STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TOMLINSON INSTRUMENTS AND )

CONTROLS, INC., )

)

Petitioner, )

)

vs. ) Case No. 98-3733BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent, )

)

and )

) WILLO PRODUCTS COMPANY, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

This cause came on for formal hearing on October 21, 1998, in Tallahassee, Florida, before Suzanne F. Hood, Administrative Law Judge with the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Mary M. Piccard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

For Respondent: Scott Clodfelter, Esquire

Department of Corrections

2601 Blair Stone Road, Room B-415 Tallahassee, Florida 32399-2500

For Intervenor: Harry Thomas, Esquire

Alejandro Espino, Esquire Cummings and Thomas, P.A. 1004 DeSoto Park Drive

Tallahassee, Florida 32302-0589

STATEMENT OF THE ISSUE

The issue is whether the decision by the Florida Department of Corrections to award contracts for items numbered 2-5, 7-8 and

12 of Invitation to Bid No. 98-INST-7188 to Willo Products Company, Inc. should be upheld.

PRELIMINARY STATEMENT

On August 3, 1998, Petitioner Tomlinson Instruments & Controls, Inc. (Tomlinson) filed a formal written protest and request for hearing pursuant to Section 120.57(3), Florida Statutes. The protest challenged the decision of Respondent Department of Corrections (DOC) to award a contract for items numbered 2-5, 7-8 and 12 of the Invitation to Bid No. 98-INST- 7188 (ITB) to Intervenor Willo Products Company, Inc. (Willo).

The case was referred to the Division of Administrative Hearings on August 21, 1998. A Notice of Hearing scheduled the case for hearing on September 8, 1998.

On September 1, 1998, DOC filed an unopposed Motion for Continuance. The undersigned granted this Motion and rescheduled the hearing for October 21, 1998.

On September 28, 1998, Willo filed a request for the undersigned to grant its Motion to Intervene. Said Motion was originally filed with DOC on August 5, 1998. A copy of the Motion was filed with the Division of Administrative Hearings on September 30, 1998. The undersigned granted the Motion by order dated October 2, 1998.

The formal hearing commenced on October 21, 1998. During

the hearing Tomlinson presented the testimony of two witnesses. Tomlinson's Exhibits P1-P13 were admitted into evidence.

Tomlinson also offered Exhibits P14 and P15 as deposition

testimony. Exhibits P14 and P15 were admitted into evidence subject to the post-hearing submission of Willo's written objections.

DOC presented the testimony of five witnesses. No exhibits were offered by DOC.

Willo presented the testimony of one witness. Five exhibits offered by Willo were admitted into evidence.

On October 28, 1998, Willo filed Intervenor's Objection to Deposition Testimony on grounds of relevance. For the reasons set forth below in the Conclusions of Law, Willo's objections are sustained.

A transcript of the hearing was filed on October 28, 1998. Tomlinson and Willo filed their proposed recommended orders on October 9, 1998. DOC filed its proposed recommended order on October 10, 1998.

FINDINGS OF FACT

1. On June 16, 1998, DOC issued the ITB seeking bids for door locking control panels for prison doors at several correctional institutions throughout Florida. The control panels will operate the doors within the institutions, including security cell doors, and will replace existing systems at these correctional institutions.

2. The ITB separated the work into fourteen items. Each item required the bidders to submit proposed costs for work, material and labor, to be performed at one or more dormitories

   within one or more correctional institutions. Each item contains a grand total cost for all work to be performed under that item. The ITB did not contain a place for a bidder to indicate the cumulative grand total for all fourteen items. The language of the ITB in section 5.0 of the specifications clearly reflects on its face that DOC would award contracts on an item-by-item basis.

3. The ITB included the following specifications among others:

   1.01 Introduction:

   
   

   The department has purchased sliding locking devices and other electronic security locks, for nine (9) institutions and (21) dormitories throughout the state. It has been determined that the existing control panels that operate the doors are not sufficient for the task. This ITB is for the purpose of procuring the appropriate control panels to operate the electro/mechanical sliding devises and other electro/mechanical locks manufactured by various security lock manufacturers. The successful bidder must have a minimum of three years experience in the manufacturing and installation of door locking control systems. The successful bidder shall furnish and install the control panels and will provide testing and training services, a one-year warranty, and spare parts. The department will initiate purchase order(s) for twenty one (21) dormitories upon a award of the bid. One dormitory will be the old style T-Dorm (Desoto CI), the remaining will be Butterfly style at various location. [sic] Depending on the availability of funds up to 33 controls panel at various locations may be purchased. (Emphasis added)

   1. Door Relay Modules:

      
      

      1. Door relays shall be mounted on circuit board modules, with each module providing door control functions for no more

   than one (1) door. Relays shall be 24VCD coil, SPDT, 10 amp rated contacts, and rated for a minimum of 1,000,000 mechanical operations. (Emphasis added)

   3.06	Submittals:
   	3.0.6.1 Six (6) copies of manufacturer's data in the form of cut sheets and engineering drawings of all components required for the complete control system. Submittals shall be delivered to the Bureau of Design and Construction within ten (10) days of receipt of purchase order. Bidders shall submit cut sheets on their equipment with bid. (Emphasis added)
   5.0	Contract Award(s)
   	The department will award contract(s) to the responsible bidder(s) with the lowest cumulative GRAND TOTAL ITEM price on an item- by-item basis as specified on the price sheet (TABLE 1) for this ITB. Each item award represents all required labor and products for all dormitories requiring control panels at various correctional institutions on a facility-by-facility basis. In the event the low cost bidder is found non-responsive, the department may proceed to the next lowest cost responsive bidder and continue the award process.
   	Per Florida Statutes (287.057 & 287.0945), a price preference of up to 5% may be given to any bid submitted by a certified MBE firm (that also meets all other bid requirements).
   4.	The ITB contained the following General Conditions	among
   others:
   	6. MANUFACTURERS' NAME AND APPROVED

   EQUIVALENTS: Any manufacturers' names, trade names, information and/or catalog numbers listed in a specification are for information and not intended to limit competition. The bidder may offer any brand for which he is an authorized representative, which meets or exceeds the specifications for any item(s).

   MEASUREMENTS: Customary measurements appearing in these specifications are not intended to preclude bids for commodities with metric measurements. If bids are based on equivalent products, indicate on the bid

   form the manufacturer's name and number. Bidder shall submit with his bid, cuts, sketches, and descriptive literature, and/or complete specifications. Reference to literature submitted with a previous bid will not satisfy this provision. The Agency reserves the right to determine acceptance of item(s) as a approved equivalent. Bids which do not comply with these requirements are subject to rejection. Bids lacking any written indication of intent to bid an alternate brand will be received and considered in complete compliance with the specifications as listed on the bid form.

   The Agency is to be notified of any proposed

   changes in (a) materials used, (b) manufacturing process, or (c) construction. However, changes shall not be binding upon the Agency unless evidenced by a Change Notice issued and signed by the Agency Purchasing Director or Purchasing Agent. (Emphasis added)

   
   

   1. AWARDS: As the best interest of the State may require, the right is reserved to make award(s) by individual item, group of items, all or none, or a combination thereof; on a statewide basis with one or more suppliers; to reject any and all bids or waive any minor irregularity or technicality in bids received. When it is determined there is competition to the lowest responsible bidder, evaluation of other bids is not required. Bidders are cautioned to make no assumptions unless their bid has been evaluated as being responsive. All awards made as a result of this bid shall conform to applicable Florida Statutes.

      
      

   2. NONCONFORMANCE TO CONTRACT CONDITIONS: Items may be tested for compliance with specifications by the Florida Department of Agriculture and Consumer Services, or by others acceptable to the State. Items

delivered not conforming to specifications may be rejected and returned at vendor's expense. . . .

1. The ITB contained the following Special Condition among others:

   12. SUBMISSION OF MANDATORY FORMS/LITERATURE

   * * *

   4. Complete Technical Data on items other than as specified shall be provided with bid by the vendor, for evaluation purposes, otherwise bid will not be considered.

   
   

2. Tomlinson submitted the lowest bid for all 14 items in the amount of $2,439,550.00. Willo submitted the second lowest bid for all 14 items in the amount of $2,479,653.00.

3. On July 20, 1998, DOC posted a bid tabulation on which the low bid for each item was circled. The tabulation stated that the "circled price indicates intent to award." Willo submitted low prices on items 2-5, 7-8 and 12. Tomlinson submitted low prices on items 1, 6, 9-11 and 13-14. The total amount of the items for which Willo submitted the low price was

   $2,031,726.00. The total amount of the items for which Tomlinson submitted the low price was $399,550.

4. Either Tomlinson or Willo submitted the low price and the second low price on every item. For every item on which Tomlinson submitted the second low price (2-5, 7-8 and 12), Tomlinson's price was within 5 percent of Willo's.

5. Tomlinson is a custom control systems manufacturer and supplier certified by the State of Florida as a Minority Business Enterprise ("MBE").

6. Tomlinson developed and manufactures a single-door control module for controlling lock mechanisms on prison doors.

   Tomlinson has provided DOC hundreds of single-door control modules, either as a prime contractor or a subcontractor.

7. Tomlinson first provided the single-door control modules to DOC pursuant to a subcontract on a renovation project. The specifications for that project called for a complicated multiple-door control panel that was problematic to troubleshoot and maintain. At that time, Tomlinson proposed the single-door control modules and DOC accepted the modification to the specifications. Since that time, every DOC project requiring door-locking control systems has called for a single-door system like the one developed by Tomlinson.

8. Tomlinson filed its protest on August 3, 1998, alleging that DOC acted arbitrarily, capriciously and with favoritism to Willo by awarding it the contracts for items 2-5, 7-8 and 12. Tomlinson also contended that: (1) Willo's bid was non- responsive for failure to submit cut sheets with its bid; (2) Willo's relay module does not meet the specifications of the ITB; and (3) Willo does not meet the experience requirements of the ITB.

9. Willo manufactures a variety of products for new construction and renovation projects. Willo's work is usually performed on a contact basis.

10. Willo was founded in 1945. It has manufactured and installed door-locking control systems since 1981. Consequently, it meets the ITB's requirement for experience in manufacturing

    and installing door-locking control systems.

    
    

11. The door-locking control systems manufactured and installed by Willo include relay logic systems. In 1997, Willo was awarded contracts in other states for projects utilizing relay logic systems, which are similar to the relay logic system required by the ITB. Subsequently, Willo fabricated and installed those systems. Willo intends to provide a relay logic system in connection with its award under the ITB.

12. During the development of the ITB, Margaret Tomlinson, president of Tomlinson, inquired of DOC whether the ITB would contain a requirement for the successful bidder to acquire a payment and performance bond. She also requested that DOC permit work under the ITB to be contracted in portions so that smaller companies like Tomlinson could compete for the work.

13. DOC decided to exclude a payment and performance bond from the ITB to allow smaller companies to compete. However, DOC was not inclined to award all fourteen items of work to a single contractor without a payment and performance bond because the work would amount to over two million dollars. Consequently, the agency determined that it would award contracts on an item-by- item basis, increasing the probability that multiple contractors would perform the substantial amount of work required under the ITB. Multiple contractors would decrease the risk of default. Additionally, DOC placed optional items within the ITB as a means to fix prices for a year because the agency did not have funding for all the projects.

14. During the development of the ITB, Ms. Tomlinson requested that DOC include the standard MBE price preference language in the ITB. DOC commonly uses price preference language that is discretionary in nature, using the word "may" instead of "shall." The Minority Business Advocacy Assistance Office approved the use of the discretionary price preference language in the ITB.

15. After DOC evaluated the bids, it decided not to apply the MBE price preference because Tomlinson, an MBE, was the low bidder on a portion of the bid. There was no necessity or basis to provide Tomlinson's prices additional consideration because its prices were very competitive.

16. Manufacturers of the component parts of a system provide cut sheets containing technical specifications of those component parts. Section 3.0.6.1 of the ITB's specifications required bidders to submit cut sheets on their equipment with their bid.

17. Willo did not submit a cut sheet with its bid. Instead, Willo bid the project per the specifications of DOC. Relying upon paragraph 12.4 of the special conditions and the signature block of the general conditions, Willo understood that it would be bound to provide the products outlined in the specifications.

18. Tomlinson included with its bid a list of material, prepared by Ms. Tomlinson, entitled "Technical Specifications of Components." This list describes some of the parts that Tomlinson would use to perform work under the ITB; it was not a cut sheet provided by the manufacturers of the component parts. Tomlinson's list did not include information regarding the diodes that it uses on its relay module. Nonetheless, DOC determined that the failure to submit cut sheets was a minor irregularity that could be waived, and it did so.

19. There is no evidence that DOC has ever rejected a bid due to a failure to submit a cut sheet. DOC assumes a bidder will provide material compliant with a bid's specifications unless the bidder identifies substitute material. DOC determines compliance with the specifications after it awards a contract to the lowest bidder when that bidder provides submittals to DOC. Accordingly, the failure of Tomlinson and Willo to submit cut sheets with their bids did not provide either of them a competitive advantage.

20. Section 2.0.2.1 of the specifications requires, among other things, that the relays have 10-amp rated contacts. The specifications do not specifically identify a requirement for relay contacts to have an inductive load rating or a resistive load rating.

21. Tomlinson's relays have 10-amp inductive load rated contacts. They meet the specification requirements.

22. Willo's relays have contacts with a 5-amp inductive load/10-amp resistive load rating. Willo's relays are also compliant with the specifications.

23. The relays will be used to control electromechanical door locks operated by motors or solenoids. Most of the motors used to move the security cell doors in this ITB were manufactured and installed by Willo. Willo's relays with 10-amp resistive load rated contacts are exactly the type of relay that DOC sought in the ITB's specifications. They are general-purpose

    relays that will work on any motor used to operate security cell doors.

24. Late in 1997, locks on cell doors were being compromised, allowing inmates to get out of their cells.

    Pursuant to pressure from the legislature, DOC decided to correct the situation by replacing swinging cell doors with sliding cell doors manufactured and installed by Willo. Later, DOC personnel determined that the door-locking control systems at various correctional institutions also needed to be replaced in an expedited manner.

25. Tomlinson's control system operates one cell door. During work on an unrelated project, Tomlinson provided DOC with drawings of its single-door control module and its control system. At that time, Willo's control system operated multiple doors.

26. The single-door module is easier for DOC's staff to maintain and replace. Therefore, DOC was interested in the procurement and installation of single-door modules.

27. DOC and Tomlinson discussed the possibility of Tomlinson entering into a SNAPS agreement with the Department of Management Services whereby Tomlinson would provide DOC with control systems for numerous dormitories. A SNAPS agreement allows a vendor to market its product to state agencies without competitive bidding.

28. Ms. Tomlinson learned that a SNAPS agreement was not an

    appropriate vehicle for DOC to procure all of the door-locking control systems that it needed. She suggested that Tomlinson provide the work on a sole-source basis for approximately $40,000 a dormitory.

29. Meanwhile, Willo provided DOC with a training session related to the installation of the sliding cell doors. During that meeting, DOC discussed its need for the control systems to operate the sliding doors. DOC furnished Willo with specifications for the work. DOC also showed Willo sample drawings of single-door control modules and control systems needed for the emergency work. These documents included schematics of various circuits, which were created by DOC's electrical engineer, and Tomlinson's control system interfacing with a steel door mechanism. Willo neither made copies nor kept copies of these drawings.

30. DOC did not show Willo a picture of Tomlinson's single- door relay module. The Tomlinson document that was shown to Willo was a 24 VDC control system. This type of system is not unique. Rather, it is common, although components vary in size, shape and configuration.

31. In time, DOC negotiated with Willo for the door-locking control systems for the following reasons: (1) Willo was on-site installing the security cell doors; (2) Willo had measured the building for the control panels; (3) Willo had determined the electrical requirement; and (4) Willo was the only company that

    could manufacture and install the control systems under an expedited schedule. Consequently, DOC issued an Emergency Purchase Order to Willo on December 11, 1997, for the manufacture and installation of control systems for ten dormitories at four correctional institutions. On January 27, 1998, DOC issued another Emergency Purchase Order to Willo further expediting the work to be performed at two dormitories.

32. There is no credible evidence that DOC showed favoritism to Willo by the issuance of the Emergency Purchase Orders. Willo did not copy Tomlinson's drawing to develop its own single-door control panel. Using the specifications provided by DOC and decades of experience in building control systems, Willo manufactured a control system that met DOC's requirements.

33. Ms. Tomlinson's testimony that Willo could not have created a single-door panel without reviewing the documents provided by DOC is not persuasive. Tomlinson's relay module is not unique. In fact, most relay logic controls are identical.

34. More importantly, there is no credible evidence that DOC showed favoritism to Willo and bias against Tomlinson in regards to the ITB at issue here.

    CONCLUSIONS OF LAW

    
    

35. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. Section 120.57(3), Florida Statutes.

36. Sections 337.02(1) and 287.057(1), Florida Statutes,

    require DOC to award the contract to the bidder who submits the lowest responsive bid.

37. Pursuant to Section 120.57(3)(f), Florida Statutes, the purpose of the hearing is to determine whether the proposed awards to Willo are contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications. The standard of proof is whether the proposed agency action was clearly erroneous, contrary to competition, arbitrary, or capricious. Id.

38. Tomlinson has the burden of proof in this case. Florida Dept. of Transp. v. J.W.C. Co., Inc., 396 So. 2d 778 (Fla. 1st DCA 1981).

39. There is no persuasive evidence that DOC favored Willo over Tomlinson in making awards under the instant ITB or in issuing the 1997 Emergency Purchase Order. Moreover, Tomlinson has not established any connection between DOC's past course of dealing with Willo and the ITB at issue here.

40. Willo filed written objections to deposition testimony in Exhibit P14 and P15 as it relates to the 1997 emergency purchase. Willo's objections on grounds of relevance are sustained.

41. There is no credible evidence that DOC showed any favoritism to Willo by opening the bids then determining whether to apply the MBE preference. A party must object to the terms and conditions of a proposal within 72 hours of receipt of the

    bid document. Capeletti Bros., Inc. v. Dept. of Transp., 499 So. 2d 855 (Fla. 1st DCA 1986); Section 120.57(3)(b), Florida Statutes. Tomlinson did not file a timely challenge to the discretionary language in the preference.

42. The agency made a decision not to require a payment and performance bond for all of the items in an effort to accommodate small companies like Tomlinson. After the bids were opened, it was apparent that the work would be divided between two bidders. Application of the MBE preference would have resulted in an award of all fourteen items to Tomlinson, increasing the risk of default. Moreover, DOC did not need to apply the MBE preference in order to make Tomlinson's bid competitive.

43. Rule 38A-20.003(5), Florida Administrative Code, authorizes agencies to include in bids a price preference up to ten percent. The rule states as follows in pertinent part:

    The 10% price preference means that if a certified minority business comes within 10% of the lowest bidder, and that bidder is not an MBE, the agency has the authority to award the contract to the MBE.

    
    

    Rule 38A-20.003(5), Florida Administrative Code. The rule clearly gives the agency authority to decide not to provide a price preference to an MBE after opening the bids.

44. Tomlinson did not prove that Willo failed to meet the experience requirement of the ITB. Persuasive evidence indicates that Willo had more than three years of experience in manufacturing and installing door-locking control systems.

45. Tomlinson and Willo both failed to submit cut sheets. DOC reserved the right to waive any minor or technical deviation pursuant to paragraph 10 of the General Conditions. DOC determined that the bidders' failure to submit cut sheets was a minor, or technical, deviation.

46. A minor irregularity is a variation from the bid specifications which "does not affect the price of the bid, or give the bidder an advantage or benefit not enjoyed by other bidders, or does not adversely impact the interest of the agency." Tropabest Foods, Inc. v. Dept. of Gen. Servs., 493 So. 2d 50, 52 (Fla. 1st DCA 1986). Such is the case here.

47. The ITB does not specify that relay contacts must have

    a 10-amp inductive load rating. Willo's relay contacts have a 10-amp resistive load rating which is responsive to the ITB.

48. The ITB plainly and unambiguously indicates that separate awards were to be made for each item. Section 5.0 of the ITB's specifications and the price sheets of Table 1 clearly reflect DOC's intent to award contracts on an item-by-item basis. The ITB does not request a bidder's cost for all fourteen items of work, as would be required under Tomlinson's interpretation. In accordance with its best interest, DOC correctly awarded each item to the lowest bidder.

49. Tomlinson has not met its burden in this case. DOC's proposed award of items to Willo is not contrary to the agency's governing statutes, its rules or policies, or the specifications. Section 120.57(3)(f), Florida Statutes.

50. DOC's action in awarding the contracts under the ITB was not clearly erroneous, contrary to competition, arbitrary or capricious. Section 120.57(3)(f), Florida Statutes. To the contrary, DOC's actions were based on facts and reason.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Corrections enter a Final Order awarding items 2-5, 7-8, and 12 to Willo.

DONE AND ENTERED this 1st day of December, 1998, in Tallahassee, Leon County, Florida.

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 1998.

COPIES FURNISHED:

F. Alan Cummings, Esquire Alejandro Espino, Esquire Cummings and Thomas, P.A. 1004 DeSoto Park Drive

Tallahassee, Florida 32302-0589

Scott Clodfelter, Esquire Department of Corrections 2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Mary M. Piccard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

Louis A. Vargas, General Counsel Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

Harry K. Singletary, Jr., Secretary Department of Corrections

2601 Blairstone Road

Tallahassee, Florida 32399-2500

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: 98-003733BID

Orders for Case No: 98-003733BID