Findings Of Fact During October, 1976, and up until the present date, Texgas Corporation has operated a service station in Palatka, Florida, at which motor fuels are offered for sale to the public at large. On October 7, 1976, Paul Rheaume, a petroleum inspector, took a sample of gasoline from one of the pumps at the station in accordance with the Department's regular inspection procedures. The sample was delivered to the Department's mobile chemical laboratory. The sample was found to have a fifty percent evaporated temperature of 246 degrees. A second sample was taken from the tank at the service station. Tests conducted at the mobile laboratory determined that the fifty percent evaporated temperature of that sample was 245 degrees. The sample taken from the tank at the service station was forwarded to the Department's main laboratory in Tallahassee. Tests conducted at that laboratory found the fifty percent evaporated temperature to be 247 degrees. There was no evidence offered at the hearing from which it could be determined that Texgas Corporation knew that the fifty percent evaporated temperature of motor fuel that it was offering for sale to the public was not within the standards set out in the Department's rules and regulations. Texgas Corporation has purchased its fuel for resale from Charter Oil International in Jacksonville, Florida. Texgas Corporation did no intentionally adulterate fuel which it received from Charter Oil. Texgas Corporation offered the fuel for resale in good faith, believing that the fuel was within the Department's standards.
Findings Of Fact Puckett reported a discharge of used oil at its site when it filed an early detective incentive program notification application with DER. Puckett, thus, advised DER that it would clean up its site and apply for reimbursement of the costs of that cleanup in accordance with Section 376.3071(12), Florida Statutes (Supp. 1986). When it received Puckett's application, DER conducted an investigation of the site and determined that a discharge of used automotive crankcase oil had occurred there. DER was advised by Puckett that the discharge had occurred when used automotive crankcase oil was drained into a service bay floor drain. Puckett and the site operator placed the used oil in the drain in the belief that a storage tank was connected to the floor drain to receive and safely store the used oil. Unknown to Puckett, however, the storage tanks previously connected to that floor drain had been removed by a former site owner or operator. The Recommended Order entered by the Hearing Officer contains findings to the effect that Puckett was unaware that storage tanks did not any longer connect with the floor drain in question, in part, at least, because it is the custom and practice in the service station business that used oil collecting persons or entities collect from such storage tanks after the service station hours of operation. Therefore, it was customary for the operator of a service station not to be aware of when used oil was removed from storage tanks. Upon learning that used oil had been spilled at the site due to the lack of a storage tank, where formerly one had been in place, the subject application was filed. DER conducted its site investigation and after it was concluded, on April 16, 1987, issued an order denying reimbursement eligibility to Puckett. DER took this position because it opined that used oil is not "petroleum" or a "petroleum product", as those terms and substances are defined in Subsections 376.301(9)(10), Florida Statutes (Supp. 1986). Puckett then filed a timely petition for administrative hearing as a result of that denial of eligibility. The cause was duly transmitted to the undersigned Hearing Officer for conduct of a Section 120.57, Florida Statutes, formal proceeding. In the discovery phase of that proceeding, requests for admissions were served by Puckett upon DER, in response to which DER admitted that the sole basis for denial of reimbursement eligibility was the fact that the substance discharged was used oil, which, DER contended was not "petroleum" or a "petroleum product". DER, thus, took the position that the used oil in question was beyond the scope of reimbursement eligibility allowed by the "Super Act," the statutory provisions cited above. The cause was duly scheduled for hearing for September 9-10, 1987. Shortly prior to the hearing, on August 31, 1987, DER filed a motion for continuance seeking an opportunity thereby to have time to explore the question of whether Puckett was "grossly negligent" in the maintenance of its facility, which is a ground for disqualification from Super Act reimbursement eligibility. This was an issue which had not theretofore been raised in the proceeding. See Section 376.3071(9)(b)3., Florida Statutes (Supp. 1986). That motion for continuance was denied, as found and discussed in the Recommended Order in the underlying proceeding. The cause then came on for hearing as scheduled on September 9-10, 1987. A motion in limine filed by Puckett was granted at the hearing so as to preclude DER from raising any issue concerning "gross negligence" at hearing. The basis for the ruling was that DER had known of the circumstances surrounding the discharge for nearly one year, but that during the discovery process, DER assured Puckett that its position was that gross negligence would not be an issue in the proceedings and that the sole basis for its denial of the reimbursement application was that the substance discharged, being used oil, was not, in its view, "petroleum" or a "petroleum product". Following the hearing, the Hearing Officer issued the Recommended Order in question finding that used crankcase oil was, indeed, "petroleum", as well as being a "petroleum product", for the purposes of the definitions in the above- cited statutory provisions. It was thus recommended that Puckett be determined to be eligible to apply to DER for reimbursement of the cleanup costs involved. Puckett, 10 FALR at 5540. Certain findings and conclusions made in the Recommended Order are germane to the question of whether DER's actions with respect to the initial and final denial of Super Act eligibility had a reasonable basis in law and fact at the time the agency action was initiated and finally taken in the Final Order. Those findings include the findings in the Recommended Order that used crankcase oil consists of "petroleum", as that term is defined by Section 376.301(9), Florida Statutes (Supp. 1986), with particular emphasis on those findings and conclusions in the Recommended Order, incorporated by reference herein, concerning crankcase oil coming within the definition of "other hydrocarbons" for the reasons delineated in the Recommended Order. Further, DER's own expert witness admitted, and it was found by the Hearing Officer, that the predominant use of used oil is as a fuel, just as is gasoline, diesel, kerosene and certain other grades of fuel oil, which are specifically included in the statutory definition of "petroleum product". See page 20 of the Recommended Order and the transcript of the proceeding below, pages 362-363. It was also established without question that used oil is a "liquid," a "commodity" and a liquid fuel commodity for the reasons delineated in the Recommended Order. It was established further by the record in the proceeding on the merits, and found in the Recommended Order that used oil has no meaningful similarity to the substances specifically, statutorily excluded from the definition of "petroleum product", and that DER has had a policy encouraging the collection and recycling of used oil as a fuel. This was well-known and accepted by DER's own experts before the "policy makers" at DER, who engendered the subject initial agency action, took the position that used oil did not constitute petroleum or a petroleum product. Used oil has not been otherwise regulated as a hazardous waste. DER's interpretation of the statutory definition of "petroleum product" to the effect that the product, as it was initially produced, must be sold or used as a fuel in order to meet that definition, in fact, imposes an additional inconsistent criteria for determining what types of substances are included within the meaning of the term, which criteria is not enunciated in the statute, either expressly or implicitly. DER's restrictive interpretation of the statute further disregards the language of the Super Act. Sections 376.3071(12)(a) and 376.315, Florida Statutes (Supp. 1986), which requires it to give "such liberal construction to the statute as will accomplish the purposes set forth in this subsection", in other words, to promote the cleanup of as many contamination sites as possible. Further, it was established by the record in the proceeding on the merits and concluded in the Recommended Order that the restrictive interpretation of the statute adopted by DER was inconsistent with existing agency policy which encourages used oil collection and recycling and that the interpretation "is clearly not one expressed or reasonably implied on the face of the statute" and "would frustrate the clear, legislative impetus of the Super Act" and is "illogical". More significantly, DER's policy makers responsible for the initial agency action and decision that used oil is not "petroleum" or a "petroleum product" did not take counsel with certain key expert personnel in DER's own used oil section concerning whether used oil is "petroleum" or a "petroleum product" prior to the initial denial of eligibility and the proceeding and hearing before the Hearing Officer. In fact, the policy makers were apparently unaware of facts critical to the subject determination and to the fact that DER's proposed (and, indeed, final) action was inconsistent with agency policy concerning treatment and definition of used oil, which DER's "in- house" experts had been aware of all along. These findings and conclusions in the Recommended Order demonstrate clearly and in detail why DER's initial agency action and position through the conclusion of the hearing, concerning rejection of Puckett's reimbursement eligibility, did not have a reasonable basis in law and fact. Those findings and conclusions appearing at pages 18-36 of the Recommended Order, which has been stipulated into the record of the instant proceeding, are incorporated by reference and adopted in the findings of fact and conclusions of law in this Final Order. Despite the findings and conclusions in the Recommended Order, DER, in its Final Order, ultimately denied reimbursement eligibility. Puckett at page 5505. DER found in its Final Order that Super Act coverage is limited to "incidents related to storage", as opposed to incidents where a contaminant is discarded. DER also found that because Puckett did not have a "petroleum storage system" at the site, the discharge was not "related to storage", despite the facility operator's proven and found intention and belief, when he dumped the product in the floor drain, that he was "storing" the used oil in question. DER acknowledged the Hearing Officer's granting of Puckett's motion in limine, which precluded denial of reimbursement eligibility on "gross negligence" grounds, but stated that it was not denying eligibility on this ground at page 18 of its Final Order. Although DER acknowledged in its Final Order that its denial of eligibility did not depend on a finding of gross negligence, this acknowledgment, which appears to re- state its position, taken in the discovery phase, that gross negligence would not be raised as an issue by DER, and is an apparent acknowledgment of the ruling on the motion in limine, is somewhat belied by the following language from the Final Order: Although my decision to deny eligibility for reimbursement to Puckett does not depend on a finding of gross negligence on the part of Puckett, any site owner who fails to ascertain whether an oil drain fitting on site is actually connected to an operational used oil system now has clear notice that it allows used oil discharges to that drain fitting only at its own peril. It is not appropriate that state funds be expended to remediate contamination caused by reckless disregard for elementary waste disposal regulations. In the future, the department will continue to deny eligibility to any site where contamination has resulted from used oil discharges to land in the complete absence of a used oil storage system. (emphasis supplied) See pages 18 and 19 of the Final Order. Puckett then appealed that denial of reimbursement eligibility. The District Court of Appeals reversed DER, finding as follows: DER's assertion that Puckett's eligibility for cleanup reimbursement of the used oil discharge was dependent on whether storage was involved and whether the used oil would be reused or recycled was never made until the final agency order was entered. These issues were not raised by the pleadings, were not litigated at the hearing, were not considered by the Hearing Officer, and were not considered by the Hearing Officer's Recommended Order. In addition, the pleadings reflect that DER was asked in a written request for admission to admit the following: 'The Department's only basis for denial of Super Act eligibility for Puckett is that the reported discharge was used oil.' DER admitted that statement. This was the only issue created by the pleadings, and it was the only issue tried and determined by the Hearing Officer. DER cannot raise and decide for the first time in the final agency order issues not previously raised or considered. See Puckett, 549 So.2d at 722 (emphasis in original). The Court then remanded the proceeding to DER for entry of an order determining Puckett to be eligible to apply for reimbursement. Puckett also petitioned the appellate court for appellate attorney's fees pursuant to Section 120.57(1)(b)5., Florida Statutes, arguing that the Final Order was a "gross abuse" of agency discretion, a standard for granting of appellate attorney's fees under that statutory provision. The Court denied that motion on the basis that gross abuse of agency discretion had not been demonstrated. Although reliance on issues improperly raised for the first time in the Final Order may not have been a "gross abuse" of agency discretion supportive of an award of appellate costs and fees pursuant to the above- referenced statutory provision, it is found that DER has not justified as reasonable its rejection of eligibility on additional non-litigated or properly raised grounds in the Final Order. Therefore, DER's reliance on the new issues in the Final Order to deny reimbursement eligibility was not "substantially justified". After issuance of the Court's mandate, Puckett filed a petition for costs and fees pursuant to Section 57.111, Florida Statutes, initiating the instant proceeding. DER filed an untimely response conceding that Puckett was a "prevailing small business party" and the other criteria for award of fees and costs provided for in Section 57.111, Florida Statutes, with the exception that it did not concede that its denial of reimbursement eligibility in the related proceeding was not "substantially justified". DER did not dispute that the reasonable amount of costs and fees incurred by Puckett exceeded $15,000.00 nor did it assert that any special circumstances exist which would make an award of costs and fees unjust nor that it was a nominal party only. Since Puckett's petition was not timely responded to and since its Motion for Summary Final Order thereon was not answered by DER, the Hearing Officer issued a Summary Final Order awarding $15,000.00 in costs and fees to Puckett. DER appealed and the First District Court of Appeals reversed the award and remanded the proceedings to the Hearing Officer to consider DER's position on the issue of award of fees and costs, based generally upon the Court's view that DER's non- timely response to the petition for fees and costs should be excused, as more particularly delineated in the Court's opinion in Department of Environmental Regulation v. Puckett Oil Company, Inc., 16 FLW D.926 (Fla. 1st DCA April 3, 1991). The cause involving fees and costs, thus, became at issue before the Hearing Officer once again. In the prehearing filings, the parties limited the issues to that concerning whether DER's action on the reimbursement eligibility question was "substantially justified". On July 30, 1991, a hearing was held on this matter, during which the parties presented their arguments and stipulated that the record in this proceeding would be the record on appeal, including the Hearing Officer's Recommended Order in the reimbursement eligibility case.
Findings Of Fact Since 1984, the Department has been the state agency charged with the responsibility to establish rules and regulate underground pollutant storage facilities in Florida. In 1988, the Legislature added the administration of the newly enacted Florida Petroleum Liability and Restoration Program to the Department's duties. The program was to be established on or before January 1, 1989. The Applicant is the owner of a petroleum storage system in Jacksonville, Florida. Since 1984, it has been subject to the rules regarding underground pollutant storage facilities promulgated by the Department. On September 18, 1989, an odor indicative of possible petroleum contamination was discovered at the site during the installation of monitoring wells. A Discharge Notification Form was sent to the Department by the Applicant on October 23, 1989. The form advised that there were no leaks in the system. It was suggested that the odor may have resulted from surface spill at the site over a number of years. In response to the notification, an inspection of the site was completed by the Department on December 5, 1989. The inspection revealed the following on-site violations: Registration requirements were not being met. The forms had not been updated to include the presence of monitoring wells and overfill protection at the facility. Two underground tanks had not been properly abandoned. Inventory and reconciliation records had not been properly maintained, as required by rule since 1987. This violation was reviewed, and discussed in detail with on-site representatives of the Applicant. The monitoring wells were not installed by the time deadlines set forth in the Department's rules regarding stationary tanks. Since the wells were installed in September 1989, samples had not been taken for visual signs of petroleum contamination. The purpose of the system is to allow the owner of the storage tanks to learn if there is a leak in the tanks that can be quickly controlled to limit contamination. The day after the inspection, the Applicant applied for a determination of eligibility for participation in the restoration coverage portion of the new Florida Petroleum Liability Insurance and Liability Program. An affidavit was signed stating that all of the Department's rules regarding stationary tanks were being complied with by the Applicant. Six days after the inspection, the Department sent the Applicant written notice of the results of the inspection. The Applicant was given time frames and instructions for correcting the listed violations that could be corrected. A contamination assessment and clean up were also required in the letter. This letter did not address the issue of eligibility for the restoration funding program because that was a matter unrelated to the inspection results. On March 7, 1990, the Department determined the facility was ineligible for participation in the restoration funding provided by the Florida Petroleum Liability and Coverage Program. The following reasons were given: Failure to properly abandon underground storage tanks, pursuant to Section 17-61.050(3)(c), Florida Administrative Code. Failure to maintain inventory records, reconciliations, and significant loss/gain investigation as per Section 17-61.050(4)(c), Florida Administrative Code. Failure to install monitoring system and overfill protection by the dates set forth in Section 17-61.06(2)(c)2, Florida Administrative Code. Failure to properly monitor leak detection system, pursuant to Section 17-61.050(5)(c), Florida Administrative Code. The 10,000 gallon fuel oil tank and the 3,000 gallon waste oil tank present at the facility were abandoned in March 1990. The notice issued by the Department after its inspection in December 1989, gave the Applicant sixty days after receipt of the notice to properly abandon the tanks. The Applicant substantially complied with this requirement after the written notice was received. Although the Applicant failed to maintain the inventory records, reconciliations, and significant loss/gain investigations required by the Department rules, some of these violations had been corrected prior to the Department's inspection in December 1989. Correct inventory recordkeeping was discussed during the inspection, and the need to immediately implement the proper recordkeeping practices was emphasized in the post-inspection notice of violations. All of the recordkeeping violations were not cured until August 1990. The records kept by the Applicant during the noncompliance period from 1984 to August 1990, did not provide a substantially equivalent degree of information regarding possible leak detection or prohibited discharges as the required recordkeeping procedures. Two underground stationary storage tanks on the site have been part of the Applicant's petroleum storage system since 1970 and 1975, respectively. The monitoring wells and overfill protection for these tanks should have been in place by December 31, 1987. Neither monitoring system was installed until September 1989. The Applicant began the contract negotiations for installation in September 1988. The Applicant did not demonstrate that the facility contained an alternative procedure between December 31, 1987 and September 1989, that provided a substantially equivalent degree of protection for the lands, surface waters, or groundwaters of the state as the established requirement for monitoring wells and overfill protection. In December 1989, the Department's notice advised the Applicant that the monitoring wells should be sampled monthly for visual signs of petroleum contamination. Since April 1990, the Applicant has been completing the monthly sampling in the monitoring wells as part of its leak detection system, as required by the Department's rule regarding underground stationary tanks.
Recommendation Accordingly, it is RECOMMENDED: That the Department enter a Final Order denying Petitioner's application for restoration coverage in the Florida Petroleum Liability and Restoration Program at the Jacksonville location. DONE and ENTERED this 28 day of December, 1990, in Tallahassee, Leon County, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this _28_ day of December, 1990. APPENDIX TO RECOMMENDED ORDER The proposed findings of fact submitted by Petitioner are addressed as follows: Rejected. Improper interpretation of law. As for the facts in the first sentence, they are accepted. See HO #8. Rejected. Irrelevant. See HO #9. Rejected. Contrary to fact. See HO #9 and #11. Rejected. Contract to fact. See HO #11. Rejected. Contrary to fact. See HO #12 and #13. Rejected. Contrary to fact. Improper shifting of duty ad legal responsibility. Rejected . Improper application of law. The Respondent's proposed findings of fact are addressed as follows: Accepted. Accepted. Accepted. Accepted. See HO #8. Accepted. See HO #8. Accepted. See HO #3. Accepted. See HO #3. Accepted. See HO #3. Accepted. See HO #5. Accepted. Accepted. See HO #4. Accepted. See HO #4. Accepted. Accepted. See HO #6. Accepted. See HO #4 and #6. Accepted. See HO #4 and #6. Accepted. Accepted. Accepted. See HO #4 and #9. Accepted. Accepted. See HO #4 and #9. Accepted. Accepted. See HO #9. Accepted. See HO #4 and #10. Accepted. Rejected. Contrary to fact. See HO #10. Accepted. Accepted. Accepted. See HO #10. Accepted. See HO #3 and #12. Accepted. Accepted. See HO #13. Accepted. Accepted. See HO #6. Accepted. See HO #4 and #6. Accepted. See HO #6. Accepted. Rejected. Not established by evidence. See HO #6. Accepted. Accepted. Accepted. Accepted. See HO #7. Accepted. Accepted. COPIES FURNISHED: William Chadeayne, Qualified Representative 8933 Western Way, Suite 16 Jacksonville, Florida 32256 Janet E. Bowman, Esquire Assistant General Counsel Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400 Dale H. Twachtmann, Secretary Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation 2600 Blairstone Road Tallahassee, Florida 32399-2400
Findings Of Fact Petitioner deals in fuel oil. It buys fuel oil from several wholesalers and sells it at retail, mainly to people who use fuel oil for heating purposes. Petitioner operates a low pressure pump on its premises for pumping fuel oil from a ten thousand gallon tank into five gallon cans and similar containers brought to the pump by its customers. At peak demand, the ten thousand gallon tank supplying this pump had to be refilled twice a week. In general, however, during the cold season, the tank was refilled only every other week or less often still. No fuel oil was ever pumped from the low pressure pump into any motor vehicle. Petitioner also maintained two big dispersing pumps for filling its tank trucks with fuel oil and a gasoline pump for fueling the truck engines. The trucks were equipped with pumps for emptying their fuel oil tanks, which pumped at the rate of forty gallons per minute. Petitioner advertised home delivery of fuel oil in the newspaper, and dispatched its trucks in response to the resulting telephone calls. In addition to delivering fuel oil for home heating purposes, petitioner occasionally sold larger quantities to fellow fuel oil dealers and to other commercial concerns. In February, March and April of 1974, petitioner sold particularly large quantities of fuel oil to Tampa Electric Company. During the period covered by the audit, petitioner sold from 50,000 to 70,000 gallons to other fuel oil dealers. Petitioner did not get resale certificates from its commercial customers, but Mr. Hayes, until recently petitioner's proprietor, required dealers to show him their dealer's licenses and he copied the dealers' license numbers onto the invoices. In March of 1976, Mr. Donald E. Snyder, a tax examiner in respondent's employ, began auditing petitioner's books. At this time most of petitioner's records were in Orlando in the custody of the Federal Energy Administration. Subsequently, some, but not all, of these records were returned to petitioner. In an effort to reconstruct records which were unavailable, Mr. Snyder contacted petitioner's suppliers and examined their records of sales to petitioner. On January 2, 1977, Mr. Hayes and Mr. Snyder took an inventory of petitioner's fuel oil. Mr. Snyder used this information as well as what records petitioner was able to furnish him, and concluded that petitioner had sold, during the audit period, two thousand four hundred seventy-nine (2,479) gallons of fuel oil to persons or concerns who were users of fuel oil for non-exempt purposes. Written on the invoices evidencing these sales, however, was the phrase "non-road use" or words to that effect. The limited materials with which he worked gave Mr. Snyder no indication as to the disposition of an additional two hundred fifty- eight thousand three hundred forty (258,340) gallons of fuel oil. Although Mr. Snyder approximated petitioner's sales month by month, these figures were unreliable because of certain erroneous assumptions, notably the assumption that petitioner never used additional storage facilities.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent abandon its notice of proposed assessment, as revised. DONE and ENTERED this 10th day of January, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Mr. James P. LaRussa, Esquire Flagship Bank Building, Suite 416 315 East Madison Street Tampa, Florida 33602 Mr. Cecil L. Davis, Jr., Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304
Findings Of Fact At all times relevant hereto, ADI and Youngquist Brothers were licensed well drilling contractors and qualified to bid on Bid Request No. 9237 issued by Southwest Florida Water Management District ("SWFWMD" or "District"), Respondent. On July 23, 1992 the District mailed packets for bid requests to ADI, Youngquist Brothers, Inc., and others. On August 12, 1992 a mandatory pre-bid meeting for Bid Request No. 9237 was conducted at the District office. Representatives of ADI and Youngquist attended the pre-bid meeting. Responses to Bid Request No. 9237 were opened by the District on August 26, 1992. ADI's bid was for $159.50 per hour, and Youngquist's bid was for $200.00 per hour. Greg McQuown, District Manager of the Geohydrologic Data Section prepared the technical portions of this bid request and, following the bid opening, visited the facilities of both ADI and Youngquist as provided in Section 2.1.1.19 of the bid specifications to observe the equipment they proposed to use. Request for Bid No. 9237 requested bidders to submit an hourly rate for furnishing an experienced crew, the drilling rig and all equipment, materials, fuel and services necessary for the proper operation and maintenance of the drilling rig to be used in drilling numerous monitoring wells as directed by the District. Although the bid is for one year, it is renewable for two additional years. Drilling contracts on an hourly basis are not frequently used in water well drilling contracts, but for this project, this type contract appeared preferable to the District due to the wide variations in well depths and drilling conditions. Speed of drilling is a very significant element in an hourly rate drilling contract. Section 1.17 of the general conditions of Request for Bid No. 9237 provides in pertinent part: If bids are based on equivalent products, indicate on the bid form the manufacturer name and number. * * * The bidder shall explain in detail the reason(s) hoe (sic) the proposed equivalent will meet the specifications and not be considered an exception thereto. Bids which do not comply with these requirements are subject to rejection. Bids lacking any written indication of intent to quote an alternate brand will be received and considered in complete compliance with the specifications as listed on the bid form. Section 1.11 of the general specifications provides: 1.11 BID DATA. Bidders shall furnish complete and detailed Bid Data as specified on the Request for Bid Form. Bids furnished without data, or incomplete submissions may be rejected at the discretion of the District. Exceptions to the requirements, if any, shall be noted in complete detail. Failure by the bidder to detail each exception to a bid specification or a requirement results in the bidder being required to meet each specification or requirement exactly as stated. Section 2.2.2.3 under Contractor Equipment and Services (exhibit 2) lists the following equipment: API 3 1/2 inch drill pipe, no hard banding, square shoulders acceptable, 1,400 feet. API 4 3/4 inch steel drill collars 10,000 lbs. (approximately 200 feet). API 7 to 7 1/2 inch steel drill collars, 13, 500 lbs. (approximately 100 feet) are acceptable equivalent. Rig equipped with hydraulic torque equipment for drill collars and drill pipe. The drilling contemplated by this Bid Request is reverse air drilling in which an air hose is inserted inside the drill pipe and air from this hose facilitates a removal of the material through which the drill bit penetrates. ADI's Bid Proposal (exhibit 4) under Equipment List provides in pertinent part: Drill stem 4 1/2" flush joint 2 1/8 ID Collars 2 @ 3 1/2" X 20' 1 @ 6" X 20' -2 @ 7 3/4" X 30' * * * Above listed tools available, we will make available any other specified tools. The inside diameter (ID) of API 3 1/2 inch drill pipe is 2 11/16 inches. This size pipe will allow use of a 3/4 inch air hose and still provide adequate area for the drilled material to be excavated from the hole being drilled. Further, this Bid Request proposed the use of 6 inch PVC casing to be provided by the District. Thus, the drill pipe and drilling equipment needed to pass through this size casing. The function of the drill collar is to provide weight on the drill bit to insure a straight hole as well as increase the speed of drilling. All else being equal (especially speed of rotation of drill bit) the greater the weight the faster the drilling. Standard API 3 1/2 inch drill pipe has an outside diameter of 4 3/4 inches and is the largest standard drill pipe that can be used in the 6 inch casing here proposed. Not only does the 4 1/2 inch drill pipe proposed for use by ADI have a smaller ID than API 3 1/2 inch drill pipe specified, but also this is not a constant ID but constricts to this 2 1/8 inch ID where pipe sections are connected. This constriction can increase the turbulence in the pipe and slow the removal of the drilled material. The cross section area of a 2 1/8 inch ID pipe is 5/8 the area of a 2 11/16 inch ID pipe. Accordingly, drilling with the API 3 1/2 inch pipe can be much faster than with a drill pipe with a 2 1/8 inch ID due solely to the greater volume flowing through the 3 1/2 inch pipe. The 4 1/2 inch drill collars listed in ADI's bid proposal weighed in at 1100 pounds in lieu of the 4 3/4 drill collars and 10,000 pounds specified in Request for Bid. ADI contends that by adding the words "above listed tools available, we will make available any other specified tools" they clearly intended to provide all equipment demanded by the District. This is the type language which leads to contract disputes. All of Petitioner's witnesses testified that they intended to commence the work, if awarded the contract, with the equipment listed on their bid proposal. On an hourly drilling contract this equipment is inadequate. All of these witnesses also testified they would use the equipment listed in the Request for Bid specifications if required to do so by the District. Neither Dave Robinson, Petitioner's superintendent who prepared its bid and attended the pre-bid conference, nor Jerry C. Howell, President of Petitioner who modified and approved the bids submitted, had ever used API 3 1/2 inch drill pipe and were not familiar with the dimensions of that item. Yet they did not check to ascertain how the inside diameter of that drill pipe compared with the inside diameter of the 4 1/2 drill stem flush joint they had on hand. Petitioner further contended that the cost of the API 3 1/2 inch drill pipe was insignificant in determining the bid price submitted, and therefore, this discrepancy was immaterial and should not lead to rejection of the bid. Petitioner's bid failed to comply with General Conditions 1.17 in that it failed to explain in detail the reasons the 4 1/2 inch drill stem proposed for use meets the specifications which required a drill pipe with a substantially larger minimum interior cross section area. Petitioner's challenge to Youngquist's bid proposal as being non- responsive for not listing the API 3 1/2 inch pipe is without merit. Youngquist's bid complied with the provision of Section 1.11 of the General Specifications and McQuown's visit to Youngquist's facility confirmed that Youngquist had on hand all of the equipment specified in the Request for Bid Proposal. Petitioner was represented at the compulsory pre-bid conference by David Robinson, ADI's superintendent, who prepared ADI's bid package. Robinson testified that at the pre-bid conference he asked Mr. McQuown what was the inside diameter of the API 3 1/2 inch drill pipe and McQuown responded 1 7/8 inches. Several other witnesses, including McQuown, testified that no questions were asked at the pre-bid conference about the API 3 1/2 inch pipe and all of these witnesses were fully aware that the pipe has an ID greater than 2 1/2 inches. McQuown's testimony that Robinson asked only about the inside diameter of the 4 3/4 inch drill collar shown in the bid specifications and he responded 1 7/8 inches to that question is deemed the more credible evidence. Robinson testified that he thought McQuown has misspoke when he said 1 7/8 inches but did not check available catalogues to determine the actual ID of this pipe to shed some light on the adequacy of the 4 1/2 inch drill pipe proposed in ADI's bid. The more credible testimony is that Robinson was not misinformed about the ID API 3 1/2 inch drill pipe at the pre-bid conference.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the formal bid protest filed by American Drilling, Inc. to challenge the award of Bid Request 9237 be dismissed and that the contract be awarded to Youngquist Brothers, Inc. DONE AND ENTERED this 15th day of February, 1993, in Tallahassee, Leon County, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6618BID Proposed findings listed by Petitioner are accepted except as noted below. Those neither noted below nor included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached. 16. Rejected. Although there can be a slight variation in the internal diameter of API 3 1/2 inch drill pipe, there is no API 3 1/2 inch drill pipe with an inside diameter less than 2 1/2 inches. 18. Rejected as contrary to the credible evidence. Rejected. ADI fully intended to use the drill pipe and collars listed on its bid unless or until the District mandated a change to the equipment or tools specified. Both of Petitioner's principle witnesses believed the 4 1/2 inch drill stem listed could satisfactorily perform the required drilling. Rejected as contrary to the evidence. Accepted as a fact that after ADI learned it was low bidder inquiries were made to locate a source for the specified drill pipe and collars. At McQuown's visit to ADI, Jerry C. Howell assured him that ADI wanted to fully cooperate with the District in carrying out the contract when issued. Rejected that ADI's response was clear and complete as required by the specifications. Second sentence rejected as irrelevant and immaterial. Rejected as irrelevant. Diversified was not a party to these proceedings. Rejected. Youngquist's bid complied with the bid specifications. By not responding to those items in the bid specification, Youngquist, pursuant to the General Bid Specifications, agreed to provide exactly the equipment specified by the District in the Request for Bid. 32. These omissions have never been deemed by the District to be grounds for rejecting bids. 33 -34. Rejected as immaterial. 36. Although McQuown testified that he did not pay a lot of attention to the general (boiler plate) conditions in the bid proposal, he recognized that the failure of a bidder to list equipment different than that contained in the bid proposal meant that the bidder intended to supply the equipment specified. See 36 above. Rejected as irrelevant. Last sentence rejected as immaterial. First sentence rejected. Rejected. First sentence rejected. 46 - 49. Rejected as immaterial. 51. Rejected insofar as Youngquist's bid is concerned. 53. Last sentence rejected. Rejected as improper and inaccurate interpretation of the contract provisions. Moreover, this is a question of law, not of fact. The bid specifications speak for themselves. Interpretation of these specifications is a legal not a factual matter. Last sentence rejected. Last sentence rejected. Rejected as fact, accepted as a conclusion of law. See 36 above. 63 Generally accepted. However, it is found that all parties recognize that it was not necessary for bidders to have on hand all equipment requested in the bid specification, and that ADI representatives indicated that they would like to start work with the equipment on hand and would do so unless otherwise directed. Proposed joint findings submitted by Respondent and Intervenor are accepted. Those not included in the Hearing Officer's findings were deemed unnecessary to the conclusions reached. COPIES FURNISHED: Douglas Manson, Esquire Mary Catherine Lamoureaux, Esquire Post Office Box 499 Tampa, Florida 33601-0499 Richard Tschantz, Esquire A. Wayne Alfieri, Esquire 2379 Broad Street Brooksville, Florida 34609-6899 Mark R. Komray, Esquire Thomas Smoot, Esquire Suite 600 12800 University Drive Fort Myers, Florida 33906-6259 Peter G. Hubbell, Executive Director Southwest Florida Water Management District 2379 Broad Street Brooksville, Florida 34609-6899
The Issue The issue in this case is whether Respondent's decision to reject the galvanized pipe replacement bid of Petitioner as non- responsive was erroneous, an abuse of discretion, arbitrary or capricious.
Findings Of Fact Petitioner, Expertech Network Installation, Inc., is a division of Bell Canada. Petitioner is a construction and engineering division of the parent company. It was set up to expand the parent's operations into the United States about nine years ago. Petitioner has steadily replaced its Canadian employees with U.S. employees over those years. The City is a governmental entity established under the laws of the State of Florida. By contract with the DOAH, the City has agreed to utilize Administrative Law Judges to hear, inter alia, bid protests involving the City. On May 7, 2007, the City issued Invitation to Bid No. ITB-PW060607-88. The Invitation to Bid sought bids for replacement of approximately 38,000 linear feet of two-inch galvanized pipe and associated appurtenances with 38,000 feet of four and six-inch DR18 PVC piping and associated appurtenances. The replacement would include approximately 385 service connections with Sch-80 PVC piping, all within the area known as Section 4 of the City. In addition, the scope of work included relocation of approximately 460 linear feet of eight-inch PVC water main pipe and associated appurtenances with 600 linear feet of eight-inch DR18 PVC piping and appurtenances along State Road 78. A total specification package and complete set of drawings for the aforementioned work was prepared by the City's consulting engineer, TetraTech-HAI (hereinafter "Ttech"). The specifications and drawings by Ttech were made a part of the Invitation to Bid. A pre-bid conference was held on May 16, 2007. At that conference, several issues were discussed, resulting in issuance of an Addendum to the Invitation to Bid. The Addendum was issued the same day as the conference and included the following paragraph: Will the City allow directional drilling on the galvanized pipe replacement project? No. All references to directional drillingon the galvanized pipe replacement projectare to be modified to jack & bore. All water main piping proposed to cross driveways shall be installed via jack & bore or open cut methods. Water main piping proposed to cross roadways, including long side services, shall be installed by jack & bore methods. Directional drilling is acceptable for the roadway crossings on the SR 78 Water Main Replacement portions only. Please see the enclosed revised Measurement and Payment section of the specifications (01025) and revised bid schedule. (Emphasis in original document.) The Addendum also extended the due dates for bids by one week, to June 13, 2007. No protest was filed with the City with respect to the terms, conditions or specifications contained in the Invitation to Bid and the Addendum. On Wednesday, June 13, 2007, the City opened the bids. Petitioner's bid was the low bid for the project. Its bid included a price of $1,816,224, as compared to the second lowest bidder, Guymann (whose bid came in at $1,987,561).1 The bids were then reviewed by Ttech for conformity to the Invitation to Bid. On July 31, 2007, Ttech notified the City that it was recommending approval of the Guymann bid despite Petitioner being the low bidder. The justification for that recommendation was as follows: The lowest apparent bidder on the project was Expertech Network Installation, Inc. (Expertech) with a total bid of $1,816,224.00. [Ttech] reviewed Expertech's bid package and found that the required list of at least five completed projects of the type as the Galvanized Water Main Replacement project was not included in the package. [Ttech] contacted Expertech concerning the incomplete bid package and requested that Expertech provided the required list of at least five projects completed by Expertech of similar type as the Galvanized Water Main Replacement project. The list provided by Expertech did not include any completed projects of the type as the Galvanized Water Main Replacement. On August 7, 2007, the City issued its Notice of Intent to Award, stating that the procurement division of the City would recommend award of the bid to Guymann as the most responsive, responsible bidder meeting the terms, conditions, and specifications set forth in the Invitation to Bid. Petitioner timely filed a Notice of Intent to Protest; its Formal Written Protest was timely filed on August 24, 2007, along with the required bond. There are three methods of drilling utilized for laying pipe in the ground: directional drilling, open cut drilling, and jack & bore drilling. A brief discussion of each is necessary in order to understand the dispute in this matter. Directional drilling is done utilizing a machine that is guided underground using steel rods. A person above ground with a sounding device directs the steel rods from one point to another. Directional boring is used when trenching or excavating is not practical. Directional boring minimizes environmental disruption. Jack & bore drilling (or auger drilling) is similar to directional drilling in that it has an entrance pit, and then the pipe is manually jacked along the desired path while simultaneously excavating the soil. It is often used in projects that have to go under existing roads or driveways. Open cut drilling is the old, traditional method of digging a trench in the ground and laying the pipe in the open cut. The Invitation to Bid, at page 10 of 53, included a request for each bidder to provide evidence of its experience with similar projects. Paragraph 5 asked for a list "of the last five projects of this type your organization has completed."2 Paragraph 6 asked for a list "of projects of this type that your organization is currently engaged in." The lists of projects were to be completed as set forth in a table attached to the Invitation to Bid. The table is recreated below: PROJECT YOUR CONTRACTOR REQUIRED ACTUAL NAME, TITLE CONTRACT OR SUB COMPLETION COMPLETION ADDRESS & AMOUNT DATE DATE & LOCATION PHONE # In its Bid, Petitioner provided a document entitled "Bidders Qualifications" in response to paragraph 5. The document was not on the table provided and was not entirely responsive to the information requested (i.e., it did not indicate whether Petitioner was contractor or subcontractor; there were no completion dates, and there were no contact persons). Nonetheless, the list contained eight completed projects. Those projects included two water main projects; the other six completed projects were telecommunication projects. While both types of projects would include drilling, there are distinct differences between the two. For example, water and wastewater projects require pressure testing, bacterial testing, and permitting that telecommunication projects do not. Petitioner's list also included projects that involved directional drilling. Since directional drilling was specifically prohibited in the galvanized pipe replacement project, those projects would not be deemed substantially similar in type.3 During the initial review of the bids, Ttech had specifically asked Petitioner to provide the required list of five completed projects of a similar type. In response, Petitioner submitted a list of four projects, which were listed as "Currently in Progress." Again, the projects were submitted on a form other than the table provided in the Invitation to Bid. When Ttech followed up with the project contacts, it found that there had been no open cut drilling on two of them; the other two had not yet begun. However, by the date of final hearing the projects were substantially complete. After Petitioner had submitted its list of projects, a meeting was called at the City. Petitioner was represented at the meeting along with City personnel and a representative from Ttech. Notes from that meeting, though inconclusive, seem to indicate that the requirement for five completed jobs of a similar nature was discussed. It is unclear whether Petitioner's representative was still at the meeting when this was discussed. However, it does not appear that anyone from the City or Ttech sent Petitioner a written request to provide evidence of additional work performed. Nor is there any evidence that the City or Ttech had an obligation to do so. At any rate, Petitioner did not submit any evidence of similar projects other than those discussed above. There were notes made by attendees of the meeting. None of the notes submitted into evidence was conclusive as to all issues that were discussed at that time. However, in notes relating to a telephone conversation five days later, Ttech's representative noted discussing with Petitioner the need to provide evidence of five similar projects, which means that at the time of the June 9, 2007, meeting, Ttech was still attempting to get the required list of projects from Petitioner. The projects submitted by Petitioner include directional drill excavation projects, which involved at least some open cuts (i.e., to make tie-ins at each end of the directional drill section). None of those projects was substantially similar in type to the proposed project, but did include some open cut work.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the City of Cape Coral upholding its rejection of Petitioner's bid for the galvanized pipe replacement project. DONE AND ENTERED this 9th day of November, 2007, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 9th day of November, 2007.
The Issue The issues to be determined are whether: (1) a violation of section 556.107(1)(a), Florida Statutes, occurred; (2) relating to a “high-priority subsurface installation” under section 556.116(1)(b); (3) which proximately caused an “incident” under section 556.116(1)(c); (4) for which a fine may be imposed against the violator in an amount not to exceed $50,000.00.
Findings Of Fact Stipulated Facts Sunshine 811 is the free-access notification system established under the Underground Facility Damage Prevention and Safety Act (the Act). See §§ 556.101 – 556.116, Fla. Stat. (2017). Section 556.105(1)(a) requires an excavator before beginning any excavation or demolition to provide Sunshine 811 with certain information that will allow a utility company to mark the location of underground facilities in the area of the proposed excavation. On January 8, 2018, Francisco Plascencia, an employee and agent of Medalist, was operating a trackhoe excavator on the property located at or around 1380 SE Cove Road, Stuart, Florida. While Medalist was digging to uproot a tree, the trackhoe excavator ruptured a six-inch underground gas- distribution main owned and operated by Peoples Gas. Before beginning the excavation, Medalist did not “call 811” or otherwise notify Sunshine 811 about the excavation. Accordingly, the excavation site did not contain “locate marks” identifying on the surface of the earth the location of the six-inch underground gas main. The Parties Medalist is owned by Jeremy LeMaster who is a licensed building contractor. Since 2007, Medalist has built over 500 homes in Martin County. Peoples Gas is the utility company that owns and operates the underground gas-distribution main that is the subject of this proceeding. Peoples Gas is a member operator of Sunshine 811 and submitted the High Priority Subsurface Installation Incident Report and Commitment regarding the incident at 1380 SE Cove Road, Stuart, Florida. The Incident Joshua Turpie is the senior utility technician with Peoples Gas who performs line locates when Peoples Gas gets tickets from Sunshine 811. Mr. Turpie testified that if a contractor or homeowner calls Sunshine 811 before digging, it comes to him and he has a 48-hour window in which to mark the location of any underground gas line. This is done by placing flags, painting the ground and taking pictures. On the morning of January 8, 2018, Mr. Turpie responded to a location on Cove Road at the request of his supervisor, Scott Tinney. Mr. Tinney informed him that a drastic drop in gas pressure was occurring, and it seemed to be in the area of Mr. Turpie’s location. At the location, Mr. Turpie found fire trucks and police cars, and saw that a gas-distribution main was ruptured. After assessing the situation and further discussing it with his supervisor, who was now on-site, he assisted Peoples Gas contractor with the “make safe” operation. This entailed fully exposing the gas main and using a “squeeze off tool” to clamp the main at a location upstream of the rupture to stop the flow of gas. Mr. Turpie arrived on scene at 9:40 a.m. and the gas flow was stopped at 11:15 a.m. At the scene, Mr. Turpie also checked on his computer and saw that this particular gas- distribution main was designated as a high priority main because “it feeds basically everything in Stuart.” An outage at this type of main would have a high customer impact. This particular gas main serviced 50 percent residential and 50 percent commercial customers. For excavation work in the area of a high-priority gas main, Mr. Turpie would not only have flagged and marked the location, but also would have called the excavator and explained the high-priority nature of the gas main. In addition, a notification letter would also be sent to the excavator regarding the high-priority gas main and providing the contact information of relevant Peoples Gas employees. Peoples Gas would also have the opportunity to determine if it needed to place an employee on-site during excavation. A contractor for Peoples Gas repaired the gas main. Peoples Gas employees also “locked off” every customer’s meter. Four hundred and nine individual meters had to be physically locked off before restoration efforts could begin. Restoration involved re-introducing gas to the system, purging the lines of air, and physically turning on each meter, checking gas appliances, and checking for leaks. This process was labor intensive and involved deploying 36 Peoples Gas employees from around the state and two contractors from Miami. Peoples Gas set up a command center to which the employees from around the state reported. There, the teams were provided with outage lists of the metered customers in order to conduct the process of restoring service. Service restoration continued through the evening of January 9. On the morning of January 10, the deployed employees were sent back home and the local teams completed restoring service to residences. Community Impact At the location of the gas main rupture, first responders (i.e., fire rescue and police) set up a command center, redirected traffic away from that part of Cove Road, and evacuated nearby residences and a nearby school. The customers without service during the outage included two hospitals, four nursing homes, a fire station, schools, a correctional facility, a church, businesses, and residences. Property Damage and Service-Restoration Costs Ruth Weintraub is the Peoples Gas supervisor for Damage Prevention & Public Awareness. Ms. Weintraub testified that she did an accounting of the expenses incurred as a result of the gas line rupture. Ms. Weintraub calculated the amount based on: (i) lost gas in the line; (ii) labor; (iii) equipment; (iv) lodging and meals; (v) charges from the third•party contractors; and (vi) administrative costs. The amount was no less than $127,000.00, which would increase as Peoples Gas finalized its accounting. Medalist’s Actions Mr. LeMaster testified that he was alerted to the incident by a text from a field supervisor who had called 911 to report the event. Mr. LeMaster arrived at the scene within approximately 30 minutes after getting the text, and remained at the site until there was complete clearance. Mr. LeMaster testified that his employees are trained in Sunshine 811 procedures. “[T]hey don’t dig without having locates.” He surmised that Mr. Plascencia thought he was doing a good thing by using the trackhoe to remove a tree which was in the center of a staked driveway at the job site. Mr. Plascencia was not instructed to remove the tree. In fact, the only work to be done that day was the placement of silt fences. Prior to this incident, Medalist had never hit any underground lines and always contacted Sunshine 811 before digging. Mr. LeMaster testified that Mr. Plascencia was immediately terminated for not following company policy and procedures. Sunshine 811 Lance Horton is the manager for Pipeline Safety & Occupational Services at Peoples Gas. Mr. Horton also served on the Board of Directors of Sunshine 811. He explained that the Sunshine 811 call and locate procedure is “a damage prevention program in the effort . . . to protect underground facilities, not just gas but also electric, communication facilities, water, [and] sewer.” It is important to prevent “incidents such as this,” which put utility employees, first responders, and members of the public in peril.
Findings Of Fact Respondent made a timely request for formal hearing in response to Petitioner's Administrative Complaint. Respondent is Mark Allen Vanderwater. At all times pertinent to these proceedings, Mr. Vanderwater held certified general contractor license number CG-CO15948. His address of record is Coral Springs, Florida. John Andrews Anagnostaras, acting on behalf of Expedia Limited (Expedia), executed an agreement on December 17, 1986 with 2C.D.M., Inc., represented by Mark Allan Vanderwater, the Respondent. Under terms of the agreement ("Expedia- Vanderwater Agreement"), the Respondent's corporation agreed to act as General Contractor and provide certain services to Expedia in connection with the construction of the project known as "Bergin's Beer & Wine Garden" located in the Bayside Marketplace Development in Miami, Florida. This agreement titled the role of Expedia as "Owners Project Representative/Construction Manager." Among services to be provided by Respondent's corporation under the terms of the Expedia-Vanderwater Agreement, were: general construction services consisting of day to day supervision as requested by Expedia; provision of required licensing necessary to obtain construction permits; securing and delivery to Expedia of any required inspection, testing and approval certificates; collection and delivery to Expedia of all written warranties and equipment manuals; provision to Expedia of proof of Respondent's workman's compensation and general liability insurance coverage; and coordination of subcontractors and suppliers and delivery of the completed project to Expedia. Payments to Respondent, under terms of the Expedia-Vanderwater Agreement, were to consist of a $500 payment upon execution of the document, professional fees of $2,500, and $125 per day for daily supervision. As adduced from testimony at the hearing, a grand total of approximately $8,500 in fees was generated by Respondent. He received payments totalling $5,000 and claims he is still owed $3,500 by Expedia. The Expedia-Vanderwater Agreement specifically provided that payments to the various suppliers and subcontractors would be made directly by Expedia, as opposed to Respondent making such payments. While Respondent ordered materials, he made no payments of any consequence to subcontractors. Rather, the customers, Bergin and Sherman, made monetary payments to John Andrews Anagnostaras on behalf of Expedia. Numerous liens totalling at least $30,000 have been filed by various subcontractors due to lack of payment for supplies or services. The Expedia-Vanderwater Agreement further stipulated that Respondent's corporation would conduct all communications with the owners of the project through Expedia. The evidence fails to show that any communication from Respondent to Mr. Bergin or Ms. Sherman, the owners and customers, ever occurred through the conduit of Expedia. For that matter, the proof establishes that neither of the owners was aware of the involvement of Respondent or his corporation in the construction of the project until the closing days of March, 1987. Subsequent to execution of the "Expedia-Vanderwater Agreement," John Andrews Anagnostaras, again acting as representative for Expedia, executed an agreement with customers Kevin Bergin and Arlene Sherman. This agreement ("Expedia-Bergin Agreement") was signed on January 16, 1987, to confirm commencement of work on the Bergin project as of December 20, 1986. The Expedia-Bergin Agreement contemplated total project costs of $130,000 for construction of the commercial beer and wine retail store. The agreement designated Expedia as "Contractor" on the project. While the document reflects the signature of Arlene Sherman in a space provided for a witness, testimony at hearing established Ms. Sherman was also an owner in the project. An agreement with a subcontractor for supply and installation of the electrical network and accessories needed on the Bergin project was signed by John Andrews Anagnostaras on January 8, 1987. He also executed an agreement on January 7, 1987, with another subcontractor for manufacture, supply and installation of millwork on the Bergin project. An application, signed by Respondent and bearing the name and local address of Arlene Sherman as owner, resulted in the issuance of a building permit for construction of interior partitions, millwork, electrical and plumbing services, floor finishing and ceiling suspension work associated with the Bergin project. The permit was issued on January 29, 1987, well after the beginning of the project as documented in the Expedia-Bergin Agreement. Other than the pulling of the building permit and ordering of materials, Respondent's involvement with the project was negligible until the latter part of March, 1987. On March 18, 1987, during the course of a "walk through" inspection of the development where the Bergin project was being constructed, Petitioner's investigator was apprised that certain records of the developer of the Market Place at Bayside, Rouse Corporation, reflected the identity of the contractor on the Bergin project to be John Andrews Anagnostaras. Subsequent investigation revealed that neither John Andrews Anagnostaras or Expedia Limited are, or ever have been, registered or qualified as general contractors by the Florida Construction Licensing Board as required by law of the State of Florida. While the record is not clear regarding the exact date, a short time later a cease and desist agreement was executed by John Andrews Anagnostaras with the Petitioner wherein Mr. Anagnostaras agreed to desist from unlicensed contracting work. At about the time of the exposure of the unlicensed status of Expedia and its representative, Ms. Sherman was informed by Petitioner's investigator that the Bergin project would be shut down because of the contractor's lack of license. This was also the time when she received her first knowledge of the involvement of the Respondent in the Bergin project. Testimony of Kevin Bergin substantiates this evidence. Although he possessed a vague recollection of seeing Respondent in the background in one meeting with John Andrews Anagnostaras, Kevin Bergin learned of the Respondent's involvement in the construction project and the unlicensed situation regarding Expedia on or about April 1, 1987. Ms. Sherman met with Respondent at the construction site to prepare a "punch list" of unfinished items on the Bergin Project around the third week of March, 1987. This list of needs was formalized by Respondent and presented to Ms. Sherman on April 10, 1987. Respondent accomplished a minimal number of the items set forth in the "punch list," but failed to correct many major noted deficiencies such as installation of a brass bar, kitchen cabinets, beveled mirrors, ventilation for an ice machine, or replacement of three quarter inch counter topping for the previously installed one quarter inch topping. Ms. Sherman visited the project construction site an average of four days a week beginning in February, 1987, but has no clear recollection of the Respondent being there until meeting with him to prepare the "punch list." She does recall discussing the delay in millwork with the Respondent, and, while the date of this conversation could not be recalled, the discussion likely took place in the latter part of March, 1987. Respondent testified he appeared on the project construction site approximately 30 of the roughly 90 days of the project's duration. The length of his visits varied from a few minutes to a few hours, according to Respondent. He also testified that he considered himself the general contractor on the project and was without knowledge of the Expedia-Bergin Agreement assigning that role to Expedia. Further, he testified that he figured the owners lived in New York. This testimony of the Respondent is not credited in view of the address of Ms. Sherman on the building permit application and the Respondent's unsuccessful, insistent and contradictory attempts during the hearing to have Ms. Sherman recall several meetings with him during the time of the construction of the project. While Respondent provided a March 9, 1987, notice to the Rouse Corporation as the developer of the Marketplace at Bayside that Respondent was providing general contracting, site supervision and coordination services in connection with the Bergin project, the evidence fails to show provision of similar notice to owners Sherman and Bergin. Respondent was aware that Expedia and John Andrews Anagnostaras were not licensed as general contractors under Florida law. Respondent failed to qualify either Mr. Anagnostaras or Expedia as an affiliate with Respondent's corporation as required by section 488.119, Florida Statutes. Respondent aided a contractor (John Andrews Anagnostaras d/b/a Expedia) not properly licensed under state licensing laws by obtaining or authorizing the obtaining of a permit, through use of Respondent's license, for a construction job known as "Bergin's Beer and Wine Garden." Respondent failed to properly supervise the finances on such construction job. By his own admission and the terms of the Expedia-Vanderwater Agreement, he relinquished to the unlicensed contractor all responsibility for finances connected with subcontractors.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding Respondent guilty of the offenses charged in the administrative complaint and imposing a penalty of $1500 and probation for a period of one year upon such terms and conditions as may be set by the Construction Industry Licensing Board. DONE AND RECOMMENDED this 18th day of February, 1988, in Tallahassee, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-5331 The following constitutes my specific rulings in accordance with section 120.59 (2), Florida Statutes, on all proposed findings of fact submitted by the parties: Proposed findings submitted by Petitioner Proposed findings submitted by the Petitioner consisted of 12 paragraphs, paragraphs 5-12 being unnumbered. Those paragraphs have been numbered and all proposed findings are treated as follows: Included in finding number 2. Rejected as unnecessary. Included in finding number 10. Included in finding number 10. Included in findings number 3, 4, 10, 12, 14 and 15. Included in finding number 14. Included in findings number 3, 4, 6, 14, IS and 22. The first sentence is included in finding number 16. Remainder rejected as unnecessary. Included in findings 16, 17 and 18. Included in findings 7 and 11. Included in finding number 7. Included in findings 18 and 19. Proposed findings submitted by Respondent While unrepresented at hearing, Respondent's proposed findings were filed on his behalf by Edmond L. Sugar, Esquire. Although untimely filed with the Division of Administrative Hearings (6 days after the required deadline determined at hearing) and unnumbered, those 21 paragraphs have been numbered 1- 21 and are treated as follows: Included in finding number 2. Rejected as unnecessary. Included in finding number 10. As to co-ownership, this proposal is included In finding number 10. The remainder is rejected as unnecessary. Rejected as contrary to the weight of the evidence. Mr. Anagnostaras held himself out to the owners as an independent contractor. Included in findings numbered 3, 4 and 6. Rejected as not supported by the evidence, see Petitioner's exhibit number 5. Rejected on the basis of credibility. Included in finding number 19. Included in finding number 12. Rejected as not consistent with the evidence. Rejected as not consistent with the evidence. Rejected as unnecessary. Rejected as unnecessary. Included only as to signing of cease and desist agreement in finding number 14. Rejected as to remainder of proposal as not supported by the evidence. See Petitioner Exhibit 3. Included in finding number 17 as to date documentation of the punch list was submitted to Ms. Sherman. Remainder of proposal rejected as not supported by the evidence. Rejected, not supported by the evidence. Rejected as unnecessary. Rejected as unnecessary and not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. COPIES FURNISHED: Lee Sims, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Mark Allen Vanderwater 3244 Coral Ridge Drive Coral Springs, Florida 33065 Edmond L. Sugar, Esquire HUNTER & HUNTER, P.A. 1930 Tyler Street Hollywood, Florida 33020 William O'Neil General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Fred Seely, Executive Director Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact It was Stipulated by the parties that the Petitioner timely filed a notice of protest and formal written protest (if section 120.53(5), Fla. Stat. (1986) is applicable) and timely filed a petition for formal administrative hearing. The Petitioner did not receive a written notice of the recommended award of the District as intended by paragraph 9 of the General Conditions of the second invitation for bids, and it did file a notice of protest with seventy-two hours of receiving notification of the District's decision to award the contract to Mid America as intended by paragraph 10 of the General Conditions, P. Ex. 3. It was Stipulated by the parties that the substantial interests of the Petitioner are at stake in this proceeding. The Department of Water Resources is involved in groundwater studies throughout the nineteen Florida counties that comprise the District, and is responsible for the District's drilling program. In the past, the District's waterwells have been in the 500 to 800 foot range, and have been constructed of 4, 6, and 8 inch casing. The Water Resources Department is currently constructing a regional groundwater monitoring network in the nineteen counties. The underlying geological formations differ greatly from county to county, and several water tables often have to be Penetrated before the well reaches the Floridan acquifer. To maintain mud circulation, it is often necessary to case off portions of the well from water table to water table. Moreover, wells are often in unconsolidated formations, and casing is needed to provide support for the hole, Particularly in the upper portions of the well. For these reasons, the District plans to construct step or telescoping wells in the regional groundwater monitoring network. The District expects that it will need to set 16 inch casing in the first eighty feet of some of these wells. In about 1984, by competitive bids, the St. Johns River Water Management District (the District) leased a Speedstar 15-III drill rig from Mid America Drilling Equipment, Inc. This rig was a Size larger than the drill rig that is the Subject of this formal administrative hearing, and had been manufactured in 1978. The District was satisfied with the performance of the larger Speedstar drill rig, and had very few problems with it. District staff became familiar with the operation of the rig. As the lease neared the end of its term, the District began to explore the question whether it should continue to lease, or should purchase its own rig. A member of the District Board Suggested that the District consider acquisition of a rig over a period of years by lease-purchase. This suggestion was adopted by the Department of Water Resources of the District. Due to his familiarity with the Speedstar rig, Mr. Munch decided to use that rig as a basis for bid specifications, but to use the next smaller size, a Speedstar SS-135. Mr. Munch copied the specifications from a Speedstar SS-135 specification sheet as the specifications for the first invitation for bids. Mr. Munch has had no education in engineering or in drill rig design. He has a degree and field work experience in geology, and is a licensed water well contractor. He has been a project manager on projects when outside contractors set 16 inch casing in wells as deep as 2,000 feet, but he has not personally set a 16 inch casing. P. Ex. 1 is the first invitation for bids and specifications for the invitation for bids, as well as the bid of the Petitioner, the George F. Failing Company. This invitation for bids was published on or about August 26, 1986. The invitation for bids provided six bid blanks providing six bid alternatives. The bid blanks appeared as follows: One Year Lease $ /month, renewal $ /month Two Year Lease-purchase $ /year, buy-out $ Three Year Lease-purchase $ /year, buy-out $ Four Year Lease/purchase $ /year, buy-out $ Five Year Lease/purchase $ /year, buy-out $ * * * Suggested Purchase Price $ Less 3 percent for payment in 20 days Four bids were received pursuant to this invitation for bids, including the Petitioner's bid and the bid of Mid America Drilling Equipment, Inc., P. Ex. 7. The four bids were opened on September 11, 1986. Mid America was the only bidder that bid a one year lease with an option to renew. Mid America, the Petitioner, and G & R Machine and Welding, Inc., were the only bidders to bid a lease-purchase. The Petitioners bid was $163,565.00 as an outright purchase price for a Failing model CF-15 and, relevant to the second bid, $5,432.00 per month for a three year lease-purchase, with the rig owned at the end of the three year lease period with no further buy-out payment. The Petitioner did not bid a one year lease. P. Ex. 1. Mid America bid $179,823.00 as an outright purchase price on a Speedstar SS135, and $56,340.00 per year for a three year lease-purchase, with a buy-out price of $61,920.00. Mid America also bid a one year lease at $6,125 per month, with a renewal at $5,288.00 per month. P. Ex. 7. Robert Schenk is the District's Director of the Division of General Services, and as such, Mr. Schenk was responsible for District Purchasing and evaluation of the bids received pursuant to the invitation of bids. Mr. Schenk Prepared an analysis of Several of the bids, including G & R Machine, Mid America, and the Petitioner. P. Ex. Mr. Schenk testified that he felt that the Mid America bid was unclear because of the total amount of the bid calculated over the years. He Said that he considered the Mid America bid for a three year lease-purchase to be ridiculous and out of line because it was $50,000 greater than the outright purchase bid. The bid of the Petitioner for a three year lease- purchase was about $32,000 higher than its bid for an outright purchase. P. Ex. 8. G & R Machine also bid a Speedstar SS-15. Mid America's three year lease-purchase bid was about $35,000 higher than the G & R Machine bid for the same three year lease-purchase. ($230,940.00 compared to $195,664.32.) P. Ex. 8. The bid of Mid America was also high compared to the bid of G & R Machine for a four and a five year lease-purchase, but was comparable for a two year lease-purchase and for an outright purchase. The bid of the Petitioner was $16,000 lower than the Mid America or G & R Machine bids for an outright purchase, was $31,000 lower than the G & R Machine bid and $34,000 lower than the Mid America bid for a two year lease-purchase, and was Slightly higher than the G & R Machine bid on all other bids. The bid of the Petitioner was substantially lower than the Mid America bid on all bids analyzed on P. Ex. 8. Although the Mid America bid was high, it was not an unclear bid. The bid of Mid America was clear and unambiguous. P. Ex. 7. Mr. Schenk thought that the Petitioner's bid was the clearest bid received in the first invitation for bids. Apparently on the same day as the bid opening, which was September 11, 1986, Mr. Schenk had one of his assistants telephone Mid America to ask that it clarify its bid. In response, on the same day as the bid opening, September 11, 1986, Mid America sent the District a letter, P. Ex. 9, which effectively lowered its bid for a three year lease-purchase by $36,612.00. This letter was ultimately not considered by the District in the evaluation of the bids. On September 23, 1986, four staff members of the Department of Water Resources, including Mr. Munch and Barbara A. Vergara, Director of that Department, recommended by memorandum to Mr. Schenk that the Mid America bid for a Speedstar SS-135 for an outright purchase price of $179,823.00 be accepted. These staff members were of the opinion that the drill rig bid by the Petitioner "did not meet all of the bid Specifications due to slight manufacturing differences." But they were also of the opinion that "[t]hese differences may not be critical to the performance and capabilities of the equipment." P. Ex. 10. The staff comparison of the Mid America bid and the Petitioner's bid included calculations for rental costs due to the differing delivery times of the equipment, and calculated that the Mid America bid had a net cost of $184,435 compared to the Petitioner's bid having a net cost of $182,013. Attached to the staff recommendation of September 23, 1986, was a comparison of the three drill rigs by specifications. The comparison used the incorrect specification sheet for the Mid America rig, and thus contained the following errors: the rig bid by Mid America had a single sheave, 3 part block, not a double sheave, 4 part block; the rig also had a working hook load of 20,000 pounds, not 32,700 pounds. Two to four days after September 11, 1986, (the date of the letter from Mid America changing its bid for a three year lease-purchase) Robert Auld, the Florida Branch Manager for the Petitioner, learned that such a letter had been requested, written, and received by the District, and called District staff to protest. Mr. Schenk thereafter apparently concluded that solicitation and receipt of the bid change from Mid America had been procedurally erroneous because he testified that as a result of all of the discussion and criticism that surrounded that event, on the second invitation for bids he concluded that he was procedurally unable to contact any of the bidders to request clarification of bids, even though he then thought that the Petitioner's bid was unclear. Mr. Schenk decided to reject all the bids from the first invitation for bids before Mr. Auld's telephone call. P. Ex. 15, p. 10. But he did not communicate this decision to the staff of the Department of Water Resources before they wrote their memorandum that was initiated through the chain of command on September 23, 1986. Mr. Schenk initially decided to reject all of the bids because the bidders had not all bid on all of the requested alternatives. Later, other reasons for rejection of all of the bids became apparent. Another major reason for rejection of all of the bids was because the specifications were drawn from the Speedstar SS-135 specifications, and unfairly eliminated the Petitioner's rig. Mr. Auld admitted that the Failing CF-15 did not meet the specifications of the first invitation for bids because the Failing CF-15 did not have an 8 1/2 inch rotary table, but was of the opinion that it met all other specifications. Mr. Schenk also rejected all of the bids because of the irregularity of having solicited and received the bid change from Mid America. On October 1, 1986, the District informed all bidders that the bids were all rejected and that the purchase would be again advertised for bids. No protest was filed concerning the first invitation for bids, and it was ruled during the formal administrative hearing that the foregoing facts are admissible as explanatory of the basis for the second invitation for bids, and not as a basis for challenge to the first invitation for bids. Mr. Munch then drafted specifications for the second invitation for bids. This time, he Specified "Speedstar SS-135 or equivalent." Mr. Munch had determined from his experience with the rented Speedstar that the Speedstar SS-135 was capable of fulfilling the needs of the District for drilling. His intention was to allow bids for other types of drill rigs that were the equivalent of a Speedstar SS-135. Ms. Vergara defined the term "equivalent" to mean no differences between a Speedstar SS-135 and the alternative drill rig with respect to doing work in the field that needs to be done by the District. At some time before the second invitation for bids was advertised, or at least before the second bids were filed, the District became Primarily (though not exclusively interested in receiving bids on a three year lease-purchase of a drill rig. Both the Petitioner and Mid America knew this before they prepared their second bids. P. Ex. 3 is the second advertisement for bids and was published on November 6, 1986. The advertisement asks for bids on a "lease-purchase of One Rotary Drill Rig." The attached sheet marked "specifications" stated that what was sought was a "[b]id for purchase or one year lease of a new Speedstar 135 rotary drill rig or at least the equivalent equipment with the following options." Following that were eight technical specifications. The second invitation for bids also specified the following: "Bidder must indicate any and all exceptions to specifications. "Bid shall be awarded to the lowest qualified, responsible bidder whose bid meets all specifications in the Invitation to Bid, including delivery, price and other factors most advantageous to the District." All bidders were to bid using the bid blank attached to the invitation for bids. The bid blank was different from the first invitation for bids apparently with the intent to make bid comparisons easier. The bid blank provided the following alternatives for bids: Purchase Price $ Lease Price $ /Month, first year (renewable) $ /Month, second year (renewable) $ /Month, third year One year guarantee non-routine, major maintenance and repair on lease equipment (renewable annually for term of leased $ . Make and Model of Equipment . Manufacturers Warranty . (minimum of 6 months or 1000 hours) Delivery days (from date of order) Delivery Charges $ . Location of Maintenance Services . Since the District was then "primarily" (but not exclusively) "interested in" a three year lease-purchase, the bid blank form was incomplete and unclear. Paragraph A) of the bid blank form clearly provides for a bid for an outright purchase only, not a "lease-purchase." And Paragraph B) provides only for a lease without any mention of purchase; Paragraph B) asks for a price by month for the first year, with the notation that the lease is renewable (apparently at the option of the District, a lease price by month for the second year, with the notation again that the lease is renewable (at the option of the District), and a lease price per month for a third year, with no mention of any further renewability. Paragraph B) says nothing about purchase of the drill rig, ownership at the end of the lease term, or the buy- out price at the end of the lease term. Moreover, the rest of the invitation for bids is similarly incomplete and unclear. Although the first page of the invitation for bids states that bids were requested on a "lease-purchase" of one rotary drill rig, the specification sheet attached to the invitation stated the specification that the bid should be "for purchase or one year lease...." P. Ex. 3 (E.S.). The specification said nothing about a three year lease-purchase. P. Ex. 3, the second invitation for bids, was sent to all entities that had submitted a bid in response to the first invitation for bids. These included five companies that were Speedstar SS-135 dealers and the Petitioner. Only two bids were received in response to the second invitation for bids, one from Mid America and one from the Petitioner. The second Mid America bid is P. Ex. 11. The Petitioner's second bid is P. Ex. 4. The bids were opened on November 20, 1986. The opening was attended by Ron Owens, President of Mid America, and Robert Auld. Mr. Schenk announced that the Petitioner was the apparent low bidder. Mr. Schenk may have only intended his announcement of apparent low bid to have been with relationship to the bid for outright purchase. A bid tabulation sheet was prepared. P. Ex. Mr. Schenk also announced that the recommendation by the staff to the District Board as to which company should be awarded the contract would be made at the next Board meeting. At that time, the next Board meeting was January 14, 1987. The Petitioner's bid, typed on the bid blank required by the District, provided in pertinent part the following: Purchase Price $146,976.00 Lease Price $ NO BID /Month, first year (renewable) (OWNED AT END OF SECOND YEAR) $6,885.00 /Month, second year (renewable) (OWNED AT END OF THIRD YEAR) $4,592.00 /Month, third year One year guaranteed non-routine, major maintenance and repair on lease equipment (renewable annually for term of lease) $NOT AVAILABLE Make and Model of Equipment FAILING MODEL CF-15 Combination Drill GEORGE E. FAILING COMPANY standard Manufacturers Warranty warranty policy will apply, extended for 9 months (minimum of 6 months or 1000 hours) Delivery 120 days (from date of order) Delivery Charges $ NO CHARGE Location of Maintenance Services GEORGE E. FAILING COMPANY 2101 Starkey Road Largo, Florida 33541 Mid America Submitted its bid on the bid blank form as follows: Purchase Price $179,823.00 Lease Price $5,241.00 /Month, first year (renewable) $5,241.00 /Month, Second year (renewable) $5,241.00 /Month, third year (SEE CONDITIONS BELOW) One year guaranteed non-routine, major maintenance and repair on lease equipment (renewable annually for term of lease) $3,000.00 per year Make and Model of Equipment Speedstar SS-135 Manufacturers Warranty 6 months or 1000 hours (minimum of 6 months or 1000 hours) Delivery 21 days (from date of order) Delivery Charges $ Included/No Charge Location of Maintenance Services Ocala, Florida * * * CONDITIONS #1. If the lease is written for a guaranteed 36 month period, there will be a purchase option available at the end for $1.00 #2. If the lease is written as a yearly renewable lease and runs 3 consecutive years there will be a purchase option available after the 36th payment for $8,092.00. The bid of Mid America was for a Speedstar SS-135, and thus complied with the specifications in that respect. The bid of Mid America was clear and enable the District to understand what its annual budgetary obligations might be should the alternatives in the bid be accepted. The Mid America bid provided the following three alternatives: Outright purchase for $179,823, which was $32,847 more than the bid of the petitioner of $146,976. Payment of a total of $188,676 over a three year period plus an additional payment of $8,092 at the end of the lease if the lease were to be written as yearly renewable for 3 consecutive years, for a total cost of $196,768. Payment of a total of $188,676 (plus a $1 buy-out option) over a three year period if the lease were to be written for a guaranteed 36 month period. This is the alternative ultimately accepted by the District. After publication of the second invitation for bids, but before the opening of those bids, Ms. Vergara appeared before the District Board to explain the manner in which the invitation for bids had been drafted. In particular she explained that the invitation used a "brand name or equivalent" specification. She further advised the Board that the staff recommended the Speedstar SS-135 as the equipment most capable of handling the drilling needs of the District, and that any equipment purchased must be at least equivalent to the Speed star SS-135. At some time before the opening of the second set of bids, Mr. Munch and his supervisor, Ms. Vergara, traveled to the offices of Mid America and inspected a Speedstar SS-135. The owner and President of Mid America was Present to explain the design advantages of the Speedstar SS-135. He was a Salesman, and had no background in engineering or drill rig design. None of the District staff visited the Petitioner's place of business to inspect a Failing CF-15. Mr. Munch and Ms. Vergara did not see a Failing CF-15 until preparations began for the formal administrative hearing. In a deposition prior to the formal hearing, Mr. Schenk testified under oath that the staff had already decided that they wanted a Speedstar SS-135 rather than a Failing CF-15 based upon the report of Ms. Vergera to the District Board. In a deposition prior to the formal hearing, Mr. Munch testified that he was never asked which rig he would rather have, that the issue was Strictly a cost decision, that he probably would have had no objection to purchase of the Failing CF-15 had it been cheaper than the Speedstar SS-135, and that the Failing CF-15 would probably have done the job needed by the District to be done. On December 12, 1986, Mr. Schenk sent a memorandum to the District Board concerning the purchase of the rotary drill rig. The memorandum advised the Board that the District had received two bids. It then presented five alternatives for the Board to consider. All of the bid alternatives (alternatives 1 through 4) related to the Mid America bid on the Speedstar SS-135, and presented all of the options bid by Mid America. None of the bid alternatives related to the petitioner's bid. The District Board was not advised as to the comparative purchase prices bid by the two bidders (the Petitioner's price being $32,000 less than Mid America's), it was not advised as to the two interpretations of the three year option in the Petitioner's bid, and it was not advised that under the second interpretation of the Petitioner's three year lease-purchase bid, the Petitioner's bid had a net cost, after accounting for delivery time, that was $9,529 less than the Mid America bid. (See finding of fact 60.) Mr. Schenk thought that paragraph B), as modified by the "CONDITIONS" placed on the bid by Mid America, presented an option to "renew" the lease monthly at $5,241 per month, for an annual cost of $62,892. Evidentially, then, Mr. Schenk thought that the word "renewable" pertained to renewal by month. P. Ex. 15, p. 2, para. 2. With respect to this option, nothing is mentioned about purchase. Mr. Schenk also treated the word "renewable" to be intended to be exercised annually, resulting in a three year lease (renewable annually). The differing use of the word "renewable" came as a result of the modifications placed on the bid form by Mid America. The District Board chose option 3, which was condition number 1 on the bid blank submitted by Mid America, (a guarantee 36 months lease with a purchase option of $1.00) with the addition of the words "Subject to the availability of funds." The Second invitation for bids had Stated in Paragraph 3 of the third page that "all lease-purchase agreements must include a nonappropriation of fund Paragraph as required by Florida Statutes." Thus, the condition that the lease be "guaranteed" was modified by the District consistent with the specification of the invitation for bids relating to the appropriation of funds. On the day of the District Board meeting approving a lease-purchase with Mid America, January 14, 1987, the District entered into a contract with Mid America for the lease-purchase of a Speedstar SS-135. SJRWMD Ex. 3. The lease agreement contains a Paragraph allowing the District to terminate the lease upon nonappropriation of funds, Subject to certain conditions. Id., para. 11. In February, 1987, Mr. Auld learned at a trade show in Orlando that the District had awarded the contract to Mid America. Mr. Auld called Ms. Mildred Horton, the Assistant Executive Director of the District, to ask for the reasons why his bid was not accepted. Ms. Horton wrote a letter to Mr. Auld dated February 17, 1987, Setting forth the reasons for the award to Mid America and attaching two amortization Schedules, one for each bid. The letter and attachments is P. Ex. 6. Ms. Horton stated that the Schedules attached were the only ones in existence, to her knowledge. None of the reasons given by Ms. Horton for the rejection of the Petitioner's bid could have been known prior to the opening of the bids. The amortization schedules attached to Ms. Horton's letter had been prepared by Mr., Schenk. The schedule for the Petitioner's bid showed a total cost over a three year period of $224,344, which resulted in an effective interest rate of 31 percent compared to the outright purchase price on the Petitioner's bid of $146,976. The schedule assumes that the Petitioner's bid was for a monthly payment of $6,885 for two years followed by a monthly payment of $4,592 in the third year. P. Ex. 6. Mr. Schenk testified that he considered the possibility that the Petitioner's bid for a three year lease purchase was $4,592 per month for 36 months, and prepared an alternative amortization table based upon that possible interpretation as well as the amortization table attached to the letter sent to Mr. Auld by Ms. Horton described above. P. Ex. 12. Mr. Schenk concluded, however, that the Petitioner's bid should be interpreted as a bid of $6,885 per month for two years and $4,592 for the third year, for a total cost of $224,344. He testified that it was confusing that the Petitioner's bid did not contain a price for the first year, but he also concluded that the price of $6,885 placed on the second line of paragraph B) of the Petitioner's bid was intended to be a price for both the first year and the second year. He further testified that the Petitioner's bid may have been more understandable had the word "renewable" been stricken on the bid form. Finally, he testified that he disregarded the additions to the Petitioner's bid form because these were "alterations" to the form, but considered the additions to the bid form by Mid America because these were only "additions." As discussed above, after the Second invitation for bids was published, the District was Primarily interested in receiving bids for a three year lease-purchase. The bid blank in the second invitation for bids, however, failed to provide a clear method for bidders to bid that option. Paragraph B) of the bid blank drafted by the District was defective because it did not in any manner state that a purchase (a transfer of ownership) was included in the "lease" for which a price was being asked, because it failed to state whether the District wanted bids on a one year lease- purchase, a two year lease-purchase, a three year lease-purchase, or only a lease for those periods of time, because the word "renewable" was susceptible of being interpreted as renewal from month to month as well as from year to year, as so construed in Mr. Schenk's December 12, 1986 recommendation to the District Board. Paragraph B) was also defective because it failed to provide a place to show the price of the purchase option at the end of the lease, or zero if there were to be none. Without the "CONDITIONS" attached to the Mid America bid, the filled-in blanks of Paragraph B) on the bid form only resulted in a bid on a lease. Mr. Schenk recognized this as he construed Paragraph B) of the form as only asking for a lease bid when he informed the District Board of option number 2 in his memorandum of December 12, 1986. P. Ex. 13. Since the bid form was defective, it was foreseeable that bidders would have to have added additional words to the bid form to make it sensical. It was also foreseeable that different bidders would take different approaches in trying to draft additions to the form to enable them to bid all critical aspects of a lease that included a purchase at the end of the lease. The bid of the Petitioner should have been construed with this foreseeability in mind. In particular, the failure of the Petitioner to place a price on the first line of paragraph B) (relating to the first year) coupled with the placing of a price at the second year line and the third year line, and the addition of the words "owned at end of second year" and "owned at end of third year" should have been construed as the Petitioner's attempt, like the attempt of Mid America, to cure the ambiguities in the bid form. As discussed above, without such words, a price in the first line of paragraph B) of the bid form would have only been a bid for a renewable lease for one year, with no purchase option. The District argues that it did not ask for a bid on a two year lease-purchase, and that the Petitioner's attempt to bid on that as well as on a three year lease-purchase caused confusion. But the problem is that the bid form, as discussed above, did not ask for any purchase associated with a lease, and asked for prices for a lease that could have either a one, two or three year term based upon the option to renew. It was not unreasonable, then, for the Petitioner to have bid a two year lease-purchase. The interpretation of Petitioner's bid as a bid for a total cost of $224,344 over three years is not reasonable. The interpretation of the Petitioner's bid as providing for a total cost of $224,344 over three years results in an interest cost of 31 percent, a rate of interest that is facially unreasonable. But more important if, as assumed in that interpretation, the District were to enter into a contract with the Petitioner at a monthly charge of $6,885 per month for two years, it would own the Failing drill rig at the end of the second year. This is so because the Same line that contains the price ($6,885) also has the added words "owned at end of second year." If it owned the rig after two years, the District Surely would not continue leasing it for the third year at $4,592 per month. Payment of $6,885 for 24 months would cost a total of $165,240, which reasonably compares to Petitioner's outright purchase price of $146,976, plus the cost of paying over a two year period. Since it was more reasonable to construe line two of the Paragraph B) of the Petitioner's bid form as a bid for a two year lease-purchase, the third line should have been given the same construction, that is, to construe the price placed on the line as the price each month for the entire period (here, three years) with ownership automatic at the end of the term. The reasonable interpretation of line 3 of Paragraph B) of the Petitioner's bid is for a lease-purchase for three years at $4,592 per month, for a total cost over three years of $165,312, the rig then being owned by the District at the end of 36 months with no buy-out cost. The reasonableness of this interpretation is further supported by the fact that payment of $165,312 on a machine that cost $146,976 to buy outright results in an interest rate for payment over three years of 7.9 percent, which is a normal and usual interest rate that would be expected in a competitive bid. P. Ex. 12. Mid America's bid offered to deliver in 21 days, while the Petitioner offered to deliver in 120 days. Since the District was then renting drilling equipment at $4,612 per month, it would potentially have incurred about one month extra rental ($4,612) on the Mid America bid, and $18,448 for four months extra rental on the Petitioner's bid, or an additional cost of $13,836 on the Petitioner's bid. Including this cost of rental during the potential delivery period, the net cost of the Petitioner's three year lease-purchase bid was $183,760, and the net cost of the Mid America bid alternative that was accepted by the District was $193,289. Thus, with respect to the bid actually accepted by the District, the Petitioner's bid was $9,529 less than the bid of Mid America. During the formal administrative hearing, it appeared from the evidence that the District relied upon the following additional issues, other than price, as the reasons for selection of the Mid America bid: One year guaranteed non-routine, major maintenance and repair on the lease equipment, renewable annually for the term of the lease. A manufacturers warranty of at least 6 months or 1,000 hours. The delivery date. The location of the maintenance Services. All of the foregoing were bid specifications printed on the bid form. P. Exs. 11 and 4. Of these, only the issue of non-routine maintenance was mentioned in the letter of Ms. Horton to Mr. Auld on February 17, 1987. P. Ex. 6. Mid America bid $3,000 per year for non-routine maintenance. The Petitioner Stated on its bid form that this item was "not available." Non-routine maintenance is needed only at the end of the warranty Period. In the industry, its is well understood that non-routine maintenance normally does not apply and is not Purchased until the end of the warranty period. The District had not purchased the non-routine maintenance at the time of the formal administrative hearing. The prices quoted in the bids, pursuant to the invitation for bids, were to have been fixed only for 90 days. Thus, it is uncertain whether the $3,000 bid of Mid America for non-routine major maintenance would still hold. The term "non-routine, major maintenance and repair" was not further defined by the bid form. Although the Petitioner did not bid on non-routine maintenance, it did offer a one year warranty which was six months beyond the minimum specified by the District. Thus, for this six months period only, the Petitioner effectively provided a free non-routine maintenance offer at least to extent of the warranty. But the Petitioner failed to offer non-routine major maintenance for the 24 month period following the first year of the lease. Both bidders complied with the specifications with respect to the manufacturer's warranty, but the Petitioner offered a warranty that was better by six months. The District Board was incorrectly advised that the Petitioner's warranty was only for 90 days (and thus not in compliance with specifications). P. Ex. 13. The delivery date was considered during the hearing only with respect to the cost of rental of equipment until the new rig would be delivered, and thus was an element of net cost discussed above. The Petitioner's delivery date caused its bid to have an additional rental cost of $13,836 as compared to the Mid America bid, but the Petitioner's total net cost still was lower than the Mid America bid, as discussed above. The Petitioner's location of maintenance services was Largo, Florida, and Mid America's location was Ocala, Florida. Mid America's location is approximately 100 miles closer to Palatka than the Petitioner's location. The difference is a difference of about 4 hours in travel time, roundtrip, or only two hours for delivery of a part. Mr. Schenk testified that this factor carried only "some weight." Mr. Schenk did not know how often maintenance at the seller's location might occur, what percentage of maintenance might be in the field rather than in the seller's shop, or the problems that might occur from lack of a part. From the testimony of Mr. Winchester, who was the only rig expert who testified, and the testimony of Mr. Munch regarding the leased Speedstar rig, it appears that maintenance on the rig for major problems should not occur very often, if at all, and that many problems can be corrected in the field. In most cases, parts will have to come overnight by bus. It is inferred that a part from Ocala will arrive no sooner by overnight bus than a part from Largo by overnight bus. Thus, the closer location of the Mid America shop is of little importance on this record. The February 17, 1987, letter from Ms. Horton to Mr. Auld Stated that the failure of the Petitioner to bid on a one year lease was one of the reasons for not accepting the Petitioner's bid. As discussed above, the District was primarily seeking a three year lease-purchase, not a one year lease, and communicated this to the two bidders. Indeed, it was the existing one year lease that prompted the desire by the Board to explore a purchase over time. The District did not enter into a one year lease with Mid America, either. Thus, a bid on a one year lease was not a material or substantial part of the bid specifications. Specification number 2, listed as a desired option, was that the drill rig have a five speed transmission. The Speedstar SS-135 had a five speed transmission, thus giving it a lower first gear, and the Failing CF-15 did not. There is no evidence that the Petitioner could have have offered a five speed-transmission. On the other hand, there is no evidence that a four speed transmission would not effectively meet the needs of the District. The only evidence was that the five speed transmission would have a lower first gear, but there was not substantial evidence that the District would encounter drilling circumstances needing only the lower gear of the Speedstar SS-135. When the rotary table is retracted on the Speedstar SS- 135, the opening is 18 inches in diameter, thus allowing the Speedstar SS-135 to set 16 inch casing. The Speedstar SS-135 otherwise marginally has the power and related mechanical ability to drill and set 16" casing, particularly lighter PVC casing, to depths of 80 feet in about six hours. Drilling the first 80 feet in six hours is very slow in comparison to the normal operation of either the Speedstar SS-135 or the Failing CF-15, and would be more a matter of use of the mud pump to wear away the soil rather than actually drilling the hole. However, the Speedstar SS-135 is in fact being used in Florida by other owners to drill and set 16 inch casing. When the rotary table is retracted on the Failing CF-15, the opening is 14 1/2 inches in diameter, and thus the Failing CF- 15 does not have any capacity to drill or set 16 inch casing. If the District had chosen the Failing CF-15, in those cases in which it needed to drill and set 16 inch casing, it would have to contract out to a larger drill rig to drill and set such casing. In all other respects the Speedstar SS-135 and the Failing CF-15 are functionally equivalent machines, and are considered to be equivalent in the industry. For the most part, the design differences explained by Mr. Munch with respect to the video tape of views of both machines were not differences causing the machines to be not functional equivalents, except as discussed above. The recommendation of the staff of the District to purchase the Speedstar SS-135 would probably have been the same, based upon factors other than price, had the staff considered the bid of the Petitioner to have been $9,529 less than that of Mid America for a three year lease-purchase, as discussed in finding of fact 60. While the District entered into the process of obtaining bids for the drill rig with a preference for a rig capable of performing like the Speedstar SS-135, it did not intend to favor the Mid America Company over the Petitioner, nor did it act in bad faith. At all times relevant to these invitations for bids and award of the contract, the District did not have rules governing purchasing of commodities or governing the notification to interested persons concerning the procedures for contesting a proposed purchase. It did not have any policy or rule requiring that the lowest bid be accepted without consideration of other factors. It did have written policies, SJRWMD Exs. 1 and 2, providing for the following: Purchases in excess of $5,000 must be advertised in a newspaper of general circulation no less than ten days prior to bid opening. The District Purchasing Director may withdraw the entire proposal, and may reject all bids or parts of bids, if the District's interest will be served by that action. Departments or Divisions of the District submitting requisitions must do so with items described in such terms to allow unrestricted bidding and to afford full opportunity to bid to all qualified bidders. Any purchase order made contrary to the provisions of the purchasing policies shall be of no effect and void.
Recommendation For these reasons, it is recommended that the St. Johns River Water Management District enter its final order that the bid of the George E. Failing Company pursuant to Bid Number 87-01, second call for bids, dated November 6, 1986, was properly rejected because it did not meet all specifications of the invitation to bid. DONE and ENTERED this 28th day of August, 1987. WILLIAM C. SHERRILL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-1606BID The following are rulings upon findings of fact proposed by the parties which have been rejected. The numbers correspond to the numbers used by the parties. Findings of fact proposed by the George F. Failing Company: 2. The third sentence is rejected because Mr. Munch chose the Speedstar SS-135 as a basis for the Specifications due to his familiarity with the leased drill rig of the same make. 6. Not relevant. 19 and 20. Mr. Auld's testimony that a manufacturer's warranty on a 1985 truck would be less inclusive that on a 1987 truck was hearsay, and cannot support a finding of fact as to that point. Thus, those portions of these proposed findings concerning a 1985 truck are irrelevant. 36. Ms. Vergara did not testify that the planned monitoring wells would be 2,000 feet deep. 38. Subordinate to finding of fact 71. 45. Rejected by finding of fact 42. Rejected by finding of fact 50. There is no evidence that the Speedstar SS-135 bid by Mid America was a display model. The delivery date of the Speedstar SS-135 is not in evidence. Findings of fact proposed by the St. Johns River Water Management District: 4. There is no evidence as to the depths of the proposed monitoring well network, and thus a finding of fact that the depth will be 1000 feet cannot be made. 8. The existence of a buy-out price in the first Mid America bid did not cause the bid to be unclear. 12. The fourth sentence, as to what the District thought the second bid blank "should" contain, is not supported by the evidence. The last sentence is rejected because it is not clear that the bid blank was a "renewable lease-purchase in one year intervals." See findings of fact 34, 55, and 56. 14. The evidence is that the Speedstar SS-135 can set 16 inch casing, not 17 1/2 inch casing. The findings concerning the failure of the Petitioner's bid to give the District the option of being able to "exit the lease" in one year is rejected because that option was securely provided in the invitation for bids, so securely so that it was construed by the District to be an implicit part of the Mid America bid that ultimately was accepted by the District. See finding of fact 50 concerning the non-appropriation of funds condition. Additionally, the findings concerning the inability of the District to construe the bid of the Petitioner to know its first year fiscal obligations are rejected for the reasons stated in findings of fact 56 through 58. The second sentence is rejected for the reasons stated in findings of fact 34 and 55. The last sentence is rejected by these findings of fact as well; the ambiguity was created by the bid form, not by the bidders. These findings of fact have essentially been rejected by findings of fact 34 and 55. Further, the word "renewable" was not inconsistent with ownership at the end of a two year period because the word "renewable" could be given the construction given it by Mr. Schenk, renewable from month to month. See finding of fact 49. 22 and 23. Rejected for the reasons stated in findings of fact 34 and 55 through 58. These proposed findings of fact are essentially correct as a matter of law, but are not facts. These findings of fact are rejected by findings of fact 34 and 55 through 58. 27. The last sentence of proposed finding of fact (4) is rejected for the reasons stated in finding of fact 66. 29. Subordinate to finding of fact 71. 32. While these Proposed findings are true and have been Substantially adopted, the proposed findings are not relevant in view of the stipulations contained in findings of fact 1 and 2. COPIES FURNISHED: Dale Twachtmann, Secretary Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Daniel H. Thompson, Esquire General Counsel Department of Environmental Regulation Twin Towers Office Building 2600 Blairstone Road Tallahassee, Florida 32399-2400 Henry Dean, Executive Director St Johns River Water Management District Post Office Box 1429 Palatka, Florida 32078-1429 Linda M. Hallas, Esquire 9455 Koger Boulevard, Suite 209 St. Petersburg, Florida 33702 Wayne E. Flowers, Esquire Post Office Box 1429 Palatka, Florida 32078-1429
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint issued against him and, if so, what disciplinary action should be taken against him.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is now, and has been at all times material to the instant matter, registered as a septic tank contractor with the Department. In July 2002, Respondent entered into a contract with Pro Gold Investments Corp. (Pro Gold), whose president and sole owner is Emerico Kemeny Fuller. The contract provided that Respondent would install a "new septic system" for Pro Gold at 453 Blue Road in Coral Gables, Florida (Blue Road Property) for $4,600.00, a job that should have taken only a "few days" to complete. Pro Gold gave Respondent a "job deposit" of $2,300.00. In July 2003, Pro Gold, by Warranty Deed, conveyed title to the Blue Road Property to Maurits de Blank's company, Mortgage Lending Company LLC (MLC), and it also executed a Bill of Sale, Absolute and Assignments of Contracts, which read as follows: PRO GOLD INVESTMENTS CORP, as Seller, in consideration of Ten Dollars ($10.00) and other valuable consideration paid to it by MORTGAGE LENDING COMPANY, LLC, as Buyer, the receipt of which is acknowledged hereby sells, assigns, grants, transfers, and conveys to Buyer all of Seller's right, title, and interest in the following described goods, contracts and personal property: SEE ATTACHED EXHIBIT "A- PROPERTY" AND EXHIBIT "B- CONTRACTS ASSIGNED" Seller covenants and agrees that it is the lawful owner of goods, contracts, rights or interests transferred hereby; that they are free from all encumbrances, except for outstanding amounts due, if any, to those parties set forth on Exhibit "B," and that it has the right to sell, transfer and assign the goods, properties and rights set forth in the attached Exhibit "A," and the right to transfer and assign the contracts, rights or interests shown on Exhibit "B," and will warrant and defend same against the lawful claims and demands or all persons. The "attached Exhibit 'A- Property'" read, in pertinent part, as follows: (Regarding transfer of 453 Blue Road, Coral Gables, Florida, "the Real Property") (Mortgage currently in favor of Mortgage Lending Company, LLC "the Mortgage") All property rights of any kind whatsoever, whether in property that is real, fixed, personal, mixed or otherwise and whether in property that is tangible or intangible, including, without limitation, all property rights in all property of any kind whatsoever that is owned or hereafter acquired by the Company and that is associated with, appurtenant to or used in the operation of the Real Property or is located on, at or upon the Real Property and is associated with or used in connection with or in operation of any business activity conducted on, at or upon the Real Property, and including, without limitation, the following: * * * All right, title, and interest in those certain contracts and agreements [set] forth in the attached Exhibit "B," which are hereby transferred and assigned to Mortgage Lending Company LLC. Among the "contracts and agreements [set] forth in the attached Exhibit 'B,'" was the aforementioned July 2002, contract wherein Respondent agreed to install a "new septic system" for Pro Gold on the Blue Road Property (Septic System Contract). This contract was still executory. Respondent had not done any work on the site in the year that had passed since the contract had been signed. In the beginning of August 2003, Mr. de Blank met with Respondent and advised him that MLC was the new owner of the Blue Road Property and that MLC had also received an assignment of the Septic System Contract from Pro Gold. In response to this advisement, Respondent stated "he did not do assignments." Following this meeting, Mr. de Blank sent Respondent documentation supporting the assertions he had made regarding MLC's ownership of the Blue Road Property and its having been assigned the Septic System Contract. Mr. de Blank then attempted, unsuccessfully, to make contact with Respondent by telephone. He "left messages," but his telephone calls were not returned. These efforts to telephonically communicate with Respondent having failed, Mr. de Blank "decided that it may make some sense to start a letter writing program." As part of that "program," on September 8, 2003, Mr. de Blank sent Respondent the following letter: Re: 453 Blue Road, Coral Gables As background, and in chronological order: Pro Gold Investments purchased the above cited property and obtained a construction loan from our firm. One of the conditions was that all construction contracts would be assignable to our firm in the event of default. Pro Gold Investments entered into contract with your firm to install a new septic tank and drainfield at 453 Blue Road. Pro Gold Investments defaults and forfeits title in lieu of foreclosure. The deed was recorded on August 4, 2003, at Bk/Pg: 21484/4283. Not recorded but attached for your reference is an assignment of contracts to include the contract Pro Gold Investments entered into with your firm. See further attachment. The original can be inspected in my office. At this point, I request you proceed with the work as soon as practical and under identical conditions as originally agreed with Pro Gold Investments. Please call me at . . . to confirm a start date. Mr. de Blank did not receive any response to his letter. He finally was able, however, to reach Respondent on the telephone. During this telephone conversation, Mr. de Blank made arrangements to meet Respondent at the Blue Road Property to discuss Respondent's doing the work Respondent had agreed to do in the Septic System Contract. This meeting between Mr. de Blank and Respondent took place on September 11, 2003. During the meeting, Mr. de Blank went over with Respondent "what the job [was] going to be." Although Respondent indicated that he was "going to put in th[e] septic tank" per the Septic System Contract, Mr. de Blank had his doubts that Respondent would be true to his word. Following the meeting, Mr. de Blank sent Respondent the following letter: Re: 453 Blue Road, Coral Gables We met today to discuss the above referenced job. My understanding is: You will start the job no later than the first week of October and will complete the job no later th[a]n the last week of October. I will obtain a copy of the approved permit. You indicated you will not need a survey.[1] Should you change you[r] mind, you can always refer to a survey I keep on site. You will have your insurance agent mail to my address a certificate of insurance. Though not discussed: I would like a partial release of payments made to date for the job. See further the attachment. Assuming you concur, then please send a signed and notarized copy to Maurits de Blank, Mortgage Lending Company, Post Office Box 430336, Miami, Florida 33143. Note that I prefer for various legal reasons that you use the release form as provided. Once the job has been started, I would like a list of firms supplying materials to the job. Notwithstanding that he had promised Mr. de Blank that he would "start the job no later than the first week of October," by the middle of October Respondent had yet to even "pull a septic tank construction permit from the City of Coral Gables" (that was needed before any on-site work could begin).2 In an attempt to find out from Respondent what was the cause of the delay, Mr. de Blank started a "calling campaign," but Respondent neither answered the telephone when Mr. de Blank called nor returned Mr. de Blank's calls. On October 19, 2003, Mr. de Blank sent the following letter to Respondent (by certified United States Mail, return receipt requested): Re: 453 Blue Road, Coral Gables I need a firm commitment when you will start and finish septic tank at above address. If you cannot perform the work, then I will need a refund of the deposit given to your firm. Please call to discuss. The end of the month was fast approaching, and Respondent had neither contacted Mr. de Blank nor begun the Septic System Contract on-site work. After paying a visit to Coral Gables City Hall and learning that Respondent had still not even "pull[ed] a septic tank construction permit from the City of Coral Gables," Mr. De Blank found another septic tank contractor, Westland Septic Tank Corp., to do the installation work for MLC that Respondent was contractually obligated to perform. MLC paid Westland $4,400.00 to do the work. Westland completed the job some time prior to November 4, 2003. The work passed all of the necessary inspections. Upon learning that MLC had contracted with Westland, Respondent sent Mr. de Blank a letter complaining that Mr. de Blank had not given Respondent an adequate opportunity to meet his obligations under the Septic System Contract. In the letter, Respondent offered to return only $500.00 of the $2,300 down payment he had received from Pro Gold. Mr. de Blank subsequently informed Respondent that this was not satisfactory and that he wanted the "full deposit back." He added that if he did not get it, he would "go to court." Not having received any portion of the "deposit back," Mr. de Blank, acting on behalf of MLC, in mid-November 2003, filed suit against Respondent in Miami-Dade County Court. On May 14, 2004, a Final Judgment was entered in Miami-Dade County Court Case No. 0313813 in favor of MLC and against Respondent "in the amount of $1,675.00 plus court costs in the amount of $121.00." As of the date of the final hearing in this case, Respondent had not made any payments to MLC. In view of the foregoing, it is found that Respondent abandoned for 30 consecutive days, without any apparent good cause, a project in which he was under contractual obligation to complete; and his failure to go forward with the project, combined with his failure to return any of the deposit he had received, caused monetary harm to a party to whom he was contractually obligated.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby: RECOMMENDED that the Department issue a final order finding Respondent guilty of the misconduct alleged in the Administrative Complaint and disciplining him therefor by fining him $500.00 and suspending his registration for 90 days. DONE AND ENTERED this 4th day of February, 2005, in Tallahassee, Leon County, Florida. S STUART M. LERNER 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 4th day of February, 2005.
