STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HART-LAND EXT., INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-5748BID

)

DEPARTMENT OF LABOR AND )

EMPLOYMENT SECURITY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William F. Quattlebaum, held a formal hearing in the above-styled case on January 7, 1993 in Tallahassee, Florida.

APPEARANCES

For Petitioner: William H. Walker, Esquire

NCNB Bank Building, Suite 403

501 First Avenue North

St. Petersburg, Florida 33701

For Respondent: Edward Dion, Esquire

Assistant General Counsel Suite 307, Hartman Building 2012 Capital Circle S.E.

Tallahassee, Florida 32399-2189 STATEMENT OF THE ISSUE

The issue in this case is whether, in rescinding the award of a lease for office space, the Respondent acted according to the requirements of law.

PRELIMINARY STATEMENT

The Department of Labor and Employment Security, in March 1992, issued a request for proposals seeking to lease in excess of 21,000 square feet of office space in Pinellas Park, Florida. Subsequent to the opening of bids, Hart-Land Ext. Inc., was determined to be the lowest responsive bidder and was awarded the contract in May, 1992. In August, 1992, the Department rescinded the award.

Hart-Land timely protested the Department's recission and requested formal hearing. The request for hearing was forwarded to the Division of Administrative Hearings which conducted the proceeding.

At hearing, the Petitioner presented the testimony of James Hartley and Lynn Mobley, and had exhibits numbered 1-15 admitted. Respondent presented the testimony of Lynn Mobley and had exhibits numbered 1-2 admitted. The prehearing stipulation filed by the parties was admitted as a Hearing Officer exhibit.

A transcript of the hearing was filed. Both parties filed proposed recommended orders which were considered in the preparation of this Recommended Order. The proposed findings of fact are ruled upon either directly or indirectly as reflected in this Recommended Order, and in the Appendix which is attached and hereby made a part of this Recommended Order.

FINDINGS OF FACT

1. In March, 1992, the Department of Labor and Employment Security ("Department") issued a Request for Proposal and Bid Submittal ("RFP") seeking to lease approximately 21,033 square feet of office space in Pinellas Park, Florida.

   
   

2. The RFP specifies that "approximately" 130 off-street no charge parking spaces were required for the exclusive use of the employees and clients of the Respondent. The RFP states that "[p]arking space must be under the control of the bidder and be suitably paved, lined, and bumper pads installed."

   
   

3. The Department received two bids in response to the RFP; one submitted by Hart-Land Ext., Inc., ("Petitioner") and the other submitted by Resolving, Inc. Both bids were signed by James Hartley, as Vice President of the respective corporations.

   
   

4. The Department initially determined that, on the basis of the representations contained in the bids, both bids were responsive. An evaluation committee determined that the bid submitted by the Petitioner was the lowest and best bid. On the basis of the evaluation, the Department awarded the bid to the Petitioner by letter dated May 13, 1992.

   
   

5. Subsequent to the bid award, the Petitioner submitted several differing site plans to the Department. The site plans indicated various amendments to the configuration of parking spaces available. None of the plans indicated that there would be less than 130 parking spaces available for use by Department personnel.

   
   

6. The Department suggests that the revisions of site plans raised doubts as to whether the property was under the control of the Petitioner, that such information was requested of the Petitioner and that appropriate responses were not forthcoming. Nothing in the site plans would suggest that the property was not under the Petitioner's control. The evidence establishes that sufficient information was provided by the Petitioner in response to Department inquiries related to property ownership.

   
   

7. By letter dated August 24, 1992, the Department rescinded its award to the Petitioner. The stated reason for recission was that the Petitioner did not have control over 130 paved and lined parking spaces as the time of the bid opening.

   
   

8. At the time the Petitioner submitted the proposal, it had the right, pursuant to an executed Contract for Sale and Purchase, to purchase the property which was identified in the proposal as the site upon which the office space was located. The contract was valid at all times material to this case.

9. The Department accepts the existence of a valid Contract for Sale and Purchase as sufficient evidence of a bidder having control over the property proposed for use. The evidence establishes that at all times material to this case, the Petitioner controlled the property proposed for use in his response to the RFP.

   
   

10. As to the parking requirements, the Department offered testimony asserting that the language in the RFP requires that such spaces be paved, lined, and bumper-pads installed, at the time the bid is submitted. The RFP includes no requirement, either express of implied, that the parking area proposed must be paved, lined, and bumpered at the time of bid submission. The Petitioner's response to the RFP met the parking requirements set forth therein.

    
    

11. The Department asserts that because the parking spaces were not lined, it was unable to determine the number of spaces available in each area proposed for parking. The Department had ample opportunity to inspect the property proposed in the Petitioner's bid, and in fact, such inspections did occur. The Department reviewed site plans, floor plans, physically inspected the structure and had full access to the property. The fact that the parking spaces were not lined or bumper-padded at the time of bid submittal would have been obvious.

    
    

12. Further, the RFP seeks to have "approximately" 130 spaces available. Of the 130 spaces the Petitioner said would be available, 118 spaces were paved at all times material to this case. The remaining 22 parking spaces were located in an unpaved area which would have been paved prior to the date upon which the Respondent would have occupied the building, at which time all 130 spaces would have been lined and bumper-padded also. Therefore, even if the agency's position that the RFP required paved spaces at time of bid submission were supported by evidence, the Petitioner's proposal would meet the requirement.

    
    

13. Subsequent to the award of the project, the Petitioner closed the contract for sale in escrow and placed $150,000 in trust to close the sale. The Petitioner employed a general contractor, obtained completed floor plans, mechanical plans, electrical and plumbing plans for the structure, performed roof repairs and purchased new air conditioning equipment. At the request of Department's representatives, the Petitioner also made arrangements for additional parking spaces beyond the 130 spaces previously proposed, with the additional spaces being located off-site and across the street from the office space. The total cost of these actions is approximately $179,600. The purchase of the property and incurrence of related costs was done in good faith and in reliance upon the award of the project.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding. Sections 120.53(5) and 120.57(1), Florida Statutes.

    
    

15. The Petitioner has the burden of establishing, by a preponderance of the evidence, that the Department's actions were contrary to the requirements of law. Department of Transportation v. J. W. C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). In this case, the burden has been met.

    
    

16. An agency has wide discretion in soliciting and accepting bids and is accorded substantial deference in competitive bidding activities. The agency decision, when based on an honest exercise of discretion, should not be

    overturned even if it may appear erroneous and even if reasonable persons may disagree. Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, at 507 (Fla. 1982).

    
    

17. In an administrative challenge to an agency's decision to award a contract or to reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. The hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally or dishonestly. Department of Transportation v. Groves- Watkins Constructors, 530 So.2d 912, at 914 (Fla. 1988).

    
    

18. The evidence establishes that the Petitioner met the specifically stated requirements of the RFP at the time the bid was submitted and that the award of the bid was appropriate. Nonetheless, the Respondent withdrew the bid award for two reasons.

    
    

19. The first reason for the bid withdrawal was that the Petitioner allegedly did not control the property proposed. The evidence establishes that he did indeed control the property proposed. The Department offered no credible support for its determination otherwise.

    
    

20. The second stated reason for withdrawal of the award was that the parking spaces included in the proposal were not paved. The RFP provides no indication that all spaces must be paved at the time the bid is submitted for consideration. Even so, of the "approximately" 130 spaces required by the RFP, the Petitioner's proposal included 118 spaces which were paved at that time, and included 22 spaces which would have been paved prior to occupancy.

    
    

21. While certainly an agency decision, when based on an honest exercise of discretion, should not be overturned even when it appears erroneous and even if reasonable persons may disagree, once a disgruntled bidder challenges the decision and establishes that his proposal complies with the requirements set forth by the agency in the RFP documents, the agency must offer credible evidence to show that the determination was, in fact, a reasonable exercise of honest discretion.

    
    

22. In this case, the evidence does not support the agency's position. Because there are no facts to support the withdrawal of the award, the Respondent's action in doing so is arbitrary. An arbitrary act is one not supported by facts or logic, or despotic. Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759, at 763 (Fla. 1st DCA, 1979).

    
    

23. The Petitioner further asserts that the Department should be equitably estopped from rescinding the bid award. Given the recommendation in this case, it is unnecessary to address whether the doctrine of equitable estoppel should apply.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that the Department of Labor and Employment Security enter a Final Order awarding proposed lease 540:0921 to Hart-Land, Ext., Inc.

DONE and RECOMMENDED this 24th day of March, 1993, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

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 24th day of March, 1993.

APPENDIX TO CASE NO. 92-5748BID

The following constitute rulings on proposed findings of facts submitted by the parties.

Petitioner

The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order.

Respondent

The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows:

1. Rejected, unnecessary.

   
   

2. Rejected as to reference of difficulty in determining availability of parking spaces, not supported by greater weight of evidence. Measurement would have established whether space was adequate. There is no evidence that it was not.

6-9. Rejected as to inference that submission of amended site plans was inappropriate, not supported by greater weight of evidence. There is no evidence that the agency rejected the proposal based on the amendment of site plans, irrelevant. As to the amendment of site plans being indicative of a lack of 130 paved spaces, rejected immaterial.

11. Rejected as to determination that such spaces were not available on property controlled by the Petitioner, not supported by credible and persuasive evidence.

COPIES FURNISHED:

Shirley Gooding, Acting Secretary Suite 303, Hartman Building

2012 Capital Circle S.E. Tallahassee, Florida 32399-2152

Cecilia Renn

Chief Legal Counsel

Suite 307, Hartman Building 2012 Capital Circle, S.E. Tallahassee, Florida 32399-2152

William H. Walker, Esquire NCNB Bank Building, Suite 403

501 First Avenue North

St. Petersburg, Florida 33701

Edward Dion, Esquire Assistant General Counsel Suite 307, Hartman Building 2012 Capital Circle S.E.

Tallahassee, Florida 32399-2189

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 ten 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: 92-005748BID

Orders for Case No: 92-005748BID