

15. The School Board claims that the failure to supply the form hampered its ability to evaluate petitioner's bid. But the evidence showed otherwise. Since Register did supply Form 10446 9/88, moreover, petitioner's peccadillo did not diminish the School Board's ability to examine the exclusionary clauses (with which it evidently found no fault.)

    
    

16. The roofing contractor's relationship to the manufacturer is not material in any way. The form explicitly states that the contractor is not the manufacturer's agent. Whatever their relationship, the manufacturer obligates itself to execute the guarantee upon the occurrence of stated conditions, all wholly independent of any relationship between manufacturer and contractor.

    
    

17. Here, as in Fairchild-Florida, Inc. v. State of Florida Department of Transportation, No. 86-1834BID (RO; July 25, 1986) petitioner's "bid is technically out of compliance with the standard specifications, but not in a way that calls into question the integrity of the bidding process.

The test for measuring whether a deviation in a bid is sufficiently material to destroy its competitive character is whether the variation affects the amount of the bid by giving the bidder an advantage or benefit not enjoyed by the other bidders. Harry Pepper and Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1977)

(reh. den. 1978)"

At page 7. Because petitioner's omission to supply the specimen in no way excuses it from the requirement set out in Section Q that it actually furnish the manufacturer's unlimited 20-year guarantee (when the time comes) it cannot be said that petitioner gained any economic advantage by not attaching form 10446 9/88. The School Board should save the taxpayers $10,600 by exercising its legal right to waive an inconsequential irregularity.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That respondent award petitioner the contract to reroof James S. Rickards High School, Project No. LCS-33016.

DONE and ENTERED this 23rd day of May, 1991, 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 23rd day of May, 1991.

COPIES FURNISHED:

Fred C. Isaac, Esquire Lewis, Paul & Isaac, P.A. 2468 Atlantic Blvd.

Jacksonville, FL 32207

C. Graham Carothers, Esquire Ausley, McMullen, McGehee,

Carothers & Proctor Post Office Box 391 Tallahassee, FL 32302

Mr. Bill Woolley, Superintendent Leon County School Board

2757 W. Pensacola Street Tallahassee, FL 32304

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

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. 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.

Docket for Case No: 91-002820BID

Orders for Case No: 91-002820BID