The Issue The issues are whether Respondent committed the several violations of Sections 489.129(1)(h)2.,(h)3.,(j),(k), and (n), Florida Statutes (1997), for the reasons stated in the respective Administrative Complaints and, if so, what, if any, penalties should be imposed. (All chapter and section references are to Florida Statutes (1997) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for regulating the practice of contracting. Respondent is licensed as a certified general contractor pursuant to license number CG C059414. At all relevant times, Respondent was the qualifying agent for Fred T. Garrett Construction, Inc. ("FTG"). As the qualifying agent, Respondent was responsible for all of FTG's contracting activities in accordance with Section 489.1195, Florida Statutes. Respondent failed to obtain a certificate of authority for Fred T. Garrett Construction, Inc., as required by Section 489.119(2), Florida Statutes. The St. Cyr Case On or about August 21, 1998, Respondent entered into a contract with Louis L. St. Cyr to construct an addition to the residence located at 201 South Bel Air Drive, Plantation, Florida. The contract price was $50,000. Although Mr. St. Cyr paid $2,500 to Respondent, Respondent failed to commence work and canceled the project, thereby abandoning it without just cause and without proper notification to Mr. St. Cyr. The contract did not permit Respondent to keep the $2,500 paid by Mr. St. Cyr, and Respondent failed to refund the payment within 30 days after abandonment. Out of the $2,500 he received from Mr. St. Cyr, however, Respondent paid $1,600.00 to the architect before abandoning the project. Thus, the net amount that Respondent owes to Mr. St. Cyr is $900. Petitioner incurred a total of $1,092.28 in investigative costs relating to the St. Cyr case. The Forney Case On May 22, 1998, Respondent, who was doing business as FTG, entered into a contract with Mr. Warren Forney for the construction of a two-bedroom, one-bath addition to the residence located at 1698 Northeast 33rd Street, Oakland Park, Florida. The contract price was $32,500. The contract with Mr. Forney did not contain a written statement explaining the customer’s rights under the Construction Industries Recovery Fund, as required by Section 489.1425(1), Florida Statutes. On July 7, 1998, Respondent obtained permit number 98-050297 from the Oakland Park Building Department. Construction commenced on or about July 7, 1998, and continued sporadically until October 29, 1998, when Mr. Forney dismissed Respondent for failure to timely complete the project. The Oakland Park Building Department issued notices of violation against the project on August 3, September 11, and October 14, 1998, for various building code violations. Mr. Forney was forced to obtain a homeowner’s permit and subsequently hired a subcontractor to complete the work. Mr. Forney paid Respondent approximately $29,250 before relieving Respondent of his duties. To complete the project, Mr. Forney paid a total of $48,746.52, which was $15,396.52 over and above the original contract price. Petitioner incurred a total of $2,190.78 in investigative costs relating to the Forney case. The Kong Case In or around January 1998, a contractor named Lakeview Concepts hired Respondent to perform demolition work for the Kong dry cleaning store project on the property located at 5171 South University Drive, Davie, Florida. On or about June 17, 1998, permit 98-00002349 was issued to Respondent to perform alterations on commercial property located at 5171 South University Drive, Davie, Florida. Respondent, however, did not yet have a contract with the owner for this work. The next month, on or about July 30, 1998, Respondent, who was doing business as FTG, entered into a contract with Shek Kong to complete the dry cleaning store project at 5171 South University Drive, Davie, Florida, for the contract price of $22,300. Shek Kong made payments to Respondent totaling $16,000. Respondent’s work was of poor quality, however, and on or about November 6, 1998, he ceased work, though the project had not been completed. On or about November 14, 1998, Douglas Frankow, license number CB C052960, gave Mr. Kong an estimate of $20,562 to complete the project. Thereafter, on or about June 30, 1999, Mr. Kong contracted with George Settergren, another licensed contractor, to complete the project for a contract price of $27,956. On December 9, 1999, in Case No. 98-020065 08, the Circuit Court, Seventeenth Judicial Circuit, Broward County, Florida, rendered a Final Judgment against Respondent and in favor of Mr. Kong. This judgment awarded Mr. Kong the total amount of $28,693.30, plus 10 percent interest per annum. Petitioner incurred a total of $2,502.78 in investigative costs relating to the Kong case.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Construction Industry Licensing Board enter a Final Order finding Respondent guilty of violating Sections 489.129(1)(h)2., (h)3., (j), (k), and (n), Florida Statutes, imposing administrative fines in the aggregate amount of $3,700, assessing investigative costs in the aggregate amount of $5,785.84, placing Respondent's license on probation for a period of four years from the date the Final Order is entered by the Board, and awarding payment of restitution to each customer as follows: (1) to Warren Forney, the amount of $15,396.52; (2) to Shek Kong, satisfaction of the unpaid civil judgment in the amount $28,693.30, plus 10 percent interest accrued thereon; and (3) to Louis L. St. Cyr, the amount of $900. DONE AND ENTERED this 15th day of February, 2002, in Tallahassee, Leon County, Florida. _________________________________ JOHN G. VAN LANINGHAM 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 2002.
The Issue The issue is whether Respondent's proposed award of a portion of Bid No. 99-79 for retread tire services to Dave Howell Tires was arbitrary and capricious, as alleged by Petitioner.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Respondent, Escambia County Utilities Authority (Authority), is a local governmental body governed by Chapter 92- 248, Laws of Florida. The Authority manages and operates certain utility systems within Escambia County, Florida, and areas adjacent thereto. It is governed by a board consisting of five elected members. To assist it in carrying out its duties, the Authority has adopted the Escambia County Utilities Authority Code (Code), which contains various regulations, including Chapter 13, pertaining to Purchasing Procedures. Pertinent to this controversy are Sections 13-2(b)(1), 13-2(d), and 13-12, which authorize the Authority to accept or reject bids, to separate bids into more than one part, and to give preference to local vendors, respectively. By public advertisement made on September 16, 1999, the Authority solicited sealed proposals for Bid No. 99-79 for the supply of new truck tires and retread services for its sanitation truck fleet. The contracting period would run for two years. Such proposals were to be filed by interested vendors no later than 2:00 p.m., Thursday, September 30, 1999. The bid specification identified the new tires and retread services as separate items, meaning that each could be awarded to separate bidders, as authorized by Section 13-2(d) of the Code. The bid also provided that the Authority "reserved[d] the right to waive informalities in any bid; to reject any and all bids in whole or in part; and to accept the bid[s] that in its judgment is the lowest and most responsible." In response to that invitation, four vendors, including Petitioner, Eagle Tire & Service Center (Eagle), and Dave Howell Tires (Dave Howell), located in Milton and Pensacola, Florida, respectively, timely submitted sealed proposals. Eagle was found to have the lowest dollar bid for both items. On the retread portion of their responses, Eagle's bid was for $83,100.00, while Dave Howell's bid was for $83,934.36, or a difference of slightly more than $900.00. At issue in this case is the retread portion of the bid. In its proposal, Eagle offered to supply specially engineered Goodyear retreading from its facility in Atmore, Alabama, some 45 minutes north of Pensacola. On the other hand, Dave Howell, whose facility is located in Pensacola, offered to use Bandag rubber on its retreads, which is another widely- recognized retread brand. According to the Authority's director of sanitation, Jerry Moore (Moore), he saw no difference in the quality of the two products. Bid proposals are first reviewed by the department head who is directly affected by the solicitation; that individual makes a recommendation to the Finance Advisory Committee (Committee), which then presents its recommendation to the Authority. The Committee is made up of seven members, including two members of the Authority (Dale Perkins and George Watson) and five appointed citizens. In this case, the bids were opened and reviewed by Moore, the director of sanitation. On the afternoon of October 19, 1999, the Committee reviewed Moore's recommendation regarding the award of a contract. The Committee unanimously accepted Moore's recommendation that Petitioner, the lowest bidder, be awarded a two-year contract for both new and retread tire services. During the course of the Committee meeting, representatives of both Eagle and Dave Howell spoke to the Committee in support of their respective proposals. In addition, Dr. Larry N. Walker (Dr. Walker), a member of the Authority, appeared before the Committee to make comments favorable to Dave Howell. Among other things, Dr. Walker made the following statements: I come before you as something of a partisan today. I'm a friend of Dave Howell. I buy all my tires from his store. [B]ecause of conversations I've had with him and other input . . . this is one of those instances where we will actually come out ahead if we were to select the higher bid. I was not asked, t but it was] suggested by Mr. Howell that I call someone at the Escambia County School Board and ask them about their experience with Dave Howell Tires, his retreads, and I called Jerry Watson, one of the assistant superintendents, and Mr. Watson just was, was just very effusive in his compliments of the tires saying that their [tires were] far better than they had gotton before from the previous vendor. That they last much longer. They very seldom, that they don't start tearing up as quickly so that the, they say that when you have school bus tires starting to shred on the edges, the retread starts shredding and stuff, that, that you'll have parents calling, complaining, that, hey, the tires on my child's school bus look terrible. And said we don't, we just don't get those calls, and so in short he was very full of praise for the product produced by Dave Howell. It is a fact too that Dave Howell Tires is a local employer and contributes to our local economy and I think that's worth considering. I have had more than a few friends who submitted bids with ECUA contracts over the years and I've never stood up and made a speech like this before for any of them nor have I ever done it for Mr. Howell before. But in this particular instance when the dollar figures are this close, I think the points that, the points that I have raised have, have impressed me at any rate. [I]n short, this is a very close bid and I think there's some legitimate reasons for considering going with Mr. Howell's bid [which] is a better bid even though it's not the lowest. Despite the recommendation of Dr. Walker, the Committee rejected by a 5-2 vote a motion by Dale Perkins to award the retread portion of the contract to Dave Howell. When these comments were made, Dr. Walker was running for a term as County Commissioner. He had accepted a contribution of $300.00 from Dave Howell on August 1, 1999. In addition, Dave Howell made another $250.00 contribution on October 4, 1999. As required by law, all contributions were disclosed by Dr. Walker in his campaign treasurer's reports filed with the local Supervisor of Elections. The first contribution was disclosed by Dr. Walker in a quarterly report filed on October 13, 1999, or before the Committee meeting at which he spoke, while the second was disclosed in a later-filed quarterly report. During his appearance at the meeting, however, Dr. Walker did not disclose either contribution. On October 28, 1999, the Authority met to consider the award of a contract under Bid No. 99-79. At that meeting, Moore, speaking on behalf of the Committee, recommended that the contract for both items be awarded to Eagle. Dave Howell was also present at the meeting and was given an opportunity to make a brief presentation. He described his product (Bandag) as being "superior" to the other proposals, and pointed out that he did retreading for the Escambia County School Board (School Board). In addition, he mentioned the fact that he used a NDI (non-destruct imager) machine for scanning tire casings which would "save money" for the Authority. Finally, he pointed out that he was a local vendor who employed 39 persons, all of whom were residents of Escambia County. At the same meeting, Dr. Walker again spoke on behalf of Dave Howell saying that "Howell Tires has the . . . best bid"; that it would "better . . . to go with Dave Howell tires because I do believe that the tires, the retread tires are a better tire, that will give longer wear, have fewer failures and therefore that we will come out ahead . . . in the long run"; that "I do believe that this is the better contract and part of that comes from talking with Mr. Jerry Watson who . . . said the School Board is absolutely delighted with the retreads from Dave Howell Tires"; and that "Mr. Howell insists that [Eagle's machine] can't be as good as his [NDI machine]." At the Authority meeting, another member produced a letter dated October 26, 1999, drafted by School Board Deputy Superintendent Jerry Watson (Watson), which stated in part that Watson understood that Dave Howell's service to the School Board under an existing contract "has been excellent"; that the firm provided "dependable, quality service"; that Dave Howell "understands that safety is of utmost importance to [the School Board]"; and that he "would recommend the excellent service of Dave Howell Tires." As it turned out, the letter had been solicited from Watson by Dr. Walker at the suggestion of Dave Howell. The letter was read in full at the meeting at the urging of Dr. Walker. Thereafter, the Authority unanimously voted to split the contract and award the new tire business to Eagle and the retread portion of the contract to Dave Howell. A splitting of the contract was permissible under Section 13-2(d) of the Code. Eagle did not send a representative to the Authority meeting believing that after the unanimous vote by the Committee to award Eagle the contract, it had no reason to attend. Had a representative attended, however, he would have been given an opportunity to speak. Eagle later learned in a telephone call from Moore that the retread portion of the contract had been given to Dave Howell. This appeal ensued. In its timely-filed appeal, Eagle contends that the award of the retread part of the contract "was arbitrary, capricious, unlawful, contrary to the Authority's rules and regulations, contrary to the substantial weight of the evidence and applicable [Authority] bidding procedures, deprived [P]etitioner of his substantial rights, and was unconstitutional." More specifically, Petitioner contended that the contract was awarded to Dave Howell "based on improper, irrelevant, incompetent, and highly prejudicial procedures, statements, events, and the personal interest of one or more board members"; that the Authority "improperly applied a 'local preference' standard"; that a board member (Dr. Larry Walker) "improperly, unethically, and in direct violation of his oath of office and state law engaged in extensive ex parse communications, personal contacts, and financial transactions with and in behalf of Howell"; and that Dr. Walker did not disclose the fact that "Howell had paid a substantial sum of money to Walker for the latter's political campaign." More specific findings regarding these contentions are made below. Local vendor preference Section 13-12 of the Code prohibits favoritism for "local bidders" except in the narrowly defined circumstance where a "rapid response time" is needed in the case of a service contract. Bid No. 99-79 did not contain a local preference provision. While the Code does not define the term "local bidders," the evidence supports an inference that it applies to bidders who are located in Escambia County and the immediate area. During the discussions regarding Dave Howell at the Authority's meeting, Dr. Walker referred to Dave Howell as a local vendor, and another member, Dale Perkins, made reference to Dave Howell's local residency, the residency of his work force, and the taxes they presumably paid to Escambia County. A third member, Elvin McCorvey, also indicated that he was "inclined to agree . . . about doing business with the local vendor." In light of the foregoing comments, the Authority's General Counsel, Mr. Kievit, twice explained to the Authority members the local preference policy. Specifically, after two members expressed their desire to keep business "at home," Mr. Kievit cautioned the members against utilizing local vendor preference as a basis for awarding the contract in this instance. Testimony by Authority members at hearing confirms that this advice was accepted and that their decision was based on other criteria, including Dave Howell's "convincing" and uncontradicted presentation; his record of service with the School Board under an existing contract; the assertion that Bandag was a better product; the assertion that most private commercial waste haulers used Bandag tires; and an assertion that over time Dave Howell's NDI machine would save the Authority money. In short, it is fair to conclude that local preference played no role in the members' final votes on the matter. Finally, the member (Perkins) who had unsuccessfully moved that the Committee award the retread portion of the contract to Dave Howell, indicated at that time to the Committee members that his recommendation was not based on the local preference rule. While Petitioner asserts that Dave Howell received special preference as a "local vendor," the more persuasive evidence supports a finding that he did not. Conflict of Interest As noted in earlier findings, Dr. Walker made comments in support of Dave Howell at both the Committee and Authority meetings. This was after Dr. Walker had accepted two contributions totaling $550.00 from Dave Howell for his reelection bid. Except for filing his campaign treasurer's reports with the Supervisor of Elections, Dr. Walker had no other legal or ethical requirement regarding disclosure of contributions. In retrospect, however, Dr. Walker wishes he had done so to avoid any appearance of impropriety. Even so, merely because he had accepted a campaign contribution did not require that Dr. Walker abstain from voting on the contract or prevent him from advocating on behalf of a contributor/constituent. There is no evidence that Dr. Walker received any direct, personal, or financial gain as a result of his vote. Although members have rarely advocated the award of a contract to a particular vendor in prior years, there is no legal or ethical prohibition against a member doing so on behalf of a constituent. There is also no prohibition against a member investigating information about a bidder. In this case, before the contract was awarded, Dr. Walker made inquiry from both Dave Howell and the School Board regarding the quality of the Bandag product; he visited Dave Howell's facility; and he solicited a letter from a School Board representative regarding Dave Howell's service under an existing contract. While he made no similar inquiries regarding Eagle, and in fairness probably should have, Dr. Walker acknowledged that had Eagle contacted him, he would have been happy to meet with a representative of that firm to discuss its product. Finally, the evidence shows that Dr. Walker did not discuss the contract with, or personally solicit the vote of, any other member before the final vote was taken. Dr. Walker, who is the author of a treatise entitled The Florida Municipal Officials Manual, a publication widely used by elected and appointed municipal officials, municipal attorneys, and the Florida League of Cities, had no reason to disbelieve, or question the reliability of, the information he obtained from Dave Howell. Indeed, he simply relied on Dave Howell's representations in advocating on that vendor's behalf. Appearance by Dave Howell at the Authority Meeting As noted earlier, Dave Howell spoke at the Authority meeting on October 28, 1999. Eagle had no representative at that meeting. Eagle suggests that it was inappropriate for a vendor to appear at the meeting at which the contract was awarded; alternatively, Eagle suggests that the Authority should have given notice that vendors could appear and make presentations in support of their proposals. The evidence shows that while it is not a normal occurrence, several times a year a disappointed vendor will appear before the Authority and make a presentation. The Authority's policy is to allow any member of the public to speak, including disappointed bidders. Also, there is no requirement that the Authority inform all vendors that a disappointed bidder intends to make a presentation, or that the successful bidder should make an appearance on behalf of its proposal. Had an Eagle representative appeared at the meeting, he would have been allowed to give a presentation. The Authority violated no rule, Code provision, or statute by allowing Dave Howell to speak at the Authority meeting. Indeed, it is not unusual for a bidder to provide further information regarding its product to the Committee and Authority before a vote is taken, and such action by a bidder does not constitute a modification to its bid package. Was the Final Decision Arbitrary? In its proposed order, Eagle contends that there was no difference in quality between the retreads offered by either vendor. Thus, it argues that any assertion by the Authority members that their votes were based on Dave Howell providing a better quality product is simply a ruse for circumventing the local preference rule, and therefore its decision was not based on adequate facts. The record establishes that both products were of similar quality and reliability and met all specifications. Assertions by Dave Howell that his product was better, that his NDI machine was superior to his competitor's machine and would save the Authority money in the long run, and that virtually all private waste haulers used the Bandag product were not accurate. Indeed, the products were similar in quality, Eagle had a NOT scanning machine which was just as good as the NDI machine and would achieve the same savings, if any, and the amount of use of Bandag tires by other waste haulers was embellished. Moreover, School Board Deputy Superintendent Watson's assertion that Dave Howell provided a better product than did the predecessor contract holder is somewhat puzzling since the prior vendor also used the same Bandag retread. All of these representations were accepted by the Authority, primarily because they were unrebutted, and they formed the factual basis for awarding the contract to Dave Howell. Indeed, at hearing, each Authority member acknowledged that he had no independent knowledge of these matters and accepted without further question the representations made by Dave Howell and Walker. Because the Authority mistakenly relied on invalid assumptions, or representations which were either embellished or incorrect, as a basis for awarding the contract to someone other than the lowest bidder, its decision was not based on facts or logic and was therefore arbitrary.
Conclusions For Petitioner: John C. Barrett, Esquire 5 Calle Traviesa, Pensacola Beach Pensacola Beach, Florida 32561 For Respondent: Robert W. Kievit, Esquire Michael J. Stebbins, Esquire Kievit, Kelly & Odom 15 West Main Street Pensacola, Florida 32501
