The Issue Whether or not the actions of the petitioner in amending its lease agreement resulted in increased costs which are reimbursable by the Department of Health and Rehabilitative Services through an interim rate request.
Findings Of Fact Hallandale is a licensed nursing home facility located in Hallandale, Florida, and at all times material hereto, Hallandale was certified to and was participating in the Florida Medicaid Program. The participation was subject to a standard nursing home provider agreement entered into by the parties. Pursuant to the agreement, Hallandale provides nursing care for Medicaid recipients and receives as payment the recognized rate of Medicaid reimbursement established for Hallandale by HRS in accordance with the applicable state and federal laws, regulations, and guidelines. The agreement may be cancelled by either party after giving thirty (30) days notice. In 1971, Hallandale entered into a lease agreement with the owners of the nursing home facility and began operating the nursing home. The lease called for a payment of $84.00 per month, per bed, had no escalation clause, and would not expire until 1986. At the time the lease was negotiated, the owners had been operating the nursing home themselves at a loss. To avoid bankruptcy or having to sell the property at a loss, the owners leased the property to Hallandale. However, within seven or eight years the owners began to put pressure on Hallandale to renegotiate the lease because the owners did not think they were getting a fair return on their investment. In 1981, the owners and Hallandale entered into negotiations to amend the terms of the lease to provide an increased rental rate and an extension of the lease term. The negotiations were not successful, and finally, by letter dated July 6, 1983, the owners issued the following ultimatum: "Although the lease has a renegotiation clause six months prior to expiration, we must renegotiate the terms and conditions of this lease immediately. The partnership has made a decision that we will definitely not renew or extend your lease unless we can come to some satisfactory arrangement regarding terms and conditions, effective immediately." On December 13, 1983, Hallandale and the owners entered into an amendment to the original lease. The amendment increased the lease payments and extended the lease until August of 1998. The amended lease provided for a minimum rental of $110 per month, per bed, as of September 1, 1983, with increases in the rental every year thereafter. Saul Lerner has been president of Hallandale since 1975 and has been associated with the facility since it was first leased in 1971. Mr. Lerner is an astute businessman who has been involved in a variety of businesses for forty years. He was chiefly responsible for renegotiating the lease with the owners. Although the lease was renegotiated due to the owners' threats to sell the facility, 1/ Mr. Lerner did not merely accede to the owners' demands. There were several offers and counteroffers made before the final agreement was reached, and the renegotiated lease provided for a considerably lower rental rate than that demanded by the owners. Prior to entering into the lease amendment Mr. Lerner consulted with people in the industry, had a MAI appraisal performed, discussed the situation with James Beymer, a real estate broker specializing in nursing home and health related facilities, consulted with his accountants who had been in the health care field for 13 years, and talked with Sebastian Gomez of the Department of Health and Rehabilitative Services. Mr. Lerner consulted with his business associates, and the pros and cons of renegotiating the lease were carefully considered. Hallandale's determination to renegotiate the lease in 1983 was a reasonable and prudent business decision. By agreeing to increased rental payments for the three years that remained on the original lease, Hallandale gained an additional 12 years to operate the facility. This permitted Hallandale to project its costs and plan for the future. It could make additions and improvements to the building, buy new equipment, and provide for stability in staffing. On the other hand, had Hallandale refused to renegotiate the lease, it faced an uncertain future. There was a strong possibility that the owners would not be willing to renew the lease when it expired, which would result in Hallandale's losing the equipment and improvements it had put into the building. In addition, the owners were threatening to sell the property, and even though Hallandale had the right of first refusal, it would have had difficulty in obtaining the money required to purchase the property. Further, Hallandale realized that even if the owners would be willing to negotiate a new lease in 1986, Hallandale would not have the same leverage or bargaining power in 1986 as it had in 1983. Hallandale has participated in the Medicaid program continuously since 1971. At the time of the hearing the facility had 142 patients, of which 45 were Medicaid patients. 2/ Hallandale has never refused a Medicaid patient, and some of the patients have been there 8 or 9 years. The Medicaid patients are treated the same as the private patients, to such a degree that no one knows which patients are Medicaid patients. Although the agreement with HRS allows a provider to leave the Medicaid program with 30 days notice, Hallandale has no intention to ever discontinue participation in the Medicaid program. The extended term of the renegotiated lease is not only advantageous to Hallandale, it is also beneficial to Hallandale's patients, including Medicaid patients. It secures continuity of care for the patients and ensures that the patients will not have to be moved to a new facility in 1986. The transfer from one facility to another can be a very traumatic event for an elderly person; some patients have died within weeks of a transfer. Further, the patients benefit immediately because the extended term of the lease allows Hallandale to make improvements to the facility and buy equipment that it would not have been able to do without the security of a long term lease. The lease payments called for by the new lease are not out of line with lease payments made by similar institutions. Mr. Lerner looked at other lease payments being made in the community and found that $110 per bed per month was not an exorbitant amount. James Beymer leased nursing home facilities that were not as nice as the Hallandale facility for $138 per bed per month $166 per bed per month, and $225 per bed per month. Had Hallandale purchased the facility for $3 million, the price asked by the owners, the cost per month per bed would have been over twice the amount of the lease payment. 3/ Lease payments are included in a facility's "fixed costs." The fixed costs also include depreciation, real estate taxes and insurance. The state places a cap on reimbursement rates for fixed costs. In June 1983, prior to the renegotiation of the lease, Hallandale's fixed costs were $4.61 per patient day; under the renegotiated lease, the fixed costs would be $5.16 per patient day. Thus, even with the higher lease payment, the fixed costs are considerably under the state cap of $12.50 per patient day. A provider's reimbursement rate is determined by HRS from a cost report submitted by a provider. The rate is a prospective per diem rate. If, during the prospective period, the provider incurs an increase in costs, the provider has a right to submit an interim rate request to HRS. The Department uses the same principles to determine whether costs submitted in an interim rate request should be allowed as in determining whether costs submitted in a cost report should be allowed. Lease payments are allowable expenses under the Medicaid program subject to the Medicaid cost reimbursement principles. In calculating Hallandale's per diem rate, HRS allowed Hallandale $84 per month lease cost for each Medicaid patient in the facility based on the 1971 lease. Prior to executing the new lease, Hallandale contacted HRS to inquire if the new lease cost would be allowable and was informed that the new costs would probably not be allowable. On November 9, 1983, Hallandale submitted an interim rate request to cover the increased cost of the new lease payments. The interim rate request was procedurally correct. By letter dated May 30, 1984, HRS denied the interim rate request because "...the lease cost was negotiated for investment related reasons and is not related to patient care." On June 25, 1984, Hallandale filed its petition for a formal administrative hearing.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the interim rate increase requested by Hallandale be granted. DONE and ORDERED this 26th day of April, 1985, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of April, 1985.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint (as amended at the final hearing)? If so, what disciplinary action should be taken against him?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is a Florida-licensed real estate salesperson. He holds license number 0186760. Respondent passed the salesperson examination on November 6, 1995. From November 13, 1995, through February 26, 1997, Respondent was an active salesperson in association with Nicholas Chillemi, an individual broker trading as ReMax 100 (ReMax) and located at 10205 Southern Boulevard in Royal Palm Beach, Florida. From February 27, 1997, through June 24, 1998, Respondent was an active salesperson in association with Bowen Realty, Inc., a broker corporation trading as Bowen Realty and located in Jupiter, Florida. From June 25, 1998, through September 30, 1999, Respondent was an active salesperson in association with Forum Realty, Inc., a broker corporation trading as Realty Executives of the Palm Beaches and located in Lake Worth, Florida. On October 1, 1999, Respondent's salesperson license became involuntary inactive (which is its current status) due to non-renewal. At no time material to the instant case did Respondent hold a real estate broker license At all times material to the instant case, Javier and Maria Velilla owned residential property located at 1290 McDermott Lane in Royal Palm Beach, Florida (McDermott Lane Property). Respondent and Ms. Velilla have known each other for 16 or 17 years. They first met in Chicago, Illinois. Some time prior to September 1, 1996, not very long after he had moved from Chicago to Florida and had begun working as a real estate salesperson for Mr. Chillemi, Respondent returned to Chicago and visited Ms. Velilla. During his visit, Respondent agreed, as a representative of ReMax, 2/ to help the Velillas find a tenant for the McDermott Lane Property. Through the efforts of Respondent, a tenant was ultimately found for the property. The tenant was Belinda Vosatka. On or about August 28, 1996, the Velillas (as lessors) and Ms. Vosatka (as lessee) entered into a Residential Lease for Single Family Home and Duplex (McDermott Lane Property Lease). The McDermott Lane Property Lease covered the one-year period from September 1, 1996, to August 31, 1997, and required Ms. Vosatka to make a security deposit of $850.00 and lease payments of $850.00 a month. Paragraph VI of the McDermott Lane Property Lease provided as follows: NOTICES. Henry Saldana is Landlord's Agent. All notices to Landlord and all Lease Payments must be sent to Landlord's Agent at 10205 Southern BLVD, R.P.B., Fl 33411 unless Landlord gives Tenant written notice of a change. Landlord's Agent may perform inspections on behalf of Landlord. All notices to Landlord shall be given by certified mail, return receipt requested, or by hand delivery to Landlord or Landlord's Agent. Any notice to Tenant shall be given by certified mail, return receipt requested, or delivered to Tenant at the Premises. If Tenant is absent from the Premises, a notice to Tenant may be given by leaving a copy of the notice at the Premises. The Velillas agreed to pay Respondent $50.00 a month for acting as their "agent" under the McDermott Lane Property Lease ("Agent" Fee Arrangement). Respondent entered into this agreement with the Velillas in his individual capacity, not as a ReMax salesperson on behalf of Mr. Chillemi. (As Respondent was aware at the time he entered into the "Agent" Fee Arrangement, collecting lease payments from tenants and providing related property management functions were not among the services that ReMax provided its clients.) Respondent made Mr. Chillemi aware of the McDermott Lane Property Lease, but at no time did he inform Mr. Chillemi about the "Agent" Fee Arrangement, much less share with Mr. Chillemi the $50.00 payments he received from the Velillas for acting as their "agent." On September 1, 1996, Respondent received from Mr. Chillemi a $425.00 commission for his role in the leasing of the McDermott Lane Property. For approximately the first half of the lease period, the Velillas received from Respondent, within five days of the beginning of each month, money orders in the amount of the monthly lease payments Ms. Vosatka was required to make under the McDermott Lane Property Lease, and the Velillas, in turn, paid Respondent (by check payable to Respondent) $50.00 a month in accordance with the "Agent" Fee Arrangement." Thereafter, however, to the dissatisfaction of the Velillas, the money orders began arriving later in the month. Upon looking into the matter, Ms. Velilla discovered that, pursuant to Respondent's instructions (which he had given without the Velillas' express authorization), Ms. Vosatka had been making her monthly lease payments by sending Respondent personal checks payable to Respondent. Displeased with this arrangement, Ms. Velilla had Respondent draft the following Amendment to Lease, which she and her husband (as lessors) and Ms Vosatka (as lessee) signed: It is mutually agreed and understood by the parties [who] entered into a leasing agreement on August 26, 1996 for the property located at 1290 McDermott Ln. Royal Palm Beach, Fl 33411 and herein referred to as, Javier & Maria Victoria Velilla, as the Landlord, and Belinda Vosatka, as the Tenant, that the rent for the above named property shall be due and payable by way of Cashier's Check or Money Order and to the name of the above mentioned Landlord on the same dates as agreed on the original lease. In consideration to the rent being paid by Cashier's Check or Money Order, the Landlord agrees to allow Four D[o]ll[a]rs ($4.00) allowance to the Tenant for expenses incurred for issuance of the payment. Therefore, the actual rent due by the Tenant shall be in the amount of $846 per month. The rest of the terms of the lease stand as originally agreed. Ms. Vosatka paid her rent for two or three months following the execution of this Amendment to Lease with cashier's checks payable to the Velillas. She then stopped making payments. When Ms. Velilla contacted Respondent and inquired about the situation, Respondent told her that Ms. Vosatka had health problems and was not able to work. After not receiving any lease payments for approximately three months, the Velillas, at the urging of a friend, traveled to Florida to inspect the McDermott Lane Property. Upon arriving at the property, they found that Ms. Vosatka had vacated the premises, leaving it in deplorable condition.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Commission issue a final order dismissing the Administrative Complaint (as amended at the final hearing) in its entirety. DONE AND ENTERED this 10th day of October, 2000, in Tallahassee, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of October, 2000.
The Issue Whether the Florida Fish and Wildlife Conservation Commission’s (“Respondent” or “FWC”) determination that Tallahassee Corporate Center, LLC (“Petitioner” or “TCC”), submitted a nonresponsive reply to FWC’s Invitation to Negotiate (“ITN”) No. 770-0235 is contrary to the Commission’s governing statutes, the agency’s rules or policies, or the solicitation specifications; and, if so, whether it was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact The following Findings of Fact are based on exhibits admitted into evidence, testimony offered by witnesses, and admitted facts set forth in the pre-hearing stipulation. ITN No. 770-0235 and Background FWC is a state agency that seeks office space to be occupied by personnel from six of FWC’s divisions. FWC currently leases office space from TCC, which expires in October 2019. On July 19, 2017, FWC issued ITN No. 770-0235, seeking vendors that could provide 53,000 square feet of office space for lease. FWC anticipates occupying the space by November 1, 2019. Between August 15, 2017, and November 2, 2017, FWC issued four addenda to the ITN, which contained amendments, modifications, and explanations to the ITN. There were no bidders that challenged the terms, conditions, or specifications contained in the ITN or its amendments. TCC and NLH were two of the potential lessors that submitted replies in response to the ITN. FWC seeks to lease either a building that already exists or a non-existing building to be constructed in the future. The ITN describes the proposals requested as follows: Competitive proposals may be submitted for consideration under this Invitation to Negotiate (ITN) for the lease of office space in either an existing building or a non- existing (build-to-suit/turnkey) building. NOTE: All buildings must comply with the Americans with Disabilities Act (ADA) as stated in Attachment A, Agency Specifications, Section 6.D., page 32. OPTION 1 - an ‘existing’ building: To be considered an ‘existing’ building, the facility offered must be enclosed with a roof system and exterior walls must be in place at the time of the submittal of the Reply. OPTION 2 - a ‘non-existing’ building: Offeror agrees to construct a building as a ‘build-to-suit’ (turnkey) for lease to FWC. Each applicant that submitted a proposal in response to the ITN was required to meet the specification in Attachment A of the ITN. The ITN provides as follows: FWC is seeking detailed and competitive proposals to provide built-out office facilities and related infrastructure for the occupancy by FWC. As relates to any space that is required to be built-out pursuant to this Invitation to Negotiate in accordance with this Invitation to Negotiate, see Attachment ‘A’ which includes the FWC Specifications detailing the build-out requirements. The specifications in Attachment A provided the basic requirements for the potential leased space such that proposals offering existing or non-existing building may be compared and evaluated together. The ITN included certain provisions to clarify the rights contemplated by the ITN, and included the following disclaimer: This ITN is an invitation to negotiate and is for discussion purposes only. It is not an offer, contract or agreement of any kind. Neither FWC nor the Offeror/Lessor shall have any legal rights or obligations whatsoever between them and neither shall take any action or fail to take any action in reliance upon any part of these discussions until the proposed transaction and a definitive written lease agreement is approved in writing by FWC. This ITN shall not be considered an offer to lease. The terms of any transaction, if consummated, shall not be final nor binding on either party until a Lease Agreement is executed by all parties. This ITN may be modified or withdrawn by FWC at any time. The ITN also included a provision expressly reserving FWC’s “right to negotiate with all responsive and responsible Offerors, serially or concurrently, to determine the best-suited solution.” The term “Offeror” was defined by the ITN to mean “the individual submitting a Reply to this Invitation to Negotiate, such person being the owner of the proposed facility or an individual duly authorized to bind the owner of the facility.” This reservation of rights placed interested lessors on notice that only responsive lessors could be invited to negotiations. While TCC and NLH were two of the potential lessors that submitted replies in response to the ITN, the bidders submitted different proposals. TCC submitted a proposal for an existing building, and NLH submitted a proposal for a non- existing building. During an initial review of all replies, FWC determined TCC’s reply to be nonresponsive based on TCC’s response to ITN section IV.G (Tenant Improvements) and a statement titled “Additional Response” that TCC submitted with its reply. As a result, FWC did not evaluate or score TCC’s reply. After TCC’s reply was declared nonresponsive, there were no further negotiations with TCC regarding the ITN. NLH’s reply passed the initial responsiveness review and was then evaluated and scored by FWC. FWC ultimately issued an intended award of the contract to NLH after conducting negotiations. Tenant-Improvement Cap The ITN prohibited vendors from proposing conditional or contingent lease rates that included a tenant-improvement cap, or allowance. A tenant-improvement cap reflects the maximum amount the landlord is willing to spend to make improvements to leased space. Mr. Hakimi asserted that the tenant-improvement cap would be an incentive to FWC to enter a lease. However, the tenant-improvement cap would also place a limit on improvements. According to ITN section IV.E, any reply offering a lease rate with a tenant-improvement cap would be deemed nonresponsive: FULL SERVICE (GROSS) RENTAL RATE The Offeror shall provide FWC with a Full Service (gross) lease structure. Therefore, the lease rate must include base rent, taxes, all operating expenses (including, but not limited to, janitorial services and supplies, utilities, water, insurance, interior and exterior maintenance, recycling services, garbage disposal, pest control, security system installation and maintenance, and any amortization of required tenant improvements to the proposed space). There shall be no pass through of additional expenses . . . . Offerors must provide their best, firm lease rates. Lease rates that are contingent, involve a basic rate plus “cap” or “range” for such things as tenant improvements will be deemed nonresponsive. The ITN also provided, in section IV.G, that any current lessor must meet all ITN requirements, including those set forth in ITN Attachment A: TENANT IMPROVEMENTS The State requires a “turn-key” build-out by the Landlord. Therefore, Offeror shall assume all cost risks associated with delivery in accordance with the required specifications detailed in this ITN, including Attachment A (see pages 28-45). Additionally, replies for space which is currently under lease with, or occupancy by, the Florida Fish and Wildlife Conservation Commission does not exclude the Offeror from meeting the requirements specified in this ITN document. Offeror agrees to provide “turn-key” build-out/improvements in accordance with the specifications detailed in this ITN. (use an X to mark one of the following): YES or NO TCC responded “NO” to the statement “Offeror agrees to provide ‘turn-key’ build-out/improvements in accordance with the specifications detailed in this ITN.” Additional Response Not only did TCC include a barred tenant-improvement cap, but TCC also attached an addendum to its proposal, which provided the following: The reality is that as the current Landlord, it would be impossible to ask FFWCC to move out of its existing office space in order to meet the requested Agency Specifications in Attachment A. If this condition makes our response to the Invitation to Negotiate (ITN) “non-responsive”, we stand willing to continue further negotiations with FFWCC. There was no provision in the ITN for additional responses outside what was requested in the ITN. More importantly, the addendum indicated TCC could not comply with the ITN, unless certain conditions were met. Mr. Hakimi confirmed the effect of what was written in the addendum when he testified that TCC is unable to meet Attachment A’s specifications because it presently has a tenant in place (i.e., FWC) that prevents it from constructing the building improvements necessary to comply with ITN Attachment A. Proof of Ownership of Property The ITN also provided that to be responsive, each lessor was required to submit certain documentation demonstrating the lessor’s control of the property proposed for the leased space: Replies must completely and accurately respond to all requested information, including the following: (A) Control of Property (Applicable for Replies for Existing and/or Non- Existing Buildings). For a Reply to be responsive, it must be submitted by one of the entities listed below, and the proposal must include supporting documentation proving control of the property proposed. This requirement applies to: The real property (land); The proposed building(s) (or structure(s); The proposed parking area(s). Control of parking includes the area(s) of ingress and egress to both the real property and the building(s). The owner of record of the facility(s) and parking area(s) – Submit a copy of the deed(s) evidencing clear title to the property proposed. The authorized agent, broker or legal representative of the owner(s) – Submit a copy of the Special Power of Attorney authorizing submission of the proposal. The Special Power of Attorney form was attached to the ITN as Attachment K. TCC’s certification was executed by TCC president, Lyda Hakimi. However, TCC did not execute Attachment K or include an executed power of attorney to demonstrate that TCC has control of the property. The evidence offered at hearing of the property’s ownership contained in TCC’s reply was a deed showing DRA CRT Tallahassee Center, LLC to be the property owner. Respondent argued that although TCC owns DRA CRT Tallahassee Center, LLC, the two are different legal entities. Because these were two different legal entities, TCC was required to provide a copy of Attachment K to its response to be deemed responsive. Broker Commission The ITN required lessors to agree to execute a broker- commission agreement, which was attached to the ITN as Attachment J: Offeror understands FWC is utilizing the services of a Tenant Broker representative for this lease space requirement and the successful Offeror shall execute a Commission Agreement, in coordination with FWC’s Tenant Broker representative, within fifteen (15) business days of notification of Award. Offeror agrees and acknowledges that a Tenant Broker Commission Agreement is a requirement and the successful Offeror shall be required to execute a Commission Agreement as described above. (use an X to mark one of the following): YES or NO The ITN included a schedule for the commission rate based on the total aggregate gross base rent that could be paid ranging from 2.50 percent to 3.50 percent. TCC conditioned its reply by agreeing to pay a two-percent broker commission, which is inconsistent with the commission schedule. By offering a lower commission rate, TCC could save money. TCC would then have a competitive advantage over other bidders. TCC’S Bid was Nonresponsive Based upon the foregoing, TCC’s bid submission added a tenant-improvement cap, failed to comply with the broker commission rate, failed to provide supporting documents to demonstrate proof of property ownership, and added additional conditions regarding compliance with the ITN requirements. The information requested and terms of the ITN were required for TCC’s bid to be responsive. TCC did not file a challenge to the specifications or any of the requirements of the ITN. It is now too late for such a challenge. TCC’s inclusion of a tenant-improvement allowance limits the amount that would pay for improvements. The lower broker commission increases the profit advantage for TCC more than for other bidders, which would be an unfair advantage over other bidders. TCC’s failure to comply with the terms of the ITN and failure to provide the required attachment to show proof of ownership were not minor irregularities, which FWC could waive. Therefore, FWC properly determined that TCC’s bid submission was nonresponsive. Standing TCC submitted a bid proposal that did not conform to the requirements of the ITN and it seeks relief that includes setting aside FWC’s rejection of its proposal. Therefore, TCC has standing to bring this protest. If it is determined that TCC was nonresponsive, NLH has standing to the extent the procurement process could be deemed contrary to competition.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Fish and Wildlife Conservation Commission enter a final order dismissing Tallahassee Corporate Center, LLC’s Petition. DONE AND ENTERED this 27th day of March, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of March, 2018.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of March, 1992.
Findings Of Fact During March 1988, the Respondent issued an Invitation to Bid by which it sought to lease 17,973 net usable square feet of office space to be located within a specified geographic area in Tampa, Florida, under a nine year lease with two additional three year option periods. This Invitation to Bid is referred to as Lease Number 590:1927. Three bids were received in response to the Invitation to Bid, and they were opened on May 13, 1988. Bids were received from the Petitioner, 8900 Centre, Ltd., and the Allen Morris Management Company. All bidders were determined to be responsive to the Invitation to Bid. Despite the fact that petitioner submitted the lowest bid, Respondent notified Petitioner by letter dated June 10, 1988, of its intent to award Lease Number 590:1927 to 8900 Centre, Ltd., as the lowest and best bidder. Petitioner has timely filed its protest seeking review of that decision. It is undisputed that Petitioner submitted the lowest bid. For the first year of the lease, Petitioner bid $7.85 per square foot, while 8900 Centre bid $7.95 per square foot. Thereafter, Petitioner proposed a yearly increase of 50 cents per square foot, reaching $11.85 per square foot in the ninth year of the lease, while 8900 Centre proposed annual increases of approximately 75 cents, reaching $14.00 per square foot in the ninth year. This equates to an actual dollar difference over the nine year term of approximately 185,000. However, using a present value methodology and a present value discount rate of 8.81 percent referred to on page 17 of the bid submittal form, the present value difference in these two bids is approximately $1,000 per month, which would result in a present value difference between Petitioner and 8900 Centre of approximately $108,000 over the nine year period. Neither the Invitation to Bid, bid specifications, nor the actual bids were offered into evidence. One page of the bid submittal form, designated as page 17 of 18, was offered and received in evidence. This portion of the bid submittal form states that the "successful bid will be that one determined to be the lowest and best." It also sets forth evaluation criteria, and assigns weights to each criteria. The evaluation criteria include associated fiscal costs (35 points), location (40 points) and facility factors (25 points) . A synopsis of bids was also offered and received in evidence showing the points awarded to each bidder by the Respondent's bid evaluation committed. Out of a possible 100 points, 8900 Centre received 95.17 points, while Petitioner received 82.25 points and the Allen Morris Management Company received 70.67 points. Petitioner asserts that the members of the evaluation committee were not qualified or knowledgeable in basic construction, design and engineering principles, and therefore could not competently evaluate the bids submitted. However, Petitioner did not offer competent substantial evidence to support this contention. Only the chairperson of the committee, Susan Jennings, was called to testify, and she appeared thoroughly knowledgeable in the bid process, the needs of the agency, the bid requirements and the representations made to the committee members by each bidder, including Petitioner, when the committee made its site visit to each location. Since the actual Invitation to Bid, bid specifications, and evidence about the other committee members were not introduced, it is not possible to know what the specific duties of the committee were, how they were to carry out their duties their qualifications and training, and whether they failed to competently carry out these duties, as alleged by Petitioner. Despite Petitioner's lower bid, Respondent awarded this lease to 8900 Centre, Ltd., based upon the evaluation committee's determination assigning 8900 Centre the highest number of evaluation points. Out of a possible 35 points for fiscal costs, Petitioner received 34 and 8900 Centre received 31.5. Thus, Petitioner's status as low bidder is reflected in the points awarded by the committee. Since neither the bid invitation or specifications were introduced, no finding can be made as to whether the difference between these two bidders comports with any instructions or directions provided by the agency to potential bidders, or whether this difference of 2.5 points on this criteria reasonably reflects and accounts for the dollar difference in these two bids. Petitioner received 34.75 points out of a possible 40 points on the general evaluation criteria "location," while 8900 Centre received the full 40 points. Within this criteria, there were three subcategories, and on the first two subcategories (central area and public transportation) there was an insignificant difference of less than one-half point between Petitioner and 8900 Centre. The major difference between these two bidders which accounts for their significant difference on the location criteria, was in the subcategory of environmental factors, in which Petitioner received 15.17 points and 8900 Centre received the full 20 points. Petitioner did not present competent substantial evidence to discredit or refute the committee's evaluation in the subcategory of environmental factors. To the contrary, the only testimony from a committee member was that of Susan Jennings, and according to her, Petitioner failed to explain the availability of individual air conditioning and heating controls, or the possibility of separate program entrances, which could be made available under its bid. Although Petitioner sought to explain at hearing that these desires of the agency could be accommodated in its bid, there is no evidence that such an explanation was provided in its bid or during the bid process when the evaluation committee visited the Petitioner's site. The committee was aware, however, that 8900 Centre would provide individual heating and air conditioning controls, as well as separate outside entrances for the three programs which would occupy the leased space. Additionally, the committee was concerned, according to Jennings, that parking areas at Petitioner's facility were more remote and removed from the building entrance than at 8900 Centre, and were somewhat obscured by trees and shrubbery, thereby presenting a potential safety concern for employees working after dark. Finally, every employee would either have a window or window access at 8900 Centre, while it was not explained that Petitioner's site would offer a similar feature. Thus, Petitioner failed to establish that the evaluation committee erred in assigning a significantly greater number of points for environmental factors to 8900 Centre than to Petitioner. The evidence reflects a reasonable basis for this difference. The other significant difference between these two bidders was in the subcategory for layout and utilization under the evaluation criteria "facility." Petitioner received 13.67 points while 8900 Centre received a full 20 points. Jennings explained that the separate outside entrances leading directly into the three programs that would occupy this space was preferred to a single reception area for all three programs. Petitioner offered the single reception area in its bid and site visit presentation, while 8900 Centre made it clear that each program would have its own entrance. Since these programs do not have a receptionist position, and none wanted to give up a secretarial position to serve as receptionist for all three programs, the committee did not consider the single reception area entrance to be desirable. Additionally, Petitioner's facility was a two-story building, while 8900 Centre is a single story facility. Jennings explained that the committee considered a ground level facility to be preferable to a two story building, particularly since the Medicaid program was to occupy the major portion of this space. The Medicaid program would have to be split up at Petitioner's facility, either in two separate buildings or on two levels of the same building, while at 8900 Centre, Medicaid could be accommodated in one, single story building, with the other two programs in a second, single story building. Finally, parking at 8900 Centre was directly next to, and outside the entrance of the building, while Petitioner offered to make assigned spaces available in a general parking area which serves its entire 100,000 square foot complex. The parking offered by Petitioner is more remote than that offered by 8900 Centre, and would be less secure at night due to a greater distance from the building entrances and the parking lot. Thus, Petitioner failed to establish that the committee erred in assigning a significantly greater number of points for layout and utilization to 8900 Centre than to Petitioner. There is a reasonable basis for this difference, according to the evidence in the record.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioner's protest to Lease Number 590:1927. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of December 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December 1988. APPENDIX (DOAH Case Number 88-3765 BID) Rulings on Petitioner's Proposed Findings of Fact: Adopted, in part, in Finding of Fact 1, but Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Adopted in Finding of Fact 5. 3-5. Adopted in Finding of Fact 4, but Rejected in 7. 6-7. Rejected in Finding of Fact 8. Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Rejected in Findings of Fact 9 and 10, and otherwise as not based on competent substantial evidence. Rulings on the Respondent's Proposed Findings of Fact: Adopted in part in Finding of Fact 1, but otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 4. 3-4. Adopted in part in Findings of Fact 5 and 6, but otherwise rejected as not based on competent substantial evidence in the record of this case. Adopted In Findings of Fact 5, 7-10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Rejected as irrelevant and unnecessary since the point difference in this subcategory is insignificant. Adopted in Finding of Fact 9. 11-12. Adopted in Finding of fact 10. COPIES FURNISHED: Michael V. Giordano, Esquire 7821 North Dale Mabry Suite 100 Tampa, Florida 33614 Jack Farley, Esquire W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Mini-Warehouses At Kendall, Ltd., d/b/a A+ Mini-Storage (Petitioner) is a business located in Dade County, engaged primarily in the rental of storage space. Petitioner employs 20 to 21 employees and has been operating for 13 to 14 years. Petitioner's property on which its business is located consists of approximately four acres and abuts property owned by the Florida Department of Transportation (Respondent), known as Parcel 0739, which contains approximately .0986 acres. On June 28, 1985, Petitioner executed a written lease agreement leasing Parcel 0739 from Respondent. The lease terms provided that it was a year-to- year lease, automatically renewable yearly until terminated by either party upon a 30-day notice, and that the yearly rental cost was $2,400 plus tax. Petitioner leased Parcel 0739 from Respondent because the parcel provides better access to Petitioner's property from the rear and prevents water from encroaching onto Petitioner's property. The same lease agreement was renewed yearly until 1991. In 1991, prior to the expiration of the lease, Respondent notified Petitioner that a new lease form would have to be executed. Respondent provided Petitioner with its Lease Agreement Form 225-080-03, OGC-00031, dated 7/92 (Form Lease) for execution. The Form Lease was developed by Respondent's Office of General Counsel and the General Counsel of each of its Districts, so that there would be a standard lease form statewide with minimal review by Respondent. The Form Lease contains blanks to be completed by Districts to comport with their specific situations. The Form Lease dramatically changed the terms and conditions of leasing Parcel 0739. Petitioner attempted to modify Paragraphs 6 and 8 of the Form Lease, but Respondent refused to agree to any modifications. Paragraph 6 of the Form Lease provides: 6. Indemnification. Lessee shall indemnify, defend, save and hold Lessor, its agents and employees, harmless of and from any losses, fines, penalties, costs, damage, claims, demands, suits and liabilities of any nature, including attorneys fees (including regulatory and appellate fees), arising out of, because of, or due to any accident, happening or occurrence on the leased land or arising in any manner on account of the exercise or attempted exercise of Lessee's rights hereunder, whether the same regards person or property of any nature whatsoever, regardless of the apportionment of negligence, unless due to the sole negligence of Lessor. Lessee's obligation to indemnify, defend, and pay for the defense or at the Department's option, to participate and associate with the Department in the defense and trial of any claim and any related settlement negotiations, shall be triggered by the Department's notice of claim for indemnifica- tion to Lessee. Lessee's inability to evaluate liability or its evaluation of liability shall not excuse Lessee's duty to defend and indemnify within seven days after such notice by the Department is given by registered mail. Only an adjudication or judgment after the highest appeal is exhausted specifically finding the Department solely negligent shall excuse performance of this provision by Lessee. Lessee shall pay all costs and fees related to this obligation and its enforcement by the Department. Department's failure to notify Lessee of a claim shall not release Lessee of the above duty to defend. Under Paragraph 6, Respondent intended to limit lessee's liability to its (lessee's) own negligence or damages it causes. Paragraph 8 of the Form Lease provides: 8. Eminent Domain. Lessee acknowledges and agrees that its relationship with Lessor under this Lease is one of Landlord and Tenant and no other relationship either expressed or implied shall be deemed to apply to the parties under this Lease. Termination of this Lease for any cause shall not be deemed a taking under any eminent domain or other law so as to entitle Lessee to compensation for any interest suffered or lost as a result of termination of this Lease, including but not limited to (i) any residual interest in the Lease, or (ii) any other facts or circumstances arising out of or in connection with this Lease. Lessee hereby waives and relinquishes any legal rights and monetary claims which it might have for full compensation, or damages of any sort, including but not limited to special damages, severance damages, removal costs or loss of business profits resulting from its loss of occupancy of the leased property specified in this Agreement, or adjacent properties owned or leased by it, when any or all such properties are taken by eminent domain proceedings or sold under the threat thereof. This waiver and relinquishment applies whether (i) this Lease is still in existence on the date of taking or sale; or, (ii) has been terminated prior thereto. Under Paragraph 8, Respondent did not intend for the lessee to waive any of its eminent domain rights or relinquish such rights subsequent to the termination of the lease, which would be improper. Presently, Respondent refuses to lease the Parcel to Petitioner unless Petitioner executes the Form Lease without modification. However, at hearing Respondent admitted that it has no intention of requiring Petitioner to agree to Paragraph 8 of the Form Lease. Rule Chapter 14-19, Florida Administrative Code, sets forth Respondent's rules on right-of-way property management. Rule 14-19.002 provides that the purpose of Chapter 14-19 is to set forth standardized methods for, among other things, the leasing of surplus property owned by Respondent. In 1992, the Form Lease was incorporated by reference in Rule Chapter 14-19. Rule 14-19.0012 specifically provides that the Form Lease is one of the forms incorporated by reference in and made a part of Chapter 14-19. Moreover, Rule 14-19.013 requires the Form Lease to be used for short term leasing. Chapter 14-19 is silent as to whether the Form Lease must be used in any of Respondent's other lease situations. Rule 14-19.013, Florida Administrative Code, does not apply to the circumstances of this case. Respondent has a Right Of Way Manual (Manual) for statewide use. Chapter 10, Section 6 of the Manual, entitled "Right of Way Property Leases" and effective January 21, 1993, provides in its "Purpose" section that the purpose of Section 6 is to establish uniform procedures for leasing property owned by Respondent. Also, the Manual's "Procedure" section mandates the use of the Form Lease for all of Respondent's leases. Prior to this mandate, Respondent had no standard lease form for its leases. In October 1992, Respondent required the Form Lease to be used in surplus property leases. The Form Lease is applicable statewide and implements procedures and policies involved in leasing surplus property. Parcel 0739 is considered by Respondent to be surplus property. The Manual is silent as to whether the Form Lease may be modified. Since the implementation of the Form Lease for surplus property, Respondent's District Offices have modified the Form Lease but rarely. In the rare instances when modification has been made, it has been on a case-by-case basis and only with approval of the District General Counsel. Respondent's Office of the Right-Of-Way Administrator under which the responsibility for leasing falls has no authority to approve or disapprove modifications made to the Form Lease by District Offices. However, Respondent's Office of General Counsel does have such authority, but it has not exercised its authority in any of the District situations in which the Form Lease has been modified. Even though there have been modifications to the Form Lease by Respondent's District Offices, although rare, no District Office has modified Paragraphs 6 or 8. Respondent admits that Petitioner has standing in this proceeding.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The petitioner is a dentist and is also engaged in the business of leasing real property in Florida for commercial purposes. A tax auditor for the respondent, Mr. Eugene A. Soinski, notified petitioner that an audit of his books and records would be conducted to determine whether petitioner was remitting the appropriate amount of rental taxes to the respondent. At the time of the initial audit, Mr. Soinski was supplied with only bank deposit receipts and certain leases. The auditor had difficulty in determining which were mortgage payments and which were rental payments. Based upon the auditor's review of petitioner's deposit slips, lease agreements, a three-year audit prepared by petitioner and discussions with some of petitioner's tenants, as assessment for delinquent taxes was made. The initial assessment was reduced and the present dispute lies with the revised assessment dated October 2, 1978, in the amount of $5,316.35. In his amended petition for a hearing and at the hearing, petitioner alleged that no rent tax was due on three specific leases. Petitioner offered no evidence to refute the respondent's assessment on any other lease. All testimony and evidence adduced at the hearing was confined to the lease agreements between petitioner and three other businesses -- Suncoast Amusement, Product Movement Systems, Inc., and Staid, Inc. One of the three disputed items in the assessment concerned an agreement between petitioner and Suncoast Amusement, also referred to as Hot Foots. The lease agreement between Suncoast and petitioner was not made available at the hearing. According to the testimony of the petitioner, the tenant removed carpeting from the premises and installed new red carpeting in its stead. Certain other improvements were also made to the property. The petitioner testified that he received no actual benefit to the property from these improvements, and that the red carpet actually decreased the value of the property. The auditor, Mr. Soinski, remembered seeing the lease agreement and matching the rental payment amounts with the deposit receipts to arrive at the assessment. A copy of the first two pages of the "business lease" between petitioner and Product Movement Systems, Inc., was received into evidence as respondent's Exhibit 3. This agreement contains the stipulation that TWENTY-SECOND: Minimum of two room office, with air, will be built at tenant's expense and remain as part of the first years rent. According to petitioner, the tenant actually built eight to ten offices and this did not improve the real estate. It was, instead, a deterrent to future tenants, according to petitioner. A copy of the "business lease" between petitioner and Staid, Inc., was received into evidence as the respondent's Exhibit 2. The consideration for the agreement was a total rental of sixty thousand dollars, payable as follows: One thousand dollars per month in advance, plus 4 percent State tax. Two thousand dollars security deposit, receipt acknowledged. Also on the first of each month an amount equal to 1/60th of the total cost of all improvements of any kind, as approved by both parties, will be paid plus the above basic rent of $1,040. - per month. Also, the twenty-fourth stipulation and condition in said lease provides as follows . . . TWENTY-FOURTH: If during the life of this lease tenant has need of more space every effort will be made to provide some adjacent. If it is desirable to both parties a new building is necessary then such buildings will be to tenants specifications, the rent will be the total cost of such land and improvements including architect fee, cost of mortgage, paving, landscaping or any expense of any nature x 15 percent net, net. According to the petitioner, he made a loan to Staid, Inc., in the amount of $48,000.00 to enable Staid to pay for certain improvements to the property. This loan was to be repaid in installments of $800.00 per month for sixty months. It was petitioner's testimony that regardless of the wording contained in the lease agreement, the improvements were not considered a part of the rent, he derived no benefits from the improvements to the property, and part of the payment made by the tenant each month was for repayments of a loan, rather than rental on the property. It was the testimony of Mr. Soinski, the auditor, that the assessment of the three disputed leases was based on the total amount of rent paid by the tenants to the petitioner, which rent included any improvements to the property. Where lease documents were available, he utilized the amount of rent due from the face of the lease document. Where possible, he compared the lease documents with the petitioner's bank deposit slips. The revised notice of proposed assessment dated October 2, 1978, was received into evidence as the respondent's Exhibit 1. This document assesses a tax on rentals of real property in the amount of $4,215.40, a delinquent penalty in the amount of $210.79 and interest through October 2, 1978, in the amount of $890.16, for a total amount of $5,316.35.
Recommendation Based upon the findings of fact and conclusions of law recited above, it is RECOMMENDED that the proposed assessment dated October 2, 1978, in the amount of $5,316.35 be upheld and that the relief requested by petitioner be denied. DONE AND ENTERED this 3rd day of January 1980 in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of January 1980. COPIES FURNISHED: James W. Hickman 203 River Bend Longwood, Florida Linda Procta Assistant Attorney General Department of Legal Affairs The Capitol LL04 Tallahassee, Florida 32301 =================================================================
The Issue This is a bid challenge case in which the primary issue is whether the Petitioner's bid is responsive to the RFP.
Findings Of Fact Some basic background facts The Department issued Request for Proposals No. 700:0652, Office Space (the "RFP"). The RFP requested bidders to submit proposals to provide 7,750 square feet of office space (+/- 3 percent) in Broward County to be leased by the Department for a probation and parole office. Under the RFP terms the space had to be available by June 1, 1993. Proposals had to be filed with the Department by January 5, 1993. In-Rel Acquisitions, Inc., and Janc, Inc., submitted bids. Pursuant to an evaluation of the bids conducted by the Department, In- Rel Acquisitions, Inc., was given a contingent award of the lease on March 31, 1993, as the vendor with the lowest price and the overall highest evaluation score. The contingent award letter of March 31, 1993, read as follows in pertinent part: It is the intent of the Department of Corrections to award the above referenced bid to In-Rel Acquisitions, Inc., as the vendor with the lowest bid price and the overall highest evaluation score. The award to In-Rel Acquisitions, Inc., is contingent upon: (a) obtaining the necessary zoning approval to operate a probation and parole office at the bid premises by May 6, 1993, and (b) the Department obtaining sufficient assurances from the Resolution Trust Corporation that the bid premises will not be taken over by the RTC and the Department's leasehold interest will not be affected. On May 18, 1993, the Department issued a letter awarding the subject lease to Janc, Inc., because the Department was of the view that In-Rel Acquisitions, Inc., had not met the conditions of the contingent award of March 31, 1993. The award letter of May 18, 1993, read as follows, in pertinent part: This letter is to inform you that the Department of Corrections has determined that the award of the lease for the above referenced bid is hereby made to Janc, Inc. The bid from In-Rel Acquisitions, Inc. has been rejected because it has not met either of the conditions stipulated on the March 31st award letter, and the property has not been properly maintained under the existing lease agreement. Both the contingent award letter of March 31, 1993, and the award letter of May 18, 1993, contained "boiler-plate" language advising the addressee of the basic details of the written protest process. In-Rel Acquisitions, Inc., filed a timely protest of the award to Janc, Inc. Facts about the zoning situation The award of the lease to In-Rel Acquisitions, Inc., was made contingent because the property was not properly zoned to support a probation and parole office for the Department. At the time of soliciting bids on the subject project, the Department was currently leasing the space proposed by In-Rel Acquisitions, Inc., and had done so for almost five years. Shortly after the deadline for the submission of bids, the Department was notified that it was in violation of the Plantation City Code because the office was not properly zoned, and the Department was subject to fines if it did not obtain proper zoning or leave the premises by June 1. The fine was at the rate of $200.00 per day. In-Rel Acquisitions, Inc., did not obtain necessary zoning approval by May 6, 1993. First, the zoning approval passed by the City of Plantation limited the hours of operation of the probation office. As approved by the City of Plantation, the Department can only operate its probation office Monday through Friday from 8:00 a.m. to 5:30 p.m., plus one evening a week until 7:00 p.m. These time limits do not satisfy the contingency placed in the March 31, 1993, award because the Department cannot operate a probation and parole office within these limited hours. The Department has 14,000 probationers in Broward County under its supervision. The caseload puts a severe strain on the caseworkers making it essential that they have flexible hours to get their job done. The caseload also requires working evenings and weekends. For example, some probation officers must maintain evening hours to test offenders for drugs. Although the officers could make the offenders visit the Department's office during the day, this would jeopardize the employment status of many offenders. Therefore, the Department needs flexible evening hours to do the drug testing. One of the major functions of the probation officer is to help rehabilitate the offender. That means that the Department must do what it can to help the offender stay employed. In addition, the probation officers need evening and weekend hours to do their paperwork, including preparing weekly reporting schedules, and recording their contacts. The officers also need evening hours to receive monetary payments due from offenders, meet with offenders who must report in person into the office each month, and counsel offenders in the office. Under the prior lease with In-Rel Acquisitions, Inc., the Department had operated and held evening hours at a minimum of three nights per week. This included both probation officers and offenders appearing at the office during the evenings. The RFP specifically notified bidders that there would be evening hours. Section B(14) of the RFP states: Staff of both sexes will be required to work in this facility during both daylight and evening hours. An environment in which staff can expect to be safe is essential. Section D(11) of the General Provisions of the subject RFP reads as follows: Federal, state, county, and local laws, ordinances, rules, and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the bidder will in no way be a cause for relief from responsibility. The records of the City of Plantation meetings show that the May 5, 1993, vote was not final. A mandatory second reading of the zoning change took place on May 12, 1993, and the minutes were approved on May 19, 1993, and June 2, 1993, with respect to the first and second reading. Even if the zoning change with its limited hours had been sufficient to meet the terms of the contingent award, the limited zoning approval was not received before May 6, 1993; and therefore, the mandatory second reading of May 12, 1993, caused the limited zoning approval to be untimely. Finally, the limited and untimely zoning change as approved on May 5, 1993, was itself contingent on satisfying all concerns of the Landscape Architect. Facts regarding the RTC assurances The second award contingency required In-Rel Acquisitions, Inc., to provide the Department with sufficient assurances from the Resolution Trust Corporation (RTC) that the bid premises would not be taken over by the RTC and that the Department's leasehold interest would not be affected. The property submitted by In-Rel Acquisitions, Inc., was in litigation; the RTC as successor mortgagee, had filed or secured a Notice of Lis Pendens, an Amended Complaint, a Summary Final Foreclosure Judgment, and a Notice of Sale. The RTC has an interest in the property offered by In-Rel Acquisitions, Inc. Paragraph 1(E) of the Summary Final Foreclosure Judgment provides that the Summary Final Foreclosure Judgment shall eliminate the interest of anyone that has acquired an interest since the filing of the Lis Pendens, including the Department's leasehold interest if it were to enter into a lease on the property. The property bid by In-Rel Acquisitions, Inc., was subject to a second mortgage. The record does not reflect that the first mortgagee and the second mortgagee entered into any type of written agreement not to disturb the leasehold interest of the Department. By letter dated May 11, 1993, an attorney for the RTC responded to the Department's request for assurances. The May 11, 1993, letter included the following: Pursuant to your request of yesterday, I am writing to belatedly confirm the April 19, 1993 telephone conference had you, Robert Gellman of Real Estate Recovery, Inc., and I. This telephone conversation was had to provide the Department of Corrections (the "Department") with the assurances requested from the RTC in the Department's March 31, 1993 letter of intent to award the subject least [sic] to In Rel Acquisitions, Inc. During this discussion you expressed the concern of the Department that the RTC intended to take title to the property and would then utilize special powers and privileges to dispossess the Department. If that were to be the case, you indicated that the Department would want an assurance that it would receive 90-days' notice before it could be dispossessed. (You indicated that 90-days is how long it would take to complete the bid process that would have to precede the Department's move.) Robert Gellman indicated that he was pursing [sic] numerous resolutions to the pending litigation, some of which might involve the RTC's taking title to the property and others which might not. Mr. Gellman assured you, however, that the RTC perceived it to be in its own best interest, and in the interest of any subsequent landlord, that the Department be kept happy and its tenancy undisturbed. Mr. Gellman also explained that he could not agree to anything at the time, as the appropriate committee approval had to be secured, but that he anticipated no problem in obtaining the necessary approvals of any writing consistent with our discussions once those writings were prepared. (I believe at the time we contemplated a written lease and a written assurance letter from the appropriate RTC official.) You indicated that your concerns had been satisfied and that these assurances were sufficient to satisfy the Department. The three of us discussed that it would not make sense to begin drafting anything at that time as the issues regarding the property's zoning still had to be cleared up and our efforts might otherwise "be all for not." Accordingly, it was mutually decided that we would wait to see the outcome of the May 5, 1993 hearing on the zoning issue before proceeding further. In the interim you indicated that you would be providing us with a list of the specific items of tenant improvements that your local officials expected to have made to the property. (We received this list on May 3, 1993.) On May 5, 1993 the Plantation City Council approved In-Rel Acquisition Inc.'s, request for a rezoning of its property and for a "special use" condition by a 4-0 vote, thus effectively resolving the zoning issue. Yesterday you and I spoke on this issue and discussed the situation. I indicated that the RTC is now in a position to provide you with written assurance that it has no intention of dispossessing the Department or interfering with its lease tenancy (either under the old or the new lease), and that the Department's leasehold interest would not be affected by the RTC taking title to the property (if it ever does). I asked and you indicated that this would give you what you needed and everything would be fine. In addition, I indicated that once the lease by and between the Department and In Rel is finalized, the RTC, if it still owns the note and mortgage, would be able to approve same. In light of the foregoing your call to me this morning, indicating that the Department had decided to withdraw its award to In Rel Acquisitions, Inc. and make the award to "Viloci" (phonetic(?), the next ranked bidder. During this discussion you indicated that Viloci's legal counsel had stated that the RTC would never be able to provide the Department with the requisite assurances. It is unfair for you to make decisions based in whole or in part on any statements made by Viloci's counsel regarding what the RTC can and cannot do without giving us an opportunity to respond -- especially in light of your indications on April 19th and again yesterday that the Department was satisfied with the RTC. The record reflects that the "Notice of Sale" failed to contain language providing that the property would be sold subject to any leasehold interest, either previously or subsequently acquired.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case dismissing the Petition of In-Rel Acquisitions, Inc., and awarding the subject lease to the Intervenor, Janc, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of September 1993. 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 17th day of September 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3438BID The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties. Proposed Findings of Fact submitted by Petitioner Paragraph 1: First three sentences accepted in substance. Fourth sentence rejected as constituting primarily irrelevant or subordinate details. Last sentence reject as contrary to the greater weight of the evidence to the extent it is intended to imply that the zoning change obtained was sufficient. Paragraph 2 and 3: Rejected as contrary to the greater weight of the evidence. Paragraphs 4 and 5: Accepted in substance. Paragraph 6: The first two sentences are rejected as irrelevant or as subordinate and unnecessary details. Last sentence rejected as irrelevant and also as contrary to the greater weight of the evidence and as suggesting implications not warranted by the evidence. Paragraph 7: Rejected because it goes further than the evidence and suggests inferences not warranted by the evidence. Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 8: Rejected as contrary to the greater weight of the evidence. Paragraph 9: Accepted in substance, with the deletion of the words "in ignoring the foregoing." Paragraph 10: Rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. Paragraph 11: First sentence is accepted in substance. Second sentence is accepted as literally true, but as also substantially irrelevant because during most of the original five-year lease there was no issue about hours of operation because there was no effort at restriction of hours of operation. The last sentence is rejected as not supported by persuasive competent substantial evidence. Paragraph 12: The first two sentences are rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. The third and fourth sentences are rejected because they go further than the evidence and suggest inferences not warranted by the evidence. As noted above, Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 13: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 14: First two sentences accepted in substance. Last sentence rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 15: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 16: It is accepted that Messrs. Gellman and Guerra made statements as to what they expected the RTC's position to be, but, as noted several times above, the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Proposed findings submitted by Respondent Paragraphs 1, 2, 3, 4, 5, 6, 7, 8 and 9: Accepted. Paragraph 10: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraphs 11, 12 and 13: Accepted in substance. Paragraph 14: Rejected as repetitious. Paragraphs 15, 16 and 17: Accepted. Paragraph 18: First sentence is accepted. The second sentence is rejected as constituting argument, rather than proposed findings of fact. Paragraphs 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28: Accepted in substance. Paragraph 29: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 30: Accepted. Paragraph 31 and 32: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 33 and 34: Accepted in substance. Paragraphs 35 and 36: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 37: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 38, 39, 40 and 41: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 42, 43, 44 and 45: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 46, 47, 48 and 49: Accepted in substance. Paragraph 50: Accepted. Paragraph 51: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 52: First sentence rejected as subordinate and unnecessary details. Second sentence rejected as repetitious. Paragraphs 53, 54 and 55: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 56: First sentence accepted in substance. Second sentence rejected as constituting argument, rather than proposed findings of fact. Paragraph 57: Accepted in substance. Paragraph 58: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 59, 60, 61, 62, 63 and 64: Rejected as primarily constituting argument or proposed legal conclusion, rather than proposed findings of fact. Proposed findings submitted by Intervenor Although there are some differences in the numerical sequence, the vast majority of the proposed findings of fact submitted by the Intervenor are identical to those submitted by the Respondent. It would serve no useful purpose to repeat the rulings on all of those findings. The following rulings address the few proposed findings submitted by the Intervenor that are different from the ones submitted by the Respondent. Paragraph 11: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraph 30: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 37: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 44: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 54: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 55, 56, 57, 58, 59 and 60: Accepted in substance. Paragraph 61: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 62, 63 and 64: Accepted in substance. Paragraphs 65, 66 and 67: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. COPIES FURNISHED: Michael S. Riley, Esquire 200 East Las Olas Boulevard, Suite 1400 Fort Lauderdale, Florida 33301 Steven S. Ferst, Esquire Assistant General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Joseph J. Villacci, Esquire 315 Northeast Third Avenue, Suite 200 Fort Lauderdale, Florida 33301 Harry K. Singletary, Jr., Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Louis A. Vargas, General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500
The Issue The Department of Corrections sought bids for construction of a health services building for a correctional facility. A discrepancy existed between the written specifications and the architectural drawings for the project. An addendum was issued to clarify the matter. The low bidder (Intervenor) did not acknowledge receipt of the addendum until several hours after the opening of bids. The Department accepted the Intervenor's bid. The Petitioner timely protested the action. The issue in this case is whether, in accepting the Intervenor's bid, the Department acted contrary to the requirements of law.
Findings Of Fact On July 31, 1990, the Department of Corrections (hereinafter "Department") issued an Invitation To Bid ("ITB") for PR-35-JRA, Project #90015, consisting of the construction of a Health Classification Building at the Columbia County Correctional Institution. In relevant part, the ITB requested price proposals for said construction, provided that the bid would be awarded to the responsive bidder submitting the lowest cost proposal, provided that "in the interest" of the Department, "any informality" in bids could be waived, and provided space on the bid form for acknowledgment of receipt of all addenda to the ITB. Bids were to be filed no later than 2:00 p.m. on September 11, 1990, the time scheduled for bid opening. Documents issued with the ITB included architectural drawings and written specifications for the building. The architectural firm of Jim Roberson and Associates, (hereinafter "JRA") had been employed by the Department to prepare the drawings and specifications. JRA was responsible for preparation and distribution of related addenda. Further, a JRA representative presided over the opening of bids on behalf of the Department. Following release of the ITB and supporting documents, JRA became aware of a conflict between sink faucets required by the drawings and those required by the written specifications. The specifications provided that sink faucets operated by hand levers or foot pedals were to be installed in the facility. The architectural drawings JRA indicated that sink faucets were to operate by means of "electric-eye" activators, rather than by hand levers or foot pedals. On September 10, 1990, JRA issued an addendum (identified as Addendum #2) 1/ to clarify that "electric-eye" type operators were to be included in the bids. The addendum was sent by telephone facsimile machine to all anticipated bidders. In part the addendum provides as follows: "This Addendum forms a part of the Contract Documents and modifies the original Specifications and Drawings, dated 31 July 1990, as noted below. Acknowledge receipt of this Addendum in the space provided on the Bid Form. Failure to do so may subject the Bidder to Disqualification." On September 11, 1990, the eight bids submitted in response to the ITB were opened by the JRA representative. The Intervenor, Custom Construction (hereinafter "Custom"), submitted the lowest bid at $898,898. The Petitioner, David Nixon (hereinafter "Nixon"), submitted the next lowest bid at $900,000. The bid form provided by the Department as part of the ITB materials to prospective bidders provided space for acknowledgment of addenda to the ITB documents. Upon opening the bid submitted by Custom, the JRA representative officiating at the opening noted that the Custom bid failed to acknowledge Addendum #2 in the appropriate space on the bid form. 2/ Robert L. Harris, president of Custom Construction, attended the bid opening. When the JRA representative noted the lack of acknowledgment of Addendum #2, Mr. Harris stated that he was unaware of the addendum. At hearing, Mr. Harris testified that his secretary told him that Addendum #2 was not received by his office. The JRA representative testified that his review of JRA's FAX transmission records indicated that the FAXed Addendum #2 was received by all bidders. The greater weight of the evidence establishes that Addendum #2 was transmitted to and received by, all bidders. Upon leaving the bid opening, Mr. Harris immediately contacted his plumbing subcontractor, Jerry Stratyon, and discussed the situation. Approximately two hours after the bid opening, and after talking with Mr. Stratton, Mr. Harris notified JRA, in a letter transmitted by FAX machine to JRA, that his bid price did include plumbing fixtures required by Addendum #2. Mr. Harris concluded the letter, "[w]hen can we start work. I know you don't want the alternate." On October 8, 1990, JRA recommended to the Department, that the Custom bid be accepted. The letter of recommendation, in part, provides: The apparent low bidder however, did not verify receipt of Addendum No. 2 on the Bid Proposal. Our office did receive a, facsimile after the bid verifying Addendum NO. 2 receipt from the Contractor's Office." However, the actual letter from Custom to JRA states, not that Addendum #2 was received, but that it was included in the price bid by Custom's plumbing subcontractor. Both Nixon and Custom obtained plumbing bids from the same subcontractor, Jerry Stratton. The cost increase attendant to the requirements of Addendum #2 is approximately $2,400 over the plumbing fixtures indicated in the written project specifications. Mr. Stratton was aware of Addendum #2 and testified that the requirements of Addendum #2 were reflected in his price quotes to both bidders. Mr. Stratton provided the same price bid to Nixon and Custom. Mr. Stratton also provided bids to Nixon and Custom for HVAC work. Mr. Stratton was accepted as Custom's HVAC subcontractor. Nixon's bid indicates that another HVAC subcontractor will perform the cork should Nixon receive the contract. The ITB provided that bid modification or withdrawal was permitted on written or telegraphic request received from a bidder prior to the time fixed for opening. Mr. Harris did not attempt to either withdraw or modify Custom's bid prior to bid opening. No bid modification was permitted subsequent to the bid opening. The Department's policy is to waive minor irregularities when to do so would be in the best interests of the State and would not be unfair to other bidders. The evidence does not establish that Custom Construction's failure to acknowledge the addendum was purposefully designed to permit withdrawal of their bid subsequent to the public bid opening. The omission of acknowledgment of Addendum #2 provided Custom an opportunity to withdraw the bid that was not available to other bidders. Custom could have informed the Department that the bid price did not include the requirements of Addendum #2, and the bid could have been withdrawn. Custom was therefore provided with a substantial advantage or benefit not enjoyed by the other bidders. The other bidders, all of whom acknowledged receipt of Addendum #2, had no opportunity to, and would not have been permitted to, withdraw their aids. The fact that Custom did not withdraw the bid is irrelevant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a Final Order rejecting the bid submitted by Intervenor as nonresponsive and awarding the contract to the Petitioner. DONE and RECOMMENDED this 15th day of January, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 15th day of January, 1991.
