STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GLE ASSOCIATES, INC., )

)

Petitioner, )

)

vs. )

)

DEPARTMENT OF TRANSPORTATION, ) CASE NO. 96-1490BID

)

Respondent, )

) OCCUPATIONAL HEALTH CONSERVATION ) and FGS, INC., )

)

Intervenors. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tampa, Florida on April 19, 1996, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: J. Riley Davis, Esquire

Katz, Kutter, Haigler, Alderman, Marks, Bryant and Yon, P.A.

Post Office Box 1877 Tallahassee, Florida 32302-1877

For Respondent: Thomas H. Duffy, Esquire

Department of Transportation

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458

For Intervenor: Hala A. Sandridge, Esquire OHC Fowler, White, Gillen, Boggs,

Villareal and Banker, P.A. Post Office Box 1438

Tampa, Florida 33601

For Intervenor: Rick D. Mahan

FGS, Inc. Qualified Representative

FGS, Incorporated

111 South Armenia Avenue Tampa, Florida 33609

STATEMENT OF THE ISSUE

The issue for consideration in this hearing is whether the Department's proposed awarded in Request for Proposal RFP-DOT-95/96-7003-RA, for district- wide asbestos consulting services to Occupational Health Conservation was proper.

PRELIMINARY STATEMENT

On February 27, 1996, the Department of Transportation, (Department), posted notice that it had evaluated all proposals for the district-wide asbestos consulting service concerning which it had solicited proposals on January 12, 1996, and from the sixteen proposals submitted, had chosen Occupational Health Conservation, (OHC), as the highest ranking bidder. Thereafter, Petitioner, GLE Associates, Inc. (GLE), the second ranking bidder, filed a timely protest and this matter was referred to the Division of Administrative Hearings for formal hearing. After the matter was set for hearing, both OHC and the third ranked bidder, FGS, Inc. (FGS), petitioned to intervene. Intervention was granted by the Hearing Officer without objection by either original party.

At the hearing, the Petitioner presented the testimony of Robert B. Greene, its President; Mark E. Amos, Deputy Right-of-way Manager of Production at the Department's District 7 office; Alfred J. Thompson. Jr., the Department's District 7 Right-of-way Manager; William P. Scott, the Department's District 7 Right-of way Administrator for Certification Compliance; Lisa Michelle Murrin, an employee in the Hazardous Materials Section of the District's Program Development Department; Ronny Porter, currently the District's Contractual Services Manager; and Robert A. Keller, a Professional Services Administrator for District 7 contracts. Mr. Amos, Mr. Thompson and Mr. Scott were on the District's selection committee for this procurement. It also introduced Petitioner's Exhibits A and B.

The above cited witnesses were the only witnesses called. The Department and the two intervenors were, upon agreement of the parties, permitted to question these witnesses as if they were called by each party. In addition, the Department introduced DOT Exhibits 1 through 21. Intervenor, OHC, introduced OHC Exhibit A.

A transcript of the proceedings was furnished. Subsequent to the receipt of the transcript, only Petitioner, the Department and OHC submitted Proposed Findings of Fact which have ruled upon in the Appendix to this Recommended Order. FGS did not file a post-hearing submittal.

FINDINGS OF FACT

1. On or about January 12, 1996, the Department's District 7 properly solicited proposals for a contract to perform district-wide asbestos consulting services for the agency. The request for proposals, RFP-DOT-95/96-7003-RA, consisted of the request accompanied by Exhibits A through D and Forms A though F, with appendices.

   
   

2. Because the buildings upon which the work was to be done were not yet acquired, the contract in issue was to be an "indefinite quantity contract" for which the Department had budgeted $200,000 per year for up to five years. As a part of the proposal, the firms were to submit a technical proposal, a statement of Disadvantaged Business Enterprise (DBE) participation, and a price proposal.

   The Department would then evaluate each proposal and assign a score to each of the three sections. The proposal with the highest score out of a possible 100 points, would be the intended award recipient.

   
   

3. The technical proposal portion of the submittal was worth a maximum of sixty-five points. It was subdivided into two main parts, the management plan, worth thirty-five points, and the technical plan worth 30 points. Each of those two areas had sub-parts with maximum scores, and the three members of the District's Technical Review Committee were to evaluate each proposal submitted, compare it against the instructions contained in the RFP and the Scope of Services Exhibit attached thereto, (Exhibit A), and assign a numerical score to it.

   
   

4. The three members of the Technical Review Committee were all employees of the Department's District VII Right-of-way office. They were William Scott, project manager and the District's Right-of-way administrator for certification and compliance; Carol Kingston, a senior agent in the District's Right-of-way certification and compliance section; and Lisa Murrin, an employee in the hazardous materials section of the District's project development and environmental office. These three members were prohibited from discussing with each other any of the proposals submitted and were forbidden to compare one proposal with another.

   
   

5. In response to the advertised solicitation, the Department received proposals from sixteen firms. Each proposer was to complete a form to demonstrate Departmentally certified DBE participation. If a proposer indicated it would utilize DBEs for more than ten percent of the work, it was to receive the maximum for that element, five points. If the proposer indicated it would use DBEs for more than five but less than ten percent of the work, it would received two points for that element. Any proposer which indicated a proposed use of less than five percent DBEs would not receive any points for that element. The District's Professional Services Unit examined the submittals and assigned points consistent with those criteria.

   
   

6. The RFP called for proposers to state prices for a hypothetical project which was broken down into twelve items, for each of which prices were to be indicated. Some of these items called for a lump sum quote while others called for a price per square foot, per man hour or per crew day. Department personnel then transferred these numbers submitted by the proposer to a form similar to that on which the prices were submitted by the proposing firm but which also included a multiplier indicating the specific square feet, man hours or crew days. Thereafter, the Department staff computed the price for each individual item and added the figures arrived at for a total price.

   
   

7. In this procurement the price element was worth a maximum of twenty points. Consistent with the rating system used here, the lowest price submitted was to receive an award of the full twenty points. As called for in the provisions of Section 1.17.6.2 of the RFP, the other proposers would be assigned points based upon "the percent of deviation from the low price total" with the highest price proposal to receive no points.

   
   

8. In addition to the Technical Review Committee, the Department also appointed a Selection Committee of three members including Mr. Scott, the project manager, who was also a member of the Technical Review Committee; Mr. Amos, the deputy right of way manager for Land Acquisition; and Mr. Thompson,

   the District right of way manager. These committee members were to evaluate the proposals and assign from ten to zero points for executive judgement based on the criteria outlined in Section 1.17.7 of the RFP which included:

   
   

   1. the consistency of price with the technical aspects of the proposal;

   2. the degree of expectation of accomp- lishing program objectives, considering technical aspects proposed, Proposer's past experience, and performance; and

   3. the extent of DBE participation.

      
      

9. Sixteen proposals were received, all of which were determined to be responsive. Of the sixteen proposals received, it was obvious that the proposals of Atlanta Testing & Engineering, Inc., (Atlanta), and Envirow Science Technologies, Inc., (EST), were calculated in error since each had prices in the hundreds or thousands of dollars for items which were to be priced per square foot. As a result, Atlanta's bid price was $47,244,975 and EST's was

   $14,353,302, where the remaining fourteen proposals ranged from $4,270 to

   $24,394. Intervenor, OHC, and Florida Groundwater Systems, Inc., (FGS), both bid $4,270.

   
   

10. Based on what appeared to be obvious error in the proposals, the Department asked both Atlanta and EST to withdraw their submittals. Atlanta complied but EST refused, asking that the Department recalculate its proposal using new prices per square foot. The Department could not properly do this since it cannot accept changes in bids or proposals after opening. As a result, EST's proposal as submitted was used by the Department in its evaluation of the remaining submittals.

    
    

11. When this was done, the two proposers who submitted the proposals at

    $4,270 each received 20 points and EST, with a proposal at $14,244,975 received no points. However, since the other proposals, even the one for $24,394, were so much closer to the low bids than to the remaining obviously high bid of in excess of $14 million, they received between 19.99 points and 19.97 points. GLE received a score of 19.98 points for price. This made a realistic appraisal of these remaining bidders almost impossible, so a decision was made to see what the point spread would be like if EST's high proposal had been withdrawn. When that was done, OHC and FGS still received twenty points for their low prices quotation, but GLE, which bid $14,609, received only 9.72 points.

    
    

12. When the fifteen proposers remaining after Atlantic withdrew were analyzed by the Selection Committee it appeared that Intervenor, OHC, was awarded 56.34 points for its written technical proposal, 20 points for bidding the lowest price, and 2 points for having more than 5 but less than 10 percent DBE participation, for a Technical/Price/DBE (T/P/DBE) total of 78.34 points. When the 10 points for executive judgement was added, OHC had a point total of

    88.34. Petitioner, GLE, was awarded 56 points for its written technical proposal, 19.98 points for its price submittal; 5 points for having more than 10 percent DBE participation for a T/P/DBE Total of 80.98 points. When 7 points was added for executive judgement, it had a point total of 87.98. Intervenor, FGS, the other low price bidder was awarded 49.33 points for its written technical proposal, 20 points for price, 5 points for having more than 10 percent DBE participation for a T/P/DBE Total of 74.33 points. When 9 points were added for executive judgement, it had a point total of 83.33.

13. However, when the Selection Committee evaluated the fourteen proposals, also leaving out the high Atlantic proposal, OHC, one of the low bidders, still had a T/P/DBE total of 78.34 points. Petitioner, GLE, which had bid almost $10,000 more than OHC, then, because of the spread of the remaining bids, was awarded price points of 7.92 instead of 19.98, and ended up with a T/P/DBE Total of 70.72 instead of 80.98. FGS, also a low price bidder, got 20 points for price and had a T/P/DBE total of 74.33, the same as it had before. When the 10, 7 and 9 points for Executive Judgement were awarded, respectively, as before, OHC and FGS still had their previous standings, but GLE, whose points had been altered by the removal of Atlantic's bid and the resultant point spread, was in a worse position than it had been in previously .

    
    

14. GLE's proposal indicated it would use EM Analytical, Inc., a DBE certified by the Department, for microscopy services that would constitute more than 10 percent of the work under the contract, and as a result, was awarded 5 points in the DBE category. OHC's proposal indicated it would use Award Engineering, Inc., a certified DBE, for asbestos surveys that would account for between 5 and 10 percent of the work. For this proposal, OHC received 2 points in the DBE category. However, Award Engineering, Inc. was not licensed as an asbestos consultant or an asbestos contractor pursuant to Chapter 469, Florida Statutes, at the time of the submittal. It had, however, informed the Department it could perform "asbestos abatement and surveys" when it applied for DBE status.

    
    

15. Department policy provides that when an RFP makes DBE participation optional, any proposer who commits to using DBE sub-contractors will receive credit for that commitment whether or not the identified sub-contractor is certified or, in fact, even if no DBE is identified. This is because substitution of DBE sub-contractors after bid is generally allowed with Departmental approval, given in this case. Therefore, the fact that Award Engineering might not have been licensed at the time of submittal is not disqualifying in this case. The provisions of the RFP relating to licensing requirements of contractor and subcontractor personnel is off-set by the fact that DBE participation in this procurement was optional, and under these circumstances, it cannot reasonably be said that OHC's proposed use of an unlicensed sub-contractor gave it an unfair advantage over other bidders.

    
    

16. As a result of the analysis of the submitted proposals by both its Technical Review Committee and its Selection Committee, on February 27, 1996, the Department posted notice of its intention to award the contract in issue to OHC.

    
    

    CONCLUSIONS OF LAW

    
    

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

    
    

18. Florida courts have long recognized that competitive bidding requirements, such as those imposed upon state agencies, have as their purpose and objectives:

    
    

    [T]o protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense;

    to close all avenues to favoritism and fraud in various forms; to secure the best values for the [public] at the lowest possible expense; and to afford an equal advantage to all desiring to do business with the [govern- ment], by affording an opportunity for an exact comparison of bids.

    
    

    Wester v. Belote, 103 Fla. 976, 139 So.721, 723-724 (Fla. 1931); Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2DCA 1977).

    
    

19. In soliciting and accepting competitive bids or proposals, a state agency has wide discretion. See D.O.T. v Groves-Watkins Constructors, 530 So.2d 912, 913 (Fla. 1988); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, 507 (Fla. 1982).

    
    

20. Notwithstanding the above, an agency's discretion with regard to procurement, while broad, is not unbridled. It must exercise its discretion in a manner that is not illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or in any other way that would subvert or undermine the purpose and object of competitive bidding. D.O.T. v. Groves-Watkins, supra.

    
    

21. Section 287.057(1), Florida Statutes, requires, in those cases where competitive bidding is essential, that the "[c]ontract shall be awarded ... to the qualified and responsive bidder who submits the lowest responsive bid." A "qualified and responsive bidder [or offeror]," within the meaning of the statute, is "a person who has the capability in all respects to perform fully the contract requirements and has the integrity and reliability which will assure good faith performance." Section 287.012(14), Florida Statutes. A "responsive bid [or proposal]," within the meaning of the statute is "a bid or proposal submitted by a responsive, and responsible or qualified bidder or offeror which conforms in all material respects to the invitation to bid or request for proposals." Section 287.012(17), Florida Statutes.

    
    

22. In this case, GLE's protest is founded on two basic points. The first relates to the Department's use of an alternative method of evaluation when it chose to excise the one price proposal which was obviously erroneous and so far out line as to skew all other price proposals in such a manner than a reasonable comparison was impossible. The second relates to OHC's proposed use of an unlicensed subcontractor as its purported DBE participant so as to give it a competitive advantage over other bidders whose DBE subcontractor was properly licensed.

    
    

23. In a bid protest proceeding, "the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted." "[T]he hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally, or dishonestly." See Groves-Watkins Constructor, supra; Fort Howard Company v. Department of Management Services, 624 So.2d 783, 784 (Fla. 1DCA 1993). This is fundamentally different from the de novo consideration of appropriate agency action as is done in most other types of cases.

    
    

24. Here, it is not the province of the hearing officer to second guess the members of the evaluation committee to determine whether he/she or other reasonable and well-informed persons might have reached a contrary result. Rather, a public body has wide discretion in administering the bidding process,

    and its decisions, when based upon an honest exercise of that discretion, should not be overturned, even if it may appear erroneous, and even if reasonable persons may disagree with it. The only basis for interfering with an agency decision regarding the bidding process is a showing of dishonesty, illegality, fraud, arbitrariness, or misconduct. An agency action has been held to be arbitrary where it is not supported by facts or logic or is despotic. Agrico Chemical Company v. Department of Environmental Regulation, 565 So.2d 759,763 (Fla. 1DCA 1989). The review for arbitrariness is limited, however. An agency's action needs to show only a rudimentary rationality to be supportable. Adam Smith Enterprises, Inc. v. Department of Environmental Regulation, 553 So.2d 1260, 1273 (Fla. 1DCA 1989). In short, the hearing officer's review may not substitute his or her judgement for that of the agency but may insure only that the agency has used reason rather than whim in arriving at its decision.

    Id. at 1273.

    
    

25. Under Groves-Watkins, the burden is on the protestant to show, by a preponderance of the record evidence, that the agency's decision should be overturned. See also Board of Trustees of the Internal Improvement Fund v. Levy, 656 So.2d 1359, 1363 (Fla. 1DCA 1995). Under this standard, and the guidelines imposed in Groves-Watkins, an agency's action will be reversed if it subverts the purpose of competitive bidding or if the agency acted arbitrarily. An agency issuing an invitation to bid must evaluate the bids received thereunder solely on the criteria stated in the invitation. If appropriate criteria have been applied and utilized in the evaluation of submitted bids, a hearing officer need not second guess the agency to determine whether he and/or other reasonable and well-informed persons might have reached a different result. Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So.2d 1128 (Fla. 1DCA 1991).

    
    

26. Applying the above to the first of GLE's major bases for protest, it can be seen that of the sixteen responses to the RFP, fourteen were reasonable and two were obviously impossible. When this situation was brought to the attention of the two proposers who were obviously out of line, one reasonably withdrew its proposal. The other did not and requested that the agency take the corrective action necessary to bring its proposal into competitive range. This was an action the agency could not take. At that point the agency could have declared that obviously inappropriate proposal unresponsive, but unfortunately it did not do so. When the proposals were thereafter evaluated consistent with the methodology devised to the award of points for price, the inclusion of the obviously out-of-line proposal so skewed the remaining price proposals as to make any difference between them almost irrelevant.

    
    

27. That being the case, the agency then devised an alternative method of price evaluation which was to omit consideration of the offending proposal and compared only those remaining fourteen proposals which were within reason and in real competition. When this was done, a reasonable evaluation of the prices submitted by those competitive proposers was accomplished and points awarded which generated a point spread which, when conjoined with the points awarded in other areas identified for evaluation, resulted in price having a greater impact on the overall point award and a realignment of point award amongst the proposers. In fact, this resulted in OHC, which had not had the highest overall point award when the out-of-line proposal was considered, still exceeding Petitioner, GLE, as the proposer with the highest award, but by a greater amount. Under the circumstances of this case, the approach taken by the agency seems eminently reasonable and there is clearly no showing of fraud, illegality or dishonesty.

28. With regard to the second issue, that regarding the choice of Award Engineering to perform the work OHC proposed it would do, i.e., approximately ten percent of the asbestos surveys. To be sure, Award Engineering was not licensed by the state to do asbestos surveys, and Section 469.003(1), Florida Statutes, provides it must be so licensed to do that work.

    
    

29. However, the RFP made it clear that DBE participation was not required in this procurement. The law is also well settled that when a subcontractor listed in a proposal is subsequently determined to be ineligible, incompetent or unwilling to do the work proposed, even after bid opening, another qualified subcontractor may be substituted. Once OHC committed to using between five and ten percent DBE participation in this procurement, the agency could not refuse to award it the two DBE points called for under the procurement plan, and to do so in no way gave OHC a competitive edge when Petitioner, GLE, was awarded five points for its proposed DBE participation in excess of ten percent.

    
    

30. Taken together, the state of the evidence of record clearly shows that GLE failed to establish by a preponderance of the evidence that the Department was fraudulent, arbitrary, illegal or dishonest in its decision to award the contract in issue to OHC. There appears no evidence on the record which indicates that the Department should have rejected OHC's proposal, and there is no solid evidence to support a claim that either Petitioner, GLE, or Intervenor, FGS, should have received a higher point award than OHC. Therefore, neither Petitioner nor Intervenor is entitled to the award of this procurement, nor should the proposal be re-offered.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation enter a final order in this matter awarding the work for RFP-DOT-95/96-7003-RA to Occupational Health Conservation, Inc., and dismissing the protest and request for intervention in support of the protest by GLE Associates, Inc. and Florida Groundwater Systems, Inc., respectively.

DONE and ENTERED this 29th day of May, 1996, in Tallahassee, Florida.

ARNOLD H. POLLOCK, 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 29th day of May, 1996.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1490-BID

To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1. Accepted but distinguished.

2. & 3. Accepted.

4. - 9. Accepted and incorporated herein.

1. Accepted.

2. - 13. Accepted and incorporated herein.

14. - 16. Accepted.

1. Accepted and incorporated herein.

2. Rejected.

3. - 24. Accepted and incorporated herein,

Respondent's Proposed Findings of Fact, (as joined in by Intervenor, OHC.

1. - 4. Accepted and incorporated herein.

5. & 6. Accepted and incorporated herein.

7. - 9. Accepted and incorporated herein.

10. - 15. Accepted and incorporated herein.

16. & 17. Accepted.

1. Accepted and incorporated herein.

2. Accepted.

3. Accepted and incorporated herein.

4. Accepted.

5. - 27. Accepted and incorporated herein.

1. Accepted.

2. Accepted and incorporated herein.

3. Accepted.

4. - 35. Accepted and incorporated herein.

COPIES FURNISHED:

J. Riley Davis, Esquire

Katz, Kutter, Haigler, Alderman, Marks, Bryant & Yon, P.A.

Highpoint Center, Suite 1200

106 East College Avenue Tallahassee, Florida 32301

Thomas H. Duffy, Esquire Department of Transportation Haydon Burns Building, Room 562 605 Suwannee Street, M.S. 58

Tallahassee, Florida 32399-0458

Hala A. Sandridge, Esquire Fowler, White, Gillen, Boggs,

Villareal & Banker, P.A., Post Office Box 1438

Tampa, Florida 33601

Rick D. Mahan

Florida Groundwater Systems, Inc.

111 South Armenia Avenue Tampa, Florida 33609

Ben G. Watts Secretary

Department of Transportation Haydon Burns Building

ATTN: Diedre Grubbs

605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0450

Thornton J. Williams General Counsel

Department of Transportation

562 Haydon Burns Building 605 Suwannee Street

Tallahassee, Florida 32399-0450

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the Final Order in this case concerning their 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: 96-001490BID

Orders for Case No: 96-001490BID