STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

WHITE CONSTRUCTION CO., INC., )

)

Petitioner, )

)

vs. ) Case No. 98-3944BID

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

) MITCHELL BROTHERS, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Following notice to all parties, Don W. Davis, Administrative Law Judge for the Division of Administrative Hearings, held a final hearing in the above-styled case on October 1, 1998, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Mary M. Piccard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

For Respondent: Brian McGrail, Esquire

Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0458

For Intervenor: Donna H. Stinson, Esquire

Broad and Cassel

215 South Monroe Street, Suite 400 Tallahassee, Florida 32302

STATEMENT OF THE ISSUE

The issue in this case is whether the Department of Transportation (DOT) acted correctly in deeming the bid of Petitioner White Construction Co., Inc. (White), to be nonresponsive for failure to meet the Disadvantaged Business Enterprise (DBE) goal for Project No. 220517-1-52-01 (the project) and whether the proposed award to Intervenor Mitchell Brothers, Inc. (Mitchell) is in accordance with governing rules and statutes or is arbitrary, capricious, or contrary to competition.

PRELIMINARY STATEMENT

White and Mitchell bid on the project to be performed in Wakulla County. Upon the opening of the bids on or about

June 17, 1998, White was the apparent low bidder and Mitchell was the apparent second low bidder.

The bids of White and Mitchell were reviewed by the DOT’s Good Faith Efforts Committee (GFEC) of the DOT’s Minority Programs Office for compliance with the project’s Disadvantaged Business Enterprise (DBE) goals. White’s bid was deemed nonresponsive because Highway Safety Devices (HSD), a DBE which White intended to use, was not an approved DBE.

The findings and recommendations of the GFEC were submitted to DOT’s Technical Review Committee (TRC). The TRC concurred with the GFEC that the apparent low bid was nonresponsive and that the project should be awarded to Mitchell.

The findings and recommendations of the TRC were submitted to the DOT’s Contract Awards Committee (CAC). The CAC concurred with the GFEC and the TRC that the apparent low bid was nonresponsive, and awarded the contract to Mitchell. When DOT issued its Notice of Intent to Award the contract to Mitchell, White timely filed its bid protest. No other bidder protested, and Mitchell filed its Petition to Intervene on September 29, 1998.

Final hearing was scheduled and held on October 1, 1998.

White presented testimony of one witness and entered into evidence seven exhibits. Mitchell presented testimony of one witness and entered into evidence one exhibit. DOT presented testimony of one witness and entered into evidence two exhibits. The transcript was filed on October 14, 1998. All parties presented Proposed Recommended Orders which have been reviewed and utilized in the preparation of this Recommended Order.

FINDINGS OF FACT

1. The project is for work in Wakulla County. The deadline for submission of bids was June 17, 1998. White and Mitchell bid on the Project. Upon the opening of the bids on or about

   June 17, 1998, White was the apparent low bidder at

   
   

   $4,140,400.14, and Mitchell was the apparent second low bidder at

   
   

   $5,237,848.89.

   
   

2. Pursuant to Rule 14-78, Florida Administrative Code, bidders have three days after bid opening in which to submit

   detailed information regarding compliance with the project’s DBE requirements. The requirements of this project were that eight percent of the contract work be performed by DBEs. With the bid itself, a bidder only needs to submit a DBE summary, noting whether it will meet the DOT established goal of eight percent.

3. Within the three day period, White submitted DBE utilization forms, one of which listed HSD as one of its DBEs, for work in the amount of $55,326.36. Mitchell submitted the required forms, showing compliance with the DBE goals.

4. The DOT publishes a DBE directory for each bidding cycle. The directory indicates the bidding cycle to which it is to be applied. If a company is not listed in the directory, a contractor is on notice that such company is not a certified DBE.

5. White is an experienced bidder and contractor with the Department of Transportation. The bid and the DBE submission in this case were prepared by a White estimator who had been an estimator for many years. White’s estimator admitted that, while he usually reviewed the DBE directory prior to submission of bids, he failed to do so in this case. White received a copy of the DBE directory for the June Letting, but did not consult it to confirm that HSD was listed.

6. While White has substituted DBE subcontractors on jobs after performance has begun where the DBE cannot complete the work for which it was hired, White has never substituted a DBE subcontractor prior to the performance of the contract or changed

   subcontractors on its bid after the bid opening because a subcontractor it listed for purposes of meeting the DBE goal was not DBE certified.

7. White, as a common practice, keeps a supply of HSD forms in its office for use in submitting the DBE Utilization Form that indicates White will meet the DBE goal for a particular project. White did not contact HSD or any of the DBEs it listed on the DBE Utilization Form and DBE Utilization Summary Form to confirm that they were DBE certified for the June Letting.

8. White is aware that subcontractors may lose their DBE certification or not apply for recertification. White is also aware that it should not use subcontractors for purposes of meeting the DBE goal that are not listed in the DBE directory unless one calls the Minority Programs Office and confirm directly that a particular company which is not listed is DBE certified for that letting cycle.

9. HSD was not aware that White listed it on the DBE Utilization Form submitted with White’s bid. For White, that is not an uncommon practice.

10. Neither DOT or HSD are depicted by the evidence of having misled White into believing that HSD was a qualified DBE. It is the bidder’s (White) responsibility to verify whether a DBE is authorized for use on a particular project. White personnel did not do this and the applicable DBE directory clearly did not

    have HSD listed. HSD was not a qualified DBE at the time of the bid letting or proposed bid award.

11. HSD sent a quote for work on the project to Mitchell and White. The quote sent to Mitchell contains a letter in which HSD notes that the company

    . . . is not listed in the DBE Directory for the June Letting. Unfortunately this means you will not be able to utilize Highway Safety Devices for DBE Goals for the June Letting.

    
    

12. At the final hearing, a witness for White asserted that White did not receive the explanatory letter received by Mitchell. Such assertion cannot be credited in view of the demeanor of the witness when testifying.

13. Subsequent to the final hearing in this matter, White submitted information indicating that HSD had received certification as a DBE, effective October 26, 1998. However, White’s submission does not change the fact that HSD was not certified at the time of the bid letting or opening in this matter.

14. White’s bid was evaluated by DOT’s GFEC to determine whether or not White met the DBE goal or provided a good faith effort evaluation for the Project.

15. DOT interprets Rule 14-78.003(2)(b)5, Florida Administrative Code, as not permitting the substitution of a certified DBE for HSD, a circumstance that would have permitted White to meet the DBE goal for the Project.

16. DOT’s Minority Programs Office does the initial evaluation of the DBE portion of the goal. If the goal has not been met, the bid will be reviewed by the GFEC. The GFEC makes a recommendation to the TRC, and the dollar amount of the bid is not a factor considered by the GFEC. The TRC will take into consideration the bid price in its evaluation.

17. The GFEC reviews the bid package by going through every criteria set forth in Rule 14-78.003(2)(b)3,b, Florida Administrative Code, to see if there are any circumstances that would credit the prime contractor in meeting the DBE goal.

18. The GFEC’s evaluation of White’s bid was to determine if the information submitted by White indicated whether good faith efforts were made to meet the DBE goal, not whether White could change HSD for a certified DBE.

19. The GFEC reviewed White’s bid for compliance with the DBE goal and to determine if good faith efforts were made to meet the goal. White did not meet the DBE goal or submit documentation of its good faith effort to do so.

20. The GFEC recommended to the TRC to deem White nonresponsive. The TRC reviewed the GFEC report and accepted the recommendation to deem White nonresponsive. The GFEC determined that Mitchell, however, did meet the DBE goal for the Project.

21. The TRC determined that Mitchell’s bid was within the automatic award criteria and recommended Mitchell be awarded the contract. The TRC recommended to the CAC that White be deemed

    nonresponsive and award the contract to Mitchell.

    
    

22. The review of White’s bid to determine whether it met the DBE goal by the GFEC, the TRC and the CAC were done in accordance with the governing statutes, rules and DOT policy and procedures.

23. Although substitution of DBEs in the performance of a contract after bid-letting is permitted by DOT, the total amount of the bid submitted by a contractor is affected by the bids it receives from DBEs. White selected HSD, without confirming its present status at the time, because White had used this presumed DBE on previous occasions to obtain the best deal for White.

24. White also asserted that, as it may change DBEs after a contract is awarded, the failure to submit a correct DBE is not a material error. However, a contractor may not change DBEs without good cause, such as its inability to perform the work, pursuant to Rule 14-78, Florida Administrative Code. That there is a procedure available after the contract is awarded does not affect the materiality of the failure to submit a qualified DBE in the first instance.

25. If the DOT believes the responsive bids which it receives are too high, it can reject all bids. The bid submitted by Mitchell, at $5,237,848.89, was within the automatic award criteria.

26. DOT’s decision to reject White’s bid for failure to comply with the DBE requirements is consistent with its practice

    and past policy. The use of an unqualified DBE is a material variation in a bid, as it may impact the price.

27. DOT’s decision to reject White’s bid as non-responsive was not contrary to statute, rule, or policy, or the bid specifications. White did not show that DOT’s action was clearly erroneous, contrary to competition, arbitrary, or capricious.

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Chapter 120, Florida Statutes.

29. Section 120.57(3)(f), Florida Statutes, provides in pertinent part:

    (3) ADDITIONAL PROCEDURES APPLICABLE TO PROTESTS TO CONTRACT BIDDING OR AWARD.–Agencies subject to this chapter shall utilize the uniform rules of procedure, which provide procedures for the resolution of protests arising from the contract bidding process. Such rules shall at least provide that:

    * * *

    
    

    (f) 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...

    
    

30. Rule 14-78.003(2)(b)3, Florida Administrative Code, provides in pertinent part:

    For all contracts for which DBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE participation information shall be submitted as outlined in 14- 78.003(2)(b)3.a. and b. below. Award of the contract shall be conditioned upon such submission of the DBE participation information and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy the information requirements shall result in a contractor’s bid being deemed nonresponsive and the bid being rejected.

31. White has the burden to demonstrate its standing as a responsive bidder. White has failed to carry this burden since its bid failed to meet the DBE goals for the project with a sufficient amount of subcontracts for qualified DBEs, a material irregularity.

32. The end of the three-day period set by Rule

    
    

    14-78.003(2)(b)3.b., Florida Administrative Code, is essentially

    the deadline for submission of all bid information. At the end of that deadline, White had failed to submit material information concerning DBE participation.

33. The fact that HSD became certified after the hearing in this matter does not change the propriety of DOT’s actions at the time of the letting. The pertinent time for determining compliance is at the letting, not subsequently. It is on this date that the playing field must be level for all players, and White’s negligent failure to confirm the eligibility of its proposed DBEs is not rectified by subsequent certification.

34. To permit one contractor to use an unqualified DBE whose price was low, without permitting other contractors to also rely on such quote, is to permit that first contractor to enjoy a competitive, material advantage which could affect price.

35. White attempted to argue that HSD should receive status as an MBE, a matter which was pending before the Division of Administrative Hearings in Highway Safety Devices, Inc. v. FDOT, Case No. 98-2976. To have considered, as a part of this case, the propriety of DOT’s certification decision regarding HSD would have amounted to a collateral attack through the instant bid dispute proceeding on DOT’s decision in that case. Further, such consideration could permit a bidder who uses a potentially unqualified DBE, a competitive advantage. Particularly, as in this case, where Mitchell did not use HSD because it was not

    certified. See also, Hubbard Construction Co. v. FDOT, Case No. 98-0749BID (1998).

36. The bid submitted by Mitchell was responsive and within DOT’s budget. It was the lowest responsive bid.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order awarding the contract on State Project Nos. 220517-1-52-01 and 220511-1-52-01 to Intervenor, Mitchell Brothers, Inc.

DONE AND ENTERED this 16th day of November, 1998, in Tallahassee, Leon County, Florida.

DON W. DAVIS

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 16th day of November, 1998.

COPIES FURNISHED

Mary M. Piccard, Esquire

Vezina, Lawrence and Piscitelli, P.A.

318 North Calhoun Street Tallahassee, Florida 32301

Brian McGrail, Esquire Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

Donna H. Stinson, Esquire Broad and Cassel

215 South Monroe Street, Suite 400 Tallahassee, Florida 32302

James C. Myers, Agency Clerk Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building

605 Suwannee Street, Mail Station 58

Tallahassee, Florida 32399-0450

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: 98-003944BID

Orders for Case No: 98-003944BID