vs. ) CASE NO. 93-2922BID
Respondent. )
Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a designated Hearing Officer of the Division of Administrative Hearings, on June 23, 1993, in West Palm Beach, Florida.
For Petitioner: Alan C. (Peter) Brandt, Jr., Esquire
For Respondent: Robert A. Rosillo, Esquire
The ultimate issue for determination at formal hearing was whether the intended action by the Palm Beach County School Board to award the bid on Project No. 93-238V to LaPlant-Adair, as the lowest responsive bidder, departs from the essential requirements of law.
On April 7, 1993, Palm Beach County School Board (Respondent) received sealed bids for the relocation of portable classrooms for which Murphy Construction Company (Petitioner) was one of the bidders.
All bid proposals were received by Respondent's Contracting and Procurement and its Maintenance and Plant Operations which recommended to the Superintendent of Schools that LaPlant-Adair was the apparent lowest bidder. The award of the contract was scheduled to be approved by Petitioner at its meeting of May 5, 1993.
On April 16, 1993, Petitioner filed a protest of Respondent's intended action, and on April 26, 1993, Petitioner filed a letter delineating specific reasons for the protest. Because of the protest, the award of the contract was
not considered by Petitioner. In an informal setting on May 13, 1993, Respondent considered Petitioner's protest and rejected it. Subsequently, Petitioner requested a formal hearing.
The matter was referred to the Division of Administrative Hearings, and a formal hearing was scheduled on June 23, 1993, pursuant to Notice of Hearing. At the hearing, a prehearing stipulation was filed. Petitioner presented the testimony of three witnesses. Respondent presented the testimony of two witnesses. The parties offered six joint exhibits and Petitioner offered one exhibit, all of which were entered into evidence.
A transcript of the formal hearing was ordered. Both parties submitted proposed findings of fact and conclusions of law which have been addressed in the appendix to this recommended order.
On March 15, 1993, Palm Beach County School Board (Respondent) issued an Invention to Bid (ITB), soliciting bids for the relocation of portable classroom structures for Project No. 93-238V. All sealed bids were required to be received by 2:00 p.m. on April 7, 1993.
The ITB contained a provision that Respondent had the right to reject any and all bids.
The "General Conditions, Instructions and Information for Bidders" section of the ITB notified bidders of Respondent's "minority/women business enterprise participation goal" and its "special conditions" which provided as follows:
24. ADMINISTRATIVE DIRECTIVE D-6.202:
Pursuant to School Board Policy 6.146, Minority/Women Business Enterprise Program, a minimum goal of 15 percent has been established for certified minority/women business enterprise participation. The School Board strongly encourages active minority/women business enterprise participation on all contracts, proposals, bids professional services and other goods. The School Board of Palm Beach County is an Equal Opportunity Employer.
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26. SPECIAL CONDITIONS: Any and all Special Conditions that may vary from these General Conditions shall have precedence.
The "Special Conditions" section of ITB provides, pertinent to this case:
AWARD: Items in groups as marked, will be awarded by group. Therefore, it is necessary for a bidder to bid on every item in the particular group in which the bidder submits a bid in order to have a bid considered. It is also required that the
bidder carefully consider each item, and make sure that each one meets the specifications as indicated. In the event that one item does not meet such specifications the entire group bid will be disqualified.
It is anticipated that this bid will be awarded at the May 5, 1993, board meeting.
TERM OF CONTRACT: The term of this contract shall be during the period June 20, 1993, through June 19, 1994, with the option to renew annually for a period of one (1) additional year.
Annual renewal acceptance will be based on the successful bidder agreeing to terms, conditions and maintaining firm prices for the forthcoming year no later than April 15 in each contract year and acceptance of same by the School Board. All prices shall
remain firm for the duration of this contract.
SCOPE OF WORK: The successful bidder (hereinafter referred to as the contractor) shall furnish, at their expense, all supervision, equipment, machines, tools, materials, labor, transportation, and other facilities and services necessary to accomplish relocation of portable structures as specified herein . . .
The contractor shall be responsible for correction/replacement, according to local codes and School Board's satisfaction, of all water lines, sanitary lines, electrical lines, curbs, sidewalks, streets, parking
lots, grassed areas, structures, etc., broken or damaged as the result of contractor's operations . . .
Contractor shall be responsible for complete and total relocation of portables to include tie down straps and any and all accessories attached to portable structures . . .
Contractor shall provide transport and placement of all precast concrete foundation blocks . . .
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U. ADMINISTRATIVE DIRECTIVE D-6.202: Pursuant to School Board Policy 6.146, Minority/Women Business Enterprise Program, a minimum goal of 15 percent has been established for certified minority/women
business enterprise participation. The School Board strongly encourages active minority/women business enterprise participation on all contracts, proposals, bids, professional services and other goods.
School Board Policy 6.146--Minority/Women Business Enterprise Policy-- provides in pertinent part:
(2) DISTRICT GOAL
To increase the participation of minority and women's business enterprises in the school district's contracts related to procurement, goods and non-professional services, construction, maintenance and renovation, and professional services.
(5) PERFORMANCE OBJECTIVES
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The MBE programs will implement a voluntary 15 percent participation goal of the total amount of funds allocated for school board purchases, professional services and contracts to be awarded to certified M/WBES upon School Board approval. The goals are reviewed annually by the M/WBE council
Appropriate language including but not limited to minority participation and goals will be included in all bid documents.
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All contract and bid documents will include procedural documentation of good faith efforts to include M/WBES to participate as associates, joint-ventures, and subcontractors.
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Establish a program where staff may provide bonus points for companies employing M/WBES on joint ventures, and as subcontractors to enhance minority participation.
(m) Establish a mechanism to delete and/or amend "option to renew" clauses in contracts to vendors once the bid time is completed.
Respondent solicited nine bids and received six responses. Of the responses, three returned the ITB with bids and three returned the ITB with a no bid. The three that bid were Gainsborough Construction, Inc., LaPlant-Adair Company and Petitioner.
The bids were opened on April 7, 1993. No evidence of irregularities at the bid opening was presented, and neither of the parties contend that there were any irregularities.
The bids were reviewed by Respondent's Contracting & Procurement (CP) and its Maintenance and Plant Operations (MPO). CP's buyer/purchasing agent who determines the responsiveness of bids and prepares the tabulation sheet determined that all bids were responsive and that LaPlant-Adair Company was the apparent lowest bidder at a bid of $14,245; whereas, Gainsborough Construction, Inc., submitted a bid of $24,412, and Petitioner a bid of $24,432. However, because of the differences among the bidders in the cost per mile for moving the different structures, Respondent's CP and MPO staff, specifically, CP's buyer/purchasing agent and MPO's major project team leader, determined that an analysis also needed to be developed to provide a fair assessment of the bids to make certain that Respondent was not being over charged, i.e., to make certain that LaPlant-Adair was the lowest and best bid.
The ITB provides that eight different types of portable structures were to be moved. Realizing that relocation of the portable classrooms depended upon the student population at each school in the district and the shift of the population, Respondent's staff determined that there was no way to know which portable classrooms would be relocated, the number of each to be relocated and the distance of the relocation. Hence, they formulated an analysis to fairly assess the situation, which consisted of (1) using the percentage of portables in each size in Palm Beach County's school system and the average number of miles portables had been moved over the past year, which was approximately 10 miles, and (2) applying these figures to the ITB's quoted figures by each bidder for "set-up, mobilization, unloading, and tie-down charge." The results showed that LaPlant-Adair's bid was the lowest bid and satisfied Respondent's staff that there was no overcharge. LaPlant-Adair remained the apparent lowest and best bidder.
The bid specifications were silent on the use of any mathematical analysis to be used by Respondent.
Of the three bids submitted, only Petitioner met and exceeded the minority/women business enterprise (M/WBE) participation goal of 15 percent. Petitioner's minority participation was 16 percent, and it provided supporting documentation with its bid. Because Petitioner included M/WBE participation in its bid, Petitioner's bid quote increased.
Petitioner interpreted Respondent's M/WBE participation goal as being mandatory for bids. For several years, Petitioner has been involved in bidding for state and county projects, and both have minority participation requirements. Petitioner's experience was that if the minority participation percentage was not met, the bidder was not awarded a contract even if the bidder was the lowest bidder.
Respondent's M/WBE participation is a "goal," not a requirement, and not mandatory. It has not been used in Respondent's prior ITBs. This was the first bid in which it had been included by Respondent.
In 1991, Respondent awarded to Petitioner, over LaPlant-Adair, the contract for relocating portable classrooms. The contract had an option to renew. For the 1992-93 contract year, Petitioner renewed its option and continued as the contractor until 1993 at which time Respondent stopped renewing options and placed contracts on a one year term. During the term of Petitioner's contract, Respondent was satisfied with Petitioner's performance.
At the time of the protest, Petitioner was using LaPlant-Adair as a subcontractor relocating portable classrooms for Respondent under the 1992-93 contract. As subcontractor, LaPlant-Adair performed 75 percent to 80 percent of the work involved in the relocating.
Prior to Petitioner being awarded the 1991 contract and prior to being the subcontractor to Petitioner, LaPlant-Adair had been awarded the contract by Respondent for relocating portable classroom structures. Respondent was satisfied with LaPlant-Adair's performance under the contract.
Based upon the bid quotes, the analysis performed, and responsibleness, LaPlant-Adair was recommended to be awarded the contract, as the lowest responsive and responsible bidder. The second lowest responsive and responsible bidder was Gainsborough Construction, and Petitioner was third.
On April 16, 1993, Petitioner filed a protest of the intended action to award the contract to LaPlant-Adair and requested a hearing. Subsequently, on April 26, 1993, Petitioner filed a formal protest in letter form providing the basis for its protest: (1) LaPlant-Adair skewed the numbers in its bid; and
neither LaPlant-Adair nor Gainsborough Construction, the second lowest responsive and responsible bidder, met the minority participation goal and, in fact, showed no attempt to do so.
On May 13, 1993, an informal hearing was held by Respondent in an attempt to resolve the protest. At the informal hearing, Petitioner included an additional challenge which was that the recommendation process for awarding the contract varied from the bid specifications. Respondent determined that Petitioner's claims were without merit and that LaPlant-Adair would be recommended for award of the contract at Respondent's meeting on June 2, 1993.
Both Petitioner and LaPlant-Adair are ready, willing and able to perform the work in accordance with their bid documents.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Subsections 120.57(1) and 120.53(5), Florida Statutes. The parties were duly noticed for the formal hearing.
The case of Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), sets the parameters for review of a bid protest matter by a hearing officer:
[A]lthough the APA provides the procedurala mechanism for challenging an agency's decision to award or reject all bids, the scope of inquiry is limited to whether the purpose of competitive bidding has been subverted. In short, the hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly.
Id., at 914. Further, the First District Court of Appeal in Asphalt Pavers, Inc. v. Department of Transportation, 602 So.2d 558 (Fla. 1st DCA 1992), stated that the principles in Groves-Watkins, supra, are not limited to situations in
which all bids are rejected but are applicable to other bid situations. Consequently, the principles of Groves-Watkins, supra, are applicable to the case sub judice.
First, Petitioner contends that only it is "responsive" because only it met Respondent's "required" minority/women business enterprise (M/WBE) participation goal of 15 percent and because LaPlant-Adair "skewed" the numbers in its bid, thereby skewing the results of the bidding process. As pointed out in Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982), in competitive bidding situations, an agency's decision is accorded great deference:
[A] public body has wide discretion in soliciting and accepting bids for public improvements and its decision, when based on an honest exercise of this discretion, will not be overturned by a court even if it may appear erroneous and even if reasonable persons may disagree. (citations omitted).
As to the "required" M/WBE participation goal, Petitioner's argument is not persuasive. The evidence shows that the 15 percent participation goal is presently only that, a "goal." Respondent has not, as yet, incorporated the goal as a mandatory or required specification for its bids, and in particular, for the bid in the case at hand. Petitioner has a misplaced reliance upon its experiences with bidding on state and county projects as it relates to M/WBE participation goals. Consequently, to not reach the goal, or to not even attempt to reach the goal, was not contrary to the bid specifications, and, therefore, cannot be considered nonresponsive.
As to the "skewing" of the numbers by LaPlant-Adair, here too, Petitioner's argument is not persuasive. Respondent's staff considered LaPlant- Adair's bid numbers to be responsive to the bid specifications. After reviewing the numbers in each bid submitted and performing an analysis, Respondent's staff determined that LaPlant-Adair was the apparent lowest bidder, and so recommended that LaPlant-Adair be awarded the contract for the project.
Petitioner has failed to show that Respondent's actions were anything other than an "honest" exercise of its "discretion" even if "reasonable persons may disagree." Baxter Asphalt, supra.
Next, Petitioner further contends that Respondent's recommendation process for awarding the contract varied from the bid specifications. This contention is based upon Respondent's staff going a step further than looking only at the numbers, but also performing an analysis of the bids. This additional process was used because Respondent's staff wanted to be certain that Respondent was not paying more for the project by using LaPlant-Adair, instead of one of the other bidders; that is, they wanted to make sure they were getting the lowest and best bid. Respondent's staff determined that the formula used was reasonable under the circumstances. After applying the analysis, LaPlant- Adair's bid was again the lowest of the bidders.
There was nothing in the bid documents prohibiting the additional process. In particular, the "Awards" subsection of the "Special Conditions" section of the ITB contained no prohibition on using such a process. Furthermore, the process was reasonable under the circumstances. Additionally,
Respondent had an obligation not to exceed its budget on the project or to be overly charged ,as well as make sure that it had the lowest responsive bid.
Groves-Watkins, supra.
Here too, Petitioner has failed to show that Respondent's action was anything more than an "honest" exercise of its "discretion" even if "reasonable persons my disagree." Baxter Asphalt, Id.
Furthermore, absent a showing of bad faith, Respondent's decision cannot be deemed arbitrary or capricious. Groves-Watkins, Id.. There is no evidence to show that Respondent acted arbitrarily or capriciously.
Even after determining that a bidder is the lowest responsive bidder, Respondent must go a step further and determine that the bidder is also the "lowest responsible bidder." Subsection 235.31(1)(a), Florida Statutes, requiring a school board to award a contract for the construction, remodeling, renovation, demolition, or improvement of any education or ancillary plant to the lowest responsible bidder.
The First District Court of Appeal in the bid protest case of Couch Construction Company, Inc. v. Department of Transportation, 361 So.2d 184, 187 (Fla. 1st DCA 1978), defined responsible, as it relates to the lowest responsible bidder, citing with approval the general definition of responsible found in 64 Am.Jur.2d Public Works and Contracts, Section 70:
The term responsible . . . is not limited in its meaning to financial resources and
ability . . . authorizations of this kind are held to invest public authorities with discretionary power to pass upon the honesty and integrity of the bidder necessary to a faithful performance of the contract--upon his skill and business judgment, his experience and his facilities for carrying out the contract, his previous conduct under other contracts, and the quality of his previous work--. . . when that discretion is properly exercised, the courts will not interfere. (Emphasis omitted)
See also, Baxter's Asphalt and Concrete, Inc. v. Department of Transportation,
475 So.2d 1284, 1286 (Fla. 1st DCA 1985), citing Willis, et al. v. Hathaway, et al., 95 Fla. 608, 117 So. 89 (1929) ["Responsible" has been judicially defined to include such factors as ". . . degree of experience . . . reputation for performance . . . outstanding obligations . . . integrity . . . as well as other matters which might influence the ability to perform the contract . . ."].
The evidence supports Respondent's determination that LaPlant-Adair is responsible. Respondent determined that LaPlant-Adair was also the lowest responsible bidder. In prior years, Respondent had awarded to LaPlant-Adair portable classroom relocation contracts, and at the time of hearing, LaPlant- Adair was working as a subcontractor for Petitioner relocating portable classrooms for Respondent. Additionally, on past relocation contracts and during the present relocation contract, Respondent has been, and was, satisfied with LaPlant-Adair's performance.
Even though Respondent is statutorily granted the discretion in awarding contracts to responsible bidders, it cannot act "arbitrarily or capriciously" and must base its action "upon facts reasonably tending to support" the action. Baxter Asphalt, supra, at 1286-87. Furthermore, there is no evidence to show that Respondent's determination is arbitrary or capricious.
Respondent has also challenged Petitioner's standing in the case sub judice. Respondent contends that, because Petitioner is not the second lowest bidder, but the third lowest bidder, Petitioner does not have standing. Respondent's position is without merit. Here, Petitioner contends that it should be awarded the contract.
Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Palm Beach County School Board enter its final order
rejecting Petitioner's protest and awarding the bid on the portable classrooms relocation Project No. 93-238V to LaPlant-Adair.
DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of Sepember 1993.
ERROLL H. POWELL
Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1993.
1/ This was the first instance in which Respondent had used a moving distance of one (1) mile per specified portable classroom.
2/ Petitioner had two (2) proposed findings of fact numbered 9.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2922BID
Petitioner's Proposed Findings of Fact.
5 & 6. Substantially adopted in finding of fact 8.
7 & 8. Rejected as constituting argument, conclusions of law or recitation of testimony.
9. Substantially adopted in findings of fact 3, 4, 5 and 10. 2/
10 & 11. Rejected as constituting argument, conclusions of law or recitation of testimony.
14 & 15. Substantially adopted in finding of fact 10.
Respondent's Proposed Findings of Fact.
Alan C. (Peter) Brandt, Jr., Esquire LEIBY FERENCIK LIBANOFF AND BRANDT
Robert A. Rosillo, Esquire
Dr. C. Monica Uhlhorn Superintendent of Schools of Palm Beach County
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.
