STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ESP SECURITY & SATELLITE ) ENGINEERING, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-2035BID

) UNIVERSITY OF FLORIDA, ) PHYSICAL PLANT DIVISION, ) ARCHITECTURE/ENGINEERING ) DEPARTMENT, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, duly-designated Hearing Officer of the Division of Administrative Hearings, on September 1, October 13, and November 1, 1994, in Gainesville and Tallahassee, Florida. The appearances were as follows:

APPEARANCES

For Petitioner: Randall J. Silverberg, Esquire

3740 Beach Boulevard, Suite 311

Jacksonville, Florida 32207

For Respondent: Joseph T. Barron, Jr., Esquire

Associate General Counsel University of Florida

207 Tigert Hall Gainesville, Florida 32611

STATEMENT OF THE ISSUES

The issues to be resolved in this proceeding concern whether the Petitioner's bid is the lowest and the best and whether it is responsive concerning bid specifications, as amended by one addendum, issued by the Respondent as an Invitation to Bid (ITB).

PRELIMINARY STATEMENT

This cause arose when the University of Florida (University) issued an ITB on September 21, 1993 seeking replacement of the fire alarm system in building

181 at the University campus, which is the Florida State Museum (Museum). A pre-bid meeting was held on October 7, 1993 and on October 21, 1993, University issued a 23-page addendum to the ITB. Thereafter, several bids were submitted to the University, including that of the Petitioner. Bids were also received from Bill Preston Electrical Company, Inc. (Preston), Fire Alarm Service Corporation (Fire Alarm), and Shine Company, Inc. (Shine). The bids were opened

on October 28, 1993, at 1:30 p.m. Following an evaluation of bids, a Notice of Intended Award was issued on December 4, 1993, and posted, showing an intended award to Preston. On October 28, 1993, the Petitioner filed a Notice of Protest against the award of the bid to Shine; and on January 13, 1994, it filed a Notice of Protest against the later proposed award to Preston. On December 20, 1993, a Formal Written Protest was filed by the Petitioner, and on February 21, 1994, an Amended Formal Protest. On April 13, 1994, the University informed all bidders of the Petitioner's protest and advised them that each could join as a party of record by filing a Petition for Leave to Intervene. There were no intervenors. In due course, the cause was assigned to the undersigned Hearing Officer for adjudication. A hearing was scheduled in accordance with the statutory hearing scheduling requirements, and the parties agreed to a continuance in order to have more time to prepare for hearing, concomitantly waiving the time requirements for hearing and rendition of the Recommended Order.

The cause came on for hearing as noticed. The Petitioner presented the testimony of A.J. Sontag, Maxwell Petzold, Mark Kerrin, and Mary Johnson. The Petitioner had 39 exhibits entered into evidence. The University presented the testimony of A.J. Sontag, Richard Moseley, Irene Thomas, Donald Jennings, K. Lynn Hodge, John Jones, C. Patrick Tate, Larry Ellis, and Emily Hamby. The University had 30 exhibits entered into evidence. The hearing was concluded on the above date and the parties obtained a transcript thereof and requested an extended briefing schedule. The briefing schedule was further extended in order to correct errors in the transcript, which, upon motion, has been accomplished. The parties ultimately submitted Proposed Recommended Orders on a timely basis. The proposed findings of fact contained therein are addressed in this Recommended Order and specifically in the Appendix attached hereto and incorporated by reference herein.

FINDINGS OF FACT

1. On September 21, 1993, the University issued an ITB for Project 2230 calling for replacement of a fire alarm system at the Museum. The bids were scheduled to be opened on October 28, 1993, at 1:30 p.m. A project manual was written incorporating the "Simplex" addressable fire alarm system in the specifications, but substitutes were permitted in the ITB. Specifications did not sole-source Simplex. The project manual allows for substitutions providing for "fire alarm system equal to Simplex . . .".

   
   

2. The project manual provides that "if bids are based on equivalent products, indicate on the bid proposal form (Bid Form 00310-1) the manufacturer's name and catalog number. Bidder shall submit at the time of bidding, cut sheets, sketches, and descriptive literature and/or complete specifications." The bidder is also required to explain in detail the reason why the proposed equivalent would meet the specifications. The specifications also provide that "bids which do not comply with these requirements are subject to rejection. Bids lacking any written indication of intent to quote an alternate brand will be received and considered in complete compliance with the specifications as listed on the bid form." Thus, if a bidder did not indicate any alternate system in its bid and did not indicate any written intent to quote an alternate system, then it would be presumed by the University that the bidder would comply with the Simplex specifications and that would be deemed responsive.

   
   

3. The advertisement for the ITB was submitted on September 22, 1993, to be published on October 1, 1993 but, instead, was published in the Florida

   Administrative Weekly on October 8, 1993. Mr. Sontag, the Senior Purchasing Agent at the University, opined that that allowed sufficient time for bidders to respond.

   
   

4. Irene Thomas is a Senior Clerk at the University Physical Plant Purchasing Office. She works for A.J. Sontag. Mr. Sontag has been with the University for six years and has prior purchasing experience.

   
   

5. The project manual provides the address for obtaining copies of the proposed contract documents, including addenda, as the Physical Plant Purchasing Building No. 705, on Radio Road, in Gainesville, Florida. The project manual requires that in order to receive consideration, bids must be made upon forms provided therefor, properly signed, and with all items filled out. Potential bidders could get a bid package by calling Ms. Thomas and requesting one for pick-up or for mailing. Additionally, the bid package was transmitted to the "Dodge Room", which is a clearing house or depository for contracting plans whereby contractors interested in bidding on public projects may learn of the projects and obtain the relevant bid documents, plan specifications, and the like. The Dodge Room provides the specification manual, any addenda, and the drawings. The ITB general conditions were not a part of the bid package sent to the Dodge Room. The Petitioner learned of the project through the Dodge Room and obtained a set of plan specifications for the installation of the fire alarm system from that source.

   
   

6. Mark Thomas Kerrin is the President and founder of the Petitioner. The Petitioner has been certified as a minority business enterprise (MBE) in electrical and fire contracting by the Department of Management Services (DMS) for four to five years. The Petitioner has never been invited by the University to bid on the project, although it has a practice of inviting MBE contractors to bid on projects. The University was not aware that the Petitioner was an MBE until they were so informed by Mr. Kerrin. For unknown reasons, the Petitioner was not in the most recent issue of the directory of MBE contractors, which the University employed in identifying potential MBE bidders.

   
   

7. The pre-bid meeting for the project was held on October 7, 1993 at Building 700, on Radio Road, on the University campus in Gainesville, Florida. It was not a mandatory meeting, but Mr. Kerrin testified that he attended the pre-bid meeting. He arrived a few minutes late, however, because he had some difficulty finding the site and because he had a job to perform for a customer of the Petitioner in Gainesville on that day. By the time he arrived, the pre- bid meeting was nearly over, and the sign-in sheet, whereby attendees at the meeting signed to show their attendance, had already been taken up. Mr. Kerrin felt no need to sign, showing his attendance, since the meeting was not mandatory in any event.

   
   

8. Mr. Kerrin described in his testimony the matters that were discussed at the pre-bid meeting after the time he arrived. He described much of the discussion as involving questions about the Edwards fire alarm system. He also described the discussion concerning a "remote annunciator panel", a certain type of electrical wire conduit (wire mold), phasing in of the new system and the use of a temporary system during installation of the new system. The consulting engineer, Lynn Hodge, who promulgated the technical specifications for the project, was at the meeting. In his testimony, he confirmed that the remote annunciator panel, conduit, phasing in of the new system and use of the temporary system were discussed at the pre-bid meeting in order to alert prospective bidders so that they would be aware of those items desired by the University for inclusion in the project. The potential bidders attending the

   meeting were advised that those items might be included in an addendum to the project manual. Mr. Hodge assumed that these potential bidders would reflect those items in their bids.

   
   

9. Mr. Kerrin testified that he met A.J. Sontag, the Senior Purchasing Agent, at the conclusion of the pre-bid meeting. He states that he introduced himself to Mr. Sontag and gave him a business card. Mr. Kerrin advised Mr. Sontag that his business is an MBE and he inquired as to why he had not been sent an ITB by the University. Mr. Kerrin also advised Mr. Sontag at that time that he intended to bid on the project, not as a subcontractor but, rather, as a prime contractor. Mr. Sontag, however, denies attending the pre-bid meeting on October 7, 1993 or meeting Mr. Kerrin prior to the bid opening, which occurred on October 28, 1993. Mr. Sontag testified that at the time of the pre-bid meeting, he was opening a bid for a different project at his nearby office. He acknowledged, however, that he could have walked to the pre-bid meeting on the Museum project at issue, which was only a short distance away.

   
   

10. The Petitioner presented the testimony of Maxwell Petzold of PCR, Incorporated, a chemical manufacturing business located in Gainesville, Florida. He confirmed that Mr. Kerrin had come to his place of business in October to perform some testing, because his company was having some difficulties with its security and fire alarm system. The Petitioner, in turn, submitted evidence in the form of a computer printout, from its business records, concerning activity with respect to the equipment of PCR, Inc. in Gainesville, Florida. That printout shows that Mr. Kerrin personally tested PCR's equipment in Gainesville, Florida, on October 7, 1993, the day of the pre-bid meeting. It is found that Mr. Kerrin was in attendance at the pre-bid meeting in the manner he described.

    
    

11. On the day after the pre-bid meeting, October 8, 1993, the ITB was advertised in the Florida Administrative Weekly.

    
    

12. The University has no written procedure concerning the issuance or dissemination of addenda to ITB's. On October 21, 1993, the addendum was transmitted to the physical plant office for dissemination to those interested in bidding on the Museum alarm project. On October 22, 1993, the 22-page addendum to the bid document was transmitted by telefacsimile (fax) to most prospective bidders. Other prospective bidders were telephoned and picked up a copy at the physical plant office. The fax cover letter accompanying the addendum stated "failure to acknowledge your addendum could constitute rejection of your bid."

    
    

13. All but two pages of the addendum were non-technical in nature. The technical changes in the addendum principally provided for the installation of the remote annunciator panel. The remote annunciator panel provides the same read-out capability and control capability as the main panel, but was to be in a supervised location easily found by the fire department when responding to calls. Other technical changes provided for a transitional monitoring system, while the old alarm system was being replaced and also a minor specification concerning use of wire molding, as opposed to common round electrical conduit.

    
    

14. On October 26, 1993, Mr. Kerrin was again in Gainesville, Florida, to test the equipment of his customer, PCR, Inc. See Mr. Kerrin's testimony at pages 156-157 of the Transcript and Petitioner's Exhibit 25 in evidence. While in Gainesville, Florida, on that day, Mr. Kerrin stopped at the University to attempt to ascertain why the Petitioner was not given information on other bidding opportunities and to see if there were any addenda or changes to the specifications of the project in question. Mr. Sontag advised him that no

    addendum had been issued, although his office had distributed the addendum to other prospective bidders four days earlier. Mr. Sontag testified that he was in Tennessee on the day the addendum was issued. It was issued from his office, by those acting in his stead.

    
    

15. The Petitioner's bid is for the Notifier alarm system in the amount of

    $74,500.00. Preston's bid was for $80,510.00 using the specified Simplex system. Shine submitted a base bid of $82,460.00 with a $15,000.00 deduction if the Edwards system was used, which resulted in a bid of $67,460.00. The Edwards system was determined to not comply with the specifications; however, and that fact is undisputed in this proceeding. Thus, Shine's bid in the amount of

    $67,460.00 was unresponsive, was not awarded, and is not contested. Fire Alarm also bid the Notifier system, and its bid was for $78,459.00. The Petitioner attached literature describing the Notifier system (Notifier AFP1010) to its bid form. Both Mr. Kerrin and his secretary, Mary Johnson, who helps him prepare bids, testified that the "cut sheets" or informational literature concerning the Notifier alarm system was attached by staples to the Petitioner's bid form. The Notifier system was ultimately determined by the University, in its evaluation process, to equal the Simplex type of equipment specified in the bid specifications. It, therefore, was the "equivalent" of Simplex.

    
    

16. Mr. Sontag, the Senior Purchasing Agent, described the normal procedure for opening bids. On October 28, 1993, the bids were opened with the contending bidders, including Mr. Kerrin, being present. The bid opening procedure began with the contending bidders signing their names on the reverse side of the bid tabulation sheet. Each bid was then opened and read aloud by Mr. Sontag and recorded by his Senior Clerk, Ms. Irene Thomas. After each bid package was opened, it was laid on a stack of bid packages on Mr. Sontag's desk. After all bids were opened, Mr. Sontag testified that he provided each attendee with a copy of the bid tabulation sheet. He then turned the original bids over to the Senior Clerk, Ms. Thomas, who photocopied them. This is a normal procedure in each bid opening that Mr. Sontag's office handles. Mr. Sontag testified that he had no specific recollection of any specific bid opened that day, although he knows that he opened all of them, including the Petitioner's bid.

    
    

17. In any event, he turned the bids over to Ms. Thomas after they were all opened and entered on the bid tabulation sheet. Concerning the process of photocopying the bids, Mr. Sontag testified that no staples were removed from the bids when they were copied, instead the pages were merely folded over for copying of each page. He reiterated his testimony, several times, that no pages are unstapled in the process of copying bid forms and that no staples are removed in making copies of bids, in the interest of the time required in unstapling bids for copying each individual page.

    
    

18. Later, however, when Mr. Sontag again testified at the hearing, he retracted his statements that bid forms are copied without removing staples. Ms. Thomas, the Senior Clerk who copies bid forms approximately 95 percent of the time, had testified and confirmed that, indeed, it is normal practice to actually remove staples attaching bid documents during the copying process. Additionally, Ms. Thomas testified that Mr. Sontag would have no way of knowing how bids were copied since he is not present during the copying process.

    
    

19. Copies of the bid packages made by Ms. Thomas are then transmitted to the Department of Architecture and Engineering for evaluation. In the bidding situation at issue, Donald C. Jennings, the Assistant Director of Purchasing, took the copies of the bids and the bid tabulation sheet. Mr. Jennings was

    Acting Project Manager in the absence of John Jones. Mr. Jennings was present at the bid opening.

    
    

20. On the same day as the bid opening, Mr. Jennings prepared a tabulation of the bids and submitted it to the Project Manager, John Jones, with a memorandum. The bid tabulation sheet submitted by Mr. Jennings to Mr. Jones listed beside the name of each bidder the amount of the bid and the type of alarm system bid by that proposed vendor. The Petitioner's entry on the tabulation has beside the name of the Petitioner on the tabulation sheet the word "Notifier". The official bid tabulation retained by Mr. Sontag did not list the Petitioner as having bid the Notifier system. It did not list Fire Alarm Service Corporation as having bid the Notifier system either, although there is no dispute that Fire Alarm did bid the Notifier system.

    
    

21. The original bid form of the Petitioner, produced by the University at hearing, (Petitioner's Exhibit 7), shows several staples had been removed from the form, including the staple on the back page where a "cut sheet" describing the type of system bid, would have been attached. Mr. Kerrin and his secretary, Ms. Johnson, both testified that the cut sheets for the Notifier system had been attached to the Petitioner's bid form when it was submitted. Their testimony is corroborated by the evidence showing that Mr. Jennings had in his possession a tabulation of the bids, which he transmitted to Mr. Jones on the same day as the bid opening, which indicates that the Petitioner was bidding the Notifier system. Thus, it is found, and the preponderant evidence establishes, that the Notifier system cut sheets and description of the Notifier system were submitted with the Petitioner's bid. The testimony of Mr. Kerrin and Ms. Johnson to this effect is accepted. Once delivered to the University, the Notifier information or cut sheets were removed for unknown reasons or inadvertently lost, (although a number of University witnesses testified to never having seen any extra cut sheets lying around their offices, that testimony is not probative of any finding that the cut sheets were not submitted with the bid).

    
    

22. Further, in this regard, on November 16, 1993, Mr. Jones wrote Mr. Jennings a memorandum inquiring "how did you know ESP was bidding Notifier system?" Mr. Jennings replied the following day, in writing, that he knew "from their bid." Since the Petitioner's bid form itself did not specify the Notifier system, Mr. Jennings should only have learned this from the attached literature or "cut sheets."

    
    

23. Mr. Jennings acknowledged in his testimony that the Petitioner was still under consideration for the bid award more than a month after the bids were open. The University's concern at that time was apparently whether the Petitioner had actually bid the Notifier system and not that the Petitioner had failed to acknowledge the addendum to the ITB. The University maintained that the Petitioner did not attach the descriptive literature or cut sheets concerning Notifier to its bid to show that it complied with specifications. The University, however, did not request of the Petitioner any descriptive literature as to Notifier to determine whether it equalled the bid specifications, but it did consult by telephone and in writing with Fire Alarm Service Corporation regarding the Notifier system, which Fire Alarm had also bid. Eventually, through these contacts, the University concluded that the Notifier system met the specifications. The preponderant, credible evidence shows, however, as found above, that the University, through Mr. Jennings at

    least, was aware that the Petitioner was bidding the Notifier system on the same day the bids were opened.

24. Initially, in the evaluation process, the award was recommended to be given to Preston, which had bid an amount of $80,510.00. Then, when the Notifier system was approved as complying with the specifications, the award was recommended to be given to Fire Alarm Service Corporation, which bid $78,459.00. This was in spite of the fact that the University at that time knew that the Petitioner had bid the Notifier system, as well, and knew that the Petitioner's bid was in the amount of only $74,500.00.

    
    

25. Ultimately, Fire Alarm Service Corporation was disqualified because it failed to meet the MBE requirements regarding "good faith effort". The bid evaluators at that point then recommended that the award go back to Preston, although its bid was $6,010.00 more than the Petitioner's bid. The Petitioner was disqualified by the University for allegedly not attaching the descriptive literature concerning the Notifier system and for failing to acknowledge the addendum to the ITB.

    
    

26. The University's specification documents associated with the ITB indicate that "failure to acknowledge your addendum could constitute rejection of your bid." This language indicates that rejection of a bid for failure to acknowledge the addendum was discretionary and not an automatic disqualification in the view of the University, according to its specification. However, the University's Associate Director of Architecture and Engineering, Mr. C.P. Tate, rejected the Petitioner's bid when he learned that the Petitioner had not acknowledged the addendum. Mr. Tate was aware that the addendum had been promulgated but did not draft it nor had he read or reviewed it. He was not shown to have known whether failure to acknowledge the addendum amounted to a material deviation from the specifications of the ITB, especially in the instant situation, where the the Petitioner had not been given a copy of the addendum.

    
    

27. Mr. Hodge, the Project Engineer, testified that all potential bidders at the pre-bid meeting would have known that the remote annunciator panel was a necessary part of the project and would have included the cost of the panel in their bids. In fact, the annunciator panel was a legal requirement of the State Fire Marshal's Office, in its enforcement function concerning the relevant fire safety statutes and rules. Mr. Kerrin was at the pre-bid meeting and testified that the Petitioner, in fact, included the cost of the remote annunciator panel and related materials and equipment in its bid. Moreover, Mr. Kerrin believed that the remote annunciator panel and a temporary monitoring capability, to be installed during the replacement of the permanent fire alarm system, was required by law, as also shown by Mr. Hodge's testimony. Mr. Kerrin therefore considered that to be implicit in the original bid specifications themselves. The wire mold, which was the other chief technical portion of the addendum, is a relatively inexpensive item which many contractors keep on hand. Mr. Kerrin considered that element of the technical changes posed by the addendum to be of negligible cost.

    
    

28. Mr. Hodge, in his testimony, stated that the estimated cost of the remote annunciator panel and other technical changes contained in the addendum would amount to approximately $8,000.00. He testified that the remote annunciator panel itself, including the cost of the panel plus the cost of installation, would be approximately $5,000.00 and the related technical items in the addendum would amount to $2,000.00-$3,000.00, for a total of approximately $7,000.00-$8,000.00. Petitioner's Exhibit 39 in evidence, however, concerning which Mr. Kerrin testified, is a letter by Mr. Hodge himself, dated September 2, 1993, which shows that he estimated the remote annunciator panel to only cost approximately $1,300.00, as opposed to $5,000.00.

    In fact, Mr. Kerrin testified that the remote annunciator panel and the related items in the addendum would cost approximately $1,500.00. He included such costs in his bid.

    
    

29. In light of this evidence and in careful consideration of Mr. Hodge's testimony, together with the September 2, 1993 letter, authored by Mr. Hodge, concerning the purported cost of the remote annunciator panel, as well as Mr. Kerrin's testimony, it is determined that Mr. Kerrin's testimony is more credible. It is accepted over that of Mr. Hodge in these particulars. Thus, the actual established cost of the technical items contained in the addendum would amount to somewhat less than 2 percent of the bid price submitted by the Petitioner. The Petitioner's bid price, in turn, was $6,010.00 less than that of Preston, the recommended awardee.

    
    

30. University personnel in the Purchasing, Physical Plant and Architecture and Engineering Offices are well familiar with Preston as a Gainesville-based business. Mr. Hodge knows certain personnel at Preston personally, sees them around town, and has recommended them to others for jobs, although he does not know them socially. Preston has received a great many jobs, both competitively-bid jobs and those which were submitted "on quote" because they were below the monetary threshold requirement for competitive bidding. In fact, during the period from December 22, 1992 through October 5, 1993, as shown by Petitioner's Exhibit 8 in evidence, Preston did more than 30 jobs of all types for the University, both competitively-bid and non- competitively-bid jobs.

    
    

31. Since the Edwards system was never considered to be responsive, which is undisputed, Shine was disqualified as not meeting bid specifications. That left the Petitioner as the lowest remaining bidder. Later in the evaluation process, Fire Alarm was disqualified for not meeting MBE requirements or the good-faith requirement to use 21 percent minority subcontractors. Thus, the practical result was that by disqualifying the Petitioner, or not approving the Notifier system at all, Preston would receive the bid. It is particularly noteworthy that later in the evaluation process, when the University determined that the Notifier system met specifications, it elected not to award to the Petitioner but, rather, to Fire Alarm Service Corporation because it had bid the now-compliant Notifier system, and its bid was slightly over $2,000.00 cheaper than Preston's. That award decision might have stood had Fire Alarm not been disqualified for the problem concerning MBE status, referenced above, even though the University was aware on the day of bid opening that the Petitioner was, in fact, bidding the Notifier system, as well, with a bid almost $3,000.00 cheaper than Fire Alarm's bid.

    
    

32. Mr. Kerrin complained in his testimony of the University failing to notify him of bidding opportunities even since the bid opening in question. After the bid opening, Mr. Hodge and other purchasing employees and agents of the University were well aware of his MBE status. Mr. Sontag explained in his testimony that the Petitioner had not been invited to bid on any projects in the year since the Museum project at issue was bid because "we haven't done any alarm system work since this." Mr. Sontag's testimony is contradicted by that of Mr. Hodge, who acknowledged doing other fire alarm addition projects through Mr. Sontag's office since the bidding at issue in this case. The Petitioner was informed of one project and bid on it. It involved an alarm system for the P.K. Yonge High School, operated by the University. The owner decided, however, to cancel that project. The bid invitation was withdrawn so that no award was made to any vendor in that situation.

33. In summary, the preponderant weight of the evidence, the credibility of which has been weighed and determined by the Hearing Officer and which has thus culminated in the above Findings of Fact, shows that as a matter of fact, the Petitioner was the lowest, responsible bidder. Its bid was responsive to the bid specifications. The knowledge to determine that the Petitioner was the lowest, responsible bidder, and that its bid was responsive to the specifications, was available to the University at the time the various award decisions to the other vendors were made in the free-form stage of this process. Nevertheless, the University elected to make an award to a bidder who was not the lowest responsible and responsive bidder.

    
    

    CONCLUSIONS OF LAW

    
    

34. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding. Sections 120.57(1) and 120.53(5)(b), Florida Statutes.

    
    

35. The purpose of competitive bidding is to secure the lowest responsible offer. Minor irregularities in bids viz-a-viz the specifications can be waived, effectuating that purpose. See, Air Support Services International, Inc. v. Metropolitan Dade County, 614 So.2d 583, 584 (Fla. 3d DCA 1993); Tropabest Foods, Inc. v. State of Florida, Department of General Services, 493 So.2d 50,

    52 (Fla. 1st DCA 1986). Although a bid containing a material variance from the specifications is not acceptable, Glatstein v. City of Miami, 399 So.2d 1005 (Fla. 3d DCA), rev. denied, 407 So.2d 1102 (Fla. 1981), not every deviation from the invitation is material.

    
    

36. The court in Robinson Electrical Co., Inc. v. Dade County, infra., stated:

    
    

    In determining whether a specific non- compliance constitutes a substantial and hence non-waivable irregularity, the courts have applied two criteria--first, whether the effect of a waiver would be to deprive the municipality of its assurance that the contract will be entered into, performed and

    guaranteed according to its specified require- ments, and second, whether it is of such a nature that its waiver would adversely affect competitive bidding by placing a bidder in a position of advantage over other bidders or

    by otherwise undermining the necessary common standard of competition.

    
    

    In application of the general principles above discussed, sometimes it is said that a bid may

    be rejected or disregarded if there is a material variance between the bid and the advertisement.

    A minor variance, however, will not invalidate the bid. In this context a variance is material if it gives the bidder a substantial advantage over the other bidders, and thereby restricts or stifles competition.

    See, Robinson Electrical Co., Inc. v. Dade County, 417 So.2d 1032 (Fla. 3d DCA 1982); quoting from Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1193 (Fla. 2d DCA 1978).

    
    

37. In the case at hand, the Petitioner's bid did not, by failing to formally acknowledge the addendum, contain a material irregularity in that regard. The failure to acknowledge the addendum did not give the Petitioner a substantial advantage over other bidders.

    
    

38. Mr. Kerrin testified that the Petitioner's bid price factored in the cost attributable to the technical requirements of the addendum, as a matter of fact. He determined that the technical requirements of the addendum concerning the annunciator panel, the temporary monitoring capability during system replacement and the matter of the wire molding were, in reality, implicitly contained in the original plans and specifications anyway, because they were required by law. Mr. Hodge's testimony itself bears this out, where he testified that the requirements of the State Fire Marshal's Office dictated that those items be in the project. Mr. Kerrin's testimony shows that he included the appropriate pricing for those items in his bid based upon his opinion that they were required. Therefore, the Petitioner, upon award, would be contractually bound to install them, as Mr. Kerrin implicitly acknowledged. Likewise, the Consulting Engineer, Mr. Hodge, observed that any person who attended the pre-bid meeting would be aware of the technical requirements of the addendum anyway and would include those requirements in its bid price. The above Findings of Fact, based upon the preponderant, credible evidence, show that Mr. Kerrin was at the pre-bid meeting and was aware of those items.

    
    

39. Further, in the face of Mr. Hodge's testimony that the items in the addendum would cost approximately $8,000.00, which testimony was discredited and not accepted, it has been shown by preponderant evidence that the additional cost of the items in the addendum would actually be $1,500.00 or slightly less. This is less than 2 percent of the bid price. Since the Petitioner's bid price was $6,010.00 less than Preston's, even an abject failure to acknowledge, as a matter of fact, the items required by the addendum would not have accorded the Petitioner any competitive advantage over other bidders. Even if Mr. Kerrin had not included the price of those items in his bid, so that the $1,500.00 or so had to be added to his bid price to determine his competitive position, versus the other bidders, the Petitioner would still be the low bidder.

    
    

40. Further, the language in the specifications, referenced in the above Findings of Fact, indicates that the University could exercise discretion in deciding whether the failure to acknowledge the addendum amounted to justification for disqualification due to non-responsiveness. In fact, however, after the University was aware that the Petitioner was bidding the Notifier system, as was Fire Alarm, and was approximately $3,000.00 lower in price than Fire Alarm, and was more than $6,000.00 below the price bid by Preston, the University still chose to avoid the low bid by the Petitioner and to initially give the bid to the higher bid offering the Notifier system. Fire Alarm was subsequently disqualified for failure to meet MBE requirements, and the University, instead of giving the bid at that point, even belatedly, to the Petitioner, chose, instead, to award the bid to Preston, an even higher-priced bidder than Fire Alarm.

    
    

41. Moreover, in consideration of the manner in which the addendum was promulgated and disseminated to potential bidders, the University's election to treat the Petitioner's supposed failure to acknowledge the addendum as a material defect, and supposedly grounds for disqualification due to non-

    responsiveness, evinces, if not an intentional effort to preclude the Petitioner from award of the bid, a negligent failure to give the Petitioner's bid fair and adequate evaluation during the bid evaluation process. This is pointed out by the facts found above, whereby it was shown, based upon the preponderant, credible testimony and evidence, that, indeed, Mr. Kerrin had been present at the pre-bid meeting. Therefore, at least one of the University's purchasing personnel present should have known that the Petitioner was a potential bidder and, therefore, entitled, as all of the other potential bidders obviously were in the mind of the University officials, to notice of and dissemination of the addendum.

    
    

42. Even if the University officials present at the pre-bid meeting were unaware that the Petitioner was considering bidding and were unaware of Mr. Kerrin's presence at that meeting, Mr. Sontag, upon being directly questioned by Mr. Kerrin concerning whether any addendum had been promulgated, told him that none had, when, in fact, his own office had promulgated the addendum four days before that conversation. Mr. Sontag may not have intentionally misled Mr. Kerrin. He may not have been present in the office when the addendum was prepared or promulgated. He apparently was in Tennessee when it was issued. In fact, however, he was the senior purchasing official in charge of the office promulgating the addendum and is chargeable with knowledge that it had been promulgated.

    
    

43. Another telling example of failure by the University officials to properly evaluate the Petitioner's bid was Mr. Tate's summary rejection of the Petitioner's bid for failure to acknowledge the addendum when he had not even read, reviewed, or become familiar with the requirements of the addendum. How could he have made a determination to reject the Petitioner's bid for non- responsiveness for this reason, when he did not know the contents of the addendum and, therefore, could not determine whether the failure to acknowledge it was a material variance from the specifications or not. Under these circumstances, the University's action in rejecting the bid for failure to acknowledge the addendum was clearly an arbitrary act.

    
    

44. The University has also treated the Petitioner's bid as non-responsive for failure to specify the equipment on its bid form concerning its bid of the Notifier system. Initially, it is observed and concluded that it is difficult to conceive how the University could determine this to be non-responsiveness when its own specifications for the project dictate that if a bidder does not specify a type of equipment in conjunction with its bid, then the University would presume that the bid was indicating the Simplex system referenced in the specifications. Additionally, the direct and circumstantial evidence, which the Hearing Officer accepted in finding the pertinent facts, shows that the Petitioner attached the necessary descriptive information describing the Notifier system to its bid. This is shown by Mr. Kerrin's and Ms. Johnson's testimony and corroborated to some extent by Ms. Thomas' testimony concerning the manner in which she copied loose pages of bids by removing staples from the bids on bid day. It is also borne out by the evidence which shows that Mr. Jennings received a copy of the bid tabulation on the day of bidding and wrote Notifier system by the Petitioner's name on the bid tabulation form copy. Upon inquiry from his superior about how he knew that the Petitioner was bidding the Notifier system, Mr. Jennings replied, in a memorandum, "from their bid". Thus, the direct and circumstantial evidence has proven that the Notifier system informational documents necessary to make the Petitioner's bid responsive, as bidding the Notifier alarm system, were attached to its bid at the bid opening. What happened after the bids were unstapled for copying is anyone's guess.

45. In the face of this evidence that the University was aware on bid day that the Petitioner was bidding the Notifier system, it treated the bid as unresponsive for failure to specify the equipment on its bid, in the face of its own specification that where bids do not specify a specific type of equipment, they would be considered to be bidding the compliant Simplex system. If the University did not know the Petitioner was bidding the Notifier system, it could have easily presumed that it was bidding the compliant Simplex system, and yet it did not. Instead, it rejected the bid for failure to be responsive in this regard.

    
    

46. Even though the evidence shows that, at the very least, Mr. Jennings knew that the Notifier system was being bid by the Petitioner and told his superior that he knew that because it was knowledge he gained from the Petitioner's bid itself, the University elected to initially award to Preston, which bid $6,010.00 more for the project than did the Petitioner and then, upon its belatedly determining that the Notifier system did comply with the specifications, elected to recommend award to Fire Alarm, bidding the Notifier system at approximately $3,000.00 more than the Petitioner. Further, in the context of attempting to demonstrate that the University did not lose the Notifier "cut sheets" from the Petitioner's bid, Mr. Sontag testified that the staples were not removed from bids in the copying process on bid opening day under the University's normal procedures and under procedures followed with this bid opening. This testimony was directly refuted by his own assistant, Ms. Thomas, who testified that she always removed the staples from bid documents and copied the pages of bid packages singly. This manner of detaching the pages of bid packages clearly gives an opportunity for such documents as "cut sheets" to be lost or removed physically from the bid package so that they are inadvertently not considered, are removed from the bid packages for other reasons, or simply ignored or misplaced. Under the above-found circumstances, the University's decision to treat the Petitioner's bid as non-responsive for failure to specify the equipment on its bid form by allegedly failing to attach the Notifier "cut sheets" was arbitrary.

    
    

47. There is a case remarkably similar to the facts of the case at bar, in which the opinion of the First District Court of Appeal is instructive and persuasive. In Asphalt Pavers, inc. v. State of Florida, Department of Transportation, 602 So.2d 558, 560, 561, 562 (Fla. 1st DCA 1992), the court was confronted with a similar situation where the protesting bidder was rejected as non-responsive for allegedly failing to attach a pertinent document to its bid package, such that the Department of Transportation (DOT) determined that it was not attached with the bid package on bid opening day. The Hearing Officer in that case, after weighing testimony and evidence, similar to that adduced by the Petitioner in this proceeding on direct and cross-examination, determined that the protesting bidder had, indeed, attached the pertinent disputed document to its bid. The Hearing Officer then made a finding that it was "virtually impossible to determine what happened to the missing sheet." The DOT, in its Final Order, seized on that finding to hold that the finding of fact concerning the supplying of the purported missing document was not based upon competent, substantial evidence but, instead, was based upon ". . . sheer speculation, a cerebral coin-toss, or an event wholly unassociated with the bid at issue." The Department then cited to the Supreme Court decision in Department of Transportation v. Groves-Watkins Constructors, 530 So.2d 912 (Fla. 1988), and its progeny, as confining the Hearing Officer's weighing of the Department's action, concerning responsiveness, to be whether the Department action was arbitrary, fraudulent, illegal, or dishonest. The Department found that no such finding or conclusion was made by the Hearing Officer.

48. Upon appeal, the Department argued that the only issue to be decided was whether the Department, in reaching its decision to reject Asphalt's bid for non-responsiveness in this regard, acted fraudulently, arbitrarily, illegally, or dishonestly. The appellate court, in considering the case, cited McDonald v. Department of Banking and Finance, 346 So.2d 596 (Fla. 1st DCA 1977), and State Beverage Department v. Ernal, 115 So.2d 566 (Fla. 3d DCA 1959), and stated:

    
    

    Factual issues susceptible of ordinary methods of proof that are not infused with policy considerations are the prerogative of the hearing officer as the finder of fact.

    [citation omitted]. It is the hearing officer's function to consider all the evidence presented, resolve conflicts, judge credibility of witnesses, draw permissible inferences from the evidence,

    and reach ultimate findings of fact based on competent substantial evidence . . . .

    
    

    The court went on to find that the agency may not reject the Hearing Officer's findings unless there is no competent, substantial evidence from which the finding could reasonably be inferred

    and that the agency is not authorized to re-weigh the evidence and judge credibility of witnesses or otherwise interpret it to fit its own conclusions. The court then found that the hearing officer's findings of fact were supported by competent, substantial evidence and proceeded to recite the testimony and evidence which supported them and which is very similar to the direct and circum- stantial evidence adduced by the Petitioner in

    the instant case, on direct and cross-examination, supportive of it attaching the relevant cut sheets to its bid. The court then stated:

    
    

    The hearing officer recited that 'both direct and circumstantial evidence support a finding

    that [Asphalt's] bid did include the documentation at the time it was presented to DOT, but that it was somehow detached and lost after opening'.

    Based upon the evidence before her, the hearing officer could not have found otherwise. Because this finding is supported by competent, substantial evidence in the record, DOT erred in rejecting it and substituting its own finding that the facts shown by the record constitute 'prima facie evidence that the documentation was not lost by the department'. [Citation omitted].

    
    

    The Hearing Officer's Recommended Order did not address the applicability of the Groves-Watkins test to the facts of this case, but treated DOT's loss of the required form as a threshold issue that prevented DOT's rejection of Asphalt's bid for failing to meet DBE goals without applying

    the Groves-Watkins test. DOT's erroneous rejection of the Hearing Officer's findings of fact formed

    the predicate for its conclusion that it had not acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting Asphalt's bid. Since the loss of Asphalt's form is clearly the fault of DOT, for the agency to reject Asphalt's bid because it

    did not contain the lost document is clearly arbitrary, within the meaning of the Groves-Watkins test, requiring reversal and remand for further proceedings consistent with this decision.

    
    

49. In the case at bar, the Petitioner established that it, indeed, supplied the purported missing information concerning the Notifier system with its bid. It was not even clearly demonstrated that the document was lost, as was apparently the situation in the Asphalt case. It was clearly demonstrated however, by direct and circumstantial evidence, that the Petitioner supplied the document with its bid. Consequently, under authority of the Asphalt decision, as well as authority cited in the Proposed Recommended Order by the Petitioner, the rejection of the Petitioner's bid for non-responsiveness in this regard, in light of the totality of the circumstances shown in the above Findings of Fact and Conclusions of Law, would be arbitrary and capricious.

    
    

50. The courts do not favor the disqualification of low bidders for non- responsiveness where a bid irregularity does not impart an unfair competitive advantage to the low bidder. In the case of Intercontinental Properties v. DHRS, 606 So.2d 380 (Fla. 3d DCA 1992), the court was confronted with a situation where a hearing officer had ruled a bid to be unresponsive because no documentation had been attached to the bid which identified the bidder as an agent with proper authority to act for a principal. The District Court of Appeal reversed the Hearing Officer and the agency, quoting at length from the case of Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982), concerning principles applicable to competitive bidding. The court stated:

    
    

    The principles applicable to competitive bidding have been set forth in Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505 (Fla. 1982). In that case, the invitation to bid required bidders to bid on alternate A and alternate B. The low bidder misunderstood the instructions and only bid on alternate B. The county commission waived the irregularity and awarded the contract on the basis of alternate B. Like the present case, Baxter's Asphalt involved a situation in which the successful bid was not complete--because the bidder had not

    bid at all on alternate A--and therefore was not a 'responsive' bid. The District Court of Appeal disqualified the low bid on the theory that the county's action in waiving the irregularity was illegal. Id. at 506. In quashing the decision of the District Court of Appeal, the Supreme Court emphasized the public policy considerations per- taining to public contracts:

    
    

    'In Florida . . . 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 . . . Gulf [the low bidder] was put in no position superior to that of Baxter's [the second lowest bidder] or the other high bidders

    by its failure to submit a bid on alternate A . . .'

    
    

51. The Intercontinental court went on to find that, just as in the Baxter case, the hearing officer was wrong in finding that the failure to prove that the bidder was the agent for the principal involved was a disqualifying irregularity in the bid. The Intercontinental court enunciated the principle from the Baxter's opinion that:

    
    

    a minor irregularity is a variation from the bid invitation or proposal terms and conditions 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 department."

    
    

    The court went on to hold that:

    
    

    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.

    
    

    The court opined that the standards set forth in

    the Baxter opinion are fully applicable to a hearing officer's "review" of an agency bidding decision (a la Groves-Watkins). This is the case regardless of whether the agency has expressly waived the condition

    in the ITB, as was true in the Baxter case, or whether, as in Intercontinental, the agency believed the bid

    was fully conforming and awarded on that basis.

    
    

    * * *

    
    

    In either event, there is a strong public policy in favor of awarding contracts to the low bidder, and

    an equally strong public policy against disqualifying the low bidder for technical deficiencies which do not confer an economic advantage on one bidder over another. Id. at 387.

    
    

52. In the case at hand, both purported deficiencies which caused the University to deem the Petitioner's bid non-responsive, as referenced in the above Findings of Fact and Conclusions of Law, did not confer any economic benefit on the Petitioner by affecting the price of its bid or giving it an unfair competitive advantage over the other bidders. The Petitioner bid the items in the addendum in its bid, as a matter of fact, as established by the Petitioner's evidence, regardless of its lack of formal response to the addendum. It proved that it attached the cut sheets, which the University maintains are missing from its bid, and, even if it had not, its bid, under the

    University's own bid specifications, should still have been deemed responsive since, in failing to specify an alternate system, by the terms of the specifications, that bidder would be presumed to be bidding a Simplex alarm system, in accordance with the specifications.

    
    

53. Even if the approximate $1,500.00 amount represented by the addendum items had to be added to the price of the Petitioner's bid, it would still be the low bidder. Consequently, in light of the above legal authority, even if the Petitioner's bid were fraught with both technical defects, which, in fact, it was not, they would not be material defects justifying rejection of the bid for non-responsiveness.

    
    

54. In summary, in light of the preponderant evidence, the Findings of Fact, legal conclusions, and considerations set forth above, it has been demonstrated that the Respondent's bid evaluation and intended award is factually and legally flawed. It has clearly been established that the University's proposed bid award, to the exclusion of any award to the Petitioner, under the above-found and concluded circumstances, was arbitrary.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is

RECOMMENDED that the University of Florida reconsider its bidding decision herein in a manner wholly consistent with the above Findings of Fact and Conclusions of Law and enter an award of the subject bid accordingly. 1/

DONE AND ENTERED this 12th day of April, 1995, in Tallahassee, Florida.

P. MICHAEL RUFF, 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 12th day of April, 1995.

ENDNOTE

1/ The Hearing Officer is constrained to recommend herein that the University reconsider the bid award in accordance with the findings and conclusions made in this Recommended Order, rather than award the bid outright to the Petitioner, because of the opinion in the Groves-Watkins decision, supra. Except for this opinion and its progeny, the award should be recommended to the Petitioner at this point in the proceeding.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-2035BID

Petitioner's Proposed Findings of Fact

The Petitioner's proposed findings of fact are accepted to the extent that they are consistent with the findings of fact made by the Hearing Officer. In the event that the Petitioner's proposed findings of fact are not in accord or consistent with those made by the Hearing Officer, they are rejected as either being not supported by preponderant evidence of record, being immaterial, irrelevant, or unnecessary.

Respondent's Proposed Findings of Fact 1-4. Accepted.

5. Rejected, as subordinate to the Hearing Officer's findings of fact

on this subject matter. 6-9. Accepted.

10. Rejected, as not in accord with the preponderant, credible evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter.

11-16. Accepted.

1. Rejected, as not established by preponderant, credible evidence.

2. Accepted.

3. Accepted, as to the extent of Ms. Thomas' knowledge and recollection.

4. Rejected, as not in accord with the preponderant, credible evidence and subordinate to the Hearing Officer's findings of fact.

21-23. Accepted.

24. Accepted, in part, but subordinate to the Hearing Officer's findings of fact on this subject matter.

25-26. Accepted.

27. Rejected, as contrary to the preponderant, credible evidence and as subordinate to the Hearing Officer's findings of fact on this subject matter.

28-31. Accepted.

32. Accepted, only as a representation of Mr. Gephart's testimony and not as a finding of fact.

33-35. Accepted.

36. Rejected, as contrary to the preponderant, credible evidence, and subordinate to the Hearing Officer's findings of fact on this subject matter.

37-43. Accepted.

44. Accepted, only to the extent of being a description of the University's reasons for its initial award decision and not necessarily as to its factual accuracy.

45-50. Accepted.

51. Rejected, as contrary to the preponderant, credible evidence, and as subordinate to the Hearing Officer's findings of fact on this subject matter.

52-53. Accepted.

1. Accepted, only to the extent of showing the University's purported reasons for its award decision in this regard.

2. Accepted, only as showing Jennings' reasons for concurring with the recommendation but not as to its factual or legal accuracy.

3. Accepted.

4. Rejected, as contrary to the preponderant, credible evidence, and as subordinate to the Hearing Officer's findings of fact, and as not materially dispositive.

58-59. Rejected, as subordinate to the Hearing Officer's findings of fact on this subject matter.

60. Rejected, as contrary to the preponderant, credible evidence, and subordinate to the Hearing Officer's findings of fact on this subject matter.

61-62. Accepted, only as constituting the representation of Mr. Hodge's testimony but not as dispositive of material issues presented.

1. Rejected, as contrary to the preponderant, credible evidence, and as subordinate to the Hearing Officer's findings of fact on this subject matter.

2. Accepted, but not as being materially dispositive.

3. Rejected, in the context that this was not the first time that the Petitioner supplied the data to the University.

66-67. Accepted, as constituting the representation of Jennings' testimony in this regard, but not as to its purported material import.

1. Rejected, as contrary to the preponderant, credible evidence, and as subordinate to the Hearing Officer's findings of fact on this subject matter.

2. Accepted, but not materially dispositive.

3. Accepted, as an accurate representation of Mr. Tate's testimony. 71-78. Accepted.

79-99. Accepted, but not in themselves materially dispositive.

100. Accepted, only as a representation of Mr. Sontag's testimony, not as a fact.

101-104. Accepted, but not in themselves materially dispositive.

COPIES FURNISHED:

Randall J. Silverberg, Esquire 3740 Beach Boulevard, Suite 311

Jacksonville, FL 32207

Joseph T. Barron, Jr., Esquire Associate General Counsel University of Florida

207 Tigert Hall Gainesville, FL 32611

Pam Bernard, Esq. General Counsel University of Florida

207 Tigert Hall Gainesville, FL 32611

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

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.

Docket for Case No: 94-002035BID

Orders for Case No: 94-002035BID