Pursuant to notice, a final hearing was held in this case on August 15, 2008, in Lithia, Florida, before Susan B. Harrell, a designated Administrative Law Judge of the Division of Administrative Hearings (DOAH).
For Petitioner: Ronald W. Sikes, Esquire
For Respondents: Margaret M. Craig, Esquire
Bricklemyer Smolker & Bolves, P.A.
For Intervenor: Mary M. Clapp, Esquire
John H. Rains III, P.A.
The issue is whether the Respondents’ decision to award a landscaping maintenance contract to Cornerstone Tree Farm, Inc., is arbitrary or capricious.
Fishhawk Community Development District and Fishhawk Community Development District II (the Districts) issued a Combined Landscape Maintenance Bid Package for Landscape Maintenance within the Common Areas of the Fishhawk Community Development District & Fishhawk Community Development District II (the RFP). The Districts received eight proposals in response to the RFP. After ranking the proposals, the Districts determined that they would award the contract to Intervenor, Cornerstone Tree Farm, Inc. (Cornerstone). Petitioner, Greenbriar Landscaping, Inc. (Greenbriar), which had submitted a proposal, filed a protest to the intended award to Cornerstone.
On August 8, 2008, the Districts entered into a contract with DOAH and referred the case to DOAH for assignment to an administrative law judge to conduct a final hearing and issue a recommended order.
On August 14, 2008, Cornerstone filed Cornerstone Tree Farm, Inc.’s Undisputed Petition to Intervene, which was granted by Order dated August 14, 2008.
At the final hearing, Joint Exhibits 1 through 8 were admitted in evidence. At the final hearing, Greenbriar called the following witnesses: Debby Bayne, Amanda King, Emit Todd Haag, Edward M. Mauser, William Schwartz, Willard McKeith, and Thomas J. Panaseny. Petitioner’s Exhibit 1 was admitted in evidence. The Districts called Debby Bayne as its witness.
Respondents’ Exhibits 1 through 4 were admitted in evidence. Cornerstone called Scott Carlson as it witness. Cornerstone did not submit any exhibits for admission in evidence.
The one-volume Transcript was filed on August 19, 2008. The parties agreed to file their proposed recommended orders within ten days of the filing of the Transcript. The parties timely filed their Proposed Recommended Orders, which have been considered in the preparation of this Recommended Order.
The Districts are local units of special-purpose government authorized by Chapter 190, Florida Statutes (2008).1 Fishhawk Community Development District was established by Hillsborough County Ordinance No. 96-24, dated September 12, 2006. Fishhawk Community Development District II was
established by Hillsborough County Ordinance No. 02-23, dated December 10, 2002.
The Districts issued the RFP for landscape maintenance for the common area within the Districts. Addendum No. 1 was issued on June 23, 2008, and included a revised Section IV, which contained the scope of services and “general maintenance conditions/specifications.” Section I of the RFP provides:
The purpose of this bid proposal is to arrive at a total lump sum bid amount and to determine the monthly maintenance of the landscaped areas as described in the Scope of Services. All responses must itemize the cost of each of the items described in the Scope of Services in Section IV (break out all costs such as the # of mowing by month and $ value by month etc.). Only those items specifically indicated in the Landscape Services Agreement and Scope of Services documents, shall be included in the bid amount.
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The scope of work for this bid shall include mulching, planting of annuals, mowing of all grassy areas, trimming of all trees and shrubs, fertilizing and pruning of all landscaping, pest control and disease, weed control, edging, and inspection as outlined in the Landscape Services Agreement and the Scope of Services and the response must include all items described in the scope of work attached and described in Section IV.
Section I of the initial RFP provides:
Basis of Award/Right to Reject: The owner reserves the right to reject any and all bids, make modifications to the work, and waive any minor informalities or
irregularities in Bids as it deems appropriate. The evaluation criteria (Exhibit B) will be used to evaluate the proposals.
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The Bids will be evaluated based on the evaluation criteria in Exhibit B. The bids will be evaluated by the Fishhawk CDD & Fishhawk CDD II Board Members. The District shall select the lowest responsive and responsible bidder in accordance with this Invitation to Bid and the Fishhawk CDD & Fishhawk CDD II Rules of Procedure.
Subsection 4.3(2)(f) of the Districts’ Rules of Procedure provide the following concerning contracts for maintenance services:
In determining the lowest responsive and responsible bidder, the District Representative may consider, in addition to the factors described in the Invitation or request, the following:
The ability and adequacy of the professional personnel employed by each bidder or proposer.
The past performance of each bidder or proposer for the District and in other professional employment settings.
The willingness of each bidder or proposer to meet time and budget requirements.
The geographic location of each bidder or proposer’s headquarters or office in relation to the project.
The recent, current, and project workloads of the bidder or proposer.
The volume of work previously awarded to each bidder or proposer.
Whether the cost components of each bid or proposal are appropriately balanced.
Whether the bidder or proposer is a certified minority business enterprise.
The Lowest Responsive and Responsible Bid/Proposal shall be accepted; however, the Board shall have the right to reject all bids, either because they are too high or because the Board determines it is in the best interests of the District.
Addendum I, included the original advertisement of the RFP, provides the following:
The District reserves the right to reject any and all bids with or without cause, award bids in total or in part, to waive technical errors or information, and to select the proposal determined by the District, in its sole discretion to be the proposal most advantageous to the District.
It is unclear why the advertisement was issued as an addendum to the RFP. It is clear, however, that based on the Districts’ rules and the provisions of the RFP, the contract was to be awarded to the lowest responsive and responsible bidder.
Subsection 1.0(2) of the Districts’ Rules of Procedure provides that “[d]efinitions located within any section of the Rules shall be applicable within all other sections, unless specifically stated to the contrary.” The definitions contained in Sections 4.1(2)(c) and (d) define “responsive bid/proposal” and “lowest responsible bid/proposal” as follows:
“Responsive bid/proposal” means a bid or proposal which conforms in all material respects to the specifications and conditions in the invitation to bid or request for proposal and these Rules, and the cost components of which are appropriately balanced. A bid/proposal is not responsive if the person or firm submitting the bid fails to meet any requirement relating to the qualifications, financial stability, or licensing of the bidder.
“Lowest Responsible bid/proposal” means, in the sole discretion of the Board, the bid or proposal (i) is submitted by person or firm capable and qualified in all respects to perform fully the contract requirements and with the integrity and reliability to assure good faith performance, (ii) is responsive to the invitation to bid or request for proposal as determined by the Board, and (iii) is the lowest cost to the District. Minor variations in the bid may be waived by the Board. Mistakes in arithmetic extension of pricing may be corrected by the Board. Bids may not be modified after the opening.
Section 4.5 of the Districts’ Rules of Procedure deals with the procedures for purchasing contractual services and provides that "[a]ll purchases for contractual services (except for maintenance services) may, but are not required to, be made by competitive Invitation to Bid.” Subsections 4.5(2)(d)
and (e) of the Districts’ Rules of Procedure define “responsive bid or proposal” and “lowest responsible bid or proposal” as follows:
“Responsive bid or proposal” means a bid or proposal which conforms in all material
respects to an Invitation to Bid or Request for Proposal and these Rules, and whose cost components are appropriately balanced. A bid or proposal is not responsive if the person or firm submitting the bid or proposal fails to meet any requirement relating to qualifications, financial stability, or licensing of the bidder or proposer.
“Lowest responsible bid or proposal” means, as determined in the sole discretion of the Board, the bid (i) is submitted by a person or firm capable and qualified in all respects to perform fully the contract requirements who has the integrity and reliability to assure good faith performance, (ii) is responsive to the Invitation to Bid or Request for Proposal as determined by the Board, and (iii) which is for a cost to the District deemed reasonable by the Board. Minor variations in the proposal may be waived by the Board.
Mistakes in arithmetic extension of pricing may be corrected by the Board. Bids may not be modified after opening.
According to Debby Bayne, who was managing the bid solicitation of the Districts, the definitions of “responsive bid/proposal” and “lowest responsible bid/proposal” contained in Section 4.1 of the Districts’ Rules of Procedure applied to the procurement of maintenance contracts such as the one at issue.
The bids were to be evaluated in five areas: personnel, experience, the bidder’s understanding of the scope of work, financial capacity, and price, and each area was assigned points. The RFP provided the following evaluation criteria:
Personnel
(E.g., skill set and experience of key management and assigned personnel, particularly the project manager; present ability to manage the project; proposed staffing levels, etc. Skill set includes certification, technical training, and experience with similar projects.) 20 Points
Experience
(E.g., past record and experience of the respondent in similar projects, volume of work previously awarded to the firm; past performance in any other contracts; character; integrity, reputation, references of respondent, skilled labor force assigned, inventory of all equipment and year of equipment, etc.) 25 Points
Understanding of Scope of Work
Does the proposal demonstrate an understanding of the District’s needs for the services requested? Does it demonstrate clearly the ability to perform these services? Were any suggestions for “best practices” performances included? Do you have additional skilled manpower to provide this service? 20 Points
Financial Capacity
Demonstration of financial resources and stability as a business entity necessary to implement and execute the services required. If all financial information is not provided, Proposer will earn no more than five (5) points. 5 Points.
Price
30 Points
Section I of the RFP provides the following for the awarding of points for price:
Price--Will be awarded to the Proposer submitting the lowest bid for completing the work for the initial term of the contract.
All other proposals will receive a percentage of this amount based upon the difference between that Proposer’s bid and the low bid.
Although the RFP provided for the award of points to the bidders based on the evaluation criteria, nowhere in the RFP does it state that the contract will be awarded to the bidder who receives the highest number of points. The RFP did not provide that a bidder had to garner a certain number of points to be considered responsive and responsible. The RFP provided that the contract award would be made to the lowest responsive and responsible bid/proposal.
The bidders who were responding to the RFP were required to submit a lump sum price for the work to be performed pursuant to the contract. The lump sum amount was to be set forth on the bid form contained in Section II of the RFP. The bid form also required that the bidders “include an itemized schedule of each monthly service by cost.”
Section IV of the RFP provides the following specifications for the planting of annual flowers and the mulching of planting beds and tree rings:
Variety and Rotation Schedule: The annual bed plantings of flowers at Fishhawk Ranch shall be maintained with year round color. Seasonal rotations of four (4) different “crops" are required by the Landscape Contractor each year (Approximately 15,000 plants). Plants shall be in 4” pots and planted at 10” on center (tip to tip) in staggered rows throughout the bed area. The owner’s representative and the Contractor shall determine the flower varieties. The annuals are to be contract grown with an approved grower.
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Mulching: All shrub planting beds and tree rings shall be maintained with a minimum 3” thick layer of medium sized pine bark nuggets as the mulch product. In some areas pine straw is currently used and is allowed; however, pine bark mulch throughout Fishhawk Ranch shall be re-mulched once per year to remove decaying, matted material and allow for fertilizer to penetrate to the shrubs root zone. The new mulch is to be installed in December and January.
The specifications for the mulch did not include a specific amount that was to be applied. The contractor was to apply however much mulch it took to maintain a three-inch layer of mulch at all times and to replace the mulch entirely once a year. The RFP did not call for a unit price to be bid for mulch, nor did the RFP require the bidders to state a certain amount of mulch that would be applied.
The specifications for the planting of annuals provided the amount of annuals as an estimate. The contractor was to provide sufficient annuals so that four-inch pots of
annuals could be planted in the beds on ten-inch centers in staggered rows four times per year. The RFP did not call for a unit price for the annuals.
Eight responsive bids were received by the Districts in response to the RFP. Greenbriar and Cornerstone were among the responsive bidders. Both Greenbriar and Cornerstone were determined to be responsible bidders.
The lump sum bid by Greenbriar was $664,389.00. In the price itemization required by Section I and the bid form of the RFP, Greenbriar listed the monthly cost of mulch at
$2,987.75 for an annual cost for mulching of $35,853.00, representing 918 cubic yards of mulch. Under the itemization for the bedding plants, Greenbriar listed 15,000 annuals per rotation of bedding plants for an annual total cost of
$84,140.00.
The lump sum bid by Cornerstone was $691,428.27.
Cornerstone itemized the annual cost of mulch as $103,125.00, which represented 2,750 cubic yards of mulch. Cornerstone listed the cubic yard price of the mulch as $37.50. Cornerstone listed the annual cost of the bedding plants as $91,000, which represented four rotations of 13,000 annuals at a price of $1.75 per annual.
The itemized price for mulch for the other bidders ranged from $46,200.00 to $66,300.00 with the average price of
$57,250.00 for the other bidders. Greenbriar's pricing for mulch was more in line with the amount of the other bidders than the pricing of Cornerstone.
The proposals were provided to the members of the Board of Supervisors for the Districts. The board members reviewed the proposals and in some cases investigated the experience and references of the bidders.
On July 11, 2008, the Districts’ board members met to consider the proposals received in response to the RFP. Some board members were concerned about the wide discrepancy of the price of mulch for Cornerstone and for Greenbriar. A suggestion was made to delete the cost of the mulch in order to compare the eight proposals. The board members were told to evaluate the proposals without considering the cost of the mulch. The only evaluation category that would have been affected by deleting the mulch was price.
The board members evaluated the bids without including the cost of mulch, except for at least one board member who did include the cost of mulch in his evaluation. Based on the evaluations, Cornerstone received the highest ranking, and Greenbriar was next in line.
The board members voted to award the contract to Cornerstone and authorized the negotiation with Cornerstone for the amount of the mulch. The unit price for mulch listed in
Cornerstone’s bid would be included in the contract as well as the unit price included for annuals. Thus, the final amount of the landscape maintenance including mulch would not be known until negotiations were completed.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding. § 120.65(7), Fla. Stat.; §§ 3.0 and 5.1 Fishhawk Community Development District Rules of Procedure; and §§ 3.0 and 5.1 Fishhawk Development District II Rules of Procedure.
The Districts do not meet the definition of “agency” as set forth in Subsections 120.52(1) and 120.57(3), Florida Statutes. Thus, Subsection 120.57(3), Florida Statutes, is not applicable in this case. However, based on the circumstances of this case, the results would be the same if Subsection 120.57(3), Florida Statutes, was applied.
Subsection 190.033(3), Florida Statutes, requires community development districts to procure by competitive solicitation contracts in excess of $150,000.00 for “maintenance services for any district facility or project.” This statute requires each district to adopt rules, policies, or procedures “establishing competitive solicitation procedures for maintenance services.” The Districts have adopted rules governing the procurement of maintenance services.
The purpose of competitive procurements is succinctly stated in Wester v. Belote, 138 So. 721, 723-724 (Fla. 1931).
[T]he object and purpose of [competitive procurements] is to protect the public against collusive contracts; to secure fair competition upon equal terms to all bidders; to remove not only collusion but temptation for collusion and opportunity for gain at public expense; to close all avenues to favoritism and fraud in its various forms; to secure equal advantage to all desiring to do business with the [public body], by affording an opportunity for an exact comparison of bids.
In Hotel China & Glassware Company v. Board of Public Instruction of Alachua County, 130 So. 2d 78 (Fla. 1st DCA 1961), the court set forth the standards for review of a public procurement.
Competitive bidding statutes are enacted for the protection of the public. They create a system by which goods and services required by public authorities may be acquired at the lowest possible cost. The system confers upon both the contractor and the public authority reciprocal benefits, and exacts from each of them reciprocal obligations.
The bidder is assured fair consideration of his offer, and is guaranteed the contract if his is the lowest and best offer received.
The principal benefit flowing to the public authority is the opportunity of purchasing good and services required by it at the best price obtainable. Under this system, the public authority may not arbitrarily or capriciously discriminate between bidders, or make the award on the basis of personal preference.
Greenbriar alleges in its formal written protest that it should be awarded the contract because it is the lowest qualified, responsive, and responsible bidder and because the Districts “engaged in the negotiation of pricing, revisions of quantity take-offs and scope modifications by the Districts with Cornerstone following receipt of the bids submitted in response to the RFP, in violation of applicable law.”
Although the RFP required the board members to evaluate the proposals received using the evaluation criteria in the RFP, the RFP did not specify that the contract would be awarded to the highest ranking bidder. The RFP provided that the contract would be awarded to the lowest responsive and responsible bid/proposal. Section 4.3 of the Districts’ Rules of Procedure requires that contracts for maintenance services be awarded to the lowest responsive and responsible bidder.
Based on the definitions contained in Section 4.1 of the District’s Rules of Procedure, the lowest responsive and responsible bid or proposal is one which conforms in all material respects to the specifications and conditions of the solicitation documents and the Districts’ Rules of Procedure; contains cost components which are appropriately balanced; is submitted by a firm capable and qualified to perform the contract requirements; is submitted by a firm with the integrity and reliability to assure good faith performance; is responsive
to the solicitation documents as determined by the Districts’ boards; and is the lowest cost to the Districts.
The RFP was for a lump sum contract. The bidders were to break down the services on a monthly basis for the purpose of determining “the monthly maintenance of the landscaped areas.” The lump sum was for all the services listed in the scope of services of the RFP, including the mulching and the planting of annuals. The winning contractor would have been required to provide the amount of mulch needed to provide a three-inch coverage at all times and to replace all the mulch at least once a year no matter the amount of mulch that it took to meet that specification. The same is true of the planting of the annuals. The RFP provided that there would be four rotations of annuals per year and that the annuals were to be in four-inch pots and planted at ten-inch centers in staggered rows. The 15,000 annuals per rotation was an estimate of the number of annuals that would be needed. However, the contractor would have been required to supply whatever number of annuals were necessary to meet the specifications of four-inch pots planted at ten-inch centers in staggered rows.
There was no need to delete the mulch from the bids for the purpose of evaluation. The low bidder was to be based on the lump sum bid. The Districts acted arbitrarily when they
deleted the mulch from the bids. That action was not supported by facts or logic.
Based on the RFP and the Districts’ Rules of Procedure, the lowest responsive and responsible bidder was Greenbriar. There was no evidence presented to demonstrate that Greenbriar was not a responsive and responsible bidder. Based on the board members’ evaluations, Cornerstone may have been more qualified than Greenbriar, but the RFP did not require the contract be let to the most qualified bidder. If the Districts had wanted to award the contract to the most qualified bidder taking price into consideration, the RFP would have to be written to allow that scenario, and, more importantly, the Districts’ Rules of Procedure would have to be amended to allow such a procedure.
The instant case is similar to the situation described in City of Sweetwater v. Solo Construction Corp., 823 So. 2d 798 (Fla. 3rd DCA 2002). In City of Sweetwater, the invitation to bid indicated that the contract would be awarded to the lowest responsible bidder. However, the bid review committee proceeded to award the contract to the most responsible bidder, which was contrary to the bid documents and to the City Code. The court in City of Sweetwater found that the City’s decision to award
the contract to the most responsible bidder was arbitrary and capricious. The court stated:
In Decarion v. Monroe County, 853 F. Supp. 1415 (S.D. Fla. 1994) the United States District Court for the Southern District of Florida defined arbitrary and capricious for substantive due process purposes to include acts taken with improper motive, without reason, or for a reason which is merely pretextual. The City of Sweetwater’s actions in attempting to award the contract to the most responsible bidder as opposed to the lowest responsible bidder, demonstrates that the attempted award was made without reason, or for a reason that is merely pretextual in that it is devoid of any legal basis. Accordingly, the City’s decision to award the contract to United Engineering Corporation was arbitrary and capricious and based upon criteria that was neither included in the bid documents nor clearly defined in any manner whatsoever.
Id. at 802.
The Districts’ clearly erred when they removed the mulch in determining the lowest responsible and responsive bidder. As stated by the court in Emerald Correctional
Management v. Bay County Board of County Commissioners, 955 So. 2d 647, 653 (Fla. 1st DCA 2007), “[A] public body is not entitled to omit or alter material provisions required by the RFP because in doing so the public body fails to ‘inspire public confidence in the fairness of the [RFP] process.’ State, Dep’t of Lottery v. Gtech Corp., 816 So. 2d 648 (Fla. 1st DCA 2001).” The mulch was a material provision of the RFP. Section I of the
RFP provides that the “scope of work shall include mulching.” There is no indication in the RFP that mulching was an add-on service which the Districts could include or delete from the contract.
Cornerstone’s lump sum bid was not the lowest bid.
With the deletion of the mulch for evaluation purposes, Cornerstone’s bid was the lowest bid. However, based on a review of the audio tape made of the meeting of the Districts’ board members in which the members voted to award the contract to Cornerstone, mulch would be added back to the contract either as a negotiated number of yards of mulch or as an add-on based on the unit price of mulch contained in Cornerstone’s bid.
Thus, it is not known whether Cornerstone’s final contract amount would be the lowest. The Districts’ actions of deleting the mulch for evaluation purposes and then adding the mulch back for the purpose of negotiation was irrational and not supported by logic. It is contrary to competition.
The Districts failed to follow their own rules relating to the procurement of maintenance services by failing to award the contract to the lowest responsive and responsible bidder. The Districts failed to follow the RFP, which required the contract be let to the lowest responsive and responsible bidder. Such actions are irrational and without logic.
The sole relief that an administrative law judge can provide is a recommendation that the Districts sustain the protest of Greenbriar. As the courts have noted, it is left to the sound discretion of the procuring entity to determine whether to proceed with the current procurement or reject all bids and start over. Procacci v. Dept. of Health and Rehabilitative Services, 603 So. 2d 1299 (Fla. 1st DCA 1992); Moore v. Dept. of Health and Rehabilitative Services, 596 So. 2d 759 (Fla. 1st DCA 1992); Courtenay v. Department of Health and Rehabilitative Services, 581 So. 2d 621 (Fla. 5th DCA 1991).
Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered sustaining the protest of Greenbriar.
DONE AND ENTERED this 11th day of September, 2008, in Tallahassee, Leon County, Florida.
SUSAN B. HARRELL
Filed with the Clerk of the Division of Administrative Hearings this 11th day of September, 2008.
1/ Unless otherwise indicated, all references to the Florida Statutes are to the 2008 version.
Margaret M. Craig, Esquire Biff Craine, Esquire
Bricklemyer Smolker & Bolves, P.A.
Ronald W. Sikes, Esquire Sikes and Van Der Rlet, PLLC
Mary M. Clapp, Esquire John H. Rains III, P.A.
