vs. )
) CASE NO. 93-6790BID
Respondent. )
Intervenor. )
Pursuant to notice, the above matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Diane Cleavinger, on January 18, 1994, in Tallahassee, Florida.
Office of the General Counsel Department of Management Services Knight Building, Suite 309
The issues in this case are whether Atlantic Ford's failure to initial a typewritten correction on a credit for a nonpreselected option is a minor irregularity and whether or not Duval Ford is entitled to award of the contract for truck 150 of the Medium and Heavy Truck bid as the lowest, responsive bidder.
This case concerns the Department of Management Services attempt to secure a contract for the future purchase of medium and heavy trucks by state agencies and local governmental units. Bids were eventually submitted and opened pursuant to an Invitation to Bid (ITB) issued by the Department. The contract was awarded to Intervenor, Atlantic Ford, as the apparent low bidder. On
October 21, 1993, Petitioner, Duval Ford, filed a Formal Protest and Petition for Hearing. The Petition was filed with the Division of Administrative Hearings for the purpose of conducting a formal hearing.
At the final hearing, Petitioner presented one witness, and submitted six exhibits into evidence. Respondent presented the testimony of one witness and offered four exhibits into evidence. Intervenor did not appear at the final hearing.
Petitioner filed its Proposed Recommended Order on February 14, 1994.
Respondent filed its Proposed Recommended Order on February 21, 1994. Intervenor did not file a Proposed Recommended Order. The parties' Proposed Findings of Fact have been considered and utilized in the preparation of this Recommended Order except where such proposals were not supported by the weight
of the evidence or were immaterial, cumulative or subordinate. Specific rulings on the parties' proposals are contained in the Appendix to this Recommended Order.
Pursuant to Section 287.042(2), Florida Statutes, the Department of Management Services (DMS), lets various Invitations to Bid (ITB) for the benefit of state agencies, cities, counties and other local government agencies so that these entities may purchase a variety of goods and services.
On August 24, 1993, DMS issued Invitation To Bid #28-070-700-P. The bid was one of 225 Invitations to Bid issued by DMS in 1993. The bid was for the purchase of medium and heavy trucks. The bid which is the subject of this case involves truck #150. The truck #150 bid has thirteen pages with forty- seven options plus base truck bid blanks.
General Condition 1 of the Invitation to Bid requires that "all corrections made by bidder to his price must be initialed."
Other documents provided by the Department to interested bidders as part of the bid package reiterate the requirement that all price changes must be initialed. These documents include the "Checklist," a document entitled "Common Problems That Result in Bid Being Rejected" and the document entitled "Medium and Heavy Trucks Index."
The requirement in General Condition I of the Invitation to Bid, that all price changes must be initialed, contains no printed exceptions with respect to "nonpreselected" options.
The purpose of the requirements of General Condition 1 of the Invitation to Bid is to protect both the State of Florida as well as competing vendors.
The reason for the requirement that all price changes or alterations be initialed by the vendor is to protect both the State of Florida against a successful bidder later inserting higher option prices and charging the state agencies those prices, and the vendor against the State later inserting lower prices and attempting to hold the vendor to those prices.
General Condition 13 of the bid document states:
LEGAL REQUIREMENTS: Applicable provisions of Federal, State and Local law and all ordinances, rules, and regulations shall govern development, submittal and evaluation of all bids received in response hereto and shall govern any and all claims and disputes which may arise between persons(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or any other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof. . .
(Emphasis added.)
General Condition 13 incorporates Rule 60A-1.001(3), Florida Administrative Code, which permits the State to waive minor irregularities in the conformance of a bid proposal to the formal bid requirements.
The lowest bidder is determined by two factors. The first factor is the price for the base truck. The base truck is the minimum truck which can be ordered in this contract with no options. It is basically a chassis with an engine.
The second factor involves additions to the truck called preselected options or predetermined options. All of the other options for the particular vehicle are deemed nonpreselected options. Preselected options are generally the most frequently ordered additions to the base truck along with some other less frequently ordered options. The preselected options can vary from bid to bid; however, DMS always determines the preselected options before opening the bids. The price of any option cannot exceed retail price. There is, therefore, a ceiling for the prices of preselected and nonpreselected options. The preselected options are not announced until after the bid is posted to prevent dishonestly low prices on preselected options and to promote competitive prices throughout the contract document. The bidders therefore do not know which options are preselected when they are composing their bids. There is nothing to be gained by a bidder loading a particular option with a high markup, because the bidder cannot guarantee that the option will not be preselected.
The bid evaluation price is the base truck price plus the price of the combined chosen preselected options.
DMS received numerous bids on the ITB, including a bid from Petitioner and Intervenor. Atlantic Ford bid a combined price of $38,737.00, and was the apparent low bidder; Duval Ford bid a combined price of $39,944.00 and was the apparent second low bidder.
Upon receipt of the bids from the bidders, the bids were held in a locked room until the bid opening. After the bid opening, the purchasing specialist assigned to this bid reviewed each bid for conformity to the general non-technical specifications. Only the Bureau of Procurement is responsible for the nontechnical review although other Bureaus or Divisions may review and have input into the review process. However, these other Divisions' input is not binding.
In the nontechnical review the purchasing specialist reviewed each bid's signatures, whether or not the bid was signed in ink, and numerous other requirements. The purchasing specialist also reviewed the bids to determine if all base bid blanks and price blanks for preselected options were filled in and that no corrections were made to those prices without a bidder's initials acknowledging the change. The bids which failed to meet the general conditions of the bid for base bid items and preselected options were rejected as nonresponsive bids.
After the initial nontechnical review, the bids were sent to the Division of Motor Vehicles and Watercraft for a technical evaluation. However, since each bid document contains bids for several trucks, there may be a mixture of responsive and nonresponsive bids for various trucks in the same document and the Division of Motor Vehicles and Watercraft may receive responsive and nonresponsive bids for technical review.
John Bevins of the Division of Motor Vehicles and Watercraft reviewed the technical parts of the bid. This information included manufacturer's codes for options and base truck features as well as the manufacturer's retail price which no bidder can exceed.
After John Bevins completed his review, he filled out a bid rejection recommendation form. John Bevins chose to include nontechnical items in his recommendation, although this was beyond the scope of his review.
Mr. Bevins indicated on his bid evaluation form that Atlantic Ford failed to initial a typewritten correction on option 8206 of truck 150. Mr. Bevins returned the reviewed bids to the purchasing specialist along with his recommendation that Atlantic Ford's bid was not responsive since it failed to initial the typewritten correction on option 8206.
The purchasing specialist discussed the failure of Atlantic Ford to initial the typewritten correction on option 8206 with H. P. Barker, Jr., the Bureau Chief of Procurement. H. P. Barker, Jr. has the final authority within the Bureau of Procurement to decide if a bid is responsive. He is the customary agency decision-maker on these matters.
After careful consideration and discussion, H. P. Barker, Jr., determined that the failure of Atlantic Ford to initial the typewritten correction on a credit is a minor irregularity according to the Department's purchasing rules, since option 8206 was a nonpreselected option and did not effect the total bid price for determining the lowest bidder. Barker's decision was based on the State's interest in obtaining trucks at the lowest price, thereby obtaining the most goods per contracting dollar.
Duval Ford conceded that the typewritten correction was faint and does not appear on photocopies of the bid. Barker testified that DMS accepts photocopies of bids. If Atlantic Ford had submitted a photocopy of its bid, as it could have legally done, then the typewritten correction would probably not have been noted by the Department or the other bidders.
Barker also testified that bids are not rejected if nonpreselected option blanks are not filled in. Dealers can choose not to offer all nonpreselected options.
Finally, in this case option 8206 was a credit. Even if a purchaser under the contract orders option 8206, it will pay six dollars ($6.00) less for the overall truck from Atlantic Ford than if the truck was ordered from Duval Ford.
Duval Ford offered evidence from 1991, that DMS had rejected a bid of another dealer for failure to initial a price change on a nonpreselected option. However, Nelson Easom, Duval Ford's manager had not been able to discover any similar rejections in the subsequent two years. Barker testified that the policy regarding noninitialed nonpreselected options changed three years ago. DMS then decided to treat them as minor irregularities. The policy change was based on the public policy to award the lowest bid whenever possible and to prevent minor deviations in bids from causing the state to pay higher prices for goods and services.
Moreover, the evidence did not show any abuse of the bid process which would occur should price changes not be initialed. The alleged "protection" afforded to bidders by requiring every change to be initialed is at best tenuous since any fraudulent price changes could easily be recognized by the party against whom the change was made.
Given these facts, this case over initials appears to be much ado about nothing, and the failure of Atlantic Ford to initial its price change on a nonpreselected option is a minor irregularity and waiveable by DMS. DMS therefore did not act in an arbitrary and capricious manner by waiving the irregularity and awarding the bid to Atlantic Ford.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. Sections 120.53, and 120.57(1), Florida Statutes.
In a bid protest proceeding, the Hearing Officer's sole responsibility is "to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly" in its decision to reject Petitioner's bid and award the bid to Atlantic Ford. Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912, 914 (Fla. 1988). The burden of proof in a bid protest rests upon the unsuccessful bidder, seeking to establish entitlement to the award. Adlee Developers v. Department of Health & Rehabilitative Services, 14 F.A.L.R. 4937, 4944 (Dept. Health & Rehab. Serv. July 10, 1992).
In this case, the issue is the responsiveness of Atlantic Ford's bid for truck 150, and whether Atlantic Ford's failure to initial a typewritten correction was a minor irregularity. Balino v. Department of Health and Rehabilitative Services, 348 So.2d 349 (Fla. 1st DCA 1977). Intercontinental Properties, Inc. v. Department of Health & Rehabilitative Services, 606 So.2d
380 (Fla. 3d DCA 1992). Duval Ford must therefore prove that DMS acted arbitrarily and capriciously in awarding the bid to Atlantic Ford.
Arbitrary means without fact or logic. Dravo v. Basic Materials Co., Inc. v. Department of Transportation, 602 So.2d 632 (Fla. 2d DCA 1992). Capricious means without thought or reason. Id.
An agency, in its discretion, may waive a minor irregularity in a bid proposal. Tropabest Foods, Inc. v. State of Florida, Department of General Services, 493 So.2d 50 (1st DCA 1986); Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982).
A minor irregularity is a variation from the bid specifications which "does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders or does not adversely impact the interests of the agency." Tropabest, supra at 52.
General Condition 13 of the bid document states:
LEGAL REQUIREMENTS: Applicable provisions of Federal, State and Local law as all ordinances, rules, and regulations shall govern development, submittal and evaluation of all bids received in response hereto and shall govern any and all claims and disputes which may arise between persons(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or any other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof. .
(Emphasis added.)
The bid document therefore incorporates of Rule 60A-1.001(3), Florida Administrative Code, which states:
(3) Minor irregularity--A variation from the invitation to bid/request for proposal terms which does not effect the price of the bid/proposal, or give the bidder or offeror an advantage or benefit not enjoyed by other bidders or offerors, or does not adversely impact the interests of the agency.
Duval Ford argues that failing to initial a price change is not a minor irregularity and poses a hypothetical option package which would cost more from Atlantic Ford than if bought from Duval Ford. The problem with this line of reasoning is that any alternative selection of preselected options could have the same effect. The generalization of the argument fails, because higher price has more to do with the combination of preselected options than with the uninitialed correction of any one nonpreselected option. More importantly, however, the argument fails because initials simply have nothing to do with the price the bidder bids. In short, Atlantic Ford's price did not change because initials were present or not present. The issue of initials goes only to the bidder's acknowledgement of his bid prices which acknowledgement is ultimately made when a bidder signs the bid form.
In this case, there is a very strong public interest in favor of saving tax dollars in awarding public contracts. There is no public interest, much less a substantial public interest in disqualifying low bidders for technical deficiencies in form, where the low bidder did not derive any unfair competitive advantage by reason of the technical omission. Overstreet Paving v. Department of Transportation, 608 So.2d 851, 853 (Fla. 2d DCA 1992); Intercontinental Properties, Inc. v. State Department of Health & Rehabilitative Services, 606 So.2d 380, 386 Fla. 3d DCA 1992). The public purpose is best
served by construing bid requirements, if at all reasonable, in a way that would give all bidders an opportunity to compete. Air Support Services v. Metro Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1883).
The interest of the taxpayers of Florida is not served well by paying
$2000 more per truck ordered under this contract. Therefore, given that there is no evidence that this is a provision that will effect the price of the contract or negatively effect the interest of the State of Florida in this contract, or the fairness of the bid process, the public purpose is best served by construing the failure to initial a typewritten correction on option 8206 as a minor irregularity.
Moreover, recognition must be given to the fact that this is one of
225 contracts DMS lets every year. In this case, there were 27 different trucks on this contract. The specifications for truck 150 encompassed 13 pages and 47 options. To require that every bid blank have an initial, for even the faintest of corrections is an unrealistic standard with no overweighing purpose.
Finally, Petitioner offers evidence that DMS changed its position regarding the rejection of bids of uninitialed corrections on nonpreselected options from 1991 to 1993. The testimony of DMS' witness confirmed the change. However, the fact that the interpretation of the criteria as applied to the facts varies from one case to the next is not dispositive. C. H. Barco Contracting Co. v. Department of Transportation, 483 So.2d 796 (Fla. 1st DCA 1986). The mere changing of the policy does not make DMS' action in this case arbitrary, when, as here, the agency explained the reason for the change.
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing
Petitioner's formal protest and awarding the contract for the Project to Atlantic Ford.
DONE AND ENTERED this 15th day of March, 1994, in Tallahassee, Florida.
Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1994.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6790BID
20 of Petitioner's Proposed Findings of Fact are subordinate.
9. The facts contained in paragraphs 22 and 23 of Petitioner's Proposed Findings of Fact were not shown by the evidence.
Office of the General Counsel Department of Management Services Knight Building, Suite 309
Kerri L. Barsh Attorney at Law
Greenberg Traurig et al. 1221 Brickell Avenue
Paul A. Rowell, Esquire General Counsel
William H. Lindner Secretary
All parties have the right to submit to the agency 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.
