STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IT CORPORATION, )

)

Petitioner, )

)

vs. ) Case No. 97-3776BID

) SOUTH FLORIDA WATER MANAGEMENT ) DISTRICT, )

)

Respondent, )

)

and )

) BERGERON LAND DEVELOPMENT, INC., ) and HARRY PEPPER & ASSOCIATES, ) INC., )

)

Intervenors. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on September 15, 16, and 17, 1997, at West Palm Beach, Florida, before Judge Michael M. Parrish, an Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Lawrence P. Stevenson, Esquire

Hank Jackson, Esquire

Dorn C. Mc Grath, III, Esquire William Gray, Esquire

Karen D. Walker, Esquire Laurie A. Thompson, Esquire Holland & Knight

312 Calhoun Street, Suite 600 Tallahassee, Florida 32301

For Respondent: Glenn M. Miller, Esquire

South Florida Water Management District

3301 Gun Club Road

West Palm Beach, Florida 33401

and

Mary F. Smallwood, Esquire Melinda S. Gentile, Esquire Jerry Brodsky, Esquire

Ruden, McClosky, Smith, Schuster & Russell, P.A.

215 South Monroe Street, Suite 815 Tallahassee, Florida 32301

For Intervenor: W. Robert Vezina, III, Esquire (Bergeron) Vezina, Lawrence & Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

For Intervenor: Philip T. Weinstein, Esquire

(Harry Pepper) 2250 Southwest Third Avenue, Fifth floor Miami, Florida 33129

STATEMENT OF THE ISSUES

This is a bid protest proceeding to determine which of several competing bidders should be awarded contracts to perform work related to the Everglades restoration activities of the Respondent. The primary issues litigated at the hearing related to the sufficiency of the bids of the Petitioner and of each of the Intervenors regarding the M/WBE requirements of the bid specifications.

PRELIMINARY STATEMENT

This case was forwarded to the Division of Administrative Hearings on August 15, 1997. A prehearing conference was conducted on August 19, 1997, at which time all parties agreed that the final hearing should commence on September 15, 1997. The Petitioner filed an amended petition on August 22, 1997.

Pursuant to the requirements of an order designed to narrow the issues in this case, on August 29, 1997, the Respondent filed an

answer setting forth the Respondent’s position on all allegations of the amended petition. The issues to be heard at the final hearing were further narrowed by stipulations of the parties and by rulings on several motions. Prehearing orders had the effect of precluding the Petitioner from offering evidence on the following issues at hearing on the basis that they involved challenges to the bid specifications, and were not filed within

72 hours of receipt of the bid specifications:1

1. The issue of whether the 16 percent M/WBE participation goal established by the District for this project is unreasonable, arbitrary, irrational, or violative of the District’s own rules or policies;

   
   

2. The issue of whether the District’s M/WBE rules are unconstitutional on their face and as applied pursuant to the Due Process and Equal Protection Clauses of the United States and Florida Constitutions and violate 42 U.S.C. Section 1983;

   
   

3. The issue of whether any or all of the following businesses improperly received certification as M/WBEs: Gulf Construction Group, Inc., Suca Pipe Supply, Inc., and/or Atlantic Environmental, Inc.; and

   
   

4. The issue of whether the District’s criteria for M/WBE certification are invalid as overly broad and overly inclusive in violation of the "narrow tailoring" requirement set forth by judicial authority.

At the final hearing the Petitioner, IT Corporation, presented the testimony of three witnesses and offered fifteen exhibits, all of which were received in evidence. The Respondent presented the testimony of one witness and offered two exhibits, both of which were received in evidence. The first Intervenor,

Bergeron Land Development, Inc. ("Bergeron"), did not call any witnesses and did not offer any exhibits. The second Intervenor, Harry Pepper and Associates, Inc. ("Harry Pepper"), presented the testimony of one witness and offered one composite exhibit, which was received in evidence.

At the conclusion of the hearing, the parties agreed that the deadline for filing proposed recommended orders would be ten days from the date of the filing of the transcript of the hearing. The transcript was filed with the Division of Administrative Hearings on September 19, 1997. On September 29, 1997, the Petitioner, the Respondent, and Bergeron filed timely proposed recommended orders containing proposed findings of fact and conclusions of law. On September 29, 1997, Bergeron also filed a Motion For Attorneys’ Fees. Harry Pepper elected to adopt the positions set forth in the Respondent’s proposed recommended order and did not file a separate proposal of its own. On October 1, 1997, Harry Pepper filed a Motion For Attorneys’ Fees.

All of the proposed recommended orders have been carefully considered during the preparation of this Recommended Order. Of the many findings and conclusions proposed by the parties, those proposed by the Respondent most nearly resemble the undersigned’s view of the issues in this case. The language of many of the Findings of Fact and Conclusions of Law which follow is drawn from the Respondent’s proposals.

FINDINGS OF FACT

1. On May 9, 1997, the District issued a RFB for project number C-ECP. The purpose of the RFB was to solicit responsive bids from responsible bidders for the construction of two stormwater treatment areas: STA-1W and STA-2. The STA-1W project involves the construction of a wetland of approximately 6700 acres, including more than 12 miles of canal and levee construction, concrete spillways, culverts, telemetry controls, and ancillary facilities. The STA-2 project involves the construction of approximately 6430 acres, including 45 miles of canal and levee construction/enlargement, concrete water control structures, culverts, telemetry controls, and ancillary facilities.

2. Prior to the issuance of the RFB, the District put substantial time and effort into M/WBE outreach activities. These activities included: (1) coordinating with and identifying M/WBE resource agencies to assist contractors in finding available and interested M/WBE subcontractors; (2) hiring a consultant to contact M/WBE firms and inform them of the contracting opportunities available for the C-ECP project, including subcontractor work; (3) conducting workshops for contractors to meet potential M/WBE subcontractors; (4) expediting the M/WBE certification process of M/WBE applicant firms; and (5) holding both mandatory and voluntary pre-bid meetings to explain the requirements of the RFB specifications

   and the M/WBE requirements. The District made extensive efforts to ensure that contractors knew about the project and the availability of M/WBE subcontractors.

3. Subsequent to issuance of the RFB, the District issued ten addenda. Addendum Number 1 established a minimum M/WBE participation goal of sixteen percent and included a list of M/WBE contractors (the "vendor list"). The vendor list was prepared by the District to identify M/WBE subcontractors who might be available to work on the project. It was prepared in consultation with the District’s project managers and identified work components of the project based on commodity codes located within the District’s database. Addendum Number 9 required the bidders to execute and submit a Good Faith Efforts Checklist form and included a revised vendor list.

4. The RFB provided in the Supplemental Conditions, Basis for Bid Award, that:

   Bidders may bid on Option "A" STA-1W, and/or Option "B" STA-2, and/or Option "C" combination of STA-1W and STA-2. Bid award will be made based on the lowest responsive and responsible bid amount from Option "A" and Option "B", or the combined amount in Option "C", whichever is lower in total dollars for the completion of STA-1W and STA- 2, after considering bid incentives (as applicable) in accordance with the District’s M/WBE Rule 40E-7.628, F.A.C.

5. The RFB identified the project as "C-ECP, Construction of STA-1W & STA-2, Palm Beach County, Florida." However, contractors and subcontractors used various names in identifying

   the project, including C-ECP, STA-1W, STA-2, and construction of STA-1W and STA-2.

6. The RFB sets forth the M/WBE requirements for the project in Article 7 of the Instructions to Bidders. Section

   7.03 provides in part that:

   
   

   Bidders not meeting the established M/WBE goal shall make and document the good faith efforts used to meet established goals. The Bidder’s efforts shall be designed to ensure that available M/WBE’s are identified, properly noticed, and provided the maximum opportunity to compete for and perform work under any contract awarded as a result of this solicitation. EVIDENCE OF GOOD FAITH EFFORTS IS REQUIRED TO BE SUBMITTED WITH THE BID IF THE BIDDER DOES NOT MEET THE SPECIFIED M/WBE GOAL.

7. The original deadline for submission of bids was June 25, 1997, but the deadline was extended three weeks by Addendum Number 3. The new submission deadline for bids was

   July 15, 1997, at 2:30 p.m. Six bids were submitted for Option "A," six bids were submitted for Option "B," and three bids were submitted for Option "C."

8. The low dollar bid for Option "A" was submitted by Harry Pepper in the amount of $18,334,100.

9. The low dollar bid for Option "B" was submitted by the Petitioner in the amount of $24,537,450. The second low dollar amount was submitted by Bergeron in the amount of $24,570,500.

10. The low dollar bid for Option "C" was submitted by the Petitioner in the amount of $42,577,669.

11. The Petitioner’s bid for Option "C" was $326,931 lower than the sum of Harry Pepper’s bid for Option "A" and Bergeron’s bid for Option "B."

12. When the lowest bidder does not meet the M/WBE participation goal, Rule 40E-7.628, Florida Administrative Code, mandates that the next lowest bidder(s) meeting that goal shall be awarded the contract if the difference in bid amounts between the lowest and next lowest bid(s) falls within the maximum bid incentive amount. For this RFB, the bid incentive for the project was one percent of the lowest bid amount which in this case resulted in a maximum bid incentive amount of $425,776. The difference between the combined sum of Harry Pepper’s bid for Option "A" and Bergeron’s bid for Option "B," and the amount of the Petitioner’s bid for Option "C," was less than the bid incentive amount of $425,776.

13. Soon after the bids were opened on July 15, 1997, Carolyn Williams, Director of the Office of Supplier Diversity and Outreach ("SDO"), received the sections of the bids relating to compliance with the District M/WBE requirements for her review and analysis. Mrs. Williams is responsible for making the ultimate recommendation as to whether or not a bid is responsive with regard to the District’s M/WBE requirements. By the afternoon of July 16, 1997, Mrs. Williams had reached a final determination that the Petitioner’s bid was nonresponsive due to failure to meet the M/WBE requirements of the RFB. The specific

    analysis of the Petitioner’s failure to document good faith efforts was subsequently memorialized in a memorandum dated July 29, 1997, from Mrs. Williams to Glenn Miller of the District’s Office of Counsel.

14. Subsequent to making the determination of nonresponsiveness, the SDO office surveyed firms listed on a spreadsheet submitted as part of the Petitioner’s good faith efforts documentation (the spreadsheet titled "Everglades Nutrient Removal Project Potential Quotations"). The purpose of contacting these firms was an effort to understand what had actually transpired in the course of the Petitioner’s efforts to meet the M/WBE requirements and to assist the District in future procurements. Information obtained from these subcontractors was not a factor in Mrs. Williams’ determination that the Petitioner’s bid was nonresponsive.

15. On July 21, 1997, the District issued its Notice of Intent to Award a contract to Harry Pepper and Bergeron for Options "A" and "B," respectively, for the C-ECP project. The Petitioner’s low bids for Options "B" and "C" were deemed nonresponsive on the grounds that the Petitioner had failed to meet the minimum participation goal of 16 percent and that the Petitioner failed to document its good faith efforts to meet such goal. This determination was set forth in Mrs. Williams’ memorandum to the Procurement Director dated July 21, 1997, and attached to the Notice of Intent to Award

16. On July 24, 1997, the Petitioner filed a Notice of Protest. Subsequently, the Petitioner filed a Formal Written Protest/Petition for Formal Hearing on August 8, 1997, and an Amended Formal Written Protest/Petition for Formal Hearing on August 22, 1997.

17. Harry Pepper submitted a bid for Option "A" that indicated an M/WBE subcontractor participation of 16 percent. Harry Pepper’s Schedule of Subcontractor/Minority Business Enterprise (M/WBE) Participation ("Schedule of Participation") form indicated that two M/WBE subcontractors would be utilized by Harry Pepper to achieve the M/WBE participation goal of 16 percent: Suca Pipe Supply, Inc. ("Suca") and Atlantic Environmental Inc. ("AEI"). Harry Pepper provided executed Statement of Intent to Perform as a Subcontractor ("Statement of Intent") forms from both Suca and AEI. Suca and AEI were identified by the District as M/WBE businesses available for use by any bidder as set forth in addendum number 1 and addendum number 9 to the RFB.

18. Suca’s Statement of Intent indicated that it would supply roller and slide gates and corrugated metal pipe to Harry Pepper. Suca is a stocker and distributor of underground utilities, pipes, valves, fittings, and construction related materials. In addition to supplying materials, Suca provides service activities to contractors, including handling of shop drawings, picking up materials from the manufacturer, getting

    missing parts to the job site and, on occasion, overseeing the installation of the materials. Suca maintains a warehouse and office facility of approximately 4,000 square feet with six offices and a conference room on approximately 1.5 acres of land.

19. Bergeron submitted a bid for Option "B" that indicated an M/WBE subcontractor participation of 17 percent. Bergeron’s Schedule of Participation form indicated that one M/WBE subcontractor, Gulf Construction Group, Inc. ("Gulf"), would be utilized by Bergeron to achieve the M/WBE participation goal of

    16 percent. Bergeron provided an executed Statement of Intent form from Gulf stating that it would provide "pipe and structures" for an agreed price of $4,176,985. Gulf was identified by the District as an M/WBE business available for use by any bidder as set forth in addendum number 1 and addendum number 9 to the RFB.

20. In the blank space for the Project Number on the Statement of Intent form, Gulf wrote: "Construction of STA-1A Works & STA-2 Works."2 The name of the subject project as stated on the RFB is "Construction of STA-1W & STA-2, Palm Beach County, Florida." The number of the subject project as stated on the RFB is "C-ECP." Obviously, Gulf wrote the "name" of the project where it should have written the "number" of the project. The Statement of Intent Form does not request information as to whether the M/WBE subcontractor is agreeing to perform work on option "A," "B," or "C" of the subject project.

21. Bergeron committed to using Gulf to perform $4,176,985 worth of work on the STA-2 contract by submitting the Schedule of Participation form, which indicates the total amount of work to be performed by Gulf and the total amount of Bergeron’s bid for that contract alone.

22. In reviewing the Bergeron bid, the District considered the entirety of the bid package, including Bergeron’s Schedule of Participation form and the face of the bid, itself, which indicated that Bergeron was bidding only on Option "B." It was clear to the District that the documents submitted by Bergeron, including the documents from Gulf, were intended to apply only to the Option "B" bid. Gulf’s use of the project name instead of the project number is not a material deviation from the requirements of the RFB. Gulf’s use of the project name instead of the project number did not afford to Bergeron any competitive advantage not enjoyed by the other bidders. Gulf’s use of the project name instead of the project number did not provide the District with any more or any less information about what Gulf intended to do than if Gulf had used the project number.

23. Gulf did not mark the box on the Statement of Intent form indicating whether it would perform as a corporation, partnership, individual, or joint venture. Gulf’s failure to mark the "corporation" box was not a material irregularity. There was no confusion created by the omission as Gulf obviously is not a partnership, individual, or joint venture. The

    abbreviation "Inc." is in Gulf’s name and appeared on the form. Moreover, it was apparent that Gulf was not proposing to perform in the capacity of a joint venture.

24. The Petitioner submitted a bid for Option "C" that indicated an M/WBE subcontractor participation of 5.6 percent. The Petitioner’s Schedule of Participation form indicated that two M/WBE subcontractors, F.R.S. Associates, Inc. ("F.R.S.") and Contract Site Services, Inc., would be utilized. The Petitioner attached an executed quotation from both subcontractors to the Statement of Intent forms. However, because the Statement of Intent from F.R.S. was not signed by the subcontractor, as required by Section 7.05, A.2. of the RFB, the District reduced the Petitioner’s M/WBE participation to 4.78 percent.3

25. Inasmuch as the Petitioner’s M/WBE participation did not meet the 16 percent goal, the Petitioner submitted documentation of its good faith efforts as part of its bid. Until the last few hours before the bid submission deadline, the Petitioner intended to, and expected to, achieve the goal of at least 16 percent M/WBE participation. Only a few hours before

    the bid submission deadline the Petitioner realized that it would not be able to achieve the M/WBE participation goals, and that it would have to include documentation of its good faith efforts with its bid.

26. The good faith efforts documentation submitted by the Petitioner included the following: a good faith efforts

    checklist executed by the President and CEO of the Petitioner; a cover document describing certain of the attached documentation and listing several newspapers in which the Petitioner purportedly advertised; a summary of the Petitioner’s M/WBE participation in federal contracts; a copy of the District’s M/WBE vendor activity report (Addendum 9, attachment 13 to the RFB) with annotations added by the Petitioner to indicate dates of contacts with M/WBE firms and notations of responses; a spreadsheet entitled Everglades Nutrient Removal Project Potential Quotations ("ENR spreadsheet") with columns indicating disciplines, names and dates of contacts, whether the firms were M/WBE’s, and notations of responses received; a form letter addressed to "All Offerors;" a copy of the District’s Commodity Vendor List, a copy of the District’s Detail Vendor Lists for Option "A" and Option "B," and a series of untitled lists of names and addresses (Enclosure One); a form letter "To Whom it May Concern" together with a list of M/WBE resource organizations (Enclosure Two); a copy of an announcement identified in the cover document as a posting on the Petitioner’s internet home page (Enclosure Three); a copy of the ABC Membership Directory/Buyers Guide and a copy of the Associated General Contractors of America Regional Membership Listing (Enclosure Four); and copies of a number of envelopes apparently returned to the Petitioner because of incorrect addresses.

27. The Documentation of Good Faith Efforts Checklist required that a bidder providing documentation of good faith efforts include a written cover letter summarizing the bidder’s efforts and identifying the bidder’s attached support documentation. The Petitioner included a one-page cover document in its good faith efforts package to meet that requirement. The cover document stated that an announcement had been sent to firms on the District’s vendor lists, that M/WBE support organizations had been contacted, that an announcement had been posted on the Petitioner’s internet home page, that certain other contractors had been contacted and that advertisements had been placed in listed newspapers. The document further stated that 1131 total vendors and 531 M/WBE vendors had been contacted. The document did not indicate how many quotations had been received from M/WBE businesses. The Petitioner’s cover document did not identify all of the documents provided in the good faith efforts package. Further, the cover document did not explain the meaning of the annotations on the District’s vendor list, did not explain what the ENR spreadsheet represented, and did not explain the relationship between the vendor list and the spreadsheet.

28. The good faith efforts documentation requirements are addressed in Section 7.08 of the RFB, which sets forth the material criteria of good faith efforts. For each of the criteria, the RFB first identifies the factors to be considered by the District in reviewing good faith efforts documentation and

    then describes the specific documents or evidence to be submitted.

29. In determining what process the contractor used to identify M/WBE firms and contracting opportunities, Section 7.08,

1. and 2. of the RFB contains the factors to be considered and states as follows:

   1. The Bidder shall identify available M/WBE firms and identify contracting opportunities for M/WBE participation. The Bidder shall be deemed to have made a good faith effort if documentation is provided that states the Bidder:

      
      

      1. selected portions of the project to be performed by available M/WBE firms, including dividing contracts or combining elements of work into economically feasible units, areas or quantities to facilitate maximum participation and increase the possibility of meeting the M/WBE goal; and

         
         

      2. determined M/WBE availability and developed a proposed M/WBE subcontractor/ supplier list by requesting and using the assistance of the DISTRICT’s SDO Office, state and local minority/woman business development agencies or contractor’s groups with knowledge of M/WBE availability.

         
         

         1. The "process" criterion requires the bidder to indicate to the District the process that the bidder used in identifying available firms and matching them to contracting opportunities for the project which have been identified by the bidder. The District assists the bidders in identifying contracting opportunities by providing them with a list of available M/WBE firms listed by commodity code as a starting point. The bidder is expected to review the project and apportion the work into

            subcontract units or components. The District also assists the bidder by providing a list of resource agencies for the bidder to use in identifying firms other than those on the District’s vendor list.

         2. The documentation needed to demonstrate compliance with Section 7.08, 1.A. is described in Section 7.08, 1.B.1 through 4 as follows:

   2. The DISTRICT, in determining good faith efforts made under subsection 1.A., shall require information including:

      
      

      1. copies of letters/transmittals to all resource agencies used to identify available M/WBE firms, including the proposed M/WBE subcontractor/supplier list developed; and

         
         

      2. the telephone numbers and the primary contact for each M/WBE firm listed; and

         
         

      3. a complete list of subcontract/supplier opportunities on the project; and

         
         

      4. identification of those opportunities for which available M/WBE firms were solicited.

1. With respect to the requirement that the bidder provide copies of letters to all resource agencies used to identify available M/WBE firms, the Petitioner submitted with its good faith documentation package an undated form letter to the list of resource agencies which stated:

   To Whom it May Concern

   
   

   Please post and/or distribute the attached announcement conveying IT Corporation’s interest in receiving proposals from M/WBE organizations to support the South Florida Water management District’s project entitled, 'Construction of Stormwater Treatment Areas

   STA-1W and STA-2, Palm Beach County, Florida.'

   
   

2. The District found the form letter to be insufficient because the letter was not drafted in a manner that was reasonably calculated to get an effective response from M/WBE organizations. It was unclear whether or not the letter was soliciting organizations for assistance in identifying available M/WBE firms or soliciting proposals from M/WBE organizations. Additionally, the letter failed to clearly state the purpose for which it was being sent, and there was no indication as to whether the letter was sent in sufficient time to elicit responses from resource agencies.

3. With respect to the telephone numbers and the primary contact for each M/WBE firm listed, the Petitioner provided the ENR spreadsheet, the annotated copy of the District’s vendor list, and a series of untitled lists of names and addresses.

4. The District found the Petitioner’s submission to be insufficient because it was difficult to determine whether the lists included in the good faith efforts submission included all M/WBE firms contacted. Additionally, the untitled lists did not identify which firms listed were M/WBE’s.

5. The District was initially uncertain as to the applicability of the ENR spreadsheet to this project because it incorrectly referenced a project that the District had recently bid and awarded; consequently, there was a concern that the Petitioner had inadvertently included the spreadsheet from

   another project. The District was eventually able to confirm that the spreadsheet was relevant, by calling a number of the firms on the list to determine whether they had been contacted by the Petitioner. Nevertheless, the District found the document to be insufficient to meet the good faith efforts requirements.

6. With respect to the requirement that a complete list of subcontractor opportunities for the project be provided, the Petitioner submitted the District’s annotated vendor list, which included District commodity codes, and the ENR spreadsheet, which included a column identifying disciplines in which quotations were being requested. The Petitioner utilized the scopes of work identified by the District and further broke the project down by Construction Specification Institute Code. It was the Petitioner’s expectation that the subcontractors would identify those parts of the project for which they wished to submit a quotation.

7. The District found the Petitioner’s submission to be insufficient to meet the requirements of Section 7.08, 1.B.3. because the use of the District’s identification of scopes of work should only be a starting point in defining opportunities for subcontractors. Further, it is not sufficient for the bidder to rely solely on the M/WBE subcontractors, themselves, to identify portions of the project appropriate for subcontracting opportunities. It is the responsibility of the bidder to break out the project into potential subcontracting opportunities.

8. With respect to those opportunities for which available M/WBE firms were solicited, the Petitioner submitted a form letter to "All Offerors" and the District’s annotated vendor list. The form letter read as follows:

   IT Request for Proposal No. 772125

   
   

   FIELD(Contact Name) FIELD(Company) FIELD(Street Address) FIELD(City, State, Zip) FIELD(Telephone)

   
   

   TO ALL OFFERORS:

   
   

   IT Corporation is actively pursuing the following project:

   
   

   South Florida Water Management District Construction of STA-1W & STA-2

   Palm Beach County, Florida Number: C-ECP

   
   

   DATE

   
   

   Therefore, your expression of interest in participating with us is being solicited.

   
   

   Your project scope letter, including any inclusions, exclusions, and terms and conditions must be received on or before: July 7, 1997 @ 2:00 p.m. Faxed proposals will be accepted.

   
   

   Contract documents, specifications, and drawings can be reviewed or purchased at the following locations:

   
   

   The South Florida Water Management District Procurement Office, B-1 Building

   3301 Gun Club Road

   West Palm Beach, Florida 33406 561/687-6391

   
   

   IT Corporation Miami Lakes Office

   14505 Commerce Way, Suite 400 Miami Lakes, Florida 33016 305/819-2335

   
   

   All technical questions for this solicitation should be directed to Phil Wasler or Frank Pescatore at 412/372- 7701.

   
   

   We look forward to receiving your proposal.

   
   

   IT Corporation 2790 Mosside Boulevard

   Monroeville, Pennsylvania 15146-2792

   Fax No: 412/856-9912 Telephone No: 412/372-7701

   
   

9. It was the Petitioner’s position that the form letter adequately identified the project opportunities as construction work. The District found the letter to be insufficient, primarily because the letter was generic and did not identify specific portions of the project for which individual subcontractors were being solicited.

10. In determining what methods the bidder has used in notifying M/WBE firms of opportunities, Section 7.08, 2.A.1. through 3. of the RFB contains the factors to be considered and states as follows:

    1. The methods used by the Bidder to notify and inform available M/WBE firms of the contracting opportunities shall be specified. The Bidder shall be deemed to have made a good faith effort under subparagraph 2. of this rule if:

       
       

       1. the Bidder provided written notice to available M/WBE firms concerning subcontract/supplier opportunities on the project in sufficient time (minimum two [2] weeks) to allow response and effective participation; and

          
          

       2. the Bidder advertised subcontract/supplier opportunities in general circulation, and/or minority-focused, media in sufficient time to allow response; and

          
          

       3. the Bidder followed up with interested M/WBE firms to provide detailed information about: presolicitation meetings; statement of work; Bidder’s project manager; assistance the Bidder offered subcontractors with insurance requirements; payment schedules; proposal addenda; minority/woman business assistance agencies, etc.

11. The "methods" criterion is intended to ensure that the contractor used appropriate and effective methods to notify M/WBE firms of subcontracting opportunities. Since there is a perception in the M/WBE community that contractors often do not make a genuine effort to reach out to M/WBE subcontractors, it is important that the bidder use effective methods in matching identified subcontracting opportunities to available and capable M/WBE firms.

12. The documentation needed to demonstrate compliance with Section 7.08, 2.A. is stated in Section 7.08, 2.B.1. through 4. as follows:

    1. The DISTRICT, in determining efforts made under subsection 2.A., shall require information with the sealed Bid, including:

       
       

       1. copies of individually addressed letters and/or requests for quotations issued to M/WBE firms; and

          
          

       2. the individual letters or requests for quotations must reference the type of work the M/WBE firms were being solicited to perform; and

          
          

       3. the advertisement or the tear sheet from newspapers used, the follow-up correspondence to M/WBE firms and/or minutes of meetings held with M/WBE subcontractors or suppliers.

    
    

13. With respect to the requirement that the Petitioner submit copies of individual letters and/or requests for quotations issued to M/WBE firms which referenced the type of work the M/WBE firms were being solicited to perform, the Petitioner submitted a form letter to "All Offerors" stating the

    Petitioner’s intent to bid on construction of STA-1W and STA-2, and Enclosure One to the good faith efforts package, which contained various lists of firms, both M/WBE and non-M/WBE. The Petitioner did not include any copies of individually addressed letters. The Petitioner was of the view, based on modern business practice, that it was not important to provide copies of individually addressed letters since the form letter had blank fields to fill in the name, address, and telephone numbers of those to whom the letter was sent. There was no documentation indicating when letters might have been mailed other than dates on copies of a few returned envelopes that were submitted with the Petitioner’s good faith efforts package.

14. The District found the Petitioner’s documentation to be insufficient because the Petitioner did not provide copies of any of the individual letters. The form letter that the Petitioner provided failed to identify specific services or products for which subcontractor proposals were being solicited. Further, it was not possible to determine from an undated letter whether notice had been given in sufficient time to allow M/WBE firms to respond to the solicitation. The form letter did not identify the scope of work for which any individual subcontractor was being solicited. Instead, the Petitioner expected the subcontractors to identify those parts of the project they were interested in.

15. With respect to the requirement that the Petitioner provide a copy of the newspaper advertisement or tear sheets, the Petitioner submitted a cover document referencing seven newspapers in which it claimed to have placed advertisements.

    The failure to provide the actual advertisement or tear sheet was an oversight on the part of the Petitioner.

16. The District found the Petitioner’s documentation to be insufficient because it was not possible to verify that the advertisements had been placed in the listed newspapers and several papers listed in the Petitioner’s cover document were not readily identifiable. Additionally, without proof of publication, the District could not determine whether any of the newspaper advertisements had been placed in sufficient time to allow M/WBE firms to respond.

17. With respect to the requirement that the Petitioner submit documentation of follow-up correspondence to M/WBE firms or minutes of meetings with M/WBE subcontractors, the Petitioner submitted the ENR spreadsheet which contained a column labeled "Response." Under that column the Petitioner had made notations such as "will bid," "sent scope," or "will call back." The Petitioner’s good faith efforts package did not include any minutes of any meetings between the Petitioner and any M/WBE subcontractors.

18. The District found the Petitioner’s submission to be insufficient because there were no documents in the good faith

    efforts package that constituted follow-up correspondence or minutes of meetings held with M/WBE subcontractors. The Petitioner’s own notations on the ENR spreadsheet are not sufficient to document whether follow-up correspondence was sent to or whether meetings were held with M/WBE subcontractors.

19. In determining whether a bidder has used good faith efforts in evaluating the M/WBE firms and in contracting with them, Section 7.08, 3.A.1. through 3. of the RFB contains the factors to be considered and states as follows:

    1. The DISTRICT shall evaluate the good faith efforts used by the Bidder in evaluating each M/WBE subcontractor’s response and contracting with M/WBE firms. The Bidder shall be deemed to have made a good faith effort under subparagraph (3) of this rule if the Bidder:

       
       

       1. documented and considered all negotiations held from M/WBE subcontractors, not rejecting M/WBE subcontractors as unqualified without thoroughly investigating their capabilities; and

          
          

       2. documented reasons why quotations with M/WBE subcontractors were not used and followed up with notices to the unsuccessful M/WBE subcontractors indicating such reason(s); and

          
          

       3. has utilized M/WBE subcontractors or suppliers on major projects within the past

          12 months.

          
          

20. The "evaluation" criterion is intended to ensure that, once initial contacts have been made, firms are not rejected out of hand without fair consideration of their capabilities or because their price is a little higher than another non-M/WBE

    firm. To obtain that assurance, the District requires evidence of quotations actually received from M/WBE firms; documentation of attempts to assist the M/WBE firms to reach a competitive price; and an explanation of why quotations submitted by the M/WBE firms were not selected.

21. The documentation needed to demonstrate compliance with Section 7.08, 3.A. is set forth in Section 7.08, 3.B. of the RFB and states as follows:

    The DISTRICT, in determining efforts made under subsection 3.A., shall require as part of its information: documentation on negotiations held with and quotations received from unsuccessful M/WBE subcontractors and a M/WBE Utilization Plan specifying the M/WBE firms that will be used during the project.

22. With respect to the requirement that the Petitioner document its negotiations held with and quotations received from unsuccessful M/WBE subcontractors, the only documents the Petitioner submitted were the ENR spreadsheet and the annotated vendor list. The Petitioner provided a five-year summary of utilization of M/WBE subcontractors on major projects and a utilization plan showing that it intended to use two M/WBE subcontractors, F.R.S. and Contract Site Services.

23. The District found that the Petitioner had submitted insufficient documentation to demonstrate compliance with this requirement because the District needed to see both actual quotations and substantive documentation regarding negotiations between the bidder and the subcontractor to determine whether an

    M/WBE subcontractor was properly evaluated by the bidder. While the column in the ENR spreadsheet labeled "Response" indicates that some M/WBE firms had submitted quotations, no copies of actual quotations were provided to the District. Moreover, there was no documentation explaining why M/WBE firms which had submitted quotations were not used. Although the "response" column on the ENR spreadsheet was intended to indicate that negotiations had taken place with some, but not all, of the listed M/WBE firms, that intent was not explained in the Petitioner’s cover document.

24. Based on the foregoing, the District reasonably determined that the Petitioner’s good faith efforts documentation was insufficient to meet the standards set forth in each of the three areas of good faith efforts criteria.

    CONCLUSIONS OF LAW

    
    

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

26. Statutory provisions relevant to the disposition of this proceeding include the following from Section 120.57(3), Florida Statutes:

    1. ADDITIONAL PROCEDURES APPLICABLE TO PROTESTS TO CONTRACT BIDDING OR AWARD. An agency which enters into a contract pursuant to the provisions of ss. 282.303-282.313, chapter 255, chapter 287, or chapters 334-349 shall adopt rules specifying procedures for the resolution of protests arising from the

       contract bidding process. Such rules shall at least provide that:

       
       

       1. The agency shall provide notice of its decision or intended decision concerning a bid solicitation or a contract award as follows:

          1. For a bid solicitation, notice of a decision or intended decision shall be given by United States mail or by hand delivery.

          2. For any decision of the Division of Purchasing of the Department of Management Services concerning a request by an agency for approval of an exceptional purchase under part I of chapter 287 and the rules of the Division of Purchasing, notice of a decision or intended decision shall be given by posting such notice in the office of the Division of Purchasing.

          3. For any other agency decision, notice of a decision or intended decision shall be given either by posting the bid tabulation at the location where the bids were opened or by certified United States mail or other express delivery service, return receipt requested.

          The notice required by this paragraph shall contain the following statement: "Failure to file a protest within the time prescribed in

          s. 120.57(3), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes."

          
          

       2. Any person who is adversely affected by the agency decision or intended decision shall file with the agency a notice of protest in writing within 72 hours after the posting of the bid tabulation or after receipt of the notice of the agency decision or intended decision and shall file a formal written protest within 10 days after filing the notice of protest. With respect to a protest of the specifications contained in an invitation to bid or in a request for proposals, the notice of protest shall be filed in writing within 72 hours after the receipt of notice of the project plans and specifications or intended project plans and specifications in an invitation to bid or request for proposals, and the formal written

          protest shall be filed within 10 days after the date the notice of protest is filed.

          Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under this chapter. The formal written protest shall state with particularity the facts and law upon which the protest is based.

          
          

       3. Upon receipt of the formal written protest which has been timely filed, the agency shall stop the bid solicitation process or the contract award process until the subject of the protest is resolved by final agency action, unless the agency head sets forth in writing particular facts and circumstances which require the continuance of the bid solicitation process or the contract award process without delay in order to avoid an immediate and serious danger to the public health, safety, or welfare.

          
          

       4. 1. The agency shall provide an opportunity to resolve the protest by mutual agreement between the parties within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of a formal written protest.

          1. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the formal written protest, and if there is no disputed issue of material fact, an informal proceeding shall be conducted pursuant to subsection (2) and applicable agency rules before a person whose qualifications have been prescribed by rules of the agency.

          2. If the subject of a protest is not resolved by mutual agreement within 7 days, excluding Saturdays, Sundays, and legal holidays, after receipt of the formal written protest, and if there is a disputed issue of material fact, the agency shall refer the protest to the division for proceedings under subsection (1).

       5. Upon receipt of a formal written protest referred pursuant to this subsection,

          the director of the division shall expedite the hearing and assign an administrative law judge who shall commence a hearing within 30 days after the receipt of the formal written protest by the division and enter a recommended order within 30 days after the hearing or within 30 days after receipt of the hearing transcript by the administrative law judge, whichever is later. Each party shall be allowed 10 days in which to submit written exceptions to the recommended order. A final order shall be entered by the agency within 30 days of the entry of a recommended order. The provisions of this paragraph may be waived upon stipulation by all parties.

          
          

       6. In a competitive-procurement protest, no submissions made after the bid or proposal opening amending or supplementing the bid or proposal shall be considered. Unless otherwise provided by statute, the burden of proof shall rest with the party protesting the proposed agency action. In a competitive- procurement protest, other than a rejection of all bids, the administrative law judge shall conduct a de novo proceeding to determine whether the agency's proposed action is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. In any bid-protest proceeding contesting an intended agency action to reject all bids, the standard of review by an administrative law judge shall be whether the agency's intended action is illegal, arbitrary, dishonest, or fraudulent.

27. The District has adopted the rules of procedure required by the first paragraph of Section 120.57(3), Florida Statutes. See Rules 40E-7.301 and 40E-7.302, Florida Administrative Code. Other District rule provisions relevant to the disposition of this proceeding include the following:

    40E-7.628 Bid Incentive Program.

    1. Bid incentives shall be used by the District to remedy documented disparity in District contracting and the present effects of past marketplace discrimination by fostering increased M/WBE participation and goal attainment.

    2. When all responsive and responsible bidders have met the M/WBE goal, the District shall award the contract to the lowest responsive and responsible bidder. When the project goal is not met by all of the responsive and responsible bidders, this provision provides an incentive for responsive and responsible bidders having:

       1. the highest percentage of M/WBE participation;

       2. bids which fall within the established maximum bid incentive percentages as described in subsection (3); and

       3. bids which fall within limits established in subsection (5).

    3. The District shall implement a one percent (1%), five percent (5%) and ten percent (10%) maximum bid incentive as indicated in subparagraphs (8), (9) and (10).

    4. The maximum bid incentive percent shall be determined by the estimated contract value and the dollar ranges as defined in subparagraphs (8), (9) and (10).

    5. When used, the actual bid incentive amount shall be limited to the lesser of:

       1. the maximum bid incentive percent multiplied by the estimated contract value;

       2. the increased percentage of M/WBE participation of the next lowest responsive and responsible bid multiplied by the dollar amount of the lowest responsive and responsible bid; or

       3. the maximum bid incentive percent multiplied by the dollar amount of the lowest responsive and responsible bid.

    6. For the purposes of this rule, a bid shall be deemed non-responsive if it neither meets the M/WBE goals established for the contract nor demonstrates good faith efforts in its attempt to meet established contract goals.

    7. When all responsive and responsible bids received exceed the estimated contract

       value and exceed the maximum dollar range established for the bid incentive, the next dollar threshold will apply to determine the bid incentive percent.

    8. For contracts with an estimated value of $2,000,000 or more, the District shall implement a maximum bid incentive of one percent (1%). The award shall be made to the next lowest responsive and responsible bidder so long as the bid does not exceed the lowest responsive and responsible bid by one percent (1%).

    9. For contracts with an estimated value of more than $500,000 but less than

       $2,000,000, the District shall implement a maximum bid incentive of five percent (5%). The award shall be made to the next lowest responsive and responsible bidder so long as the bid does not exceed the lowest responsive and responsible bid by five percent (5%).

    10. For contracts valued at $500,000 or less, the District shall implement a maximum bid incentive of ten percent (10%). The award shall be made to the next lowest responsive and responsible bidder so long as the bid does not exceed the lowest responsive and responsible bid by ten percent (10%).

    11. Examples of how the District's Bid Incentive Program shall apply are shown in Tables 7.6-1 and 7.6-2, below:

    *** *** *** 40E-7.647 Good Faith Efforts.

    The District shall determine what constitutes a "good faith effort" for purposes of contractor compliance. The contractor shall be deemed to have made a good faith effort if the requirements of subparagraphs (1), (2) and (3) of this rule are satisfied.

    (1)(a) The process used by the Contractor to identify available M/WBE firms and identify contracting opportunities for M/WBE participation. The contractor shall be deemed to have made a good faith effort under subparagraph (1) of this rule if:

    1. The Contractor selected portions of the project to be performed by available M/WBE firms, including dividing contracts or combining elements of work into economically

       feasible units, areas or quantities to facilitate maximum participation and increase the possibility of meeting the M/WBE goal; and

    2. The contractor determined M/WBE availability and developed a proposed M/WBE subcontractor/supplier list by requesting and using the assistance of the District's Office of Supplier Diversity and Outreach, state and local minority/woman business development agencies and contractor's groups with knowledge of M/WBE availability.

    (b) The District, in determining efforts made under subsection (1)(a), shall require as part of its solicitation information including: copies of letters/transmittals to all resource agencies used to identify available M/WBE firms, including the proposed M/WBE subcontractor/supplier list developed, the telephone numbers and the primary contract for each M/WBE firm listed, a complete list of subcontract/supplier opportunities on the project, and identify those opportunities for which available M/WBE firms were solicited.

    (2)(a) The methods used by the Contractor

    to notify and inform available M/WBE firms of the contracting opportunities. The contractor shall be deemed to have made a good faith effort under subparagraph (2) of this rule if:

    1. The Contractor provided written notice to available M/WBE firms concerning subcontract/supplier opportunities on the project in sufficient time (minimum two [2] weeks) to allow response and effective participation;

    2. The Contractor advertised subcontract/supplier opportunities in general circulation, and/or minority-focused, media in sufficient time to allow response; and

    3. The Contractor followed up with interested M/WBE firms to provide detailed information about: pre-bid meetings; access to plans; specifications; Contractor's project manager; subcontract bonding, if any; assistance the Contractor offers subcontractors with bonding and insurance requirements; payment schedules; bid addenda;

    minority/woman business assistance agencies, etc.

    (b) The District, in determining efforts made under subsection (2)(a), shall require as part of its solicitation information including: copies of individually addressed letters and/or requests for quotations issued to available M/WBE firms, the individual letters or requests for quotations must reference the type of work the M/WBE firms were being solicited to perform, the advertisement or the tear sheet from newspapers used, the follow-up correspondence to M/WBE firms and/or minutes of meetings held with M/WBE subcontractors/suppliers.

    (3)(a) The good faith efforts used by the

    Contractor in evaluating each M/WBE bidder's response and contracting with M/WBE firms.

    The Contractor shall be deemed to have made a good faith effort under subparagraph (3) of this rule if:

    1. The Contractor documented and considered all quotations received from M/WBE bidders, not rejecting M/WBE bidders as unqualified without thoroughly investigating their capabilities;

    2. The Contractor documented reasons why quotations from M/WBE bidders were not used and followed up with notices to the unsuccessful M/WBE bidders indicating such reason(s); and

    3. The Contractor has utilized M/WBE subcontractors/suppliers on major projects within the past 12 months.

    (b) The District, in determining efforts made under subsection (3)(a), shall require as part of its solicitation information including: documentation on quotations received from unsuccessful M/WBE bidders and a M/WBE utilization plan specifying the M/WBE firms that will be used during the project.

    (4) Upon making a determination regarding whether a good faith effort has been demonstrated under Subsections (1), (2), and (3), the District shall notify bidders who specifically request such notification, prior to posting the District's notice of intent to award.

28. The basic issues to be decided in this case are whether it would be "clearly erroneous, contrary to competition, arbitrary, or capricious" for the District to conclude that the Bergeron and the Harry Pepper bid proposals were responsive, and to also conclude that the Petitioner’s bid was nonresponsive. A capricious action is one which is taken without thought or reason or is irrational. An arbitrary decision is one that is not supported by facts or logic, or which is despotic. Agrico Chemical Co. v. Department of Environmental Regulation, 365 So. 2d 759, 763 (Fla. 1st DCA 1978).

29. In a competitive procurement protest, no submissions made after the bid opening which amend or supplement the bid shall be considered. Section 120.57(3)(f), Florida Statutes. "[A] bidder cannot be permitted to change his bid after the bids have been opened, except to cure minor irregularities." Harry Pepper & Associates, Inc. v. City of Cape Coral, 352 So. 2d 1190, 1191 (Fla. 2d DCA 1977).

30. In a bid protest proceeding, the burden of proof is on "the party protesting the proposed agency action" to establish that it is entitled to the award of the subject contract. Section 120.57(3)(f), Florida Statutes. Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). Therefore, in this case the Petitioner bears the burden of showing that the District acted clearly erroneously, contrary to competition, arbitrarily, or capriciously, by concluding that

    the bids of Harry Pepper and Bergeron were responsive and that the Petitioner’s bid was nonresponsive.

31. The District promulgated Rule 40E-7, Part VI, Florida Administrative Code, the Supplier Diversity and Outreach M/WBE Contracting Rule, to establish the policies and procedures of the District’s M/WBE program. The objective of these rule provisions is to provide incentives to increase the participation of M/WBE’s which are experiencing the effects of marketplace discrimination and have sought to do business in the District’s relevant market area. Rule 40E-7.611(2), Florida Administrative Code.

32. Rule 40E-7.647, Florida Administrative Code, provides that "the District shall determine what constitutes a 'good faith effort' for purposes of contractor compliance. The contractor shall be deemed to have made a good faith effort if the requirements of subparagraphs (1), (2), and (3) of this rule are satisfied." The requirements of each of these subparagraphs must be met independently and failure to meet any one of the three criteria constitutes a material deviation.

33. Subparagraphs (1), (2), and (3) of Rule 40E-7.647, Florida Administrative Code, require the bidder to demonstrate:

    (1) the process used by the contractor to identify available M/WBE firms and identify contracting opportunities for M/WBE participation, (2) the methods used by the contractor to notify and inform available M/WBE firms of contracting opportunities, and (3) the good faith efforts used by the contractor in

    evaluating each M/WBE bidder’s response and contracting with M/WBE firms. Rule 40E-7.647, Florida Administrative Code, further identifies the documentation needed to demonstrate compliance with the material criteria related to process, methods, and evaluation.

34. Rule 40E-7.621(15), Florida Administrative Code, defines "responsive" to mean that "a firm’s bid or proposal confirms in all material respects to the invitation to bid or request for proposal and shall include compliance with M/WBE goals or good faith efforts."

35. The test for measuring whether a deviation is sufficiently material to be contrary to competition is whether the deviation gives an advantage or benefit to the bidder not enjoyed by others. E.M. Watkins & Co. v. Board of Regents, 414 So. 2d 583 (Fla. 1st DCA 1982); Hubbard Construction Company v. Department of Transportation, 642 So. 2d 1192 (Fla. 1st DCA 1994).

36. With regard to the Petitioner’s challenge to the responsiveness of the Bergeron bid proposal, the use of the project name instead of the project number in Gulf’s Statement of Intent submitted to Bergeron was not a material deviation from the RFB specifications in that it provided no competitive advantage to Bergeron. As noted in the findings of fact, above, Gulf’s use of the project name instead of the project number did not provide the District with any more or any less information

    than if Gulf had used the project number. Other bidders and subcontractor’s used various names in identifying the project. It was clear that Bergeron’s bid was submitted only for Option "B."

37. With regard to Gulf’s failure to check the box indicating whether it would perform as a corporation, partnership, individual, or joint venture, the Petitioner appears to have abandoned this aspect of its challenge to Bergeron’s responsiveness, because this issue was not addressed in the Petitioner’s prehearing stipulation, in its opening statement, or in its proposed recommended order. In any event, that small omission would not constitute a basis for concluding that Bergeron’s bid was nonresponsive.4 Consequently, since Bergeron exceeded the 16 percent M/WBE participation goal, Bergeron’s bid was responsive in all material respects to the District’s M/WBE requirements.

38. With regard to the Petitioner’s challenge to the responsiveness to the Harry Pepper bid, the Petitioner asserted in the original formal protest and in the amended formal protest that Harry Pepper’s use of Suca as an M/WBE subcontractor could not be counted towards fulfillment of Harry Pepper’s M/WBE goal, because to do so would constitute a violation of Rule 40E- 7.631(8), Florida Administrative Code. Harry Pepper’s use of Suca is not contrary to Rule 40E-7.631(8), Florida Administrative Code, because that rule provision is inapplicable to this type of

    situation. The cited rule applies to the evaluation of subcontractors used in proposals and not to those used in bids. Moreover, the Petitioner failed to present any evidence suggesting that Suca is either subcontracting all or a majority of the subcontractual portion of the work to another non-M/WBE firm, or that Suca intends to collect a brokers fee or commission or that its employees would perform none of the direct labor or service activities specified in the contract, as prohibited by Rule 40E-7.631(8). Accordingly, it is appropriate to allow Harry Pepper credit for the use of Suca as an M/WBE on the subject bid.

39. At the final hearing the Petitioner asserted for the first time an additional basis for challenging the use of Suca to fulfill Harry Pepper’s M/WBE goal. The new challenge is based on the assertion that subsection C of Article 7.06 of the bid specifications precludes counting an M/WBE such as Suca towards fulfillment of the M/WBE goal, because Suca is proposing to be only a supplier. The argument fails for several reasons, not the least of which being that it was raised for the first time during the course of the final hearing. Raising a new legal or factual issue at such a late date is precluded by Section 120.57(3)(b), Florida Statutes, which requires the formal written protest to "state with particularity the facts and law upon which the protest is based."

40. Even if timely raised, the new challenge to the use of Suca would not provide a basis for the relief sought by the

    Petitioner because the challenge is predicated on an interpretation of subsection C of Article 7.06 that is illogical in view of other provisions of the M/WBE requirements of the bid specifications and in view of the District’s M/WBE rules.

    Subsection C of Article 7.06 reads as follows, in pertinent part:

    
    

    1. The District will count toward a Bidder’s M/WBE goal attainment the M/WBE fees or commissions charged for providing direct labor or a bona fide service, such as professional, technical, consultant or managerial services, which includes assistance in the procurement of essential personnel, facilities, equipment, materials or supplies required for the performance of the contract, consistent with customary industry practice.

41. The above-quoted language is by no means a model of clarity and, standing alone, it would certainly be, at best, ambiguous. But it does not stand alone and it must be considered in the context of the other provisions of the bid specifications, as well as in the context of the applicable M/WBE rules adopted by the District. Both the bid specifications and the applicable rules contain numerous references to M/WBE "suppliers." Suca was certified by the District as an M/WBE stocker and supplier of pipe and related supplies. Harry Pepper has committed to use Suca as an M/WBE subcontractor to supply pipe and related supplies in reliance on the District’s certification of Suca as an M/WBE. It would be illogical for the District to certify M/WBE firms like Suca if use of those firms did not count towards fulfillment of the M/WBE goals. Any ambiguities in the quoted

    language of subsection C of Article 7.06 of the bid specifications must be resolved in a manner consistent with the purposes of the District’s M/WBE program. When the ambiguities are resolved in such a manner, it is appropriate to count Harry Pepper’s use of Suca towards fulfillment of Harry Pepper’s M/WBE goal. Consequently, since Harry Pepper met the 16 percent M/WBE participation goal, Harry Pepper’s bid was responsive in all material respects to the District’s M/WBE requirements.

42. Under Rule 40E-7.628, Florida Administrative Code, the District shall apply a bid incentive within certain maximum percentages to responsive and responsible bidders who have met the M/WBE project goal when the lowest responsive and responsible bidder does not meet the M/WBE goal. The bids of Bergeron and Harry Pepper are responsive in all material respects to the RFB and both Bergeron and Harry Pepper met the 16 percent M/WBE goal. The Petitioner’s bid failed to meet the 16 percent M/WBE participation goal. Inasmuch as the sum of the Bergeron bid and the Harry Pepper bid is less than one percent greater than the Petitioner's bid, the contracts must be awarded to Harry Pepper and Bergeron under the bid incentive provision of the District’s M/WBE rule, regardless of whether the Petitioner’s bid was responsive and responsible. (Rule 40E-7.628, Florida Administrative Code.) Accordingly, the determination of whether the Petitioner’s bid was responsive is a moot issue.

43. Nevertheless, inasmuch as this is a recommended order, it is always possible that the District might issue a final order reaching a different conclusion regarding the responsiveness of the Bergeron or Harry Pepper bids. Because of that possibility, in the paragraphs which follow attention is directed to the issue of the responsiveness of the Petitioner’s bid.

44. In order to be found to be responsive, the Petitioner’s bid must include documentation of the Petitioner’s efforts to comply with the M/WBE requirements of the bid specifications sufficient to show that the Petitioner made a good faith effort to achieve such compliance. Assuming, without deciding, that the Petitioner made a good faith effort to comply with the M/WBE requirements of the bid specifications, such good faith efforts, standing alone, are not a sufficient basis upon which to conclude that the Petitioner’s bid was responsive, unless those efforts are sufficiently documented in the bid proposal as required by the bid specifications and Rule 40E-7.647, Florida Administrative Code. For the reasons discussed below, the documentation submitted with the Petitioner’s bid proposal was insufficient.

45. The District should protect the integrity of the bidding process and not allow the consideration of bids which are not responsive, for competitiveness and confidence in the bidding process will be undermined if bidders cannot rely on the bid specifications in submitting their bids. E.M. Watkins & Company Inc. v. Board of Regents, 414 So. 2d 583 (Fla. 1st DCA 1982). In

    this case, Section 7.03 of the RFB required that documentation of good faith efforts be submitted with the bid if the M/WBE participation goal was not met.

46. Failure to comply with specific requirements for good faith efforts documentation is a material deviation which justifies a determination of nonresponsiveness. Centex-Rooney Construction Company v. Florida Board of Regents, DOAH Case No. 92-2272BID (failure to provide copies of letters, telegrams, or meeting notes constituted a material deviation and submission of a telephone log in lieu of such documents was insufficient). The District may not waive a material deviation in a bid. Robinson Electrical Co., Inc. v. Dade County, 417 So. 2d 1032 (Fla. 3rd DCA 1982); Harry Pepper and Associates v. City of Cape Coral, supra.

47. The Petitioner failed to clearly identify selected portions of the project to be performed by available M/WBE firms and used a generic form letter to solicit assistance from resource agencies. The bid did not sufficiently document the process used by the Petitioner to obtain M/WBE participation. This failure constitutes a material deviation from the requirements of the RFB and the M/WBE rule and may not be waived by the District.

48. The Petitioner failed to provide copies of individually addressed letters and/or requests for quotations to M/WBE subcontractors or follow-up correspondence and minutes of

    meetings held with M/WBE businesses. The Petitioner relied on an undated generic letter to "All Offerors," and failed to provide proof of timely publication in newspapers. The bid did not sufficiently document the methods used by the Petitioner to obtain M/WBE participation. This failure constitutes a material deviation from the requirements of the RFB and the M/WBE rule, and may not be waived by the District.

49. The Petitioner failed to provide documentation demonstrating its negotiations with, or quotations received from, M/WBE firms. The Petitioner also failed to provide information explaining why available M/WBE firms were not utilized. The bid did not sufficiently document the Petitioner’s evaluation of the responses it received from M/WBE businesses or the Petitioner’s evaluation of the capabilities of such businesses. This failure constitutes a material deviation from the requirements of the RFB and the M/WBE rule and may not be waived by the District.5 A waiver of the requirements discussed above would have the effect of granting to the Petitioner a competitive advantage not enjoyed by other bidders, a result which must be avoided because it is contrary to competition.

50. It would be contrary to the intent of the M/WBE Rule and RFB to accept as sufficient the Petitioner’s documentation of its efforts to meet the M/WBE goal. To do so would suggest to other bidders that the District is not serious about its 16 percent M/WBE participation requirement, its requirement to

    document good faith efforts, or its role in assuring equal treatment among competitive bidders. See, Dooley & Mack Constructors, Inc. v. Board of Regents and Norwood Industrial Const., DOAH Case No. 91-2703BID, August 19, 1991.

51. As a public body, the District has wide discretion in the bidding process; and its decision, when based on an honest exercise of discretion should not be overturned, even if it may appear erroneous and even if reasonable persons may disagree, unless it shown that "the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious." Section 120.57(3)(f), Florida Statutes. Scientific Games, Inc. v. Dittler Brothers, Inc., 586 So. 2d 1128 (Fla. 1st DCA 1991); Central Florida Equipment Rentals of Dade County, Inc. v. Lowell Dunn Company, 586 So. 2d 1171 (Fla. 3d DCA 1991); Baxter’s Asphalt and Concrete, Inc. v. Department of Transportation, 475 So. 2d 1284 (Fla. 1st DCA 1985); Liberty City v. Baxter’s Asphalt & Concrete, 421 So. 2d 505 (Fla. 1982). The evidence in this case is insufficient to demonstrate that "the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious."

52. Both Intervenors have filed motions seeking awards of attorneys fees and costs pursuant to Section 120.569(2)(c) and Section 120.595, Florida Statutes. The record in this case does not support an award of attorneys fees and costs under either of

the cited statutory provisions. Accordingly, the motions for attorneys fees and costs are denied.

RECOMMENDATION

On the basis of all of the foregoing, it is RECOMMENDED that the South Florida Water Management District issue a Final Order in this case to the following effect: Dismissing the petition and amended petition in this case and denying all relief requested by the Petitioner and awarding the subject contracts to the Intervenors.

DONE AND ENTERED this 15th day of October, 1997, in Tallahassee, Leon County, Florida.

MICHAEL M. PARRISH

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 15th day of October, 1997.

ENDNOTES

1/ The Petitioner moved for reconsideration or clarification of the order precluding it from offering evidence on these issues. The motion was denied at the commencement of the final hearing.

2/ The Gulf entry on the Project Number line was handwritten. In view of the nature of the handwriting, it cannot be concluded with any certainty whether the symbol between "STA-1A Works" and "STA-2 Works" was intended by the writer to be an ampersand or a plus sign. The intent of the writer in this detail is irrelevant, because under the circumstances either symbol would

convey essentially the same idea. Further, quibbles over whether Gulf wrote a "+" or a "&" are not the kinds of details on which multi-million dollar bid protests are won or lost.

3/ The Petitioner and the Respondent have both submitted argument and proposed conclusions of law on the issue of whether the Petitioner’s percentage of M/WBE participation should be determined to be 5.6 percent or 4.78 percent. The disposition of that issue is moot, because disposition of that issue does not have any bearing on the disposition of the main issues in this case. Accordingly, this Recommended Order does not contain any conclusions of law regarding the issue of whether the Petitioner should be credited with 5.6 percent or 4.78 percent M/WBE participation.

4/ In any event, it would have been difficult for the Petitioner to have pursued this issue with much vigor, because one of the W/MBE Statement of Intent forms submitted with the Petitioner’s bid suffered from the same omission. See, Intercontinental Properties, Inc. v. Department of Health and Rehabilitative Services, 606 So. 2d 380 (Fla. 3d DCA 1992).

5/ It is in this area that the Petitioner’s documentation of its good faith efforts suffers some of its most serious shortcomings. The Petitioner failed to include any documentation from which it could be reasonably concluded that the Petitioner made a good faith effort to secure the participation of any M/WBE firm that submitted a quotation that was not accepted by the Petitioner.

It is clear from a fair reading of Section 7.08, 3.A.1. and 2. of the bid specifications, and from a fair reading of the related rule provisions, that, at a minimum, the Petitioner’s documentation should have included the following: (1) A copy of each quotation submitted by an M/WBE firm that was not accepted by the Petitioner; (2) documentation of negotiations with each such M/WBE firm in sufficient detail to show a reasonable effort by the Petitioner to enter into an agreement with the M/WBE firm;

(3) documentation of the Petitioner’s opinion as to the qualifications of each M/WBE firm; (4) documentation of a reasonable investigation prior to concluding that any such M/WBE firm was unqualified; and (5) documentation of the reasons for which the quotations from each such M/WBE firm were unacceptable to the Petitioner. To a large extent the Petitioner’s arguments gloss over the language of Section 7.08, 3.A.1. and 2. and asserts that the Petitioner’s de minimus documentation of these matters complies with the literal language of Section 7.08, 3.B. In doing so, the Petitioner appears to treat the language of Section 7.08, 3.B. as though it existed in a vacuum. It does not. Documentation sufficient to comply with the requirements of Section 7.08, 3.B. must include the matters of specific concern that are described in Section 7.08, 3.A.1. and 2.

COPIES FURNISHED:

Lawrence P. Stevenson, Esquire Holland & Knight

312 Calhoun Street, Suite 600 Tallahassee, Florida 32301

Glenn M. Miller, Esquire

South Florida Water Management District

3301 Gun Club Road

West Palm Beach, Florida 33401

Mary F. Smallwood, Esquire Ruden, McClosky, Smith, Schuster

& Russell, P.A.

215 South Monroe Street, Suite 815 Tallahassee, Florida 32301

W. Robert Vezina, III, Esquire Vezina, Lawrence & Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

Philip T. Weinstein, Esquire

2250 Southwest Third Avenue, Fifth floor Miami, Florida 33129

Samuel E. Poole, III, Executive Director South Florida Water Management District 3301 Gun Club Road

West Palm Beach, Florida 33401

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: 97-003776BID

Orders for Case No: 97-003776BID