STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THE RIVENITE CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 92-1269BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

BTW INDUSTRIES, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a formal hearing in the above- styled case on March 23, 1992, at Tallahassee, Florida.

APPEARANCES

For Petitioner: Fred A. McCormack, Esquire

Richard A. Lotspeich, Esquire John T. LaVia, Esquire

Post Office Box 271 Tallahassee, Florida 32302

For Respondent: Susan P. Stevens, Esquire

605 Suwannee Street

Tallahassee, Florida 32399-0458

For Intervenor: Martha Harrell Chumbler, Esquire

Post Office Drawer 190 Tallahassee, Florida 32302

STATEMENT OF THE ISSUES

Whether Respondent's action in finding Petitioner's product did not meet bid specifications was arbitrary, capricious or unsupported by reason or logic. Specifically, the issue is whether the test procedures employed by Petitioner to test the material submitted by Petitioner for testing to determine water absorption are arbitrary, capricious and invalid for the purpose intended.

PRELIMINARY STATEMENT

Pursuant to legislative mandate, the Florida Department of Transportation (DOT), Petitioner, was directed to investigate the potential use of recycled

plastic material for fence posts, guard rails, etc., in its highway construction program. In carrying out this mandate, after some tests had been conducted by the University of Florida under contract with DOT, an invitation to bid (ITB) was issued to purchase 5000 fence posts, 8 feet long by 3.5 inches in diameter, made from recycled plastic.

Six bidders submitted bids, and on initial tabulation Rivenite Corporation, Petitioner, was the apparent low bidder. The bid specification required the successful bidder to submit a sample of the bid product for testing. This was done; and, following the test at the University of Florida testing laboratory, the product was found to have absorbed more than the 10 percent water absorption allowed under the terms of the ITB. Identical tests were performed on the products submitted by the second low bidder, BTW Industries, Intervenor, whose product met the specifications in the ITB. Accordingly, BTW was selected to receive this contract. Rivenite Corporation timely filed a protest to challenge this decision, and these proceedings followed.

At the hearing, Petitioner called 5 witnesses, Respondent called 1 additional witness, and 29 exhibits were admitted into evidence. Intervenor questioned the other parties' witnesses, but did not call any witnesses. The parties presented a prehearing stipulation. Findings of Facts 1 through 24 below are those stipulated by the parties.

Proposed findings have been submitted by the parties. Treatment accorded those proposed findings is contained in the Appendix attached hereto and made a part hereof.

FINDINGS OF FACT

1. The 1988 Florida Legislature enacted Section 49 of Chapter 88-130, Laws of Florida, now codified as Section 336.044, Florida Statutes, which, among other things, requires DOT to investigate the use of "recycled mixed-plastic materials for guard rail posts and right-of-way fence posts."

   
   

2. In the Fall of 1988, representatives from DOT met with representatives from the University of Florida to discuss the different types of recycled materials that should be investigated.

   
   

3. Subsequent to this meeting, DOT officials contacted several manufacturers of recycled plastic products and asked them to send any materials that were made of recycled plastic so that these products could be evaluated for use by DOT as recycled plastic fence posts to replace wood line fence posts now being used.

   
   

4. DOT maintains many miles of right-of-way which is separated from private property by wire fencing material supported and held upright by pull- posts and line posts. The pull-posts are more substantial and are designed to support most of the tension of the fence wire. The line posts are spaced 15 to

   20 feet apart for a distance of approximately 300 feet between the pull-posts and are designed to take some of the extra tension off the pull-posts.

   
   

5. In response to requests from DOT, several manufacturers sent samples of recycled plastic fence posts to the DOT Materials Office in Gainesville in late 1989 and early 1990 for evaluation and testing. These manufacturers included Rivenite and BTW.

6. In late 1989, DOT entered into a contract with Dr. Charles Beatty of the University of Florida, Department of Materials Science and Engineering, to perform the evaluation and testing on the recycled plastic fence posts.

   
   

7. During 1990, Dr. Richard Ramer of the DOT Materials Office worked with Dr. Beatty to design laboratory tests that were to be used to evaluate the potential in-field performance of the recycled plastic fence posts. In addition to the laboratory tests, Dr. Ramer also initiated field testing of the posts in 1990 by placing the posts in the ground at the Materials Office to see how the plastic posts would behave under actual exposure conditions. After an initial uncontrolled field test, Dr. Ramer began a controlled field test of all the different manufacturers' posts by placing them in the ground attached to fence wire and linked to sets of pull-posts.

   
   

8. During the spring and summer of 1990, Dr. Beatty, through one of his students, began to conduct a series of tests on the recycled plastic fence posts. Included in these tests was a test on the water absorption characteristics of the post materials.

   
   

9. Over the testing period, three different water absorption testing techniques were employed. Technique 1 was used first and was later revised to compensate for the lack of uniformity in some of the samples. In Technique 1 each of four posts were cut into 1/8 inch discs. After initial thickness, diameter and weight measurements were taken, the discs were placed in boiling water. Periodically the discs were removed, measured, weighed and then replaced in the boiling water. This process was repeated until no further changes were observed. Technique 2 was similar to Technique 1 except that more measurements were taken and the discs were boiled in a 5% salt water solution. In Technique 3, the same tests were run except the measurements and weights were taken more frequently.

   
   

10. In November 1990, the Materials Office submitted a purchase requisition for the purchase of 1000 recycled plastic fence posts from each of five manufacturers, including Rivenite and BTW, to conduct a final six-month long field evaluation on the posts then being subjected to the laboratory testing. The posts were to be placed in actual field applications throughout the state by the personnel at the various DOT district offices.

    
    

11. The purchase was authorized and the posts were purchased. Throughout the winter and spring of 1991, posts were delivered to the DOT Materials Office. The posts were then shipped to the DOT district offices for installation in the ground. By October of 1991, the posts had been installed by the district offices.

    
    

12. During the summer of 1991, DOT began to prepare bid specifications in anticipation of issuing an invitation to bid for an order of 5000 recycled plastic fence posts. These posts are to be used as a demonstration project prior to a large scale purchase of posts. Based on a five year cost history, it is estimated that the maximum number of fence posts used on an annual basis by DOT is approximately 100,000. Dr. Ramer prepared the initial draft of the bid specifications and then solicited comments on it from Ken Morefield, the State Highway Engineer, and Dr. Beatty. After several revisions, the final bid specifications were included as a part of the ITB as a section entitled Recycled Plastic Fence Posts, Specifications.

    
    

13. The ITB was mailed to numerous manufacturers, including Rivenite and BTW, on October 8, 1991. Included in the Specifications attached to the ITB was

    Section 5, entitled "Predicted Performance Life." This Section requires that the posts provide a minimum acceptable performance life of 35 years. This Section also provides for "Conditions which may be used by the Department to determine unacceptable performance . . . ." Included in these conditions is:

    
    

    d. Water uptake exceeding 10 percent by

    weight of its original weight over its predicted lifetime.

    
    

14. The Specifications did not state specifically how the water uptake would be measured but implied that testing would be performed.

    
    

15. Also included as part of the ITB was a section entitled Recycled Plastic Fence Posts, Bid Title, Special Conditions. In the Special Conditions is a Section 3.0, entitled "Additional Testing." This section requires the apparent low bidder to deliver one post to Dr. Ramer for unspecified testing.

    
    

16. Six bids were submitted in response to the ITB, including bids by Rivenite and BTW. On October 22, 1991, the DOT Purchasing Office opened the bids and determined that Rivenite was the apparent low bidder having bid a unit price of $5.00 per post for 5,000 posts for a total bid price of $25,000.

    
    

17. As the apparent low bidder, Rivenite delivered one post to Dr. Ramer for testing. Upon receiving the Rivenite post, Dr. Ramer, in conjunction with Dr. Beatty and his graduate student, Ingrid Liedermooy, performed a variety of tests on the post. Among the tests performed was an accelerated water absorption test conducted by Ms. Liedermooy. After receiving samples of the post cut into 1/8 inch discs by Dr. Ramer, Ms. Liedermooy conducted the accelerated water absorption test using Technique 3 which was one of the testing techniques utilized to test the recycled plastic fence posts over the 1990-1991 testing period. The results of that test showed that the Rivenite discs had a weight gain of 25.54% in the boiling water and 24.06% in the salt water.

    
    

18. Based on the results of the water absorption tests, Dr. Ramer concluded that the Rivenite post had exceeded the maximum water uptake of 10% required by the Bid Specifications and, therefore, failed to meet the Bid Specifications of the ITB. The Rivenite bid and the Rivenite post meet all other requirements of the ITB and Bid Specifications.

    
    

19. Subsequent to obtaining the results of the tests on the Rivenite post, DOT notified BTW that it was now the apparent low bidder. BTW then sent a post to Dr. Ramer for testing. The same tests were performed on the BTW post as had been performed on the Rivenite post, and the BTW post was determined to meet all the Bid Specifications. Tests on the BTW discs showed a 6.65% weight gain in boiling water and 6.4% weight gain in boiling salt water.

    
    

20. On January 16, 1992, DOT posted the results of the bid showing that it intended to award the bid to BTW and that Rivenite's bid had been rejected because it did not meet the Bid Specifications. Subsequently, Rivenite filed a timely Notice of Protest and a timely Formal Protest and Petition for Formal Hearing.

    
    

21. The initial theory behind the accelerated water absorption tests is a theory called time-temperature superposition. Time-temperature superposition tests are used on a variety of materials to obtain information as to their behavior over long periods of time. Through these tests, the aging characteristics of materials can be accelerated in a laboratory setting. One of

    the aging characteristics of materials which is often important is water uptake or absorption. One of the methods used to accelerate water absorption in materials is to subject the material to boiling water.

    
    

22. No field tests have been performed for a 35 year period which establish the water uptake characteristics of a Rivenite post or any other recycled plastic fence post under any field conditions for that length of time.

    
    

23. At the time it submitted its bid in response to the ITB Rivenite was aware of the Interim Report on the accelerated water absorption tests which had been performed by Dr. Beatty and his students.

    
    

24. Rivenite's product is made from scrap plastic and sawdust. The scrap plastic comes from stretch wrap, various laminates, cable scraps, grocery store plastic bags, etc. The sawdust is obtained from furniture manufactures because the hard wood sawdust is preferred to softer wood sawdust which would absorb more moisture.

    
    

25. The plastic is chopped, shredded and heated to approximately 140 degrees C and sawdust is blended into the plastic. The molten mass is then extruded through a die to produce the shape desired, here 3 1/2 inch cylinders cut into 8 feet lengths. Other dies used create extruded "lumber" of various sizes and shapes which is used in industrial flooring, boardwalks, etc. The addition of the sawdust to the recycled plastic stabilizes the melt, renders the product paintable, facilitates the extrusion process, reduces the coefficient of expansion and the end product provides better traction than if no sawdust is used.

    
    

26. Petitioner does not contest the accelerated aging process used in these tests as nobody expected field tests to be ongoing for 35 years to see if the product meets the life expectancy requirements. What Petitioner contests is the testing of 1/8 inch slices from the 8 foot fence post offered for testing. However Petitioner knew that the initial Rivenite post tested by DOT when cut into 1/8 inch slices and placed in boiling water for ten hours showed an absorption in excess of 25% by weight. (Exhibit 2)

    
    

27. The initial samples of Rivenite received by DOT from Petitioner were a 50-50 blend of recycled plastic and sawdust. One test of this product was conducted in the corrosion lab at DOT to determine if the product would float. This test consisted of submerging a 4 inch by 4 inch by 2 inch thick section in a 5% saline solution at ambient temperature and periodically thereafter removing the piece and weighing it to determine the moisture absorbed. After six days the block of Rivenite had absorbed 7.7% water, after two years it had absorbed 14.4%, and had not reached stability although the rate of absorption had slowed (Exhibits 21 and 22).

    
    

28. DOT sponsored tests of Rivenite posts showed the original posts (50% plastic 50% sawdust) absorbed less water than the new posts (70% - 30%) (Exhibit 23). On the other hand tests run by Dr. Kopf showed the 50-50 blend absorbed slightly more water than did the 70-30 blend. It is obvious that these samples were taken from different batches where not only different waste plastics were used but also different sawdusts were used. The differences in absorption could be attributed to the plastic mixture used as different plastics have different absorption rates as testified by Dr. Kopf.

    
    

29. By cutting the post into 1/8 inch segments many more pieces of sawdust are exposed to water than would be the case if a much thicker piece of material

    was tested. This is so because many of the pieces of sawdust exceed 1/8 inch in size and when cut into 1/8 inch slices the sawdust could be exposed to water on both sides of the slice rather than be encapsulated in plastic as it was before being cut.

    
    

30. Further Petitioner contends that heating the water under pressure would increase the temperature to more than 100 degrees C and this could "melt" the recycled plastic and change the chemical make-up of the product. However, no evidence was presented, and presumably no one knows, what specific recycled plastics were used in the fence post offered for testing and, therefore, the chemical characteristics of this material.

    
    

31. Petitioner's expert witness, Peter Kopf, testified that he was familiar with the characteristics of plastics and that some absorb much more water than others. His example of a composite with low absorption characteristics is bakelite which has been used for handles on kitchen appliances for 75 years. Bakelite is a mixture of plastic (a polymer) and wood ground to a powder. This powder is encapsulated with the polymer.

    
    

32. Dr. Kopf tested different length sections of a Rivenite fence post by boiling these lengths in distilled water for 3000 hours. His 1/8 inch slice absorbed 26% water, 1/4 inch slice absorbed 24% water, 1/2 inch slice absorbed 18% water and a 1 inch slice absorbed 9% water. However, at the completion of this test period the 1 inch slice had not reached equilibrium. Accordingly, his opinion that the 8 foot fence post would absorb 8 or 9% moisture over its 35 year life-span in the field, is little more than an opinion based on insufficient facts.

    
    

    CONCLUSIONS OF LAW

    
    

    The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

    
    

33. There is no dispute as to the facts here involved. Accordingly, the only issue is whether the testing procedures utilized by DOT to determine if the fence posts ordered pursuant to the ITB would absorb not more than 10% moisture over the 35 year life span were inaccurate, arbitrary or capricious.

    
    

34. Although the procedures to be used to test the water absorption qualities of the sample fence post offered by Rivenite for this purpose were not spelled out in the ITB, Rivenite knew that the samples presented to DOT for the initial tests were cut into 1/8 inch slices and placed in boiling water to accelerate the absorption process. Rivenite also knew that the 50-50 mix initially submitted failed the maximum 10% absorption provided for in the ITB.

    
    

35. While all expert witnesses agreed that accelerated laboratory tests cannot accurately determine the amount of water the product will absorb over its

    35 years anticipated life, they also agreed that this procedure gives some indication of what will occur during the aging process; and, when correlated with field tests, are quite reliable. Since field tests require a minimum of two years to be of any help in correlating the lab results with actual changes in the product, the urgency of the mandate to DOT did not provide the time to conduct these field tests although they are on-going and have been on-going since 1990.

    
    

36. The DOT decision to use the same tests on the products offered pursuant to the ITB as were used on the initial tests reported in Exhibit 2 can

    hardly be said to be arbitrary. Had a totally different test been used a better argument of arbitrariness could possibility be made.

    
    

37. The standard by which an agency's actions in bid letting is gauged is as stated in DOT v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988):

    
    

    . . . An agencies decision based upon a honest exercise of this discretion cannot be overturned absent a finding of illegality, fraud, oppression, or misconduct. This is the standard by which an agency's decision on competitive bids for a public contract should be measured. [In a bid challenge] the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly.

    
    

38. An arbitrary decision is one that is not supported by facts or logic or that is despotic. No evidence was presented to support illegality, fraud, or dishonesty on the part of DOT. Petitioner, in its proposed recommended order acknowledges that it only contends DOT acted arbitrarily.

    
    

39. Here the test procedures adopted by DOT were the result of study and consultation with industrial and academic experts in the field of plastics. It can hardly be said that the test procedures adopted after such study and consultation were arbitrary, capricious, illegal or dishonest.

    
    

40. It is significant in evaluating the test procedures utilized herein that no one who immersed a Rivenite plastic composite larger than one inch thick in water obtained stabilization. This would imply that these pieces were continuing to absorb water and therefore increase their percentage of absorption with time. Coupling this fact with the evidence submitted by Petitioner's witness that the water absorption of plastics varies widely and no one knows the chemical make up of the plastic mixture used in the Rivenite post submitted for testing, it would be expected that the 8 foot Rivenite post would absorb water for an extended period of time before reaching equilibrium. This factor lends additional credence to the test procedure used which did lead to the product tested reaching equilibrium.

RECOMMENDATION

It is recommended that a final order be entered dismissing the challenge to Invitation to Bid No. OC2291E4 by Rivenite Corporation and awarding the bid to BTW Industries, Inc.

DONE and ORDERED this 27th day of April, 1992, in Tallahassee, Florida.

K. N. AYERS 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 27th day of April, 1992.

APPENDIX

Proposed findings submitted by DOT are accepted. Those not included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached.

Proposed findings submitted by Petitioner are accepted except as noted below. Those not noted below or included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached.

1. First sentence rejected.

2. Accepted to the extent the posts were placed outside to see how they weathered exposed to the elements.

15. In 1988 those posts were planted solely to see how they weathered.

1. See Hearing Officer's #27.

2. See Hearing Officer's #27.

1. See Hearing Officer's #31.

2. See Hearing Officer's 27.

31 and 32. Rejected. While the water absorption tests conducted cannot definitely tell how the posts will react over a 35 year period, those tests do provide some indication.

33. Rejected for the reason that no one knows exactly what the facts will be over a 35 year period.

1. Third sentence rejected. This sentence is based upon the false assumption that plastic does not absorb water.

2. Accepted except for the conclusion that a thick piece of post absorbs less water than a thinner piece. The thicker slice absorbs a lesser percentage over the same time.

3. Rejected. See Hearing Officer's #33.

4. Rejected. See Hearing Officer's #33.

1. Accepted, however, ASTM test procedures cited are not accelerated aging tests.

2. Rejected as speculation. See Hearing Officer's #32.

3. Rejected. See Hearing Officer's #27.

COPIES FURNISHED TO:

Fred A. McCormack, Esquire Richard A. Lotspeich, Esquire John T. LaVia, Esquire

Post Office Box 271 Tallahassee, Florida 32302

Susan P. Stevens, Esquire Department of Transportation 605 Suwannee Street

Tallahassee, Florida 32399-0458

Martha Harrell Chumbler, Esquire Post Office Drawer 190 Tallahassee, Florida 32302

Ben G. Watts Secretary

Department of Transportation Haydon Building, MS 58

605 Suwannee Street

Tallahassee, Florida 32399-0458

Thornton J. Williams General Counsel

Department of Transportation Haydon Building, MS 58

605 Suwannee Street

Tallahassee, Florida 32399-0458

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. 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.

Docket for Case No: 92-001269BID

Orders for Case No: 92-001269BID