STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HEWETT-KIER CONSTRUCTION, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 93-6449BID

) SCHOOL BOARD OF BROWARD COUNTY, )

)

Respondent, )

and )

) JAMES B. PIRTLE CONSTRUCTION ) CO., INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on December 9, 1993, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Robert E. Ferencik, Esquire

David Valdini, Esquire

LIEBY, FERENCIK, LIBANOFF & BRANDT

Penthouse 2, 290 Northwest 165 Street

Miami, Florida 33169-6457

For Respondent: Edward J. Marko, Esquire

MARKO & STEPHANY

Post Office Box 4369

Fort Lauderdale, Florida 33338

For Intervenor: John B. DiChiara, Esquire

507 South East 11th Court

Fort Lauderdale, Florida 33316 STATEMENT OF THE ISSUES

Whether Broward County School Board Project Number 2611-88-01 pertaining to construction at Bair Middle School should be awarded to James B. Pirtle Construction Co., Inc. (Pirtle). The resolution of this issue turns on whether Pirtle failed to comply with the minority business enterprise subcontractor participation goals contained in the bid specifications so as to make its bid non-responsive.

PRELIMINARY STATEMENT

The Broward County School Board issued an invitation to bid for certain work on Bair Middle School, which was designated Project Number 2611-88-01. Both the Petitioner (Hewett-Kier) and the Intervenor (Pirtle) filed bids in response to the invitation. Hewett-Kier timely filed its bid protest following the Board's announcement that it intended to award the bid to Pirtle, and this proceeding followed. Succinctly stated, Hewett-Kier contends that Pirtle's bid was non-responsive because Pirtle failed to meet the minority business enterprises (MBE) goals set forth in the bid documents and it failed to establish that it made good faith efforts to do so.

Hewett-Kier called Claudia Williams, Francisco Flores, and James Hewett as its witnesses. Ms. Williams is the School Board's MBE contract compliance administrator. Mr. Flores is employed by a black-owned minority business enterprise as an estimator. Mr. Hewett is a principle in Hewett-Kier. The School Board called no additional witnesses. Pirtle called Michael Geary, a vice-president of Pirtle, as its only witnesses. The parties submitted 8 joint exhibits, each of which was accepted into evidence. Hewett-Kier submitted six additional exhibits to be marked for identification. One of Hewett-Kier's exhibits was withdrawn, but the remaining five Hewett-Kier exhibits were admitted into evidence. Pirtle submitted four exhibits, each of which was accepted into evidence. The School Board submitted no separate exhibits.

A transcript of the proceedings has been filed. At the request of the parties, the time for filing post-hearing submissions was set for more than ten days following the filing of the transcript. Consequently, the parties waived the requirement that a recommended order be rendered within thirty days after the transcript is filed. Rule 60Q-2.031, Florida Administrative Code. Rulings on the parties' proposed findings of fact may be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. On July 15, 1993, the School Board issued an invitation to bid for certain construction work on Bair Middle School, which was designated Project Number 2611-88-01.

   
   

2. Responses to the invitation were due by 2:00 p.m. on August 26, 1993. Hewett-Kier, Pirtle, and six other contractors timely submitted bids for the project. The bids were opened on August 26, 1993, and Pirtle was the apparent low bidder with a bid of $1,150,000. Hewett-Kier was the second low bidder with a bid of $1,167,000.

   
   

3. On September 2, 1993, the bids were posted. The Bid Tabulation Form indicated the intent of the School Board's Facilities Department to recommend that the School Board award the subject contract to Pirtle.

   
   

4. Article 10 of the Special Conditions to the invitation pertains to MBE subcontractor participation goals and requirements. Article 10, Paragraph 1 sets forth the following MBE participation requirement for the subject bid:

   
   

   The School Board of Broward County, Florida is committed to affirmatively ensuring a substantial increase in the awarding of construction subcontracts to Minority Businesses. School Board Policy . . .

   requires all projects estimated to cost $1 million or more must have MBE subcontracting goals and that Contractors awarded work on such projects fully participate in the MBE Program. Compliance with the requirements of this article is mandatory.

   
   

   The total MBE Contract Goal for this project is 6 percent. This total MBE Goal will be

   comprised of the sum of the following categories:

   
   

   1. Black: 2 percent.

   2. Hispanic: 2 percent.

   3. Woman: 2 percent.

   4. Other: 0 percent.

      
      

5. Article 10, Paragraph 3(A) of the Special Conditions provides, in pertinent part, as follows:

   
   

   Failure to Comply: Failure on the part of the Bidder to comply with the requirements of this Article shall be cause for finding the bidder Non-responsive, unless every

   reasonable effort to utilize MBE subcontractors is demonstrated to The School Board of Broward County, Florida. In the event a bid is deemed non-responsive, award may then be made to the next lowest bidder, or all remaining bids may be rejected and the project readvertised.

   
   

6. Article 10, Paragraph 4(A) of the Special Conditions pertains to bidding requirements and procedures prior to contract award and provides, in pertinent part, as follows:

   
   

   1. Submittals

      Within seven (7) calendar days after bid opening, the low Bidder . . . as a condition of contract award, shall submit to the Owner the following documents . . . concerning MBE Contractor and Subcontractor participation in the contract:

      * * *

      3. Unavailability Certification-MBE Subcontractor Participation: If the Low Bidder is unable to commit adequate MBE Subcontractor Participation

      to meet the Contract Goal, he/she should request execution of this document for each MBE Subcontractor he/she has solicited, but who cannot participate for reasons of their own. This is necessary to show good faith efforts on the Bidder's part to meet the Contract Goal.

      
      

      Failure to submit the requested Documents within the allotted time will render a bid non-responsive, unless it is determined that the contract goal cannot be met.

7. Article 10, Paragraph 4(B) of the Special Conditions pertains to good faith efforts required of bidders to meet the MBE subcontracting goals and provides, in pertinent part, as follows:

   
   

   1. Good Faith Efforts:

      If the information submitted in response to the previous paragraph demonstrates a

      Bidder does not meet the MBE Subcontractor Goal, information sufficient to satisfy The School Board of Broward County, Florida that the bidder has made good faith efforts must be submitted.

      Efforts to obtain MBE Subcontractor participation are good faith efforts to meet the goal, if they are sincerely motivated, if, given all relevant

      circumstances, they could not reasonably be expected to produce a level of MBE Subcontractor participation sufficient to meet the goal. In order to award a contract to a Bidder that has failed to meet the

      MBE Subcontracting Goal, The School Board of Broward County, Florida must determine that the Bidder's efforts were those that a bidder actively and aggressively seeking the goal would make given all relevant circumstances.

      
      

      In making the required judgment, The School Board of Broward County, Florida may consider the kinds of efforts listed below. This is not a mandatory checklist. The School Board of Broward County, Florida does not insist the Bidder do any one or any particular combination of things on the list, nor is the list exclusive or exhaustive. Other factors or types of efforts may be relevant in appropriate cases. In determining whether or not a bidder has made good faith efforts, the School Board of Broward County, Florida will look not only at the different kinds of efforts that a

      Bidder has made, but also the quantity and intensity of these efforts.

      
      

      Good Faith Efforts are as follows:

      1. The Bidder attended pre-bid meetings if advertised and scheduled by The School Board of Broward County, Florida to inform MBE Subcontractors of subcontracting opportunities;

      2. The Bidder provided written notice to a reasonable number of specific MBE Subcontractors that their interest in the contract is being solicited in sufficient time to allow MBE Subcontractors to participate effectively;

      3. The Bidder, in order to increase the likelihood of meeting the goal, selected portions of the work to be performed by MBE Subcontractors

         that could be broken down into economically feasible units to facilitate MBE Subcontractor participation;

      4. The Bidder provided interested MBE Subcontractors with adequate information about the plans, specifications and requirements of the contract;

      5. The Bidder negotiated in good faith with interested MBE Subcontractors, not rejecting MBE Subcontractors as unqualified without sound reasons based on a thorough knowledge of their capabilities;

      6. The Bidder contacted the MBE Coordinator for direct referral of certified MBE Subcontractors;

      7. The Bidder maintained records listing name, address, type of trade, and describe (sic) results of contact of each MBE Subcontractor with regard to each prospective contract opportunity;

      8. The Bidder notified the MBE Coordinator whenever he cannot successfully locate qualified MBE Subcontractors;

      9. The Bidder actively maintains a file with the names and addresses of MBE subcontractors.

         (List may be obtained from MBE Coordinators Office)

      10. The Bidder engaged in specific and continuing personal recruitment efforts directed at Minority contractor's organizations, Minority recruitment organizations, and Minority Business Assistance Centers.

   
   

   Meeting the goal or making good faith efforts to

   do so is a condition of being awarded this contract.

   
   

8. Claudia Williams is the MBE Contract Compliance Administrator for the School Board. Ms. Williams has the responsibility to assign minority goals to each project and to determine on behalf of the School Board whether bidders have complied with the School Board's policy pertaining to minority subcontractor participation. Ms. Williams has made this compliance determination on behalf of the School Board on over a 100 occasions. Ms. Williams is familiar with the good faith effort requirements contained in the School Board's bid documents and she is familiar with the availability of black-owned MBE subcontractors to perform work on School Board construction projects.

   
   

9. There are fewer black-owned MBE subcontractors certified by the School Board than there are female or Hispanic-owned MBE subcontractors. It is more difficult for a contractor to meet the black-owned MBE subcontractor goal of 2 percent than it is to meet the other MBE subcontractor goals.

   
   

10. Pirtle's bid had a total of 24 percent MBE participation comprised of female or Hispanic-owned MBEs. Initially, there were no black-owned MBE subcontractors.

    
    

11. The MBE goals are not intended to be rigid or inflexible requirements, but the general contractor is expected to make good faith efforts to secure the participation of MBE subcontractors. Pirtle met (and greatly exceeded) the MBE goals set forth in the bid documents for total MBE participation. Consequently, Pirtle is required to show nothing further in this proceeding as to the total goal. It is the second goal, pertaining to MBE distribution based on the gender or the ethnicity of the subcontractor, that was not met. Specifically, Pirtle did not meet the MBE goal of 2 percent for participation by black-owned MBE subcontractors.

12. On September 2, 1993, Pirtle submitted minority business enterprise (MBE) participation documentation pursuant to Article 10 of the invitation, which established that Pirtle had received responses to bid solicitations from three black-owned MBE subcontractors and that it had received noncompetitive bids from two of those black-owned MBE subcontractors. Pirtle also provided the School Board with a copy of the solicitation letter it sent to black-owned MBE subcontractors. Ms. Williams reviewed this documentation, taking into consideration the nature of the project, her knowledge of the availability of black-owned subcontractors, and the criteria for judging good faith efforts contained in the bid documents. Ms. Williams was satisfied after reviewing the information furnished to her by Pirtle on September 2, 1993, that Pirtle had satisfied the good faith efforts requirement to secure the 2 percent black-owned MBE subcontractor participation.

    
    

13. Petitioner failed to establish that the Ms. Williams, on behalf of the School Board, acted fraudulently, arbitrarily, illegally, or dishonestly in making the determination that Pirtle's efforts to secure black-owned MBE subcontractors met the good faith efforts requirements contained in Article 10 of the Special Conditions to the invitation.

    
    

14. Ms. Williams was nevertheless concerned that Pirtle had secured the participation of no black-owned MBE subcontractor, and so informed Pirtle. On September 7, 1993, Pirtle informed Ms. Williams that it had secured the participation of a black-owned MBE subcontractor to perform work valued at

    $5,700.00, which represented 0.5 percent of the value of the contract. This additional information was provided pursuant to Article 10, Paragraph (4)(D)1 of the Special Conditions of the bid, which provides for a pre-conciliation conference process as follows:

    
    

    If the MBE Coordinator questions the acceptability of the Low Bidder's MBE Subcontractor submissions, the Bidder shall, upon at least three (3) calendar days notice given by the MBE Coordinator, meet with the MBE Coordinator to present information and arguments pertinent to his compliance with the applicable requirements.

    
    

15. At the formal hearing, Pirtle established that it had made good faith efforts to secure black-owned MBE subcontractors to participate in the project. Pirtle solicited bids from 47 black-owned subcontractors, only three of which filed any response to the solicitation.

    
    

16. Hewett-Kier argued that Pirtle should have given black-owned MBE subcontractors the opportunity to undercut the bid of other subcontractors after the bidding was closed in order to obtain the ethnic distribution goal. This contention is rejected because this questionable tactic was not shown to be necessary, reasonable, or appropriate.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Section 120.57(1), Florida Statutes.

18. In bid disputes, the role of the Hearing Officer is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly. Department of Transportation vs. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988).

    
    

19. Pirtle met the overall MBE subcontractor goal, but did not meet the ethnic distribution goal. Because Pirtle did not meet the ethnic distribution goal, it was required to establish that it had met the good faith efforts to satisfy that goal. Pirtle's efforts to meet the ethnic distribution goal were carefully scrutinized by Ms. Williams on behalf of the School Board. Petitioner failed to establish that the School Board acted fraudulently, arbitrarily, illegally, or dishonestly in making the determination that Pirtle's efforts to secure black-owned MBE subcontractors met the good faith efforts requirements contained in Article 10 of the Special Conditions to the invitation.

    
    

20. Hewett-Kier asserts that in deciding whether Pirtle had made good faith efforts to meet the 2 percent black-owned MBE subcontractor goal set forth in the invitation, Ms. Williams improperly considered information provided to the School Board by Pirtle on September 7, 1993, that it had secured the participation of a black-owned MBE subcontractor to perform work valued at

    $5,700. That contention is rejected because Ms. Williams testified that she determined that Pirtle had satisfied the good faith requirements by its submittals on September 2, 1993, which was clearly timely, and because the additional information was proper if considered part of the pre-conciliation conference process. The additional submittal was made on September 7, 1993, only because Ms. Williams voiced her concern that there was no black-owned subcontractor involved in the project, and it did not establish that Pirtle met the ethnic distribution goal of 2 percent participation by a black-owned MBE subcontractor and did not, consequently, relieve Pirtle of the requirement to establish that it had met the good faith efforts provisions of the bid documents.

    
    

21. Section 235.31(1)(a), Florida Statutes, requires a school board to award construction contracts such as the one at issue to the lowest responsible bidder meeting specifications. The School Board of Broward County has not elected the option to reject all bids. Petitioner has failed to establish that the School Board acted fraudulently, arbitrarily, illegally, or dishonestly in making the determination that Pirtle is the lowest bidder meeting specifications. Consequently, it is concluded that the bid protest of Hewett- Kier should be rejected and the bid should be awarded to Pirtle.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Broward County, Florida, enter a Final

Order which denies the bid protest of Hewett-Kier and which awards the subject bid to Pirtle.

DONE AND ENTERED this 28th day of February, 1994, in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 28th day of February, 1994.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6449BID

The following rulings are made on the proposed findings of fact submitted by Petitioner.

1. The proposed findings of fact contained in the section designated "General Factual Background" are adopted in material part by the Recommended Order.

2. The proposed findings of fact contained in the section designated "Intervenor is a Non-Responsive Bidder" are adopted in part by the Recommended Order. The proposed findings that Hewett-Kier was a responsive bidder is rejected as being unnecessary to the conclusions reached. The conclusion that Pirtle is a non-responsive bidder is rejected as being contrary to the conclusions reached.

3. The proposed findings of fact contained in the section designated "The School Board's Determination of Good Faith Efforts is Arbitrary and Capricious" are adopted in material part by the Recommended Order, but the conclusions intertwined with those proposed findings are rejected as being contrary to the conclusions reached.

The following rulings are made on the proposed findings of fact submitted by Respondent.

1. The proposed findings of fact in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 are adopted in material part by the Recommended Order.

2. The proposed findings of fact in paragraphs 15, 16 and 17 are rejected as being unnecessary to the conclusions reached.

The following rulings are made on the proposed findings of fact submitted by Intervenor.

1. The proposed findings of fact contained in the section designated "Testimony of Claudia Williams" are adopted in material part or are subordinate to findings made.

2. The proposed findings of fact contained in the section designated "Testimony of Francisco Flores" are subordinate to the findings made.

3. The proposed findings of fact contained in the section designated "Testimony of James Hewett" are subordinate to the findings made.

4. The proposed findings of fact contained in the section designated "Testimony of Michael Geary" are subordinate to the findings made.

COPIES FURNISHED:

Robert E. Ferencik, Esquire David Valdini, Esquire

LIEBY, FERENCIK, LIBANOFF & BRANDT

Penthouse 2, 290 Northwest 165 Street

Miami, Florida 33169-6457

Edward J. Marko, Esquire MARKO & STEPHANY

Post Office Box 4369

Fort Lauderdale, Florida 33338

John B. DiChiara, Esquire

507 South East 11th Court

Fort Lauderdale, Florida 33316

Virgil L. Morgan, Superintendent School Board of Broward County 600 Southeast Third Avenue

Fort Lauderdale, Florida 33301-3125

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: 93-006449BID

Orders for Case No: 93-006449BID