vs. ) CASE NO. 93-6015BID
Respondent. )
Pursuant to stipulation of the parties, this case has been submitted to the Division of Administrative Hearings for issuance of a Recommended Order without a formal hearing on the basis of a stipulated record. The assigned Hearing Officer is Michael M. Parrish. Appearances for the parties are as follows:
For Petitioner: Harry M. Hobbs, Esquire
For Respondent: Phyllis O. Douglas, Esquire
The basic issue in this case is whether the Respondent School Board should award a contract to the Petitioner under School Board Bid No. 050-P-03 or should reject all bids and rebid the contract.
Following a School Board decision to reject all bids submitted on School Board Bid No. 050-P-03, the Petitioner filed a bid protest petition seeking a formal hearing on the decision to reject all bids. Thereafter, the parties submitted a written stipulation in which they stipulated to a number of facts and also stipulated to inclusion of a number of documents in the record of this proceeding. Later the parties further stipulated to include in the record an affidavit of Dale McClellan and video tapes referred to in the affidavit.
The parties agreed to waive a formal hearing in this case and to submit the case to the Hearing Officer on the basis of the stipulated facts and documents. The parties also agreed to a deadline of December 20, 1994, for service of their respective proposed recommended orders. Both parties filed timely memorandums
in support of their respective positions. The parties' memorandums have been carefully considered during the preparation of this Recommended Order. The findings of fact which follow are based on the parties' stipulations and on the documents the parties included in the record by stipulation.
M & B Products, Inc., submitted the lowest bid on School Board Bid No. 050-P-03, bid title Fruit Juice II, on August 17, 1993.
Exhibit A, attached to the stipulation, is a true and correct copy of the bid submitted by M & B Products, Inc.
Exhibit B, attached to the stipulation, is a true and correct copy of a document entitled "Important Notice To Bidders, New Statement Must Be Submitted For All Bids after 1/1/93." This document was a part of the bid documents and was provided to all prospective bidders who received the bid documents.
Exhibit C, attached to the stipulation, is a true and correct copy of a sworn statement pursuant to section 287.133(3)(a), Florida Statutes, which was submitted by the president of M & B Products, Inc., pursuant to the requirement of the statute and the previously mentioned statement incorporated in the bid documents.
A recommendation for award to M & B Products, Inc., was submitted to the School Board of Dade County, Florida, at its meeting of September 22, 1993. The matter was tabled by the School Board. Attached to the stipulation as Exhibit D is a true and correct copy of the transcript of the pertinent portion of that School Board meeting wherein this action was considered.
On October 6, 1993, the School Board took this matter from the table. Exhibit E, attached to the stipulation, is a true and correct copy of the transcript of the meeting of October 6, 1993, wherein the School Board considered and took action rejecting all bids.
After the September 22, 1993, School Board meeting, the attorney for the School Board received a letter, Exhibit F attached to the stipulation, from Joan Van Arsdall, Staff Attorney for the Department of Management Services of the State of Florida. Each member of the School Board received a copy of the letter per the School Board meeting on October 6, 1993.
On September 8, 1993, Exhibit G was mailed to Phyllis Douglas. On September 10, 1993, Exhibit H was mailed to Phyllis Douglas. Those two letters were the only objections filed.
On November 4, 1993, the bid on Fruit Juice II was canceled. See Exhibit I attached to the stipulation.
Since June of 1987, the company known as M & B Products, Inc., has been doing business on a bid basis with over thirty (30) county school boards in the State of Florida. The Dade County School Board has, on previous occasions during the past several years, accepted the bid of M & B Products, Inc., when M & B Products, Inc., was the low bidder. No other school board has rejected the right of M & B Products, Inc., to bid and to have its bid accepted.
The video tapes filed with the McClellan Affidavit accurately depict the events at the two relevant School Board meetings. No person or entity has complained about not being allowed to bid as a result of the bidding instructions furnished by the Dade County School Board. The only complaint was from the second lowest bidder.
It is necessary for the employees of M & B Products, Inc., to work for several weeks prior to the submission of a bid to determine the cost availability of juice concentrate, freight, bank loans to carry the accounts receivable of Dade County, and the most economical distribution of the products to be assembled for the purpose of bidding.
M & B Products, Inc., has never received a written protest of the bid.
Facts based on stipulated documents
The bid documents for the subject contract included the following language:
IV. AWARDS
A. RESERVATION FOR REJECTION OR AWARD. The Board reserves the right to reject any and all bids, to waive irregularities or technicalities and to request re-bids.
The subject bid documents also included the following language: IMPORTANT NOTICE TO BIDDERS
NEW STATEMENT MUST BE SUBMITTED FOR ALL BIDS AFTER 1/1/93
The State of Florida has enacted a new law that requires bidders or contractors to submit a sworn document stating whether or not a corporation, its officers, predecessors or successors have been convicted of a public entity crime as defined in Section 287.133(3)(a), Florida Statutes. In order to contract with a public entity, neither the bidder nor contractor nor any officer, director, executive, partner, shareholder, employee, member or agent who is active in the management of the business entity of the bidder, contractor or any affiliate shall have been convicted of a public entity crime subsequent to July 1, 1989. [Emphasis
supplied.]
The statement quoted immediately above was an erroneous description of the requirements of Section 287.133(2)(a), Florida Statutes. (See the text of Section 287.133(2)(a), Florida Statutes, in the conclusions of law below.)
M & B Products, Inc., submitted a bid on the fruit juice contract notwithstanding the fact that its president had been convicted of a public entity crime subsequent to July 1, 1989. M & B Products, Inc., filled out the sworn statement required by the bid documents, correctly stating that an officer of the corporation had been convicted of a public entity crime.
The second low bidder, Natural County Farms, protested the award to M & B Products, Inc., taking the position that the School Board should not contract with an entity whose officer had been convicted of a crime.
The matter came on to be heard by the School Board on September 22, 1993, and the School Board attorney recommended that the award go to M & B Products, Inc., since neither that company nor its officer had been placed on the "convicted vendor list". Much discussion ensued during which the attorney for Natural County Farms alleged that M & B Products, Inc., was "not on that list because somebody messed up and didn't put him on the list". Board member Renick asked the School Board attorney to recheck the facts with Tallahassee. The attorney agreed to do so and the matter was ultimately tabled.
The matter was taken from the table on October 6, 1993. At this meeting, the attorney for Natural County Farms for the first time raised the issue of the language set forth in the bid documents to the effect that no bidder may do business with a public entity if it or one of its officers has been convicted of a public entity crime. The attorney took the position that the School Board's own bid documents excluded M & B Products, Inc., from consideration notwithstanding the fact that M & B Products, Inc. was not "on the list".
The attorney for the School Board explained that the bid document had incompletely stated the statutory provisions. Some Board members expressed concern about the erroneous interpretation of the statute and about the ambiguity it may have created in the bid preparation. Furthermore, some Board members expressed the view that the low bidder was not qualified pursuant to the Board's own bid specifications and the School Board attorney advised that if the Board did not want to award to the low bidder because of the statement in the specifications, it should reject all bids, rewrite the specifications and re- bid. At the meeting on October 6, 1993, the School Board voted to reject all bids.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Section 120.57, Florida Statutes.
Section 287.133(2)(a), Florida Statutes, reads as follows in pertinent part:
. . . A person or affiliate who has been placed on the convicted vendor list following a conviction for public entity crime may not submit a bid on a contract to provide any goods or services to a public entity for the construction or repair of a public building or public work, may not submit bids on leases of real property to a public entity, may not be awarded or perform work as a contractor, supplier, subcontractor, or consultant under contract with any public entity, and may not transact business with any public entity in excess of the threshold amount provided in s.
287.017 for CATEGORY TWO for a period of 36 months from the date of being placed on the convicted vendor list. [Emphasis supplied.]
Comparison of the statutory language quoted immediately above with the language of the "Important Notice to Bidders" quoted in paragraph 15 of the findings of fact reveals that the language in the subject bid specifications was more restrictive than the statutory language. Such being the case, it is possible that other prospective bidders were misled with respect to their eligibility to bid by the language in the subject bid specifications and it is reasonable for the School Board to be concerned about such a possibility.
The language in the School Board's bid documents regarding rejected of bids is similar to the statutory language before the court in Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988). In that case the statute authorized the Department of Transportation (DOT) to award to the lowest responsible bidder or reject all bids and proceed to re-advertise the work or otherwise perform the work. At the outset the court, relying on Liberty County v. Baxter's Asphalt and Concrete, Inc., 421 So.2d 505 (Fla. 1982); Culpepper v. Moore, 40 So.2d 366 (Fla. 1949); and William A. Berbusse, Jr., Inc. v. North Broward Hospital District, 117 So.2d 550 Fla.2d DCA 1960), noted the strong judicial deference accorded an agency's decision in competitive bidding situations, stating:
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.
The prior case law had recognized this broad discretion and held that an agency's decision based on an honest exercise of the discretion cannot be overturned absent a finding of "illegality, fraud, oppression or misconduct". Liberty County, supra at 507.
The Groves-Watkins court ruled that when the statute authorized the DOT to either award to the lowest responsible bidder or reject all bids, the scope of the Hearing Officer's inquiry was limited. "[T]he hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly." 530 So.2d at 914. The Supreme Court concluded that the DOT's rejection of all bids on the basis that the low bid was too high was a proper exercise of the agency's discretion, notwithstanding the fact that the hearing officer had found that the DOT had made an honest mistake in its pre-bid estimate.
The instant case is similar to Caber Systems, Inc. v. Department of General Services, 530 So.2d 325 (Fla. 1st DCA 1988), where the Department of General Services determined that an invitation to bid was ambiguous and substantially flawed and also noted that the confusion in the specifications may have worked to the detriment of the State in that it may have reduced price competition. 537 So.2d at 332. Citing to the same cases relied upon in Groves- Watkins, the District Court noted that an agency has wide discretion to reject all bids and absent arbitrary or capricious action the agency decision will not
be disturbed. The Court concluded, as did the Hearing Officer, that the Department of General Services' decision to reject all bids did have a rational basis and was not arbitrary or capricious.
There is nothing in the record of this case upon which to conclude that the School Board has acted fraudulently, arbitrarily, illegally, or dishonestly. Although reasonable persons might differ with regard to whether it is necessary to rebid the contract under the circumstances, the decision to rebid is one of several reasonable dispositions of the matter, and it is a decision well within the broad discretion vested in the School Board. Accordingly, there is no basis for disturbing the School Board's decision to rebid the contract.
On the basis of all of the foregoing, it is RECOMMENDED that the School Board of Dade County, Florida, issue a Final Order in this case denying the relief sought by the Petitioner and dismissing the petition.
DONE AND ENTERED this 12th day of January 1994 in Tallahassee, Leon County, Florida.
MICHAEL M. PARRISH
Filed with the Clerk of the Division of Administrative Hearings this 12th day of January 1994.
Harry M. Hobbs, Esquire Post Office Box 18225 Tampa, Florida 33679-8225
Phyllis O. Douglas, Esquire Dade County School Board
Octavio J. Visiedo, Superintendent Dade County School Board
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.
