Grubbs, Inc. (Grubbs) protested the award, and the Board referred the matter to the Division of Administrative Hearings in accordance with Sections 120.53(5) and 120.57(1)(b)3., Florida Statutes (1991 and 1992 Supp.). Caldwell's petition to intervene was granted without objection, at hearing.
By invitation to bid for Architect's Project No. 9129-A, the Board solicited bids for "construction of one new single story building at Lecanto School Complex in Lecanto, Florida." Joint Exhibit No. 1, p. 01010.1.
Specifications (Re)stated
The invitation to bid gave notice of a mandatory pre-bid conference at two o'clock on the afternoon of June 10, 1993, at Lecanto Vocational Center at the project site. Joint Exhibit No. 1, A-1. ("BIDDERS MUST ATTEND . . . TO BE ABLE TO BID")
The invitation to bid consisted of a project manual, amended seriatim in a series of four addenda. Joint Exhibit No. 1. The project manual required substantial completion of the project within 250 days of written notice to proceed, Joint Exhibit No. 1, p. 00700.8, but on another page the same document required substantial completion by July 13, 1993. Id. at 00100.8. Later Addendum No. 1 put the date for substantial completion at "250 days after Notice to Proceed is given," but superseding Addendum No. 2 reverted to July 13, 1993.
Addendum No. 3 directed prospective bidders to "[d]elete all previously issued Proposal Forms and replace with the Proposal Form attached." The attached form states:
The undersigned agrees that if this bid is accepted, construction of this project will begin after receipt of "Notice to Proceed" and shall be substantially completed within
250 calendar days and finally completed within thirty (30) calendar days from substantial completion.
Directions concerning the form specify that it is to "be copied on Contractor's business letterhead." Addendum No. 3, p. 5.
Among the specifications were bond requirements, including minimum ratings for companies writing the bonds:
To be acceptable to the owner as surety for Bid Bonds, Performance Bond, and Payment Bonds, a surety company shall comply with the following provisions:
3. The surety shall have at least the following ratings:
. . .
1,000,000 to 1,500,000 A Class XI
Joint Exhibit No. 1, p. 00600.1. Addendum No. 2 "delete[d] the Class ratings" but not Best's Policyholder's Ratings.
Although the copy of the invitation to bid that came in evidence as Joint Exhibit No. 1 lacked pages 00400.1 and 00400.2, the table of contents indicates that these pages contain a bid bond requirement. The proposal form also calls for a bid bond. In its proposed recommended order, moreover, petitioner states that the Board "set forth in its project manual a provision that bidders should submit a bid bond from a company with an 'A 11' rating."
The Project Manual states, at page 00100.3, that a contract "will be awarded only to a responsible Bidder, qualified by experience . . . . " Joint Exhibit No. 1. Bidders were required to submit forms along with their bids which called for, among other things, lists of major construction projects in process and major projects completed in the last five years. Joint Exhibit No. 1, p. 00110.3.
Compliance Attempted
When, on the afternoon of June 10, 1993, Greg Cecil, Grubbs' general manager, arrived for the pre-bid conference, he was erroneously "instructed that Lakeview was at another site in Hernando." T.70. When he arrived there, "somebody on site . . . said . . . Lakeview Relocation is going to be moved to the site that you were previously at." Id.
By the time he again reached his original, correct destination, he "ended up being late for the meeting." Id. It was about quarter of three and only Tom Williford, who is the Board's Director for General Services, and an electrical subcontractor remained. T.78. Mr. Williford recounted what had occurred before the other contractors had dispersed, and told Mr. Cecil "that there would be an addendum issue[d] reflecting any items that occurred that day." T.211. The Board's Addendum No. 2 lists Mr. Cecil as having been "in attendance at the Mandatory Pre-Bid Conference."
Bids Submitted
Grubbs, Caldwell and others submitted bids for Architect's Project No. 9129A. Grubbs' bid was low, at one million one hundred five thousand dollars ($1,105,000.00). Dated June 17, 1993, Grubbs' proposal offered to bring construction to substantial completion by July 13, 1993. In a blank for "Bond Rating," "A- 11" was inserted. Joint Exhibits No. 2 and 3.11. The bid documents contained no other rating information.
A form bid bond executed by Grubbs' president and by Sandra McCullough, as attorney in fact both for Reliance Insurance Company, a Pennsylvania Corporation, and for Employees Reinsurance Corporation, a Missouri corporation, accompanied Grubbs' bid. Best rates the former company A- and the latter A++, evidence at hearing showed. The body of the bond begins:
KNOW ALL MEN BY THESE PRESENTS, that we JOHN
G. GRUBBS, INC. P.O. BOX 10262, BROOKSVILLE,
FLORIDA 34601
as Principal, hereinafter called the Principal, and RELIANCE INSURANCE COMPANY AND EMPLOYERS REINSURANCE CORPORATION, P.O. BOX
945090 MAITLAND, FLORIDA 32751 a corporation duly organized under the laws of the State of PENNSYLVANIA as Surety, hereinafter called the Surety, are held and firmly bound unto SCHOOL BOARD OF CITRUS COUNTY . . . .
Joint Exhibits Nos. 2 and 3. Attached to the bid is a power of attorney appointing Ms. McCullough attorney in fact for Reliance Insurance Company and another limited power of attorney appointing her attorney in fact for Employees Reinsurance Company, which authorizes her to execute "any bond . . . in co- suretyship with RELIANCE INSURANCE COMPANY." Id.
Grubbs' bid included a list of five "open contracts" for amounts ranging from $98,749 to $1,362,252 for projects ranging from a water storage system to sanitary sewer installation to road construction; and a list of some
95 completed projects including roads, sewers, clearing, earthwork, a $53,387 reroofing job, and a $116,772 job installing a canopy and sidewalks for a middle school in Hernando County. Joint Exhibit Nos. 2 and 3. After the bids had been opened, John G. Grubbs told the Board's architect of still other projects Grubbs had completed.
On July 1, 1993, a principal of the architectural firm the Board had engaged wrote Mr. Williford, as follows:
Dear Tom:
We have reviewed the bids received and would recommend that the low bid from John G. Grubbs, Inc. be rejected for being in non- conformance with the Bid Documents for the following reasons:
The bid by John G. Grubbs, Inc. was submitted on a proposal form that contained an error in the completion date. Their form indicated construction to be completed by July 13, 1993; rather than 250 days as required by the Bid Documents, per addendum #3.
Bid Bond received was written by a bonding company having a Best rating of "A minus" (A-). The Documents require an "A" rating. (Section 00600, Page 00600.1, Third Paragraph)
The Contractor's Qualification form indicates that John G. Grubbs, Inc. has been in the Site and Drainage business for ten
(10) years but has not constructed any School Facilities. It also shows having completed construction of only two buildings and one under construction. These 3 buildings are small fire stations in the $300,000 range each.
Due to the above outlined concerns we would recommend the contract be awarded to Caldwell Construction Company, the next low bidder.
Respondent's Exhibit No. 1. The Board met on July 8, 1993. During the meeting, one Board member opined, "the critical thing here is probably the bond rating." Id., p. 26. The Board voted to reject Grubbs' bid and, separately, to accept Caldwell's.
CONCLUSIONS OF LAW
Since the Board referred petitioner's hearing request to the Division of Administrative Hearings, in accordance with Section 120.53(5)(d)2., Florida Statutes (1992 Supp.), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1992 Supp.).
Burdens of Proof
In Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), the Court held that an agency's free-form 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.
While 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. Willis v. Hathaway 95 Fla. 608, 117 So. 89 (1928); it is another to oust the Division of Administrative Hearings from its traditional role of recommending 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 and Finance, 346 So.2d 569 (Fla. 1st DCA 1977).
The First District has nevertheless extended the narrow Groves-Watkins standard of review to situations where an administrative agency elects to choose among competing bidders, and let the contract. E.g. Procacci v. State Department of Health and Rehabilitative Services, 596 So.2d 759 (Fla. 1st DCA 1992); Scientific Games v. Dittler Bros., Inc., 586 So.2d 1128 (Fla. 1st DCA 1991). The same standard apparently applies where the issue is whether a bid is responsive. Asphalt Pavers, Inc. v. Department of Transportation, 602 So.2d 558 (Fla. 1st DCA 1992).
Nonresponsive Bid
Here the Board rejected Grubbs' bid as nonresponsive. 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. 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).
"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 1055 (Fla. 3rd DCA) rev. den. 407 So.2d 1102 (Fla. 1981). Unless the variance from specifications frustrates governmental requirements, 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).
Grubbs' general manager's tardy arrival at the pre-bid conference gave Grubbs no competitive advantage over the other bidders. There was no showing that any matter that later became a subject of misunderstanding or dispute was discussed at the pre-bid conference. At the time, Mr. Williford treated his late arrival as immaterial and, after his conversation with Mr. Cecil, listed Grubbs as in attendance, apparently satisfied that the Board's purposes in requiring an appearance had been served. Even if no Board employee had misdirected Mr. Cecil, rejection of Grubbs' bid on account of the events of June 10, 1993, would be highly problematic.
While the Board must also bear some responsibility for the confusion regarding completion dates, bidders are under an obligation to examine all bidding documents carefully. In any event, the completion date specified in Grubbs' bid was earlier than the time the specifications, as ultimately amended, called for. This put Grubbs, not his competitors, at a disadvantage; it gave him no advantage over other bidders. Nor would the Board have been unable to exact contractually prescribed penalties for delays that might have extended construction beyond the same times it could have held another bidder to.
The evidence showed, however, that the Board was entitled to conclude, as it did, that the bid documents failed to demonstrate that Grubbs has the necessary experience to perform, and that the bid bond rating met specifications.
One 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 & Association v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2nd DCA 1977) (ren. den.
1978).
But public procurement is more than a contest between vendors. The overriding requirement is that the bid comprise an offer to supply what the public authority has required.
Grubbs proved at hearing that it had completed jobs more like the ones it bid for than those it listed as part of its bid submission, but the Board was right not to allow any amendment to the papers actually filed. The bidders were also on notice that the Board would rely on the bid documents for the sureties' ratings. Petitioner has not shown that the Board's rejection of its bid for the reasons stated by its architectural consultant was fraudulent, arbitrary, illegal or dishonest.
