STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WOODRUFF AND SONS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 96-5658BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

On January 8, 1997, a formal administrative hearing in this case was held in Tallahassee, Florida, before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Brant Hargrove, Esquire

1026 East Park Avenue Tallahassee, Florida 32301

For Respondent: Mary S. Miller, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458 STATEMENT OF THE ISSUE

The issue in the case is whether the Department of Transportation's rejection of all bids in this case meets the requirements of law.

PRELIMINARY STATEMENT

On November 4, 1996, the Department of Transportation (Department) posted notice of its rejection of all bids submitted for State Project Numbers 13160-3512, 13160-6502, and 13160-6512.

The Petitioner objected to the Department’s rejection and requested formal hearing. The matter was referred to the Division of Administrative Hearings for formal proceedings.

At the hearing, the Petitioner presented the testimony of two live witnesses, filed the deposition testimony of a third witness, and had exhibits numbered one (the deposition) and 3-5 admitted into evidence. The Department presented no witnesses. Joint exhibits numbered 1-10 were admitted into evidence.

The parties filed a joint prehearing statement prior to the hearing. A transcript of the hearing was filed. Both parties filed proposed recommended orders.

FINDINGS OF FACT

1. In August 1996, the Department sought bids for several road projects to be constructed in Bradenton, Florida. The projects were identified as State Project Numbers 13160-3512, 13160-6501, 13160-6502, and 13160-6512.

2. The construction project includes utility relocation work to be performed on behalf of the Manatee County, the City of Bradenton, and GTE, the owners of various utilities within the project area.

3. In preparing for road construction projects, the Department enters into joint partnership agreements with utility owners. The agreements identify the responsibilities of the parties related to performance of utility relocation/construction work related to the road project.

4. Essentially, the owner and Department determine an estimated cost for the utility construction which the owner places into escrow and the Department assumes the responsibility for obtaining bids for the utility work.

5. In the event that the bid exceeds the escrowed estimated cost, the utility owner may withdraw from the agreement. Upon such withdrawal, the joint partnership agreement provides that the owner may perform the work itself or the Department can pay the amount in excess of that which the owner has escrowed.

6. If the Department agrees to pay the "excess" cost, the utility work remains included in the bid project. If the Department does not pay the "excess," the work is performed by the utility owner in accordance with the Department's construction schedule, and is deleted from the final contract negotiated with the winning bidder.

7. Six companies filed bids in relation to the projects at issue in this proceeding, including Gator Asphalt Co., APAC- Florida, MacKenzie E.T. Company, Westra Construction Corporation, Smith and Co., Inc., and the Petitioner.

8. The Petitioner's bid of $6,586,034.13 was the low bid submitted.

9. The Petitioner has been properly prequalified by the Department to perform the work that is the subject of the bid at issue in this proceeding.

10. The date upon which the bids were opened is unclear, but by October 4, 1996, the bids had been opened and tabulated.

11. By letter dated October 4, 1996, the Department notified the City of Bradenton of the bid tabulation. Although the estimated cost of work to be performed on behalf of the city was about $400,000, the letter indicates that the total amount of the deposited escrow should be $534,160.50. The letter provided a deadline of October 10 to provide certification to the Department that the funds had been escrowed.

12. Although the Department's letter of October 4 does not address whether the Department was willing to pay the "excess," the request for additional city funds indicates that the Department was not offering to pay the additional costs associated with the work.

13. By letter dated October 9, 1996, the City of Bradenton withdrew its participation from the project. The city portion of the work was State Project Number 13160-6501.

14. The Department's technical review committee met on October 9, 1996. The committee reviews bid proposals and makes a recommendation to the awards committee.

15. There is no reliable evidence of what occurred during the technical review committee meeting. No one who attended the technical review committee meeting testified at the hearing.

16. At the hearing, a witness who did not attend the meeting reviewed minutes of the committee meeting and testified

    as to what the minutes appeared to indicate. The minutes were not offered into evidence.

17. The awards committee met on October 15, 1996. There is no reliable evidence of what occurred during the awards committee meeting. No one who attended the awards committee testified at the hearing.

18. Despite the lack of information as to what occurred during the committee meetings of October 9 and 15, the evidence establishes that the Department made no attempt to recalculate the bid amounts after the City of Bradenton withdrawal.

19. On November 4, 1996, the Department posted notice of its intention to reject all the bids for State Project Numbers 13160-3512, 13160-6502, and 13160-6512.

20. Four bids exceeding the maximum acceptable bid established by the Department were rejected.

21. Two bids, including the Petitioner's, were rejected as nonresponsive for failing to meet requirements related to utilization of "Disadvantaged Business Enterprises" (DBE) in the project.

22. The Petitioner filed a timely protest of the Department's proposed rejection of all bids.

23. The Department requires that each bid proposal either meet specific goals for DBE utilization or include an adequate "good faith effort" package identifying the efforts made by the bidder to meet the goal.

24. The DBE goal for these projects was 12 percent of the total bid amount.

25. Failure to either meet the DBE goal or submit an adequate "good faith effort" package renders a bid submittal nonresponsive.

26. The evidence establishes that the Petitioner's bid was nonresponsive for failing to meet the DBE requirements.

27. The parties have stipulated that the Petitioner's proposal did not include an adequate "good faith effort" package.

28. The Petitioner's bid identifies DBE participation as

    
    

    11.3 percent of its total bid.

    
    

29. The Petitioner's total bid amount included the utility work for the City of Bradenton. The Petitioner asserts that a specification set forth in the bid package requires that the Department recalculate the bid proposals by deleting the City of Bradenton work from the project.

30. Article 3-1 of the Supplemental Specifications issued as part of the bid package at issue in this proceeding, states as follow:

    The Department reserves the right to delete the bid portion of the utility relocation work from the Contract. Deletion of any utility relocation work from the Contract will require the Contract bid tabulations to be recalculated based on the remaining project quantities.

    
    

31. According to calculations made by the Petitioner, reducing the amount of his total bid by the cost of utility work

    related to the City of Bradenton, results in his DBE participation rising to 11.9777 percent of the revised total.

32. The DBE reporting form supplied to bidders by the Department states that the "[g]oal may be rounded to the nearest tenth percent," indicating that his 11.977 percent could be rounded up to 12 percent.

33. The Petitioner asserts that the withdrawal of the City of Bradenton from the project and the rounding of the goal results in his bid meeting the DBE requirement of 12 percent.

34. The language of Article 3-1 of the Supplemental Specifications is applicable, not to bid proposals, but to the contract negotiated between the successful bidder and the Department.

35. In practice, the Department has implemented this provision according to the specification language. Items specifically related to withdrawn utility relocation work are deleted from the contract negotiated with the successful bidder.

36. The evidence fails to establish the Petitioner is entitled to recalculation of his bid proposal.

    CONCLUSIONS OF LAW

    
    

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

38. The Petitioner has the burden of establishing, by a preponderance of the evidence, that the Department's actions were

    contrary to the requirements of law. Department of Transportation v. J. W. C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981). In this case, the burden has not been met.

39. In an administrative challenge to an agency's decision to award a contract or to reject all bids, the scope of the inquiry is limited to whether the purpose of competitive bidding has been subverted. The hearing officer's sole responsibility is to ascertain whether the agency acted fraudulently, arbitrarily, illegally or dishonestly. Department of Transportation v.

    Groves-Watkins Constructors, 530 So.2d 912, at 914 (Fla. 1988). An arbitrary act is one not supported by facts or logic, or despotic. Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759, at 763 (Fla. 1st DCA, 1979).

40. The evidence fails to establish that the Department acted fraudulently, arbitrarily, illegally or dishonestly. In this case, the Department deemed the Petitioner's bid proposal nonresponsive because it did not meet the requirement for 12 percent participation by a DBE. The evidence establishes that the Petitioner's bid was nonresponsive. Rejection of the Petitioner's bid proposal as nonresponsive is appropriate.

41. Clearly, the Petitioner's original bid proposal failed to meet the DBE requirement. Had the Department chosen to pay the "excess" amount beyond what the City of Bradenton was willing to pay, the total project cost would not have changed and the Petitioner could not have met the DBE goal. In this case, the

    Department did not choose to pay the additional amount.

    
    

42. The Petitioner asserts that Article 3-1 of the Supplemental Specifications requires, after the withdrawal by the City of Bradenton, that the Department recalculate his bid proposal. Recalculating the Petitioner's total bid amount by deleting the costs related to withdrawn utility work results in a percentage increase in DBE utilization to the required level, however the language of the specification does not support the assertion that the Department is required to make this recalculation in order to improve the Petitioner's DBE utilization statistics.

43. Supplemental Specification Article 3-1 falls within the bid package section titled "AWARD AND EXECUTION OF CONTRACT." The specification permits the agency to delete withdrawn utility work from the contract negotiated with the successful bidder. Such deletion requires that the bid quantities be recalculated to account for the withdrawn work: "[d]eletion of any utility relocation work from the Contract will require the Contract bid tabulations to be recalculated based on the remaining project quantities."

44. The cited article does not require the Department to recalculate the bids submitted by all vendors in response to the withdrawal of a utility owner from participation in a project.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation issue

a Final Order dismissing the protest filed by the Petitioner in this case.

RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida.

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32301-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997.

COPIES FURNISHED:

Pamela Leslie, General Counsel Department of Transportation

562 Haydon Burns Building 605 Suwannee Street

Tallahassee, Florida 32399-0450

Ben G. Watts, Secretary Department of Transportation Haydon Burns Building

605 Suwannee Street

Tallahassee, Florida 32399-0450

Brant Hargrove, Esquire 1026 East Park Avenue Tallahassee, Florida 32301

Mary S. Miller, Esquire Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 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: 96-005658BID

Orders for Case No: 96-005658BID