L. COLE PHOTOGRAPHY, INC., )
vs. ) Case No. 98-3471BID
Respondent. )
On August 28, 1998, a formal administrative hearing was held in this case in Tallahassee, Florida, before J. Lawrence Johnston, Administrative Law Judge, Division of Administrative Hearings.
Cummings, Hobbs and Wallace, P.A. 1020 East Lafayette Street, Room 205
For Respondent: Judson M. Chapman
The issue in this case is whether the Respondent, the Department of Highway Safety and Motor Vehicles (the Department), should enter into a contract with Southern Photo Supply as low responsive bidder under Invitation to Bid (ITB) 052-98; the
Petitioner, E. L. Cole Photography, Inc., contends such a contract would breach the Petitioner's contract under ITB 055-97.
ITB 052-98 was issued on May 22, 1998. On June 4, 1998, the Department posted notice of its intent to award a contract for 11,000 rolls of Kodak Ektapress PJ400 135/36 film (PJ400) to Southern Photo Supply as low responsive bidder. The Petitioner filed a notice of protest on June 9, and a formal protest on June 22, 1998.
The Department did not refer the protest to the Division of Administrative Hearings (DOAH) until July 30, 1998; in addition to the protest, the Department also referred the Agency's Motion to Dismiss Bid Protest.
At DOAH, the matter was set for final hearing on August 28, 1998, and a hearing was held on the Agency's Motion to Dismiss Bid Protest on August 19, 1998. An Order Denying Motion to Dismiss was entered on August 24, 1998.
At final hearing, the Petitioner called two witnesses and had Petitioner's Exhibits 1 and 2 admitted in evidence. The Department called one witness and had Respondent's Exhibits 1 through 10 admitted in evidence. The Petitioner ordered a transcript of the final hearing, and the parties were given ten days from the filing of the transcript in which to file proposed recommended orders. The transcript was filed on September 17, 1998.
On September 29, 1998, the Petitioner filed an emergency Motion for Injunctive Relief to prevent the Department from proceeding with its intention to purchase 2,000 rolls of PJ400 film outside the competitive bidding process. At an emergency hearing on the motion, the Department attempted to allay the Petitioner's concerns by representing that the 2,000-roll purchase was being made to meet the Department's current requirements and would not impact the contract under ITB 052-98. In any event, DOAH has no jurisdiction to enjoin the Department from making the purchase, and the Motion for Injunctive Relief is denied.
On May 14, 1997, the Respondent, the Department of Highway Safety and Motor Vehicles (the Department), awarded a contract for miscellaneous photographic supplies to the Petitioner, E. L. Cole Photography, Inc., as the low responsive bidder under ITB 055-97. ITB 055-97 replaced a similar contract awarded to Southern Photo Supply, as the low responsive bidder under ITB 039-94. Both ITBs were restricted to minority business enterprises (MBEs).
Both ITBs (039-94 and 055-97) specified supplies listed under "Product Groups." The preamble to the "Product Groups" list in the bid specifications for both ITBs stated:
The following product groups include the listed representative products and the anticipated order quantities for the representative products during the . . .
contract period. These lists are based on a combination of experience and estimation, and are furnished to assist bidders to determine their interest in the contract and to estimate the type and volume of business that might be derived from the contract. However, the agency reserves the right to vary both products used and quantities required as may best serve the interests of the agency in carrying out agency business.
Both lists included a group consisting of various types of color negative standard roll film in quantities ranging from 120 to 360 rolls.
ITB 039-94 was for an eighteen-month contract (through June 30, 1995), renewable for two additional twelve-month terms. ITB 055-97 was for a five-year contract (through June 30, 2002), renewable for one additional five-year term.
Both ITBs (039-94 and 055-97) included the following provision entitled "Additions/Deletions": "As products and agency requirements change over the life of the contract the agency may add new or different products to an appropriate discount group, or increase the use of products, at the same discount rate, or discontinue or reduce the use of products."
Twice during the life of the 1994 contract, the Department solicited price quotes from Southern Photo for a large order of a type of color negative standard roll film not specifically listed under "Product Groups" in ITB 039-94. Southern Photo responded that it would sell the film to the Department at a 33% discount, which was even higher than the already deep 32% discount for color negative standard roll film in Southern Photo's response to ITB 039-94. The Department saw no need to solicit price quotes from other suppliers to verify that Southern Photo's 33% discount was deep enough to justify foregoing the issuance of an ITB for the film, with attendant administrative costs and delay. Instead, the Department added
the purchase to the 1994 contract using the "Additions/Deletions" clause.
The second time the Department added a large order of a type of color negative standard roll film not specifically listed under "Product Groups" in ITB 039-94 was about the time it was awarding the contract to the Petitioner under ITB 055-97. In the Petitioner's response to ITB 055-97, the discount for color negative standard roll film in the Petitioner's response to ITB 055-97 was 18%. Upon inquiry, the Department was advised that Southern Photo again would sell the large order at a 33% discount.
Given the depth of Southern Photo's discount, as compared to the discount for color negative standard roll film offered in the Petitioner's response to ITB 055-97, the Department's decision was logical and reasonable. The Department assumed that the Petitioner would not reduce its price for color negative standard roll film from an 18% discount down to a 33% discount. It also was logical and reasonable for the Department to believe that it would not get a price quote from any other MBE that would be enough below Southern Photo's price quote to justify the administrative cost and delay of issuing an ITB for the film.
On or about April 22, 1998 (long after Southern Photo's contract under ITB 039-94 had expired and well into the Petitioner's contract under ITB 055-97), the Department decided
it needed to place another large (11,000-roll) order of color negative standard roll film that was not specifically listed under "Product Groups" in ITB 055-97, namely Kodak Ektapress PJ400 135/36 (PJ400). The Department asked the Petitioner for a price quote. The Petitioner took the position that the order was covered by its contract under ITB 055-97 and quoted a price ($4.95 a roll) that would reflect the 18% discount offered on color negative standard roll film in the Petitioner's response to ITB 055-97.
The Department believed that it could buy the PJ400 film at a price low enough to justify the administrative cost and the delay of issuing an ITB for the film instead of adding it to the Petitioner's contract at $4.95 a roll. To ascertain if its belief was accurate, the Department solicited price quotes from several other MBEs and was able to obtain lower quotes, including a quote from Southern Photo of $3.96 a roll. The Department decided that the prospect of possibly saving $11,000 or more would be worth the administrative cost and delay of issuing an ITB for the film.
On or about May 22, 1998, the Department issued ITB 052-98 for 11,000 rolls of PJ400 film. Both the Petitioner and Southern Photo responded. Southern Photo again offered a price of $3.96 a roll. Recognizing that it was not bound by the 18% discount in its response to ITB 055-97, the Petitioner bid $4.30 a roll. However, the Petitioner submitted its response "under
protest." The Petitioner made clear in the cover letter to its response that the Petitioner still believed that the 11,000 rolls of PJ400 film should be added to the Petitioner's contract under ITB 055-97.
On June 4, 1998, the Department posted notice of its intent to award the contract to Southern Photo. The Petitioner filed a notice of protest on June 9 and a formal protest on June 22, 1998.
In its protest, the Petitioner took the position that the intended award of the contract to Southern Photo would breach the Petitioner's contract under ITB 055-97. In part, the Petitioner based its protest on its understanding that, at the opening of the responses to ITB 055-97, the Department's Chief of Contract Purchasing, William R. Rothman, answered in the affirmative a question from the Petitioner's principal, Eddie Lee Cole, Sr., as to whether the Petitioner would be the supplier of all of the Department's needs for photographic supplies under ITB 055-97.
Cole's testimony in support of the Petitioner's protest is rejected as being either a miscommunication or a misunderstanding on his part. It is not believed that the Department's Chief of Contract Purchasing would have answered such a question in the affirmative in the face of the provisions of ITB 055-97. See Findings 2 through 4, supra. Despite the possible ambiguity injected by the use of the phrase
"representative products" in the preamble to the "Product Groups" list in the bid specifications for ITB 055-97, Rothman testified that he viewed the purpose of the phrase to be to give the Department flexibility in the use of the "Additions/Deletions" clause. In particular, Rothman understood the purpose of the phrase to be to alert bidders that the Department would not necessarily purchase all listed products or purchase them in the listed quantities. Given Rothman's interpretation of ITB 055-97, it is not likely that Rothman would have given an affirmative answer to Cole's alleged question. If he did, it is found that Rothman's answer was intended to incorporate the provisions of the ITB as defining the contractual relationship between the Department and the Petitioner.
The Petitioner's protest also was based in part on evidence that, on at least one occasion, the Department purchased from the Petitioner photographic supplies not specifically listed under "Product Groups" in ITB 055-97 without making formal use of the "Additions/Deletions" clause. However, it is found that the Department's action in that regard was an oversight from not carefully comparing its purchase orders to the "Product Groups" list.
Reading the ITB in its entirety and in pari materia, it is found that the phrase "representative products" was not intended to require the Department to purchase large (11,000- roll) orders of color negative standard roll film not
specifically listed under "Product Groups" in ITB 055-97 from the Petitioner. (Despite this finding, it is suggested that rephrasing the language in future ITBs may eliminate ambiguity, as well as the cost and delay it apparently caused in this case.)
The Petitioner's protest also was based in part on its concern that, despite virtually identical pertinent ITB provisions, the Petitioner was not treated under its contract (ITB 055-97) the same way as the Department treated Southern Photo under its contract (039-94). However, as reflected in these findings, the Department actually treated both contractors the same; the outcome of that treatment was different only because Southern Photo's price quotes for large orders of color negative standard roll film not specifically listed under "Product Groups" were much lower than the Petitioner's.
CONCLUSIONS OF LAW
Section 120.57(3)(b), Florida Statutes (1997), provides in pertinent part:
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.
The Petitioner's protest was not required to be filed within 72 hours after the issuance of ITB 052-98. The Petitioner did not seek to protest the bid specifications. Such a protest would have to seek to clarify, correct, or refine the bid specifications. Instead, the Petitioner's protest sought to enjoin and cancel the bid solicitation and award altogether. It is concluded that, assuming such a protest is cognizable under Section 120.57(3), Florida Statutes (1997), it would not have to be filed within the statutory time limitation for a bid specification protest.
Section 120.57(3)(f), Florida Statutes (1997), provides in pertinent part:
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 this case, the Petitioner attempted to prove that ITB 052-98 (and its award to Southern Photo) was "erroneous, contrary to competition, arbitrary, or capricious" because it would breach the Petitioner's contract under ITB 055-97.
It is concluded that the Petitioner did not waive its protest in this case; nor is the Petitioner estopped from filing its protest. The evidence was clear that, while the Petitioner responded to ITB 052-98, it did so "under protest." The Petitioner consistently maintained its position that the 11,000 rolls of PJ400 film should be added to the Petitioner's contract under ITB 055-97.
"Waiver is the intentional or voluntary relinquishment of a known right, or conduct which infers the relinquishment of a known right. Thomas N. Carlton Estate v. Keller, 52 So. 2d 131 (Fla. 1951); Enfinger v. Order of United Commercial Travelers,
156 So. 2d 38 (Fla. 1st DCA 1963); Fireman's Fund Insurance Company v. Vogel, 195 So. 2d 20 (Fla. 2d DCA 1967). The essential elements of waiver are (1) the existence at the time of the waiver of a right, privilege, advantage, or benefit which may be waived; (2) the actual or constructive knowledge of the right; and (3) the intention to relinquish the right. Gulf Life Insurance Company v. Green, 80 So. 2d 321 (Fla. 1955); Gilman v. Butzloff, 155 Fla. 888, 22 So. 2d 263 (1945); Wilds v. Permenter,
228 So. 2d 408 (Fla. 4th DCA 1969). Waiver may be express, or implied from conduct or acts that lead a party to believe a right has been waived. Thomas N. Carlton Estate, supra; Davis v. Davis, 123 So. 2d 377 (Fla. 1st DCA 1960). However, when waiver is to be implied from conduct, 'the acts, conduct, or circumstances relied upon to show waiver must make out a clear
case.' Fireman's Fund Insurance Co., supra, at 24, citing Gilman v. Butzloff, supra." Taylor v. Kenco Chemical & Mfg. Corp., 465 So. 2d 581, 587 (Fla. 1st DCA 1985). The Petitioner's statements and conduct in responding to ITB 052-98 under protest evinced no intention to relinquish or waive its right to protest an award made under the ITB.
"Estoppel in pais or equitable estoppel is the doctrine 'by which a person may be precluded by his act or conduct, or silence when it is his duty to speak, from asserting a right which he otherwise would have had.' Black's Law Dictionary 483,
495 (5th ed. 1979). The elements of an estoppel are: '(1) words and admissions, or conduct, acts, and acquiescence, or all combined, causing another person to believe in the existence of a certain state of things; (2) in which the person so speaking, admitting, acting, and acquiescing did so wilfuly [sic], culpably, or negligently; and (3) by which such other person is or may be induced to act so as to change his own previous position injuriously.' 22 Fla.Jur.2d Estoppel and Waiver S 31 (1980). Unlike waiver, an essential to estoppel is a reliance on the words or conduct of a party which causes a detrimental change in position for the party so relying." Id. The elements of estoppel were not present in this case.
As found, the Petitioner failed to prove that ITB 052-
