Findings Of Fact Prior to June, 1988, HRS determined that it needed 32,000 square feet of office space to house some of its indigent social services for southern Escambia County. Since the desired office space is greater than 2,000 square feet HRS was required to competitively bid lease number 590:1984. Towards that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety one building to house all its units employee morale moving costs traffic flow within the building public access Many of the above areas were important to HRS since the agency would render indigent services to approximately 17,000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. Employee morale was important because of high employee burn out due to rendering aid to so many people who have so little and supplying a pleasant environment conducive to the work of the employees. Moving costs were important should HRS be required to find other space to operate in while necessary remodeling took place in the selected building, or be required to incur the expense of moving to a new building. 1/ All of the above areas were covered by one of Respondent's weighted bid evaluation criteria. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task, Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure a cross section of input from people who had a variety of backgrounds and knowledge that would be material in evaluating the office space under the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individual who were familiar with the type of work to be done in the proposed space, as well as a persons familiar with the bid process. Ms. Schembera assigned to serve on the committee Charles Bates, Deputy District Administrator; Jim Peters, to provide a fiscal and overall administrative perspective as well as bid expertise; two citizens from the District Advisory Council to assure objectivity and to look at the properties from the perspective of a private citizen; Mamun Rashied, a program manager; Darlene McFarland, a program manager; Cherie Neal, a unit supervisor and program worker; and Stacey Cassidy, a clerical employee. Ms. Schembera did not personally know Cherie Neal or Stacey Cassidy. These staff members were designated by the supervisors upon Ms. Schembera's direction that she wanted persons who were both intelligent and respected by their peers. One private citizen member of the committee did not participate. The committee as constituted showed a great deal of thought on Ms. Schembera's part to ensure the objectivity of the bid process she was engaging in and to ensure the maximum amount of input from persons who had experience relevant to the overall review of the proposed real estate and to the decision they were being asked to make. The selection of the bid evaluation committee members was neither an arbitrary nor capricious act on Ms. Schembera's part. In fact, the evidence demonstrated the merit in constituting the committee as she did for the input she sought. The bid evaluation committee members, minus Mr. Bates, were briefed on their duties by Joe Pastucha, Facilities Services Manager. Mr. Pastucha is part of the staff responsible for the bid process at HRS. He provided these committee members with the weighted bid evaluation criteria found at page 15 in the bid package. He also gave the committee members a copy of Chapter 5 of the HRS manual containing guidelines for the bid process. His verbal instructions on specific procedures to follow in the evaluation process were limited since he did not wish to improperly influence the committee members. On July 20, 1988, HRS received three bids responding to its invitation to bid on Lease Number 590:1984. Bid A was submitted by Phillips and Company, the apparent second lowest bidder and Intervenor in this case. Its property consisted of one multi-story building located at 1740 North Palafox Street, Pensacola, Florida. Bid B was not responsive and therefore was not considered by HRS and is not a part of this litigation. Bid C was submitted by Petitioner Carmon S. Boone, and was the apparent low bid. Mr. Boone's property consisted of two buildings located at 401 and 411 North Baylen Street, Pensacola, Florida. The Boone property is the present location of Respondent's offices. Both Bid A and Bid C were within the mandatory geographical area designated in the bid package. Once the bids were received the bid evaluation committee began its work. The committee members, minus Mr. Bates, visited the Phillips property. However, the members did not visit the Boone property. There was no need. Four of the members currently worked at the Boone property and the other members had previously visited the Boone property on various other occasions. Mr. Bates was likewise already familiar with both properties. All members were sufficiently familiar with the cogent aspects of each property to allow them to make a rational decision. The bid evaluation committee, minus Mr. Bates, met as a group to evaluate each property in accordance with the weighted bid evaluation criteria. Each individual scored their sheets separately and the general consensus was supportive of recommending the Phillips property. Five committee members scored Mr. Phillips' property higher than the Boone property. The one exception was Mr. Peters who felt that HRS could not support a bid awarded for other than monetary reasons, i.e., he felt the lowest bid had to be accepted. Mr. Bates later reviewed all the bid synopsis sheets of the committee members and discussed the bid award with Mr. Peters and Mr. Pastucha. Mr. Bates felt that the Phillips property was the lowest and best bid. At about the same time, the staff responsible for providing technical assistance to the committee and the District Administrator were made aware that the general consensus of the committee was leaning towards the second lowest bidder, Phillips and Company, as the lowest and best bid. The staff members, one of whom was a bid committee member, disagreed with the award of the bid to Phillips and Company because the Boone property was the lower bid. The staff members sought to head off the committee's intended recommendation. The staff personnel held a meeting with some of the committee members in order to get them to join in a recommendation to Ms. Schembera of the Boone property. Mr. Boone was invited and attended the meeting. He was allowed to improperly bolster his bid by agreeing to convert the two buildings to one and other lesser additions. /2 The potential decision was discussed, but no committee member changed his or her mind. However, through a total lack of communication, a run away staff somehow rationalized themselves into a position of being authorized to submit a letter for Ms. Schembera's signature which awarded the Boone property the lease. Ms. Schembera became aware of her staff's attempt to subvert the bid process she had established. She refused to sign the letter submitted by the staff. She removed the staff member of the committee as a voting member. The staff member had supported the Boone property. She also removed a committee member who supported the Phillips property as a voting member. Ms. Schembera feared that her staff had improperly influenced this member to such an extent that his objectivity had been affected. Both members could still participate in committee discussions. Ms. Schembera thereby reasonably ensured the ongoing objectivity of the bid evaluation committee. The committee was reconvened, minus one member. It recommended the Phillips and Company property. Every reason given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that the Phillips property was the better property for the money. The Phillips property allowed working units to be located in one area with each such unit having its own access. It provided flat safe parking areas and sidewalks, bigger and more elevators, wide halls and windows which presented a bright, happy and pleasant working environment. The Boone property was in two buildings which could not accommodate co-located working units with their own access no matter how much remodeling took place. Parking and sidewalks are on a hill which is slippery when wet. It had one small elevator and narrow halls which did not adequately accommodate more than one wheel chair, and one ground floor where no windows could ever be remodeled into the building leaving a dark, dingy and unpleasant environment. Importantly, every committee member except for the staff member came to the conclusion that the Phillips and Company property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a particular piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. After reviewing and considering information from the bid evaluation committee, the information on the bid synopsis sheet, and the oral recommendations of Mr. Bates, Mr. Peters and Mr. Pastucha, Ms. Schembera concluded that the Phillips property was vastly better, even considering costs. She found it to be materially superior in terms of construction, organization, client accessibility, handicap accessibility, repairability (in terms of walls), and maneuverability for clients and staff. She felt the Phillips' building's qualities would offer more "humanity" to the process of serving the Department's clients. Additional facts she considered when making her decision included the morale of the staff and their productivity; the ability of staff and clients to conduct their business in a reasonably pleasant, comfortable, safe, and easy to understand and comprehend environment; and the desire to provide a minimally adequate work space. In addition to other monetary costs, she considered energy costs and life cycle costs as reflected on the bid synopsis sheet. The bid synopsis sheet defined minimal energy and life cycle costs to be anything less than 55 BTU's per square feet per year. In this case, the Boone property reflected 39.5 BTU's per square feet and the Phillips property reflected 53.5 BTU's per square feet. Both properties were under the 55 BTU cutoff established by HRS. Translated into monetary figures (life cycle costs) the Boone property reflected a cost of $26,735.00 and the Phillips property reflected a cost of $41,160.00. It was the difference between the energy figures which caught Ms. Schembera's eye. In her layman's opinion, it was incomprehensible that the two buildings would have such a wide divergence of energy costs. /3 She learned from her staff that the information used to compute these costs was supplied by the bidders who had vested interests in the outcome. Ms. Schembera concluded the cost difference was minimal and not of overriding concern in relation to the physical characteristics of the two buildings and how they compared to each other. She quite correctly felt the two buildings were not comparable. In essence, the two buildings' differences in design location and construction rendered neither building comparable to the other building as a like facility under Section 255.254, Florida Statutes. 4/ Based on that information she gave the energy figures relatively little weight. More importantly, however, before the final bid award was made by HRS, the Division of General Services within HRS in its failsafe role in reviewing bids considered the life cycle cost figures of the two bids. The minimal language of Section 255.254, Florida Statutes, has been interpreted by HRS to mean that anything under 55 BTU's is minimal and except in one instance not applicable here, numerical differences under 55 BTU's are immaterial. The Division, without getting into the issue of the likeness of the facilities, concluded that both bids met the Department's interpretation of the "minimal" language of Section 255.254, Florida Statutes, and the relative numerical difference in the energy costs was immaterial. Ms. Schembera is entitled to rely on other more expert HRS Division staff to ensure a proper analysis of highly technical bid specifications such as the energy cost analysis required under Section 255.254, Florida Statutes. It does not matter that the review took place after Ms. Schembera had made her preliminary decision. What is important is that the review be made either personal or vicariously through staff before the final award is made. A proper review of energy costs was, therefore, made by Respondent before the final award was made. Likewise, Ms. Schembera's ultimate decision that the buildings were not comparable like facilities was a proper review of energy costs even though that conclusion was arrived at through a layman's unsophisticated, but more accurate intuition and common sense. To that extent, the energy cost data had no impact on the ultimate choice made by the District Administrator and were properly considered by the District Administrator. 5/ A letter for Ms. Schembera's signature adopting the committee's recommendation was drafted by Mr. Pastucha. The letter was signed and sent to the Department's Division of General Services for review. The District was requested to provide additional justification for its choice by the Department's Division of General Services. Mr. Rashied was directed to draft the response. He simply reorganized the original memorandum into a format more compatible with the Division's direction, clarified a few points and without significantly changing the content, submitted the response as directed. The Division acquiesced in Ms. Schembera's decision.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order dismissing Case NO. 88-4900BID, and awarding lease number 590:1984 to Phillips and Company as the lowest and best bidder. DONE and ORDERED this 5th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER 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 5th day of January, 1988.
The Issue The issue presented for decision herein is whether or not the Intervenor, V.I.P. Painting and Sandblasting, is the lowest responsible bidder on state project numbers 73906-9004 and 76906-9004. FIMDINGS OF FACT 1..Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings. 2..Petitioner, C-Line Coating, and the Intervenor, V.I.P. Painting and Sandblasting, submitted bids to perform work for the above-referenced projects, which consisted of cleaning and painting all structural steel located in the scale pit areas of the Flagler Beach and Palatka Scales on State Roads 9 and 100, respectively, in Flagler and Putnam Counties. Sealed bids were to be received in the downstairs conference room of the District Office, Department of Transportation, 719 S. Boulevard, Deland, Florida, on February 14, 1985. The bid opening was scheduled to occur at 9:30 a.m. (Deland local time). On February 14, 1985, the bid letting occurred pursuant to notice in an advertisement to prospective bidders. Respondent received bids on said projects from Petitioner and Intervenor prior to 9:30 a.m.; however, the bid from Intervenor was not opened until after the scheduled letting. Intervenor's bid was opened, after notice to all bidders, on February 25, 1985. Of the bids opened by Respondent on February 14, 1985, Petitioner was the apparent low bidder; however, upon later opening the bids submitted by the Intervenor, that bid was deemed the lowest responsible bidder by the Respondent, and the Respondent gave notice of its intent to award the contract to Intervenor. Pursuant to the Notice to Contractors issued by the Respondent, bids or proposals were to be delivered to or mailed to arrive at the Department office designated in the Notice to Contractors prior to the deadline set out in the Notice, which, in this case as stated, was February 14, 1985. The Department office designated on the Notice was 719 S. Boulevard, Deland, Florida. (Respondent's Exhibit 1) Intervenor mailed its bid by certified mail, return receipt requested, to the designated address on February 11, 1985. The U.S. Postal Service placed their first Notice of Receipt of Intervenor's certified envelope containing its bid in the Respondent's post office box on February 13, 1985 sometime after the morning pickup by the District office employee (Respondent). Respondent had Intervenor's bid in its possession on the morning of February 14, 1985, prior to 9:30 a.m., though it was not in the hands of the officer who conducted the bid letting (Thomas George) at the time the bids were opened. (Respondent's Exhibit 2) Lewis Santucci2 left the Deland District office at aprroximately 9:00 a.m. on February 14, 1985 to pick up the mail at the Deland Post Office. Santucci picked the mail up at approximately 9:15 a.m. and arrived back at the District office with the mail pouch at approximately 9':30 a.m. The mail, which contained the Intervenor's bid, was placed in the upstairs mailroom where all bids, etc. are placed at approximately 9:30 a.m. (Respondent's Exhibit 2) Petitioner contends that Intervenor's bid was not a responsible bid inasmuch as it was not placed in an outer envelope which designated the number of the project on the outside of the sealed envelope. In this regard, Mr. George related that Petitioner's bid also did not contain the number of the project involved when Petitioner submitted its bid. Mr. George, however, placed the project number of Petitioner's bid on the envelope which appeared to cure that minor problem. That minor omission, by both the Petitioner and Intervenor, did not cause any confusion in the bid letting and was, at most, harmless error.
The Issue The issues are 1) Whether the Department of Health and Rehabilitative Services (HRS) properly rejected all bids on Lease Bid No. 590:2133, and 2) Whether either Petitioner is entitled to award of Lease Bid No. 590:2133 as the lowest and best responsive bidder.
Findings Of Fact On October 16, 1989, HRS issued an Invitation to Bid (ITB) on Lease Bid No. 590:2133 for 43,634 net square feet of office space in Ocala, Marion County, Florida. The bid package contained specifications, evaluation criteria, and numerical weight to be assigned to each criteria. The bid package indicated the area of emphasis placed on the facility by HRS which focused on client safety, public access, availability of public transportation, and parking. The emphasis on each area was indicated by the weighted points to be given in each area. On January 24, 1990, HRS received bids from both Wharton and Curtis. Both bids were responsive. Curtis submitted the apparent low bid and Wharton submitted the apparent second lowest bid. Curtis, as Trustee, is the owner of the property which is presently occupied by HRS in Ocala, Florida. The lease on these premises was awarded in 1980 and expires in 1990. Curtis purchased the leasehold in April of 1988 while HRS was a tenant and subject to the existing lease. Philip J. Procacci is the President of Procacci Development which is the general partner in Wharton Investment Group. The actual bids submitted were not offered into evidence by any party in this proceeding. Susanne Casey, the District Administrator of HRS District 3, is ultimately responsible for the leasing of all HRS facilities in the district, including facilities in Marion County. Casey appointed a bid evaluation committee to review and evaluate the responsive bids based on the criteria stated in the bid package. The committee was to make a recommendation regarding the lowest and best bidder. Before the bids were opened, the bid evaluation committee met and agreed upon objective parameters for each of the evaluation criteria. These parameters established standards against which each committee member could independently evaluate and award points on each bid. The evaluation criteria in the bid package assigned points in three major categories: associated fiscal costs, location, and facility. Associated fiscal coasts were further broken down into (a) rental rates for the basic lease term, (b) rental rates for optional renewal terms, and (c) associated moving costs. The maximum points available in each of these categories were fixed in the bid package and could not be altered by the committee. These criteria are standard in a lease procurement through out the state. State regulations require that all bids for lease space in the state evaluate rental rates using present value methodology. See Rule 13M-1.029, Florida Administrative Code. This means that the proposed rental rates in all bids are calculated to present value dollars for the purpose of comparison. The Department of General Services has a computer program, the sole function of which is to calculate the present value of the rental rates. The program has nothing to do with the assignment of points under the criteria, but is used as a tool to allow comparison of the bids. The present value of the Curtis bid was $662,464 lower than the present value of the Wharton bid. The rental rates were awarded points under criterion 1a of associated fiscal costs. The committee awarded the full 20 points to Curtis and awarded 5 points to Wharton. The committee members awarded these points in accordance with the standards and formula they had agreed on prior to the bid opening. The formula the committee used was not the more commonly used formula, but it was reasonable and rational and it was fairly applied to the bids in this case. There is no rule or policy of HRS or of the Department of General Services (DGS) that mandates that a particular formula be used in awarding points for the rental rate criterion 1a. There is a formula that HRS and DGS recommend as guidance of a methodology that is appropriate and reasonable, but the recommendation is not binding on the committee or on the District Administrator. There was another criterion of associated moving costs considered as part of the associated fiscal costs. Each committee member awarded 10 points to Wharton and 8 points to Curtis on this item. Wharton received 10 points because it sent a letter with its bid in which it offered to pay all moving costs incurred by HRS in a move to its building. Curtis received 8 points because HRS already occupied two of its buildings and would have limited moving costs in moving into the two additional buildings included in its bid. The bid specifications and bid package contained no indication that a bidder could offer to pay all moving costs as part of its bid. In fact, Wharton submitted its letter offering to pay all moving costs as a result of its discussion with one committee member, T.C. Little. Mr. Little is also the General Services Manager for HRS District 3 and is involved with all bids in the district. Mr. Little interpreted the bid specifications to permit such an offer even though the bid specifications were silent on the issue. At page 5 of the bid package, it is clearly stated that questions concerning the bid are to be directed to the project contact person. It further states: Any questions which might be prejudicial to other bidders will be answered in writing in the form of a clarification to the bid and will be sent to all prospective bidders. On that same page, the bid specifications address proposal of alternatives by stating: For evaluation purposes each bid submitted will be evaluated as to adherence to the specifications requested. If a bidder desires to propose alternatives to the specified specifications, he/she may do so by attaching a sheet to the bid submittal document titled Alternatives. However, these alternatives will not be presented to the bid evaluation committee for use in comparison of bids and can only be considered after an award of bid is made. The project contact person was Donald J. Cerlanek and any request for clarification should have been addressed to him and not to Mr. Little. Mr. Little's gratuitous advice and interpretation of the bid specifications made to Wharton and not to all bidders was incorrect, violated the terms of the bid specifications, and was improper. The bid specifications do not permit an offer to pay all moving costs to be considered in the award of points under the associated moving costs criteria. Such an offer can only be considered as an alternative proposal and cannot be considered by the bid evaluation committee in comparing the bids. Under the standards established by the committee, Wharton should have received 5 points on the associated moving costs criterion instead of 10 points. The committee members individually evaluated each bid and awarded points within the parameters they had established. Except for the incorrect award of points on the associated moving costs criteria, the scoring method and award of points by each committee member was rationally and reasonably related to the relative importance of each criterion as established in the bid package and was neither arbitrary nor capricious. Each committee member came to the conclusion that the Curtis bid was the lowest and best based on the award of points in each member's independent evaluation. On February 13, 1990, they recommended in writing that Curtis be awarded the bid. On February 19, 1990, the District Administrator adopted the committee's recommendation and reported the recommendation to Steven Gertel, the assistant staff director for HRS Facilities Services in the Office of General Services. On March 7, 1990, Mr. Gertel sent a memo to the District Administrator. The memo said: Review of the bid evaluation committee's recommendation has disclosed that the committee used a non-standard method of evaluating present value of rental rate for the lease term. Please provide an explanation of this variation to accepted practice. In fact, the committee used the established DGS formula to calculate the present value of rental rates. However, the committee used its own formula to award points based on the present value of rental rates. There was nothing impermissible about the committee's actions or formula. Because of a fear of a bid protest, Ms. Casey, the District Administrator, sent a notice rejecting all bids on the project. No other reason was articulated for rejecting all bids. The fear of a bid protest is not a legally sufficient reason to reject all bids, particularly because it is not stated in the bid specifications and is based on speculation about a future event which may never occur. HRS did reserve the right to reject all bids in the bid package, but it may not do so for an improper purpose. Fear of a bid protest is not a proper purpose. Wharton alleged and attempted to show some level of collusion between Curtis and Mr. Cerlanek of HRS. While Mr. Curtis had several contacts with Mr. Cerlanek about the project, such contacts are not per se inappropriate because Mr. Cerlanek is the District 3 Lease Coordinator and is the proper person to discuss future projects with potential bidders. No competent, substantial evidence was presented to show that Mr. Cerlanek discussed anything that was not public record or anything that gave Mr. Curtis any advantage in the bid process. Mr. Cerlanek did not tell Mr. Curtis what would be in the bid package or what would be needed to insure award of the bid to Curtis.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health and Rehabilitative Services enter a Final Order awarding the bid in Lease No. 590:5133 to Gail Curtis, as Trustee, as the lowest and best bidder. DONE and ENTERED this 27th day of September, 1990, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of September, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE NOS. 90-2459BID AND 90-2666BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Wharton 1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(5) and 19(27). 2. Proposed findings of fact 1, 5, 11-17, 20, 29, 30, 38, 39, 45, 46, 51, and 57 are subordinate to the facts actually found in this Recommended Order. 3. Proposed findings of fact 6, 8-10, 18, 21, 24, 25, 27, 31-34, 37, 40-44, 48- 50, 52, and 55 are irrelevant. Proposed findings of fact 7, 28, 56, 58, and 59 are unsupported by the competent, substantial evidence. Proposed findings of fact 22, 23, 26, 35, 36, 38, 47, 53, and 54 are mere summaries of testimony and are not appropriately framed as proposed findings of fact. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Curtis, as Trustee Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 4(11), 7&8(13), 9(14), and 15(25). Proposed findings of fact 1-3, 5, 6, 10-12, and 16-26 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 13, 14, and 27-29 are unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Health and Rehabilitative Services Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: Part I paragraphs 2(1&2), 3(4), 4(8), 5(30), Part II paragraphs 2(1&2), 3(3), 4(4), 5(8), 6(9), 8(10), 19(25), and 20(26). Proposed findings of fact Part I paragraphs 1 and 6 and Part II paragraphs 1, 7, 9, 10, 12-18, and 21-24 are subordinate to the facts actually found in this Recommended Order. Proposed finding of fact 11 is irrelevant. Copies furnished to: Robert A. Sweetapple Attorney at Law 465 East Palmetto Park Road Boca Raton, FL 33432 Harry R. Detwiler, Jr. Attorney at Law Holland & Knight Post Office Drawer 810 Tallahassee, FL 32302 Gloria Fletcher Attorney at Law 515 North Main Street, Ste. 300 Gainesville, FL 32607 Frances S. Childers District Legal Counsel Department of HRS 1000 Northeast 16th Avenue Gainesville, FL 32609 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue The issue in the case is whether the Department of Transportation's rejection of all bids in this case meets the requirements of law.
Findings Of Fact In August 1996, the Department sought bids for several road projects to be constructed in Bradenton, Florida. The projects were identified as State Project Numbers 13160-3512, 13160-6501, 13160-6502, and 13160-6512. The construction project includes utility relocation work to be performed on behalf of the Manatee County, the City of Bradenton, and GTE, the owners of various utilities within the project area. In preparing for road construction projects, the Department enters into joint partnership agreements with utility owners. The agreements identify the responsibilities of the parties related to performance of utility relocation/construction work related to the road project. Essentially, the owner and Department determine an estimated cost for the utility construction which the owner places into escrow and the Department assumes the responsibility for obtaining bids for the utility work. In the event that the bid exceeds the escrowed estimated cost, the utility owner may withdraw from the agreement. Upon such withdrawal, the joint partnership agreement provides that the owner may perform the work itself or the Department can pay the amount in excess of that which the owner has escrowed. If the Department agrees to pay the "excess" cost, the utility work remains included in the bid project. If the Department does not pay the "excess," the work is performed by the utility owner in accordance with the Department's construction schedule, and is deleted from the final contract negotiated with the winning bidder. Six companies filed bids in relation to the projects at issue in this proceeding, including Gator Asphalt Co., APAC- Florida, MacKenzie E.T. Company, Westra Construction Corporation, Smith and Co., Inc., and the Petitioner. The Petitioner's bid of $6,586,034.13 was the low bid submitted. The Petitioner has been properly prequalified by the Department to perform the work that is the subject of the bid at issue in this proceeding. The date upon which the bids were opened is unclear, but by October 4, 1996, the bids had been opened and tabulated. By letter dated October 4, 1996, the Department notified the City of Bradenton of the bid tabulation. Although the estimated cost of work to be performed on behalf of the city was about $400,000, the letter indicates that the total amount of the deposited escrow should be $534,160.50. The letter provided a deadline of October 10 to provide certification to the Department that the funds had been escrowed. Although the Department's letter of October 4 does not address whether the Department was willing to pay the "excess," the request for additional city funds indicates that the Department was not offering to pay the additional costs associated with the work. By letter dated October 9, 1996, the City of Bradenton withdrew its participation from the project. The city portion of the work was State Project Number 13160-6501. The Department's technical review committee met on October 9, 1996. The committee reviews bid proposals and makes a recommendation to the awards committee. There is no reliable evidence of what occurred during the technical review committee meeting. No one who attended the technical review committee meeting testified at the hearing. At the hearing, a witness who did not attend the meeting reviewed minutes of the committee meeting and testified as to what the minutes appeared to indicate. The minutes were not offered into evidence. The awards committee met on October 15, 1996. There is no reliable evidence of what occurred during the awards committee meeting. No one who attended the awards committee testified at the hearing. Despite the lack of information as to what occurred during the committee meetings of October 9 and 15, the evidence establishes that the Department made no attempt to recalculate the bid amounts after the City of Bradenton withdrawal. On November 4, 1996, the Department posted notice of its intention to reject all the bids for State Project Numbers 13160-3512, 13160-6502, and 13160-6512. Four bids exceeding the maximum acceptable bid established by the Department were rejected. Two bids, including the Petitioner's, were rejected as nonresponsive for failing to meet requirements related to utilization of "Disadvantaged Business Enterprises" (DBE) in the project. The Petitioner filed a timely protest of the Department's proposed rejection of all bids. The Department requires that each bid proposal either meet specific goals for DBE utilization or include an adequate "good faith effort" package identifying the efforts made by the bidder to meet the goal. The DBE goal for these projects was 12 percent of the total bid amount. Failure to either meet the DBE goal or submit an adequate "good faith effort" package renders a bid submittal nonresponsive. The evidence establishes that the Petitioner's bid was nonresponsive for failing to meet the DBE requirements. The parties have stipulated that the Petitioner's proposal did not include an adequate "good faith effort" package. The Petitioner's bid identifies DBE participation as 11.3 percent of its total bid. The Petitioner's total bid amount included the utility work for the City of Bradenton. The Petitioner asserts that a specification set forth in the bid package requires that the Department recalculate the bid proposals by deleting the City of Bradenton work from the project. Article 3-1 of the Supplemental Specifications issued as part of the bid package at issue in this proceeding, states as follow: The Department reserves the right to delete the bid portion of the utility relocation work from the Contract. Deletion of any utility relocation work from the Contract will require the Contract bid tabulations to be recalculated based on the remaining project quantities. According to calculations made by the Petitioner, reducing the amount of his total bid by the cost of utility work related to the City of Bradenton, results in his DBE participation rising to 11.9777 percent of the revised total. The DBE reporting form supplied to bidders by the Department states that the "[g]oal may be rounded to the nearest tenth percent," indicating that his 11.977 percent could be rounded up to 12 percent. The Petitioner asserts that the withdrawal of the City of Bradenton from the project and the rounding of the goal results in his bid meeting the DBE requirement of 12 percent. The language of Article 3-1 of the Supplemental Specifications is applicable, not to bid proposals, but to the contract negotiated between the successful bidder and the Department. In practice, the Department has implemented this provision according to the specification language. Items specifically related to withdrawn utility relocation work are deleted from the contract negotiated with the successful bidder. The evidence fails to establish the Petitioner is entitled to recalculation of his bid proposal.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation issue a Final Order dismissing the protest filed by the Petitioner in this case. RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997. COPIES FURNISHED: Pamela Leslie, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Brant Hargrove, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Mary S. Miller, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0458
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, 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 26th day of September, 1996.
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The issue for consideration in this matter is whether Respondent's intended award of a lease for office space to Intervenor, Anthony Abraham Enterprise, is arbitrary and capricious and whether the proposal of the Petitioner, Adlee Developers, the current lessor, is responsive.
Findings Of Fact The parties agreed that on April 7, 1991, the Department issued an Invitation to Bid entitled, "Invitation To Bid For Existing Facilities State Of Florida Lease Number 590:2286, Dade County" This procurement was for the provision of 30,086 net rentable square feet to be used for office space in Dade County. A 3% variance was permitted. The facility was to house the District's Aging and Adult Services office which has been a tenant in Petitioner's building for several years and remained there during the pendancy of this protest process. According to the published advertisement, a pre-proposal conference was to be held on April 22, 1991, with all bids due by the bid opening to be held at 10:00 AM on May 30, 1991. The pre-bid conference was conducted by Philip A. Davis, then the District's facilities service manager and included not only a written agenda but also a review of the evaluation process by which each responsive bid would be examined. Petitioner asserts that the potential bidders were told, at that conference, that annual rental increases for the ten year lease period could not exceed five per cent (5%) and claims that Abraham's bid exceeded those guidelines. Thorough examination of the documentary evidence presented and the transcript of the proceedings, including a search for the reference thereto in Petitioner's counsel's Proposed Findings of Fact, fails to reveal any support for that assertion as to an increase limitation. The ITB for this procurement, in the section related to the evaluation of bids, indicated that pursuant to the provisions of Sections 5-3 and 5-11 of HRSM 70-1, dealing with the procurement of leased space, the responsive bids would be reviewed by an evaluation committee which would visit each proposed facility and apply the evaluation criteria to it in order to determine the lowest and best bidder. The evaluation criteria award factors listed in the ITB defined a successful bid as that one determined to be the lowest and best. That listing of evaluation criteria outlined among its categories associated fiscal costs, location, and facility. As to the first, the committee was to look at rental rates for both the basic term of the lease and the optional renewal period. The rates were to be evaluated using present value methodology applying the present value discount rate of 8.08% and rates proposed were to be within projected budgeting restraints of the Department. The total weight for the rental rate category was to be no more than 40 points with 35 points being the maximum for the basic term and 5 points for the option. Evaluation of the location was to be based on the effect of environmental factors including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the operations planned therefor. This included the proximity of the facility to a preferred area such as a co-location, a courthouse, or main traffic areas. This item carried a maximum weight of 10 points. Also included in location were the frequency and availability of public transportation, (5 points); the proximity of the facility to the clients to be served, (5 points); the aesthetics of not only the building but the surrounding neighborhood, (10 points); and security issues, (10 points). The third major factor for evaluation was the facility itself and here the committee was to examine the susceptibility of the offered space to efficient layout and good utilization, (15 points), and the susceptibility of the building, parking area and property as a whole to possible future expansion, (5 points). In that regard, the Bid Submittal Form attached to the ITB called for the successful bidder whose property did not have appropriate zoning at the time of award to promptly seek zoning appropriate to the use classification of the property so that it might be used for the purposes contemplated by the department within 30 days. In the event that could not be done, the award could be rescinded by the department without liability. The committee could award up to 100 points. The basic philosophy of this procurement was found in paragraph 1 of the Bid Award section of the ITB which provided: The department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interest of the department and the state. After the bid opening, three of the four bids received, excluding Petitioner's which was initially determined to be non-responsive, were evaluated by the Department's bid evaluation committee according to the above point system which allowed no discretion or deviation from the formula in comparing rental rates between bidders. Once Petitioner's bid was thereafter determined to be responsive, it, too was evaluated by the committee. At this second evaluation session, relating to Adlee's bid only, the committee scored the bid and added its scores to the original score sheets upon which the other three bidders' scores had been placed. Abraham had the lowest rental rates for the basic term of the lease and received the maximum award of 35 points for that category while Adlee received points. Abraham received an additional 2.29 points for the optional period rates while Adlee got 0. In the other categories, "location" and "facility", which comprised 60% of the points, Adlee's facility was routinely rated superior to Abraham's except for the area related to susceptibility for future expansion in which Abraham was rated higher by a small amount. Overall, however, Adlee was awarded 620.41 points and Abraham 571.03 points and as a result, Adlee was rated by the committee to be the lowest and best bidder. RCL, another bidder, was rated second, with Abraham third and DCIC fourth. Thereafter, the committee chairman, Mr. VanWerne, forwarded the new (and complete) evaluation results to the District Administrator on June 14, 1991 by an addendum dated June 27, 1991 which recommended award of the bid to Petitioner, Adlee Developers. No award was made at the time. Several factors not pertinent to the issues here caused that delay. Among the major of these was pending legislation which would have transferred the operation needing this space to another agency. This transfer was never consummated, however. On or before March 20, 1992, the new District Administrator, Mr. Towey, who had been appointed to his office in December, 1991, and who was made aware that this procurement had not been finalized, requested all available material on it so that he could study it and make his decision based on his own review of the submission. As a part of his determination process, he visited and inspected both the Adlee and the Abraham sites. One of the factors he considered was what appeared to be the significant monetary discrepancy between the two pertinent bids. Initial calculations indicated that Abraham's bid was approximately $835,000.00 lower than Adlee's over the ten year basic term of the lease. This amount was subsequently determined to be somewhat lower but the discrepancy is still significant. Nonetheless, because of that difference, Mr. Towey called a meeting with the members of the evaluation committee which had evaluated the bidders and had recommended Adlee. His stated reason for calling that meeting was to allow him to hear their reasons for rating the submissions as they had done and to take that information into consideration when he made his final decision. None of the committee members who testified at the hearing at Petitioner's behest indicated any feelings of pressure or intimidation by Mr. Towey. During his meeting with the committee members, Mr. Towey went over several of the evaluation criteria award factors to determine the committee's rationale. Of major importance was the issue of cost, of the availability of the facility to transportation to and from the building, employee security and the ability to control access to the facility, and the availability of on-site parking without cost to both employees and clients. It appears the Adlee facility is a multistory building with some parking available on site and would be easier to control. In addition, it is closer to public transportation access points. There is, however, some indication that on-site parking for clients would not be free and the closest free parking is some distance away. According to Adlee's representative, this matter would not be a problem, however, as adequate, free on site parking, which apparently was not initially identified as a problem, could be provided in any new lease. The Abraham facility is a one story building surrounded by on-site parking. In that regard, however, at hearing, Petitioner raised the claim that the Abraham site did not, in actuality, provide adequate parking because the zoning requirements of the City of South Miami, the municipality in which the facility is located, did not permit the required number of parking spaces to accommodate the prospective need. Petitioner sought and received permission to depose the Building and Zoning Director for the city, Sonia Lama, who ultimately indicated that the Abraham site was grandfathered in under the old zoning rule and, thereby, had adequate parking available. In any case, had this not been true, under the terms of the ITB, any zoning deficiencies could have been corrected after award, or the award rescinded without penalty to the Department. After the meeting with the committee, Mr. Towey indicated he would probably go against the committee's recommendation. One of his reasons for doing so, as he indicated to them, was the appearance certain amenities in the facility would give. In the period between the time the committee met and Mr. Towey was ready to decide, there were several newspaper articles published in the Miami area which were negative in their approach to Department leasing policies and this publicity had an effect on him. In his response to a reporter's question, in fact, Mr. Towey indicated he would not permit the lease of any property which contained such amenities while he was District Director. There is some evidence that the wet bar referred to here was a sink and counter used by agency employees to make coffee. However, before making his decision, Mr. Towey also met with Herbert Adler of Adlee. Mr. Towey advised him he was concerned about the fact that the Adlee property provided a wet bar, a private bathroom and some other amenities in that suite of offices occupied by the Department. Mr. Towey was adamant in his public and private pronouncements on the subject that there would be no such amenities in HRS offices in his District while he was in charge. At the meeting in issue, Mr. Adler made it very clear he was willing to remove all the offending amenities to bring the space into conformity with Mr. Towey's standards. Mr. Towey obviously took Adler at his word as he did not consider this matter to be an issue when he evaluated the bids. Based on his independent evaluation of the proposals, and considering all the pertinent factors, Mr. Towey decided not to concur with the committee's recommendation and instead recommended to the Department's Office of General Services that the bid be awarded to Abraham. Because his recommendation differed from that of the evaluation committee, under the provisions of Section 5-13, HRS Manual 70-1, he was required to forward additional justification for his position. In his forwarding memorandum dated March 20, 1992 to Mr. King Davis of the Department's Office of General Services, Mr. Towey listed as his reasons for disagreement with the committee's recommendation, (1) the lower term cost of Abraham's bid, (2) his opinion that the one story floor plan of Abraham was more convenient and accessible to clients, and (3) the provision for ample free parking at the Abraham site as opposed to the limited parking at the Adlee building. Petitioner claims that Mr. Towey's justification for disagreement was improper because, (a) the rental difference he cited was not based on the ITB formula and did not consider the difference in square footage offered; (b) the rental rate comparison compared a proposed lease with an existing lease, not with a proposal; and (c) the reference to on-site parking referred to the situation under the existing lease with Adlee and not to what could occur under a new lease. The major factor in Mr. Towey's decision was the price differential between the two offerings. While the difference may not have been as great as presented initially by the department staff, even taken in its most conservative light of about half that amount, and considering the appropriate figures, the difference was still considerable and significant. In the continuing period of budgetary austerity under which state operations have been and must continue to be conducted, the financial consideration loomed large in his thinking. As for the parking situation, no change for the better was provided for in Adlee's proposal and even if it were, it was but one of several factors. When Mr. Towey's March 20, 1992 memorandum in justification of his disagreement was evaluated at the Office of General services, it was determined that his decision was rational and objectively justified. Thereafter, by letter dated April 2, 1992, the Office of General Services authorized District 11 to award the lease to Abraham and this decision was transmitted to all responsive bidders by letter dated April 7, 1992. It was this action which prompted Petitioner's protest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered dismissing the protest by Adlee Developers, Inc., of the award of procurement No. 590:2286 to Anthony Abraham Enterprises. RECOMMENDED this 10th day of July, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 10th day of July, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-2798 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 4. Accepted and incorporated herein. Accepted. Accepted that the pre-bid conference was held but reject the finding that a 5% limit was mentioned. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 11. Accepted and incorporated herein. 12. - 14. Accepted and incorporated herein. 15. - 19. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. Accepted except for the next to last sentence which is rejected. Accepted. Accepted and incorporated herein. Accepted but not probative of any material issue. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 30. Rejected. - 33. Accepted and incorporated herein. FOR THE RESPONDENT AND INTERVENOR: & 2. Accepted and incorporated herein. 3. - 5. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. & 21. Accepted and incorporated herein. Accepted and incorporated herein. - 25. Accepted. COPIES FURNISHED: Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell 200 East Broward Blvd. P.O. Box 1900 Fort Lauderdale, Florida 33302 Paul J. Martin, Esquire Department of Legal Affairs The Capitol - Suite 1501 Tallahassee, Florida 32399-1050 Peter W. Homer, Esquire Greer, Homer & Bonner, P.A. 3400 International Place 100 S.E. 2nd Street Miami, Florida 33131 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power Agency Clerk DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
The Issue The issue in this case is whether the bid of Kimball International Marketing, Inc., and Corporate Interiors, Inc., (Petitioners) is the lowest responsible bid which was received by the Pinellas County School Board (Respondent) for systems furniture (partitions) for the New District Administration Building, or in the alternative, whether all bids should be rejected as urged by The Harter Group (Intervenor).
Findings Of Fact On or about February 27, 1990, the Respondent sought competitive bids for systems furniture (partitions) for the New District Administration Building. In response thereto, Respondent timely received three bids, including those of the Petitioners and Intervenor, and one no bid. The bid opening occurred on April 17, 1990, and neither Petitioners nor Intervenor were determined to be the lowest responsible bidder. However, the Petitioners' bid was lower than that of the bidder to whom the Respondent proposes to award this contract. Petitioners' bid was $932,502.39, Intervenor's bid was highest at $1,101,509.90, and the bid of lowest responsible bidder, Haworth, Inc., was $1,072,286.50. The first reason given by Respondent for its determination that Petitioners' bid was not responsive to the bid specifications is that it did not include an amount for sales tax. Intervenor also did not include sales tax in its bid, but Haworth, Inc., which was determined by Respondent to be the lowest responsible bidder, did include sales tax. However, there was no dispute at hearing that the Respondent does not pay sales tax on transactions involving the acquisition of furnishings for the Pinellas County School System, and that Section 9.2.2 of the bid specifications erroneously stated that this contract would not be exempt from sales tax. The second reason given by Respondent for rejecting Petitioners' bid was that it omitted a required page from the approved form which was to be used to list those items in the bid proposal that were not in strict compliance with the Respondent's specifications. Petitioners admit that the required page numbered 00310-7 was not included in their bid, but maintain that it was not necessary to include this exact page since all items in their bid do meet specifications, and since a statement to this effect was included elsewhere in the bid. The lowest responsible bidder, as determined by the Respondent, did include this required page with a statement thereon that "all items comply". Intervenor also included this page listing 11 items in its bid which differed from the specifications. The purpose of this required page is to allow the Respondent to have a uniform, clearly identifiable place in each bid proposal where it can look to determine if the items in that bid meet specifications, without having to check every page of each bid. The third reason given by Respondent for rejecting Petitioners' bid was that it included numerous pages of unit costs which were not called for in the specifications, without any explanation as to their meaning or the purpose for which they were included in the bid. Section 4.1.1 of the bid specifications, found at page 00100-11, makes it clear that no bid form other than that which is set forth in the specifications will be accepted, and specifically states that bidders are not even to retype the form on their letterhead, but are to simply fill-in a copy made from the form in the specifications. The Petitioners admit that their bid includes additional, unexplained information that was not called for in the specifications. A final reason given by Respondent at hearing for rejecting Petitioners' bid was that it was accompanied by a bid bond, required by Section 4.2.4 of the specifications, in the name of Kimball International Marketing, Inc., while the public entity crime affidavit, required by Section 2.1.5, was subscribed to by Corporate Interiors, Inc. Petitioners' bid did not include a resolution or other evidence of authority that Corporate Interiors, Inc., had authority to submit a public entity crime affidavit on behalf of Kimball International Marketing, Inc., or that the affidavit submitted was valid as to Kimball. Thus, while Petitioners maintain that their bid was jointly filed on behalf of the manufacturer, Kimball, and the vendor, Corporate Interiors, their bid includes a bond from the manufacturer only, and a crime affidavit from the vendor only. Section 1.8 of the specifications, found at page 00100-2, specifies that the bidder is the person or entity that submits a bid. Petitioners urge that theirs is a joint bid, but they have failed to submit a joint bond or affidavit. Section 5.2.1 of the specifications allows the Respondent to reject any bid which fails to include a required security, or other required data. The bid which was determined by the Respondent to be the lowest responsible bid contains no technical flaws, errors or omissions, and the proposal meets all specifications for this project. The Respondent properly posted notice of its intent to award this contract to Haworth, Inc., the lowest responsible bidder. Under Section 5.3.1 of its bid instructions, the Respondent has the right to waive "any informality or irregularity in any Bid or Bids received and to accept the Bid or Bids which, in (its) judgment, is in (its) own best interest." Respondent chose not to waive any of the irregularities in the Petitioners' bid. This decision was made, in part, because of Respondent's previous experience with Petitioners in their installation of similar systems for Respondent at the Walter Pownall Service Centers in which there had been problems involving service during installation, coordination of the installation work, and verification that invoices received from Corporate Interiors did not exceed the bid base price, and that all items being paid had actually been received.
Recommendation Based on the foregoing, it is recommended that the Respondent enter a Final Order dismissing Petitioners' and Intervenor's protests of its intent to award a contract for systems furniture (partitions) for the New District Administration Building to Haworth, Inc., as the lowest responsible bidder. DONE AND ENTERED this 6th day of July, 1990, in Tallahassee, Leon County, Florida. DONALD D. CONN 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 6th day of July, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2863BID Petitioner and Intervenor filed letters, but no proposed findings of fact upon which rulings could be made. Rulings on Respondent's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 3. 3. Adopted in Findings 4-6. 4. Adopted in Finding 6. 5. Adopted in Findings 4-6. 6. Adopted in Finding 6. 7. Adopted in Findings 6, 8. 8. Adopted in Finding 1. 9. Adopted in Findings 2, 3. 10-12. Adopted in Finding 6. 13. Adopted in Finding 4. 14. Adopted in Finding 3. 15. Adopted in Finding 5. 16-17. Adopted in Finding 7. 18. Adopted in Finding 1. 19. Adopted in Finding 8. COPIES FURNISHED: Allen D. Zimmerman, President Corporate Interiors, Inc. 1090 Kapp Drive Clearwater, FL 34625 Bruce P. Taylor, Esquire P. O. Box 4688 Clearwater, FL 34618-4688 Sue Olinger 1284 West Fairbanks Avenue Winter Park, FL 32789 Dr. Scott N. Rose Superintendent P. O. Box 4688 Clearwater, FL 34618
Findings Of Fact On August 31, 1994, the Respondent received and opened bids for its Project No. HSMV 92044000, Repairs, Art Sutton Drivers' License Office, Miami, Florida (the Project). The bid specification documents (the Specifications) for the Project included requirements for a Base Bid and for specific alternate proposals with respect to three defined items of alternate work. Section 01100 of the Specifications stated that "[a]ll Alternates described in this Section are required to be reflected on the Bid Form as submitted by the bidder." Part 2 of that section provided: ALTERNATE NO. 1 A. Provide a deductive price to the base bid for the removal of existing window units and the installation of new units as indicated in plans and specification Section 08520. ALTERNATE NO. 2 A. Provide a deductive price to the base bid for the provision of communications conductors see specification Section 16400. ALTERNATE No. 3 A. Provide a deductive price to the base bid for the installation of all landscape materials as indicated on plans and as per specification Section 02960. Also included in the Specifications as Exhibit 4 was a Proposal Form. The Specifications required each bidder to submit this form in triplicate on the bidder's letterhead. With respect to alternates, the Proposal Form required: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add or Deduct $ Alternate No. 3 Add or Deduct $ The Respondent's architect received four bids on August 31, 1994. As recorded on the Bid Tabulation and Notice of Award Recommendation, three bidders provided specific prices for the three alternates, as well as a Base Bid. The Bid Tabulation shows that two bidders provided specific prices for the three alternates and included the alternate prices in their Base Bids. The Petitioner provided specific prices for the three alternates, but excluded the alternate prices from its Base Bid. The fourth bidder provided a specific price for only one alternate and excluded that alternate price from its Base Bid. (The fourth bidder was disqualified as non-responsive for failing to submit prices on all three alternates.) In pertinent part, the Petitioner's proposal read: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications: Alternate No. 1 Add or Deduct . . . $4,400.00 Alternate No. 2 Add or Deduct . . . $1,158.00 Alternate No. 3 Add or Deduct . . . $2,084.00 These Alternates were in addition to the Petitioner's Base bid of $204,322.00. The proposal form submitted by the Petitioner comports with Exhibit 4 to the Specifications, which was the mandatory Proposal Form. On August 31, 1994, William Phillip Austin, Peitioner's President, wrote the architect: Per our telephone conversation this date regard- ing the confusion relating to the Add/Deduct for Alternates 1, 2 and 3 for the above project, please be advised that our base bid did not include the work described in the Alternates. As stated if you want work described in Alternates 1, 2 and 3, you must add the cost to our base bid. The base bid including Alternates 1, 2 and 3 would, therefore, be $211,964.00. If we can provide additional information, please do not hesitate to contact us. The Respondent's architect completed and submitted the bid Tabulation and Notice of Award Recommendation to the Respondent in early September. The document clearly discloses the amounts of each bidder's Base Bid and Alternate proposals. Using plus (+) and minus (-) signs, the Bid Tabulation further shows each bidder's method of calculation. The record is devoid of evidence that the Respondent had any problem in evaluating the bids and identifying the lowest bidder. The Petitioner was the lowest bidder on any combination of base bid plus or minus any or all alternates. Subsequently the Petitioner received a NOTICE OF AWARD RECOMMENDATION dated October 4, 1994. The Notice informed the Petitioner that the Respondent "has recommended that the contract be awarded to your firm in the total amount of $211,964.00, accepting the Base Bid and Alternates #1, #2 & #3. The Administrator of Contracts Design and Permitting, Division of Building Construction, Department of Management Services, State of Florida will consider this recommendation." Larry R. Coleman, Construction Projects Administrator, signed the letter. The Petitioner acknowledged receipt. A representative of the second lowest bidder, Kalex Construction, then contacted the Respondent, complaining of the Award Recommendation. The grounds for the Kalex complaint are not in the record. However, on October 14, 1994, H. R. Hough, the Respondent's Contracts Administrator, sent the Petitioner a letter "to notify you of the State's decision to reject all bids on the above referenced project due to ambiguities in the specifications." Mr. Hough's reasons for the rejection are "other than those stated by the protestor," Kalex. The Respondent's Rule 60D-5.007, Florida Administrative Code, states: Determination of Successful Bidder. All projects except where competitive bidding is waived under the provisions of Rule 60D-5.008 will be publicly bid in accordance with the provisions in the project specifications bidding documents. Award of contract will be made to the responsive bidder, determined to be qualified in accordance with the provisions herein and meeting the requirements of the bidding documents, that submits the lowest valid bid for the work. The lowest bid will be determined as follows: The lowest bid will be the bid from the responsive bidder that has submitted the lowest price for the base bid or the base bid plus the additive alternates or less the deductive alternates chosen by the Agency to be included in or excluded from the proposed contract, taken in numerical order listed in the bid documents. The order of the alternates may be selected by the Agency in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. Under the above-quoted rule, the Respondent compares bids beginning with the lowest "base bid." The Respondent is of the view that for this comparison to be fair and equal, all bidders must include the same scope of work in the "base bid." The Respondent does not interpret the above-quoted rule to allow deductive alternates from some bidders and additive alternates from others. (For reasons discussed in the Conclusions of Law which follow, the Respondent's interpretation and application of the above-quoted rule is erroneous.) The Specifications contain some ambiguous and inconsistent language regarding whether alternates should be treated as additive or deductive. The ambiguous and inconsistent language did not provide any bidder with an advantage or a disadvantage, nor did it otherwise affect the fairness of the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services issue a Final Order in this case awarding a contract for the subject project to the Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. MICHAEL M. PARRISH 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 16th day of December 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner Paragraph 1: This is primarily a statement of position and is addressed in the Preliminary Statement. Paragraphs 2 through 10: Accepted in substance with a few unnecessary details omitted. Proposed findings submitted by Respondent Paragraphs 1 through 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as constituting a conclusion which is not warranted by the evidence. Third sentence is accepted as an accurate statement of how Respondent has been interpreting the subject rule, but is not accepted as constituting a correct interpretation of the rule. Paragraph 8: Rejected as misleading and confusing because the "scope of work" to be performed under the contract can only be determined after the Respondent decides which alternates to include and which to exclude. Paragraph 9: The first two sentences are accepted in substance. The last sentence is rejected as constituting a conclusion which is not warranted by the evidence. COPIES FURNISHED: Timothy J. Armstrong, Esquire Armstrong & Mejer Suite 1111 Douglas Centre 2600 Douglas Road Coral Gables, Florida 33134 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of General Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Whether the Department of Health and Rehabilitative Services (HRS) acted in an arbitrary and capricious manner in determining to award the bid for its district office to Koger Properties, Inc. (Koger) and whether the petitioner submitted the lowest and best bid under the terms of the bid specifications.
Findings Of Fact GENERAL BACKGROUND - STIPULATED FACTS Petitioners received a formal Invitation to Bid on Lease No. 590:1784 from HRS, District V. The purpose of the ITB was to obtain competitive proposals for the leasing of office space by HRS within a specifically defined area. Petitioners timely submitted their bid in response to the ITB. All timely received bids were first evaluated to determine technical responsiveness. Petitioners' bid was determined to be responsive to the technical requirements of the ITB. Responsive bids were then presented to a bid evaluation committee for comparison and formulation of a recommendation for award. In comparing the various responsive bids and formulating a recommendation for award, the members of the bid evaluation committee were required to visit each proposed facility and to apply the evaluation criteria as contained in the ITB package. By memorandum dated July 30, 1986, the bid evaluation committee recommended that the bid be awarded to Koger although petitioners submitted the lowest rental price. On or about August 5, 1986, petitioners received notice from HRS of its intent to award Lease No. 590:1784 to Koger. By letter dated August 6, 1986, petitioners notified HRS of their intent to protest the intended award of Lease No. 590:1784 to Koger. The Notice of Intent to Protest was timely filed pursuant to the provisions of Section 120.53(5), Florida Statutes, and Rule 10- 13.11, Florida Administrative Code. Thereafter, the petitioners timely filed their formal written protest. Petitioners are substantially affected by the decision of HRS to award the lease to Koger. THE BIDDING PROCESS The Department of Health and Rehabilitative Services issued an Invitation to Bid and Bid Submittal Form (ITB) seeking approximately 39,968 net rental square feet of office space in Pinellas County, Florida, to be used as the district administrative offices. The ITB set forth the method in which the bids would be evaluated as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsive- ness. This includes submittal on bid submittal form, inclusion of required information and data, bid signed and notarized, etc. Non responsive bids will be withdrawn from further consideration. Responsive bids are presented to a bid evaluation committee for com- parison and formulation of a recom- mendation for award. This is accomplished by a visit to each proposed facility and application of the evaluation criteria. The committees recommendation will be presented to the department's official having award authority for final evaluation and determin- ation of successful bidder. EVALUATION CRITERIA The successful bid will be that one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated in the bid submittal form. The ITB also provided that "the department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interests of the department and the state." In accordance with the ITB a pre-bid conference was held on April 29, 1986; however, neither petitioners nor any representative of petitioners attended the pre-bid conference. Further, petitioners made no oral or written inquiries concerning the ITB or the evaluation criteria to be utilized. Bids received from the following providers were determined to be responsive and presented to the bid evaluation committee for comparison and formulation of the recommendation for award: James P. & Margaret R. Gills (1100 Building) Koger Properties, Inc. (Koger) LTBCLH Partnership (Justice Building) Procacci Real Estate Management Co., Inc. (ICOT Building) Elizabethan Development, Inc. (Handy City Building). BID EVALUATION COMMITTEE The bid evaluation committee was composed of the following people who, along with their staffs, would occupy the leased property: Robert Withrow, Chairman of the Committee and District Administrative Services Director; Samuel Kinsey, Financial and Accounting Director for District V; Patricia Bell, Program Manager for Aging and Adult Services; Fredrick M. O'Brien, General Services, Manager for District V; and Pegi Hollingsworth, Personnel Officer. Each member of the evaluation committee received a bid package consisting of the bid specifications and the bids submitted. Each member also received a bid evaluation sheet which was used to rate each bidder. They received no other instructions with regard to the evaluation criteria. Although each specific evaluation criterion was weighted, i.e., given a comparative value, the committee members were not specifically instructed as to how points should be assigned for each category. The evaluation committee went to each of the proposed buildings for the purpose of making a comparative evaluation based on the evaluation criteria provided. However, the primary focus was on the Koger Building and the petitioners' 1100 Building because they had submitted the lowest rental rates of the five bidders considered. After the viewing process, the members of the committee, except Mr. Withrow, discussed the factors that should be considered in applying each of the evaluation criterion. Although the committee members had not formulated the evaluation criteria to be used, they were uniquely qualified to apply the evaluation criteria provided to the specific needs and requirements of the HRS offices that would occupy the building. Though the committee members were in agreement as to the various factors to be included in each of the criterion listed, they did not discuss the points that would be awarded to each facility. Each member independently assigned points to each facility based on his or her own evaluation of the facility's comparative value in each of the listed categories. Koger received the best evaluation from all five committee members with point totals of 98, 98, 98, 98 and 99 out of a possible 100 points. Petitioners' building was ranked last of the five buildings evaluated by four of the members, with point totals of 75, 77, 71 and 75, and fourth by Mr. Withrow with a total of 81 points. Based on the comparative evaluation of the buildings, the committee recommended that the bid be awarded to Koger. By letter dated July 30, 1986, the District V office received authorization from the HRS Director of General Services to award the bid to Koger as being in the best interest of the department and state. THE EVALUATION CRITERIA The ITB included the evaluation criteria list used by the committee to ascertain the relative value of each building. At the top of the page it is stated: The successful bid will be that one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated... The evaluation criteria are divided into three general areas: (1) Associated Fiscal Costs, (2) Location, and (3) Facility. Each general area includes subcategories, with each subcategory being given a total maximum value. Each of the criteria disputed by petitioners is discussed below. 1(a) Rental rates for basic term of lease. (Weighting: 45) All of the bids received by HRS were within the rental limits established by the Department of General Services and also much lower than expected. Even the highest bid was lower than anticipated, and Koger's and petitioners' bids were considered especially desirable. The bids received, listed at present value for the ton year basic lease period, are as follows: BIDDER TOTAL COST AMOUNT MORE THAN LOW BID 1100 BUILDING $1,881,690.1 KOGER 1,993,131.4 $111,441.3 JUSTICE 2,473,559.8 591,869.7 ICOT 2,655,306.1 773,616.0 HANDY CITY 3,223,202.0 1,341,511.9 Rental rates for the basic term of the lease were given a weighted value of 45. All of the committee members gave petitioners 45 points, as the low bidder, and all gave Koger 44 points as the next low bidder. However, four of the members simply agreed that the low bid would receive the maximum amount of points with each subsequent low bidder receiving one less point than the one before it, which resulted in the high bidder receiving 41 points even though its bid was 1.7 times greater than the low bid. Only Mr. Withrow made an attempt to prorate the points based on the differences in the amount bid, thus resulting in the high bidder receiving only 20 points. However, even Mr. Withrow awarded Koger 44 points based on the minimal difference between the Koger bid and the petitioners' bid. Both Mr. Withrow and Mr. Kinsey explained the award of 44 points to Koger by comparing the difference in the amounts bid to the HRS District V budget or the budgets of the entities using the facilities. However, the purpose of the evaluation was to compare each facility to the other facilities. Thus, the award of points for rental rates should have been based on a comparison of the rates offered. Although it was reasonable to assign the maximum number of points to petitioners, as the low bidders, the amount of points assigned to the remaining bidders should have been based on a comparison of the amount of each bid to the low bid. This would have made a significant difference in the points awarded to Justice, ICOT, and Handy City; however, even using a strict mathematical computation would not significantly affect the points awarded Koger due to the minimal difference in Koger's bid and petitioners' bid. Koger would receive no less than 42 points, only 2 points less than awarded, regardless of the method of mathematical computation used. 1/ 2(a) Proximity of offered space in central or preferred area of mad boundaries (Weighting: 5) All the members of the committee agreed that Koger is in the most preferred area because its location is more accessible to the employees and the persons who visit the office than any of the other buildings. Koger is in northeast St. Petersburg, minutes from the interstate. The 1100 Building is located in a more congested area in downtown Clearwater on the extreme northern boundary of the designated area. In making a comparison Of the building locations, all of which were located within the map boundary, the committee jusifiably determined that the building that was the most strategically located, in terms of accessibility, would be considered to be in the most preferred area. Thus, Koger was awarded five points by all committee members. The 1100 Building received 2, 0, 1, 3 and 1 points. Although all committee members awarded Koger the highest points, only one committee member resided closer to the Koger Building than the other buildings. Mr. Withrow, who lives closer to the 1100 Building than Koger, gave the 1100 Building only 1 point because it was more inaccessible to the district clients and employees. Further, the District Administrator, who approved the lease to Koger, resides closer to the 1100 Building. 2(b) Frequency and availability of satisfactory public transportation within proximity of the offered space (Weighting: 5) Both Koger and the 1100 Building received the maximum of five points in this category except from Mr. Withrow who gave the 1100 Building four points. The committee members felt that the bus transportation as about the same for each building. Although the 1100 Building had more buses passing the facility due to its location in downtown Clearwater, the committee considered the destination of the buses and concluded that a person would wait the same length of time for a bus to take him to his destination from either the Koger Building or the 1100 Building. Mr. Withrow differed on the points awarded because he considered the Koger location to be better due to its proximity to the airport. The district office has a large number of people that visit from Tallahassee and other districts in the state. 2(c) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of departmental operations planned for the requested space. (Weighting: 3) Koger received the maximum of 3 points from every committee member in this category; the 1100 Building received 0 points from every member. Although this category is listed within the general area of "Location", the committee members followed the category requirement and considered all environmental factors, including the physical characteristics of the building. In the 1100 Building, committee members noted problems with the air conditioning system and the elevators. The building was not maintained well, and the bathrooms were small and poorly ventilated. The HRS parking at the 1100 Building was not conveniently located. To get to the parking lot from the building an employee would have to cross a parking lot adjacent to the building, cross an intersection and then walk up to a block to get to his or her car. Many of the office employees work late and would be walking to their cars after dark, and there was concern expressed for employee safety considering the parking arrangement offered by petitioners. Koger had none of the problems observed at the 1100 Building. Further, Koger was better suited for the handicapped because there was no need to use a ramp as there was at the 1100 Building. 3(a) Conformance of space offered to the specific requirements contained in the Invitation to Bid. (Weighing: 10) 3(b) Susceptibility of the design of the space offered to efficient layout and good utilization. (Weighting: 10) 3(c) Provisions of the aggregate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations...within 100 yards of each other. (Weighting: 10) Koger's bid is for a two-story building containing approximately 39,000 square feet. The 1100 Building is a 15-story building. It would provide approximately 39,000 square feet on the second, fourth, fifth, part of the eighth, part of the ninth, and twelfth floors. The space allocation in the 1100 Building, spread over 6 floors, would provide a major problem in efficiently locating the staff. Certain offices could not be placed on certain floors because of space restrictions, and related offices could not be placed in close proximity to each other. Offices that needed to be on the same floor could not be located on the same floor. Because the space offered by petitioners is spread over 12 floors, accessibility to related offices would be much more difficult. Further, the limited space per floor makes it more difficult for HRS to properly utilize the space provided. None of the testimony provided by the committee witnesses related the "conformance of the space offered to the specific requirements contained in the Invitation to Bid" (e.s.) The ITB lists the offices and rooms required, giving sizes for each. Other than the total square footage, which petitioners met, there were no other specific requirements contained in the ITB. None of the committee members compared the conformance of the space offered to the specific room and office requirements. Indeed, the testimony of the committee members indicate that accessibility of the space was considered under criteria 3(a) rather than the conformance of the space to the ITB. Since the space offered by petitioners apparently complied with the requirements of the ITB, petitioners should have received 10 points for that category. The points awarded under 3(b) and 3(c), however, were proper. The space offered by the 1100 Building is not susceptible to an efficient layout or good utilization of the space offered. Further, the committee legitimately differentiated between the single buildings offered by each bidder, under 3(c), by considering where the space was located within the building. Obviously, factor 3(c) reflects a concern that the space offered not be too separated. It clearly provides that proposals for space in two separate buildings will get fewer points than single building proposals, and there is no indication that all single building proposals should receive the same maximum points. This factor clearly relates to the proximity of the spaces offered to one another, with contiguous space getting the most points. 3(d) Offers providing street-level space (Weighting: 2) Approximately half of the space offered by Koger is street-level space. Koger received two points. The 1100 Building provides no street-level space; it received no points in this category. Petitioners do not contend that they should have gotten any points, but assert Koger should only have gotten one point because not all its space was street-level space. THE COMPARATIVE EVALUATION The evaluation committee members were very conscientious in comparing the relative values of the buildings offered based on the criteria provided and their observations. Their evaluations were not made arbitrarily, but based upon the factors set forth in the evaluation criteria. Although errors were made in calculating the values awarded for categories 1(a) and 3(a), these errors were not due to arbitrary action by the committee members. Further, should the appropriate points under 3(a) be added to petitioners evaluations and three points be subtracted from Koger's evaluations (two points for 1(a) and one point for 3(d)), petitioners evaluations would be 79, 80, 76, 80 and 84, and Koger's would be 95, 95, 95, 95 and 96. The strategic plan for HRS, 1986-1991, Goal 12, is to enhance employee morale and job satisfaction in several ways, one of which is to replace or upgrade 90 percent of substandard physical work environments by December 31, 1990. The testimony and evaluations show, and the committee members found, that the Koger Center would provide a better work environment than the petitioners' 1100 Building. Based on the criteria set forth in the ITB, the Koger bid is the "lowest and best" bid.
