STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JUKEBOX EXPRESS DRIVE-IN ) RESTAURANTS OF AMERICA, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 96-5062-BID

) THE SCHOOL DISTRICT OF PALM BEACH ) COUNTY, FLORIDA, )

)

Respondent, )

and )

)

VELDA FARMS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Administrative Law Judge of the Division of Administrative Hearings, on December 9, 1996, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Michael B. Small, Esquire

Small and Small, P.A.

324 Royal Palm Way, Suite 231 Palm Beach, Florida 33480

For Respondent: Robert A. Rosillo, Esquire

Palm Beach County School Board 3318 Forest Hill Boulevard

West Palm Beach, Florida 33406-5813

For Intervenor: Jim E. Solomon, Esquire

Jim E. Solomon and Associates, P.A. 1180 South Powerline Road

Suite Nos. 207-209

Pompano Beach, Florida 33069

STATEMENT OF THE ISSUE

The issue presented is whether the bid of Intervenor Velda Farms, Inc., is responsive to and complies with Respondent's Invitation to Bid No. SB 97C-85R.

PRELIMINARY STATEMENT

Both Petitioner Jukebox Express Drive-In Restaurants of America, Inc., and Intervenor Velda Farms, Inc., responded to an invitation for bids issued by Respondent The School District of Palm Beach County, Florida. As a result of Respondent's decision to include both Petitioner and Intervenor on its list of approved vendors, Petitioner timely filed this protest to challenge the inclusion of Intervenor Velda Farms, Inc., on that list. This cause was thereafter transferred to the Division of Administrative Hearings to conduct an evidentiary hearing.

Petitioner presented the testimony of Marvin Jeffery Monroe, Eugene F. Guydozik, Robert Bruno, Gus Lopez, Dominic Delpozzo, and William Scott Maxwell. The School Board also presented the testimony of Gus Lopez. Additionally, Petitioner's Exhibits numbered 1, 3, 5, 6, 8, 10, 11, and 13 were admitted in evidence.

The transcript of the proceeding was filed on December 20, 1996. All parties filed proposed recommended orders on or before January 13, 1997, the last date agreed to by the parties.

FINDINGS OF FACT

1. On August 15, 1996, Respondent The School District of Palm Beach County, Florida (hereinafter "School District") issued an Invitation to Bid entitled "Term Contract for Uncooked Pizza

   Products," soliciting vendors for the 1996-97 school year. Both Petitioner Jukebox Express Drive-In Restaurants of America, Inc. (hereinafter "Jukebox Express"), and Intervenor Velda Farms, Inc. (hereinafter "Velda Farms"), timely submitted bids.

2. The School District opened the bids on September 11, 1996, and determined that Jukebox Express and Velda Farms, as well as five other vendors, had submitted responsive bids. The School District prepared a list of approved vendors for that contract and included Jukebox Express and Velda Farms and the other responsive vendors on that list. The cafeteria manager for each school in the School District can select any vendor from that approved list to supply pizza products to that school.

3. Jukebox Express timely filed its protest to the School District's determination that Velda Farms should be included on the list of approved vendors for pizza products, alleging that the bid of Velda Farms was not responsive and that Velda Farms is not a responsible bidder as to the subject bid. The School District is purchasing pizza products "off-bid" from Velda Farms during the pendency of this proceeding.

4. Velda Farms does not manufacture or prepare the pizza products it currently supplies and would supply pursuant to the School District's Invitation to Bid. It is the distributor. The pizza is manufactured by Mimmo's Gourmet Pizza, a business currently located in Pompano Beach, Florida.

5. During the 1995-96 school year Mimmo's supplied pizza to the School District through Jukebox Express. That pizza was

   manufactured by Mimmo's in its Fort Lauderdale location. Jukebox Express stopped supplying Mimmo's pizza to the School District in March 1996 due to deficiencies in the quality of the product.

6. On May 7, 1996, Mimmo's Fort Lauderdale facility was inspected by the Florida Department of Agriculture and Consumer Services. Mimmo's received an overall rating of poor, with several critical sanitation items cited for correction within 48 hours. When the Department returned to that Fort Lauderdale facility on May 28, it discovered that Mimmo's was no longer doing business out of that facility.

7. Instead, Mimmo's had begun doing business out of its Pompano Beach facility. It is from that facility that Mimmo's began supplying pizza products to the School District through Velda Farms in June 1996 and continuing through the time of the final hearing in this cause.

8. No evidence was offered as to when Mimmo's obtained a permit to commence construction of its Pompano Beach facility. The records of the City of Pompano Beach reveal that on April 10, 1996, Mimmo's received approval for temporary electrical service for 30 days to test equipment. That approval did not permit operating a business at the site. That approval for temporary electrical service was never extended or renewed.

9. Mimmo's August 6, 1996, request for a temporary certificate of occupancy for its Pompano Beach facility was denied.

10. On September 12, 1996, Mimmo's Pompano Beach facility

    was "red-tagged" for failure to have a certificate of occupancy. On the following day Mimmo's applied for and received a temporary certificate of occupancy. Mimmo's did not obtain a final certificate of occupancy from the City until November 7, 1996.

11. On September 19, 1996, the City of Pompano Beach received Mimmo's application for an occupational license which represents that Mimmo's opened for business in September 1996. The City issued an occupational license to Mimmo's that same day.

12. Special Condition H.3. of the subject Invitation to Bid provides as follows:

    Vendors must have a system in place that provides for quality control and the delivery of product at consistent and specified quality levels. Vendors must have in place a system for safety and sanitation inspections assuring the delivery of product that is free from contamination and product degradation.

    
    

    At the time it submitted its bid and through the time of the final hearing in this cause, Velda Farms had no system in place for quality control of Mimmo's product and had no system in place for safety and sanitation inspections of Mimmo's product.

13. Velda Farms performed no investigation of Mimmo's product or manufacturing facility before it commenced supplying Mimmo's product to the School District. Velda Farms relied solely on the fact that Mimmo's pizza was listed as an approved product in the School District's Invitation to Bid.

14. The School District's employee who prepared the Invitation to Bid included Mimmo's pizza in the approved product list pursuant to oral information given by the director of food

    services that Mimmo's was tested and accepted as an approved product by the School District in May 1996 for the 1996-97 school year. That same employee is not aware of any written test report to that effect.

15. When Velda Farms submitted its bid to the School District, it attached a letter on Velda Farms stationery which read as follows:

    As per our conversation, Velda Farms [sic] ability to fulfill the obligations of the Pizza Bid No. SB 97C-85R is contingent upon the following:

    1. Mimmo's Pizza's ability to supply the required amounts at the agreed pricing.

    2. Mimmo's Pizza's ability to meet the nutritional specifications and requirement of the Palm Beach County School District.

       I appreciate your understanding in this matter. Should you have any questions, please contact me.

16. The statements in that letter are directly contrary to the requirements contained in Special Condition H.3. of the Invitation to Bid. Indeed, the statements in that letter render the bid submitted by Velda Farms only a conditional offer to supply pizza products.

17. Special Condition B of the Invitation to Bid provides that the contract will be awarded to the lowest and best responsive, responsible multiple bidders. Section 6.14 of the School District's Procurement Department Purchasing Procedures were adopted as School Board policy on November 21, 1995.

18. Section 6.14(5) provides, in part, as follows:

    
    

    Responsible bidder or offeror is defined as a person/firm who has the capability, in all

    respects, to perform the contract requirements

    fully and the moral and business integrity and reliability to assure good faith performance. Responsive bidder or offeror is defined as a person/firm who has submitted a bid that conforms in all material respects to the invitation for bids or request for proposals.

    
    

19. As to the subject bid, Velda Farms is neither a responsible bidder nor a responsive bidder. Its letter attachment to its bid form represents that Velda Farms does not have the capability to fully perform the contract and that Velda Farms will not assure good faith performance. Further, its bid does not conform in all material respects to the subject Invitation to Bid.

20. Although the School District's Procurement Department Manager suggests that the deficiencies in Velda Farms' bid can be waived by the School Board, those deficiencies are not minor. They are material deficiencies in that they involve the quality of the food in the School District's schools and the price of Velda Farms' bid.

21. No other bidder included a condition giving itself the right to cease performance of its agreement to supply pizza products to the School District. No other bidder was advised by the School District's Procurement Department employees that the bidders could condition their bids in such a fashion.

22. At the time Velda Farms submitted its bid and at the time the bids were opened and the School District announced the award, Mimmo's was operating illegally from a building which had not been approved for occupancy and without benefit of an

    occupational license. Although Velda Farms may not have known that the pizza product it was supplying to the School District at the time of the bid submittals and bid opening was manufactured without the necessary government approvals, General Condition 19 provides as follows:

    Legal Requirements: Federal, State, county, and local laws, ordinances, rules, and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the

    bidder will in no way be a cause for relief from responsibility.

    
    

    CONCLUSIONS OF LAW

    
    

23. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Sections

    120.569 and 120.57(1) and (3), Florida Statutes.

    
    

24. The intended award to Velda Farms is contrary to the School District's policies and contrary to the specifications for this bid. Velda Farms' conditional bid fails to comply with Special Condition H.3. in the Invitation to Bid, and Velda Farms is, therefore, not a responsive bidder. Similarly, Velda Farms' conditional bid clearly demonstrates that Velda Farms is not a responsible bidder as to this bid award since the bid advises the School District that it may or may not perform under the contract.

25. The definitions of responsible bidder and of responsive bidder are contained in the Invitation to Bid and have been adopted as School Board policy. Further, the Special Conditions

    specifically provide that the award will only be made to responsible and responsive bidders.

26. The School District argues that its award to Velda Farms is proper since Velda Farms has performed under other bid awards and is a large company. Those factors are wholly irrelevant to whether Velda Farms submitted a proper bid in this instance. Since Velda Farms' bid is only a conditional offer, its bid is fatally deficient. Moreover, past performance is not a criterion in the subject bid specifications.

27. The School District argues that any deficiencies in Velda Farms' bid are not material and can be waived. No authority has been cited, and none has been found, for the proposition that the quality of food, the price of a bid, and the potential non-performance of a bidder are minor considerations in a contract for the provision of food. Further, the testimony of the School District's Procurement Department Manager that it is not unusual for bidders to submit bids containing conditions that vary from the bid specifications misses the issue of whether the School District can legally award a contract to such a bidder.

28. Similarly irrelevant is Velda Farms' argument that it never investigates to determine whether its suppliers are operating legally. Velda Farms' good fortune in other situations cannot change the character of the conditional bid it submitted in this competitive procurement nor can it change the fact that the product it bid was not being manufactured legally at the time of the bid submittal.

29. Jukebox Express’ argument that Velda Farms has been providing Mimmo's pizza product to the School District in boxes which misrepresent the nutritional value of the product does not affect the outcome of this proceeding since the bid specifications do not require that the pizza product supplied to the School District have any nutritional value or that any such nutritional value be disclosed. Accordingly, the testimony offered by Velda Farms that School District employees gave oral permission for Mimmo's to provide pizza in boxes with nutritional information different from the nutritional value of the pizza in the boxes is irrelevant.

30. Since all other bidders had to comply with the requirement in the Invitation to Bid that the bidder assure both the quantity and the quality of the product bid, the School Board has given Velda Farms an economic advantage not enjoyed by, or even available to, the other bidders.

31. The standard of proof in this proceeding is whether the School District's intended award to Velda Farms is clearly erroneous, contrary to competition, arbitrary, or capricious. Section 120.57(3), Florida Statutes. The evidence reveals that an award to Velda Farms is clearly erroneous since Velda Farms' conditional offer does not comply with the bid specifications or with the School District's policies. It is also contrary to competition because the other bidders were required to comply with the bid specifications. It is also arbitrary since the School District's intent to include Velda Farms on the list of

approved vendors for this bid award is not supported either by the facts or by logic. See, Agrico Chemical Co. v. Dept. of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1979) cert. den. 376 So.2d 74.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

RECOMMENDED that a Final Order be entered finding that Intervenor Velda Farms, Inc., is not a responsible or responsive bidder for Respondent The School District of Palm Beach County, Florida's term contract for uncooked pizza products, Bid No. SB 97C-85R, and deleting Intervenor Velda Farms, Inc., from the list of approved multiple bidders under that bid award.

DONE AND ENTERED this 31st day of January, 1997, in Tallahassee, Florida.

LINDA M. RIGOT

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 31st day of January, 1997.

COPIES FURNISHED:

Michael B. Small, Esquire Small and Small, P.A.

324 Royal Palm Way, Suite 231 Palm Beach, Florida 33480

Robert A. Rosillo, Esquire Palm Beach County School Board 3318 Forest Hill Boulevard

West Palm Beach, Florida 33406-5813

Jim E. Solomon, Esquire

Jim E. Solomon and Associates, P.A. 1180 South Powerline Road

Suite Nos. 207-209

Pompano Beach, Florida 33069

Dr. Joan Kowal

Superintendent of Palm Beach County Schools 3340 Forest Hill Boulevard

West Palm Beach, Florida 33406-5869

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 10 days from the date of 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: 96-005062BID

Orders for Case No: 96-005062BID