The Issue The ultimate issue for determination at formal hearing was whether the intended decision by the Palm Beach County School Board to reject all bids on the Gladeview Elementary School project, Project No. 125191702/205840, departs from the essential requirements of law.
Findings Of Fact Palm Beach County School Board (Respondent) issued a request for proposals (RFP), soliciting sealed bids for the reroofing, renovating and replacing the HVAC of Gladeview Elementary School, Project No. 125191702/205840 (Gladeview Elementary Project). The RFP and bid documents for the Gladeview Elementary Project were contained in the "Project Manual." The addendum to the RFP required all bids to be submitted by April 20, 1993 at 2:00 p.m., at which time all bids were to be publicly opened. Pertinent to the case at hand, the RFP further required a bid bond or cashier's check for not less than five percent (5 percent) of the bid and notified bidders that Respondent had the right to reject all bids and waive any informalities. Section 00100 of the "Instruction to Bidders" in the Project Manual is material to the case at hand and provides in pertinent part: BIDDING PROCEDURES: * * * Preparation and Submission of Bid Proposal Form: [P]roposals containing any conditions, omissions, unexplained erasures, alternates, items not called for or irregularities of any kind may be rejected by the Owner. . . (e) Proposal Submittal shall contain the following documents: Section 000443 - Public Entity Crimes Statement Section 00310 - Proposal Form Section 00410 - Bid Bond or otherwise acceptable Bid Guarantee (see Paragraph 3.08). Manufacturer's Letter of Intent to Warranty (See Section 7610) and will be enclosed in a sealed envelope. . . * * * 3.08 Bid Guarantee: Bids shall be accompanied by a bid guarantee of not less than five percent (5 percent) of the amount of the Base Bid, which shall be a Cashier's Check or a Bid Bond (Bid Bond, see Section 00410) made payable to the Owner. * * * 3.10 Subcontractors: At the time of the Bid Opening each Bidder submitting a Bid shall submit a written list of the major Subcontractors; namely, structural steel, membrane roofing, preformed metal roofing & siding, plumbing, HVAC, electrical and general contractor, on Form 00420 (List of Major Subcontractors). The list shall be placed in a "sealed envelope". . . Within five (5) Owner Business days after the Bid Opening, the apparent low Bidder(s) shall submit Form 00430) (List of Subcontractors), completed in full to the Owner ... Failure to submit these lists within the time period specified herein shall result in a non- responsive Bid. * * * REJECTION OF BIDS: 6.01 The Bidder acknowledges the right of the Owner to reject any or all Bids and to waive any informality or irregularity in any Bid received. In addition, the Bidder recognizes the right of the Owner to reject a Bid if the Bidder failed to furnish any required Bid security, or to submit the data required by the Bidding Documents, or if the Bid is any way incomplete or irregular; to reject the Bid of a Bidder who is not in a position to perform the Contract; and to re-advertise for other or further Bid Proposals. SUBMISSION OF POST-BID INFORMATION: * * * 7.02 The selected Bidder shall within eight (8) Owner business days after notification of Board Award submit the following: . . . 6. Photocopies of prime Contractor's certification and/or registration and either state registrations or Palm Beach County Certificate of Competency of all Subcontractors. . . * * * AWARD OF CONTRACT: The Contract, if awarded by the Owner, will be awarded to the lowest bona fide responsible Bidder; provided the Bid is reasonable and it is in the interest of the Owner to accept the Bid. The method of determining the lowest bona fide Bid from Bidders shall be the Base Bid price plus or minus Alternate Prices listed on the Bid Proposal Form which are accepted by the Owner. Alternates will be considered for acceptance by the Owner as set forth in the Alternate section of the Specifications, Division One-General Requirements, Section 01030-Alternates. The bid opening was conducted on April 20, 1993, at which time the bids were tabulated and the Bid Tabulation Form (BTF) was posted. Respondent received bids from Bonner Roofing whose base bid was $869,000, S&S Roofing, Inc. (Petitioner S&S Roofing) whose bid was $693,000, Therma Seal Roofs, Inc. (Petitioner Therma Seal) whose bid was $691,500, Titan Roofing, Inc. (Petitioner Titan Roofing) whose base bid was $689,500, and Trans Coastal Roofing, Inc. (Petitioner Trans Coastal) whose base bid was $884,248. The BTF showed that the rank of the bids, beginning with the apparent lowest bidder to the apparent highest, were (1) Petitioner Titan Roofing, (2) Petitioner Therma Seal, (3) Petitioner S&S Roofing, and (4) Petitioner Trans Coastal. The BTF showed further that Bonner Roofing failed to submit with its bid the Manufacturers Letter of Intent which was a required document. Bonner Roofing's bid was rejected. Within minutes after the bid opening, Respondent's staff discovered that Petitioner Titan Roofing had failed to list its major subcontractors on Form 00420, List of Major Subcontractors, even though it had submitted the form. Respondent's staff contacted Petitioner Titan Roofing by telephone and requested the list. Petitioner Titan Roofing's failure to submit a completed Form 00420 was inadvertent and not intentional. At the time of the bid opening, Respondent's staff had not considered Petitioner Titan Roofing's failure to submit a completed Form 00420 to be a major irregularity, but a minor one. Consequently, Respondent's staff considered the failure to be a waivable irregularity. Unable to discern if it had the original figures submitted by its major subcontractors, Petitioner Titan Roofing telephoned them to verify the figures it had. Within two hours, Petitioner Titan Roofing had faxed to Respondent's staff a completed Form 00420. Respondent's recommendation or intended action was to award the bid to Petitioner Titan Roofing as the apparent lowest bidder. Petitioner Therma Seal, the apparent second lowest bidder, filed a timely protest of Respondent's intended action. Respondent held an informal hearing on the protest, and the recommendation was to reject all bids. In prior bids, a bidder's failure to submit Form 00420 at bid opening has been considered a major irregularity by Respondent. The purpose of Form 00420 is to prevent or guard against bid shopping. Respondent's action has been to routinely reject bids with such a deficiency. Petitioner Therma Seal failed to submit with its bid the required bid bond of 5 percent of its base bid. Failure to submit a required bid bond is considered by Respondent to be a major irregularity. Furthermore, Petitioner Therma Seal was not a licensed general contractor. It listed itself as the general contractor on Form 00420. All bids failed to comply with the roofing warranties and specifications, which Respondent considers to be a major irregularity. Respondent's budget, based upon its architect's construction estimate, for the Gladeview Elementary Project was $652,130. All bids were over budget. Prior to the formal hearing, Respondent Trans Coastal notified the parties that it was not proceeding with its protest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Palm Beach County School Board enter its final order rejecting all bids on the Gladview Elementary School project, Project No. 125191702/205840, and re-advertise. DONE AND ENTERED this 7th day of September 1993 in Tallahassee, Leon County, Florida. ERROLL H. POWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of September, 1993.
Findings Of Fact Mr. Ansley is the holder of license No. CB C033338 as a building contractor in the State of Florida, having been issued that license in 1985. At all times relevant hereto, Mr. Ansley was so licensed. In 1987, Fred Fox Enterprises, a private consulting firm in economic development and housing rehabilitation, worked with the Town of Baldwin to write a Community Development Block Grant to upgrade housing in targeted areas of the town. The Town of Baldwin received the grant and Fred Fox Enterprises administered the grant. As part of the grant, arrangements were made to build a new home for Michael and Karen Turner. The Turners qualified for a $25,000 grant and the Turners augmented the grant with their own funds in the amount of $2,750. Fred Fox Enterprises solicited contractors to participate in the grant activities. Mr. Ansley was one of the contractors who agreed to participate. The Turners selected a floor plan and Mr. Ansley's bid for the job was acceptable. A contract was signed on June 29, 1987. Ansley was to receive $27,750 in draws from a special escrow account in the name of the homeowner and the contractor. Ansley pulled the permits and began construction pursuant to a Notice to Proceed dated August 31, 1987. Ansley had 75 days to complete construction. Ansley did the foundation and poured the slab. He was paid his first draw of $3,750 for the slab on September 24, 1987. By early October, the exterior walls were constructed up to the lintel, however no trusses and no roof were in place. No further work was done on the house. Ansley's next draw would have been at dry-in, but the construction never reached that stage. Representatives of Fred Fox Enterprises and of the Town of Baldwin tried to contact Ansley about the work stoppage. Letters were sent to Ansley by the Town of Baldwin on September 30, October 15, and October 30, 1987, reminding Ansley that by contract he had 75 days to complete the project, that his time was running out, that liquidated damages of $50 per day were called for under the contract, and that the deadline for completion was November 14, 1987. On November 10, 1987, the Town of Baldwin wrote to Ansley advising that no work had been done since October 26, 1987, in violation of the contract, that the structure was only 20% complete in violation of the contract, that a Claim of Lien had been placed against the property by a materialman, and that any further payments would cease until the lien was satisfied. Ansley never responded to that letter. On November 27, 1987, the Town of Baldwin officially informed Ansley that his contract was terminated. The letter also reminded Ansley that he was still responsible for payment for materials, labor and/or supplies purchased for work on the Turner's house prior to termination of the contract. On December 3, 1987, another Claim of Lien was filed by Southern Atlantic Concrete in the amount of $3,386.59. The previous lien was by Holmes Lumber Company in the amount of $194.63. At various times Ansley contacted representatives of Fred Fox Enterprises and the Town of Baldwin and told them that the liens were in error or that he would take care of them in the future. Ansley acknowledged that he was having financial difficulties. Another contractor was retained to complete the house for approximately $1,000 more than the Ansley/Turner contract price. Also, the Turner's were placed in temporary housing at the cost of the Town of Baldwin and the grant. Ansley never paid the liens. Finally, to protect its reputation, Fred Fox Enterprises paid the liens out of its own funds, not from the grant money. Including interest, Fred Fox Enterprises paid $3,873,15 to cover the liens. Ansley acknowledges that he was in a financial crunch. He intended to finish the house and not to abandon it, but he was financially unable to do so. He says he had $5,500 of his own money tied up in the house, in addition to the liens. He simply did not have the funds to complete the house up to the second draw so he could use the draw funds to pay for the materials and labor.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Professional Regulation, Construction Industry Licensing Board, enter a Final Order and therein: Find Mark V. Ansley guilty of violating Sections 489.105(4) and 489.129(1)(h), (j), (k), and (m), Florida Statutes, as charged in the Administrative Complaint. Order Mark V. Ansley to pay an administrative fine of $5,000. Suspend building contractor's license No. CB-C033338 issued to Mark V. Ansley for a period of one (1) year. DONE and ENTERED this 17th day of April, 1989, in Tallahassee, Florida. DIANE K. KIESLING 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 April, 1989. COPIES FURNISHED: Mark A. Sieron Attorney at Law 1329-A Kingsley Avenue Orange Park, Florida 32073 Mark V. Ansley 7034 Luke Street Jacksonville, Florida 32210 Harper Fields General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Fred Seely Executive Director Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32201
Findings Of Fact Standard Specifications are a part of every DOT construction contract issued. Subsection 8-1.1 of these standard Specifications provides that a subcontractor shall be recognized only in the capacity of an employee or agent of the Contractor, and his removal may be required by the Engineer, as in the case of any employee (Exhibit 1). Subsection 8-5 thereof provides the Contractor shall assure that all superintendents, foreman and workman employed by him are competent, careful and reliable (Exhibit 3). All contracts entered into by DOT provide for a contract completion time and provide for adjustment to the contract period for delays in construction due to factors beyond the contractor's control which could not be reasonably anticipated at the time bids for the contract were received (Exhibit 4). Requests for extension of contract time are made by the Contractor to DOT, and each request is evaluated on its merits. Often these requests for extension of contract time are made after the contract is completed and the contractor is seeking relief from penalties accrued as a result of his failure to complete the contract in the time allocated. Prior to 1987, all contracts entered into by DOT contained built-in delays based on average weather conditions expected during the contract period. Since mid-1987, contract delays due to expected adverse weather are not included in the contract time, but the period is subsequently adjusted based on daily recording of weather conditions during the contract period. There is no policy by DOT, as suggested by Petitioner, that delays due to weather outside the initial contract period but within the extension granted due to weather delays will not be considered by DOT in granting extensions of contract time. Federal Department of Transportation grants to Florida DOT for road construction in Florida contain a provision that a certain percentage of the contract must be subcontracted to DBE's. This provision is included in the contracts on which the prime contractors submit bids. In order to qualify as a responsible bidder on these contracts, the Contractor must show compliance with the DBE quota for the job at the time his bid is submitted or show that despite good faith efforts the Contractor was unable to meet the DBE goals. DOT certifies individuals and companies which meet the minority business standards needed for certification and maintains a current list of all potential subcontractors who can be used by the Contractor to meet the DBE quota for the specific contract on which the Contractor bids. These DBE subcontractors are not qualified by DOT as capable to perform the work for which they hold themselves out as able to perform. DOT qualifies no subcontractors, either DBE or non-DBE. In the event the Contractor needs to replace a subcontractor for any reason, his application to replace a non- DBE subcontractor is routinely approved by DOT. However, if the Contractor proposes to replace a DBE subcontractor, the Contractor must replace him with another DBE subcontractor (if this is necessary to retain the required DBE participation) and show to DOT that the replacement was for just cause and does not constitute unlawful discrimination. Accordingly, it is more likely to delay a project if a DBE subcontractor is replaced for failure to perform the work for which he subcontracted than if a non-DBE subcontractor has to be replaced for the same reason. Although DOT individually considers each request for extension of contract time, it treats delays resulting from DBE subcontractor performance the same as it treats delays resulting from non-DBE subcontractor performance. As noted in finding 2 above, the contract provides that subcontractors are agents or employees of the Contractor. Accordingly, extensions of time for completion of the contract are not generally granted when the delay is due to the agents or employees of the Contractor. It is the refusal of DOT to treat DBE subcontractors different from non-DBE subcontractors that forms the basis of Petitioner's challenge to this "policy" that extensions of contract time are not granted when the delay was due to the DBE subcontractor failing to comply with his subcontract which failure was "beyond the control" of the Contractor.
The Issue The issue in this case is whether the Department of Transportation (DOT) acted correctly in deeming the bid of Petitioner White Construction Co., Inc. (White), to be nonresponsive for failure to meet the Disadvantaged Business Enterprise (DBE) goal for Project No. 220517-1-52-01 (the project) and whether the proposed award to Intervenor Mitchell Brothers, Inc. (Mitchell) is in accordance with governing rules and statutes or is arbitrary, capricious, or contrary to competition.
Findings Of Fact The project is for work in Wakulla County. The deadline for submission of bids was June 17, 1998. White and Mitchell bid on the Project. Upon the opening of the bids on or about June 17, 1998, White was the apparent low bidder at $4,140,400.14, and Mitchell was the apparent second low bidder at $5,237,848.89. Pursuant to Rule 14-78, Florida Administrative Code, bidders have three days after bid opening in which to submit detailed information regarding compliance with the project’s DBE requirements. The requirements of this project were that eight percent of the contract work be performed by DBEs. With the bid itself, a bidder only needs to submit a DBE summary, noting whether it will meet the DOT established goal of eight percent. Within the three day period, White submitted DBE utilization forms, one of which listed HSD as one of its DBEs, for work in the amount of $55,326.36. Mitchell submitted the required forms, showing compliance with the DBE goals. The DOT publishes a DBE directory for each bidding cycle. The directory indicates the bidding cycle to which it is to be applied. If a company is not listed in the directory, a contractor is on notice that such company is not a certified DBE. White is an experienced bidder and contractor with the Department of Transportation. The bid and the DBE submission in this case were prepared by a White estimator who had been an estimator for many years. White’s estimator admitted that, while he usually reviewed the DBE directory prior to submission of bids, he failed to do so in this case. White received a copy of the DBE directory for the June Letting, but did not consult it to confirm that HSD was listed. While White has substituted DBE subcontractors on jobs after performance has begun where the DBE cannot complete the work for which it was hired, White has never substituted a DBE subcontractor prior to the performance of the contract or changed subcontractors on its bid after the bid opening because a subcontractor it listed for purposes of meeting the DBE goal was not DBE certified. White, as a common practice, keeps a supply of HSD forms in its office for use in submitting the DBE Utilization Form that indicates White will meet the DBE goal for a particular project. White did not contact HSD or any of the DBEs it listed on the DBE Utilization Form and DBE Utilization Summary Form to confirm that they were DBE certified for the June Letting. White is aware that subcontractors may lose their DBE certification or not apply for recertification. White is also aware that it should not use subcontractors for purposes of meeting the DBE goal that are not listed in the DBE directory unless one calls the Minority Programs Office and confirm directly that a particular company which is not listed is DBE certified for that letting cycle. HSD was not aware that White listed it on the DBE Utilization Form submitted with White’s bid. For White, that is not an uncommon practice. Neither DOT or HSD are depicted by the evidence of having misled White into believing that HSD was a qualified DBE. It is the bidder’s (White) responsibility to verify whether a DBE is authorized for use on a particular project. White personnel did not do this and the applicable DBE directory clearly did not have HSD listed. HSD was not a qualified DBE at the time of the bid letting or proposed bid award. HSD sent a quote for work on the project to Mitchell and White. The quote sent to Mitchell contains a letter in which HSD notes that the company . . . is not listed in the DBE Directory for the June Letting. Unfortunately this means you will not be able to utilize Highway Safety Devices for DBE Goals for the June Letting. At the final hearing, a witness for White asserted that White did not receive the explanatory letter received by Mitchell. Such assertion cannot be credited in view of the demeanor of the witness when testifying. Subsequent to the final hearing in this matter, White submitted information indicating that HSD had received certification as a DBE, effective October 26, 1998. However, White’s submission does not change the fact that HSD was not certified at the time of the bid letting or opening in this matter. White’s bid was evaluated by DOT’s GFEC to determine whether or not White met the DBE goal or provided a good faith effort evaluation for the Project. DOT interprets Rule 14-78.003(2)(b)5, Florida Administrative Code, as not permitting the substitution of a certified DBE for HSD, a circumstance that would have permitted White to meet the DBE goal for the Project. DOT’s Minority Programs Office does the initial evaluation of the DBE portion of the goal. If the goal has not been met, the bid will be reviewed by the GFEC. The GFEC makes a recommendation to the TRC, and the dollar amount of the bid is not a factor considered by the GFEC. The TRC will take into consideration the bid price in its evaluation. The GFEC reviews the bid package by going through every criteria set forth in Rule 14-78.003(2)(b)3,b, Florida Administrative Code, to see if there are any circumstances that would credit the prime contractor in meeting the DBE goal. The GFEC’s evaluation of White’s bid was to determine if the information submitted by White indicated whether good faith efforts were made to meet the DBE goal, not whether White could change HSD for a certified DBE. The GFEC reviewed White’s bid for compliance with the DBE goal and to determine if good faith efforts were made to meet the goal. White did not meet the DBE goal or submit documentation of its good faith effort to do so. The GFEC recommended to the TRC to deem White nonresponsive. The TRC reviewed the GFEC report and accepted the recommendation to deem White nonresponsive. The GFEC determined that Mitchell, however, did meet the DBE goal for the Project. The TRC determined that Mitchell’s bid was within the automatic award criteria and recommended Mitchell be awarded the contract. The TRC recommended to the CAC that White be deemed nonresponsive and award the contract to Mitchell. The review of White’s bid to determine whether it met the DBE goal by the GFEC, the TRC and the CAC were done in accordance with the governing statutes, rules and DOT policy and procedures. Although substitution of DBEs in the performance of a contract after bid-letting is permitted by DOT, the total amount of the bid submitted by a contractor is affected by the bids it receives from DBEs. White selected HSD, without confirming its present status at the time, because White had used this presumed DBE on previous occasions to obtain the best deal for White. White also asserted that, as it may change DBEs after a contract is awarded, the failure to submit a correct DBE is not a material error. However, a contractor may not change DBEs without good cause, such as its inability to perform the work, pursuant to Rule 14-78, Florida Administrative Code. That there is a procedure available after the contract is awarded does not affect the materiality of the failure to submit a qualified DBE in the first instance. If the DOT believes the responsive bids which it receives are too high, it can reject all bids. The bid submitted by Mitchell, at $5,237,848.89, was within the automatic award criteria. DOT’s decision to reject White’s bid for failure to comply with the DBE requirements is consistent with its practice and past policy. The use of an unqualified DBE is a material variation in a bid, as it may impact the price. DOT’s decision to reject White’s bid as non-responsive was not contrary to statute, rule, or policy, or the bid specifications. White did not show that DOT’s action was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order awarding the contract on State Project Nos. 220517-1-52-01 and 220511-1-52-01 to Intervenor, Mitchell Brothers, Inc. DONE AND ENTERED this 16th day of November, 1998, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 Filed with the Clerk of the Division of Administrative Hearings this 16th day of November, 1998. COPIES FURNISHED Mary M. Piccard, Esquire Vezina, Lawrence and Piscitelli, P.A. 318 North Calhoun Street Tallahassee, Florida 32301 Brian McGrail, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Donna H. Stinson, Esquire Broad and Cassel 215 South Monroe Street, Suite 400 Tallahassee, Florida 32302 James C. Myers, Agency Clerk Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450
Findings Of Fact In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows: CONTRACTOR BASE BID ALTERNATE NO. 1-ADD TOTAL Harris 332,000.00 28,649.00 360,649.00 Weston 338,991.00 20,965.00 359,996.00 Hathaway 343,429.00 33,224.00 376,653.00 Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states: "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners." Weston did not submit that information with its bid but did submit that information on October 9, 1975. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows: Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an $11,635 advantage in the bidding. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified." Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.
Findings Of Fact Respondent issued an invitation to bid on March 13, 1992. Bid number SB 92-244I involved the disassembly and removal of an existing walk-in freezer and the furnishing and installation of a new walk-in freezer at Coral Sunset Elementary School. The invitations to bid provided in paragraph Y of the Special Conditions: Failure to file a specification protest within the time prescribed in Florida Statutes 120.53 3.(b) shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. (sic) Bid specifications were included in the invitations to bid issued on March 13, 1992. Twenty-three bids were solicited. There were five responses. One of the responses was submitted by Choice Restaurant Equipment, Inc. ("Choice"). Choice is a vendor for equipment manufactured by Petitioner, Nor-Lake, Inc. ("Nor-Lake"). Nor-Lake is an out-of-state corporation with manufacturer's representatives in numerous states including Florida. 4, Petitioner, CHD Marketing Group ("CHD"), is the manufacturer's representative for Nor-Lake in Florida. CHD represents no other manufacturer of the product included in the bid response. Choice is a sales agent for CHD and other manufacturer's representatives in Florida. Choice sells the products of a variety of manufacturers but is the exclusive sales agent for CHD pursuant to a verbal agency agreement. Choice timely submitted a bid for bid number SB 92-244I on April 8, 1992, prior to the bid deadline of 2:00 p.m. on the same day. The successful bidder submitted its bid by Federal Express at 4:51 p.m on April 8, 1992. Respondent's Department of Purchasing and Stores (the "Department") had stated on March 13, 1992, when the invitations to bid were issued, that bid responses must be received by the Department no later than 2:00 p.m. on April 8, 1992, at the Department's address at 3980 RCA Boulevard/Suite 8044, Palm Beach Gardens, Florida, 33410-4276. Prior to April 8, 1992, the Department relocated to a new facility at 3326 Forest Hill Boulevard, West Palm Beach, Florida. The new address was posted at the old location and Department representatives were present at the old address to accept walk-in bids. Federal Express first attempted to deliver the successful bid at the Department's old address at 10:30 a.m. on April 8, 1992. Federal Express delivered the successful bid to the Department's new address at 4:51 p.m. At 2:00 p.m. on the same day, The Department announced that all bids were in and opened the bids that had been delivered. The successful bid and one other bid were delivered on April 8, 1992, after the public opening conducted at 2:00 p.m. on the same day. Bids were tabulated on April 9, 1992. Bid tabulations were posted on April 13, 1992, and the successful bid was announced. The successful bid was for $8,174.00. Three bids were lower than the successful bid. Choice's bid was for $7,742.56. The other two lower bids were for $8,020.00 and $6,620.00. All three lower bids were rejected as non- responsive. Choice's bid was rejected because it did not meet bid specifications for 22 gauge steel, thermostatically controlled door heaters, and reinforced steel door panels. CHD filed a Notice of Protest on April 14, 1992, and a Formal Written Protest on April 24, 1992. CHD's protest alleges that: Choice's bid was lower than that of the successful bidder; the successful bid was not timely made; the bids were not opened publicly in violation of bidding procedure requirements; and the bid specifications were arbitrary and capricious, favored one bidder, and that Choice's bid was responsive. Neither a notice of protest nor a formal written protest was submitted by Choice or Nor-Lake. Neither Choice nor Nor-Lake attended the informal protest conference conducted on April 30, 1992. On May 7, 1992, Respondent's Office of General Counsel issued its written notice of proposed agency action. The written notice recommended that the bid be awarded to the successful bidder and that CHD's protest be dismissed for lack of standing. CHD requested a formal hearing on May 14, 1992, and the matter was referred to the Division of Administrative Hearings for assignment of a hearing officer on May 15, 1992. The bid submitted by Choice was prepared by CHD but signed by the president of Choice. Neither Nor-Lake nor CHD signed a bid or were otherwise bidders of record for bid number SB 92-244I. Neither Choice, CHD, nor Nor-Lake, filed a notice of protest concerning the bid specifications within 72 hours after Choice received the notice of the project plans and specifications on March 13, 1992. The sole basis upon which CHD claims it is substantially affected is the adverse economic impact caused to it by the proposed agency action. The proposed agency action will result in lost sales from this and future transactions. CHD will lose commissions from this and future transactions. The dealer relationship between CHD and Choice will be damaged because Choice will not want to sell a freezer that is not acceptable to Respondent. The marketing strategy developed between CHD and Nor-Lake will be damaged because it is conditioned upon the award of public contracts.
The Issue The issue to be determined is whether Respondent's proposed award for ITB 09-22 for Building 14B renovation is contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.
Findings Of Fact The University of North Florida published its Notice of Bid/Request for Proposal in reference to ITB #09-22 entitled "GC's for Building 14B Renovation" on December 19, 2008, with a submission deadline of January 27, 2009. The opening date was eventually extended to January 30, 2009. There were four addendums to the ITB #09-22 Project. The Notice of Bid/Request for Proposal document contained the following provisions: This project consists of the following scope of work: The work includes all labor, supervision, equipment, and materials required to execute the Contract Documents in two phases for the tenant build-out of the existing UNF Building 14-B (approximate square footage 9742). The work includes, but is not limited to, demolition of all interior walls, finishes, mechanical, electrical, plumbing and communication components as well as a new exterior curtain wall system. Exterior construction will include new glazing in aluminum curtain wall. Interior construction will include new gypsum wallboard partitions with metal stud walls, millwork, suspended acoustical and gypsum wallboard ceilings, wood and metal doors in hollow metal frames, coiling overhead grilles, toilet partitions and vanities. Interior finishes include carpeting, resilient tile, ceramic tile, painting, and window treatments. Mechanical work includes installation of new Owner provided HVAC units with ductwork and all necessary connections to the UNF Central Plant chilled water system. Plumbing includes new piping and fixtures for the tenant build-out and renovation of the group male and female restrooms. Electrical work includes new wiring, devices and lighting for the new tenant build-out. Successful bidders must have demonstrable previous experience with the described systems and technical requirements. All bidders must be qualified at the time of the bid opening in accordance with the Bidders Qualification within the ITB 09-22 Bid documents. . . Article I, Section 2 includes a heading in bold stating "Qualification Criteria." This section states: Participants must qualify to bid on this project. UNF will utilize the following criteria to qualify the general contractors within this ITB. The information must be completed on the UNF Qualifications Form provided (page 10-11): Bonding: Demonstrates a bonding capacity of at least $2 million dollars and has an A.M. Best Rating of "A-V" or better. Licenses: Company is licensed to do business in the state of Florida and approved by the US Department of Treasury listing as an acceptable surety. Project references: Company has successfully completed at least 3 commercial construction projects of more than $1 million dollars each in the past three (3) years. List 3 such projects to include project name, client name, completion date, location, project value, role in project. Reference: Project name, owner, owner's representative name/phone number, completion date and construction cost. Years of experience: Company has a minimum five (5) years of GC experience under the current company name. The directions for the General Contractor's Qualification Summary, under Related Experience, reiterated that the bidder was to list "No more than 4 projects of comparable type, size and complexity. (1) Project must be for a college/university)." Addendum I for the Project, issued January 9, 2009, clarified that the requirement for having completed successfully a project of similar size and scope at a Florida University in the last three years is a qualification factor for this project. Addendum II, issued January 12, 2009, removed the requirement for bidders to have completed one project for a college or university. The other two addenda did not address contractor qualifications. Petitioner, Core Construction Company (Core Construction or Petitioner) bid in response to the ITB. Approximately 19 other bidders also responded. Core Construction was the apparent low bidder on the project, with a bid of $1,073,000. There was some concern expressed by the architect reviewing the bids because the bids were all within ten percent of each other for the top bidders, with the bidders 2-10 being within six percent of each other. In an e-mail to Dianna White, the Senior Buyer for UNF purchasing, Mr. Norman stated: Overall there was a 20% range in bid prices which I attribute to a significant difference in the size, quality and abilities of the contractors that bid this project. The apparently low bidder was $60,516 below the second low bidder and $83,000 below the third low bidder. This is a significant concern since there is only $46,484 between the second and fifth low bidders. I suggest the apparent low bidder be contacted and asked if they feel comfortable with their bid, because it appears to me they are missing something significant in their pricing. Purchasing should also carefully review their current financials and current bonding capacity if this is allowed. Project reference checks, price verification against the architect's construction estimate and bonding checks were performed with respect to the four lowest bidding companies: Core Construction, Pooley Contracting, Rivers & Rivers and Warden Construction. Pooley Contracting, the second-lowest bidder, was disqualified as non-responsive because its bid package did not include a bonding letter. Core provided the names of three completed projects that were valued at over one million dollars. Dianna White called each of the references provided, not only for Core but for three of the four lowest bidders. The same questions were asked of each reference for each company: 1) Was the project on time and within budget; 2) Did the project run smoothly; 3) Were project issues handled; and 4) Would you use the contractor again. Calls related to Pooley Contracting were not completed because it was disqualified as non-responsive. While the references for Rivers & Rivers and Warden were consistently good, two of the three references received for Core were not. Ms. White described them as the most "strongly negative" references she had ever received. In particular, the references indicated difficulty in completing jobs within budget and on time, which the Respondent viewed as the basis for determining whether a contractor had successfully completed a project. Two of the references indicated that they would not use the contractor again, or as one put it, "not if there was any way around it." Based on the recommendations received, the Purchasing Office for the University recommended that Core Construction be disqualified for failing to demonstrate successful completion of three projects over one million dollars that were similar in scope. Because Pooley Construction was also disqualified, the Purchasing Department recommended that the Project be awarded to the third-lowest bidder, Rivers & Rivers. The recommendation to award the project to Rivers & Rivers was accepted by the Vice President of Administration and Finance, and on February 18, 2009, a Notice of Award issued identifying Rivers & Rivers as the company receiving the award. On February 19, 2009, Core Construction notified Respondent that it intended to protest the award of the Project to Rivers & Rivers. On February 24, 2009, Core Construction provided a $10,000.00 surety bond and a written protest of the award. The basis of the protest was two-fold. First, Core Construction contended that Rivers & Rivers did not meet the qualification criteria set out in the ITB, because it was did not have a minimum of five years of general contractor experience under the current company name. Second, Core felt that the poor references received should not be a basis for disqualification. Upon receiving the bid protest, Respondent contacted Rivers & Rivers to verify its licensure status. Upon inquiry, it was determined that while the principals of the company had over 30 years of experience, the Rivers & Rivers entity had not been licensed under that name for the requisite five years. While no action has been taken while this bid protest is pending, Respondent indicated its intention to withdraw the award from Rivers & Rivers and award the contract instead to the next lowest bidder. The procedures used by the University in determining the appropriate award were not contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid. It was consistent with University policy to check references for projects of similar scope and size. Therefore, it was appropriate to ask for and check references for projects of over one million dollars. There is no indication that any bidder questioned what the University would consider as successful completion of a project. The time for questioning this issue would have been when the specifications were issued, consistent with Article I, Section 7 of the ITB. Having a project come in on time and within budget is a reasonable measure of successful completion. It is not the same as "substantial completion," which generally refers to a point of time in the construction process, not the final completion of the project.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the President of the University of North Florida, pursuant to his authority under Board of Governor's Regulation 18.002, enter a final order dismissing Petitioner's written protest. DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009. COPIES FURNISHED: Jay H. Chung Core Construction Company, Inc. 4940 Emerson Street, Suite 205 Jacksonville, Florida 32207 Paul Christopher Wrenn, Esquire University of North Florida J.J. Daniel Hall, Suite 2100 1 University of North Florida Drive Jacksonville, Florida 32224 John A. Delaney, President University of North Florida J.J. Daniel Hall, Suite 2800 1 University of North Florida Drive Jacksonville, Florida 32224
Findings Of Fact By Invitation to Bid for Lease NO. 590:1944, Respondent invited lease proposals for approximately 15,206 square feet of office space "located within the following boundaries: On the North, Aloma Avenue/Fairbanks Avenue the East, Semoran Boulevard the South, Colonial Drive, and on the West, Mills Avenue." The geographic area includes as many as 100 office buildings, although the invitation only generated three bids. The Invitation to Bid announced a Pre-Bid Conference on December 22, 1987. Interested parties were directed to contact Linda N. Treml, whose telephone number was provided, for "bid specifications and information regarding the space." The Invitation to Bid stated that "[a]ny questions concerning this project are to be directed to [Ms. Treml]" and "prospective bidders are encouraged to consult with [Ms. Treml] beforehand in an attempt to enable as correct a bid submittal as possible." The Invitation to Bid required that certain attachments accompany the bid proposal and referred the prospective bidder to paragraph 9 of the Bid submittal Form. The required attachments included a scaled floorplan "showing present configurations with measurements," net rentable square footage calculations using floorplan measurements, and a preliminary site layout. The Invitation to Bid stated that Respondent reserved the right to waive any minor informalities or technicality and seek clarification" of bids received, when such is in the best interest of the state. Responding to Respondent's newspaper advertisement and direct-mail solicitation for bids, James W. Boyle, who is a real estate broker active in leasing and property management, requested from Ms. Treml an Invitation to Bid and Bid Submittal Form. Mr. Boyle regularly reviews announcements of forthcoming leasing activity by state agencies. If he is aware of a building that appears to meet the agency's requirements, he contacts the building's owner or manager and informs him or her that he may have a prospective tenant. After receiving the bid materials for Lease No. 590:1944, Mr. Boyle contacted Kathryn Doyle, who is the leasing manager of Petitioner, and learned that Petitioner could accommodate Respondent's space needs for the term sought in the Lakeview 436 office building. Mr. Boyle assisted Ms. Doyle in the preparation of the Bid Submittal Form for Petitioner. In his first conversation with Ms. Doyle, Mr. Boyle ascertained that Petitioner's building carried a Semoran Boulevard street address and in fact had direct access to Semoran Boulevard. Petitioner's building lies on the east side of Semoran Boulevard, which serves as the eastern boundary of the geographic area described in the Invitation to Bid. Three bids were submitted in response to the subject Invitation to Bid. When they were opened, Ms. Treml and her supervisor, George A. Smith, determined that bids of Petitioner and a third party were nonresponsive because their office buildings were outside the geographic area specified in the Invitation to Bid. These bids were not considered further. Mr. Boyle had previously represented the owners of the FARE building several months earlier in a bid for Lease No. 590:1895. The Invitation to Bid in that case, which was issued by Respondent and named Ms. Treml as the contact person, provided that the proposed office space must be located within the following boundaries: Beginning at the intersection of US 17-92 and Colonial Drive, then west on Colonial Drive to the intersection of Edgewater Drive, then north on Edgewater Drive to the intersection of Kennedy Blvd. . ., then east on Kennedy Blvd. . . . to the intersection of US 17-92, then south on US 17- 92 to the point of beginning." Although Mr. Boyle's client was not awarded Lease NO. 590:1895 for reasons not relevant here, his client's bid, as well as the bid of another unsuccessful bidder owning a building on the east side of the highway serving as the east boundary of the geographic area, were considered responsive and thus within the specified geographic area. Ms. Treml interpreted the boundary description in Lease NO. 590:1944 differently from the boundary description in Lease NO. 590:1895. The description for Lease NO. 590:1895 defined the boundaries by "beginning" at a certain intersection, then proceeding "on" a highway, and so on. The description for Lease NO. 590:1944 defined the boundaries by identifying landmarks "on the north," then the "east," and so on. At the time of assisting in the preparation of Petitioner's bid, Mr. Boyle was also aware of an Invitation to Bid issued by Respondent for Lease NO. 590:1875. In this case, Respondent specified office space "in the following area of Brevard County, Florida: Beginning at the intersection of U.S. Highway 1 and State Road 50, then West on SR-50 to the intersection of 1-95, then North on 1-95 to the intersection of SR-406 . . . then East on SR-406 to the intersection of U.S. 1, then South on U.S. 1 to the point of beginning." In the case of Lease NO. 590:1875, the bid contact person, Lynn Mobley, issued a clarification letter stating that any building located on either side of the boundary road with an address on the boundary road would be considered to be within the boundary. Ms. Mobley and her supervisor, Ernest Wilson, who are Respondent's District 7 Facilities Services Assistant Manager and Manager, respectively, have consistently advised potential bidders that a building located on a boundary highway is included in the geographic area even though it would be outside the area if the dividing line were the centerline of the highway. Mary Goodman, Chief, Bureau of Property Management of the Department of General Services, testified that, in the course of her review of leasing activities by various state agencies, she has historically guided agencies that, if a building abuts a boundary highway but is not, strictly speaking, within it, the agency "could waive that as a minor technicality and consider it a responsive bid." Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner spoke to Ms. Goodman prior to submitting the subject bid proposal. Ms. Treml customarily waives minor irregularities in bid submittals. However, she does not treat the location of a building outside the geographic area as a minor irregularity. To do so would be unfair to owners of other buildings outside the geographic area who took the geographic description at its face value and never submitted bids. Ms. Doyle received the bid materials from Mr. Boyle after the Pre-Bid Conference had taken place. However, Mr. Boyle elected not to attend the Pre- Bid Conference at which Ms. Treml explained, among other things, her interpretation of the specific geographic area. He chose not to attend because he felt that he would not learn anything relevant at the conference, which was attended by a representative of Intervenor. Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner contacted Ms. Treml prior to submitting Petitioner's bid. Mr. Boyle, whose compensation in this case is entirely contingent upon a successful bid, estimates that he spent about 20 hours working on Petitioner's bid. Ms. Doyle estimates that she spent about 40 hours working on the bid. Petitioner also spent $800 in obtaining an "as-built" drawing of the space that accompanied its proposal. By letter dated February 22, 1988, Respondent notified the bidders of its decision to award the lease contract to Intervenor. Petitioner filed a notice of intent to protest the award by letter dated February 24, 1988. Ms. Treml met Mr. Boyle and Ms. Doyle on March 1, 1988, and cited the location of Petitioner's building as the only reason for the determination of nonresponsiveness. The attempt at mediation having failed, Petitioner filed a formal written protest of the award by letter dated March 3, 1988. Petitioner attached to its bid proposal an "as-built" drawing. Although drawn to scale, the drawing did not bear the measurements of the then- present interior tenant improvements, mostly walls, nor did it disclose on its face any calculations showing how the rentable area was computed from the gross area. These omissions were due to Mr. Boyle's advice to Ms. Doyle that such information would be unnecessary in this case. The omissions from Petitioner's "as-built" drawing were rendered less critical by the fact that Respondent would have the right under the lease to require the landlord, at its expense, to remove the present improvements and re- configure the space to Respondent's demands. However, one purpose of the floorplan is to show where the space is located within the building. Another purpose is to verify the rentable area calculation by showing the measurements of items, such as restrooms, that should not be included in the rentable area for which Respondent is charged rent. The drawing is supposed to show the rentable area computation. Additionally, even though Respondent could insist on a total renovation of the premises, Respondent might wish to evaluate whether it could use a portion of the existing space in order to reduce the possibility of construction delays. George A. Smith, the Senior Management Analyst for Respondent who reviewed Ms. Treml's determination of nonresponsiveness prior to the award of the subject lease, testified that the deficiencies in Petitioner's "as-built" drawing were not a "minor irregularity."
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules or policies, or the bid specifications in its proposed decision to award Contract No. T1285 to Intervenor Kamminga & Roodvoets, Inc. ("K & R").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of the proceeding, the following findings of fact are made: On May 14, 2008, the Department released its bid solicitation for Contract T1285. The proposed contract was for the construction of a one-way pair through Lake Alfred, including new construction, reconstruction, milling and resurfacing, widening, drainage improvements, lighting, signalization, signing and pavement marking and landscaping on State Road 600 (U.S. 17/92). Polk County, the location of the project, lies in the Department's District 1. Qualified contractors, including Mid-State and K & R, received an electronic disk containing the solicitation, bid blank, plans and specifications for Contract T1285. The letting date for this project was June 18, 2008. Bids were to be submitted on or before that date via Bid Express, the electronic bidding system used by the Department. No party submitted a protest of the terms, conditions, and specifications contained in the solicitation pursuant to Subsection 120.57(3)(b), Florida Statutes. The work to be performed on Contract T1285 included the installation of limerock road base to be paid for in accordance with line item 0175, Optional Base Group 09 ("Base Group 09"). The bid documents included a set of "Supplemental Specifications." Section 6 of the Supplemental Specification was titled "Control of Materials." Subsection 6-3.3, titled "Construction Aggregates," provided as follows: "Aggregates used on Department projects must be in accordance with Florida Administrative Code Rule 14-103."2 Under the heading "Developmental Specifications" is a February 15, 2008, revision to the Construction Aggregates subsection that provides: Subarticle 6-3.3 (Page 54) is expanded by the following: 6-3.3.1 Department Directed Source for Aggregates: For this Contract, obtain aggregates for use in limerock base from the following vendor: Vulcan Construction Materials LP. Upon award of the Contract, provide the vendor and the Department a schedule of project aggregate needs. Once a schedule has been provided to both the Department and vendor, the Engineer will issue written authorization, with a copy to the vendor, for the purchase of aggregates from the vendor. This authorization is required before aggregates will be released by the vendor. Pick up the required aggregate such that the project schedule will be maintained. Payment to the vendor by the Contractor will be due upon receipt of the materials pursuant to the Department's Vendor Contract No. BDH50. This rate is the unit price agreed upon by the Department and the vendor and will be made available to bid proposal holders at the time of bid at http://www.dot.state.fl.us/construction/aggregate /aggregate.htm. The Department will make payment to the Contractor for the aggregates on progress estimates as a part of the bid unit price for the appropriate pay items. The rate is subject to change and adjustments for such changes will be made to the bid unit price of the appropriate pay items. Disputes with the vendor concerning aggregate supply will not be cause for Contract time adjustments, time suspensions or monetary adjustments to the Contract amount. The Contractor will be solely responsible for providing the necessary advance notice to the vendor and other coordination to obtain timely aggregate supply for the project. The import of Developmental Specification 6-3.3.1 was that all bidders would be required to obtain the limerock needed for Base Group 09 from a single vendor, Vulcan Construction Materials LP ("Vulcan"). The winning bidder would agree to pay Vulcan in accordance with a separate contract negotiated between Vulcan and the Department. The hyperlink provided in Developmental Specification 6-3.3.13 led to a document called "Aggregate Guidance" produced by the Department's State Construction Office. The front page of the Aggregate Guidance document contained "Bidder Information" consisting of a spreadsheet setting forth the Vulcan price per ton for limerock base and limestone coarse aggregate, with the price varying depending on the date and port of delivery. Between January and June 2008, the Vulcan price per ton for limerock base from both the Port of Tampa and Port Canaveral was $16.93. The Aggregate Guidance page contained additional hyperlinks with the following titles: "Aggregate Vendor Contract Usage," "Aggregate Vendor Contract," "Aggregate Vendor Projects List," "Aggregate Vendor Authorization Letter," "Aggregate Vendor Contract Frequently Asked Questions," and "Aggregate Price Adjustment Sheet." Alvin Mulford is the vice-president of Mid-State who, along with his estimator, put together his company's bid for Contract T1285. Mr. Mulford testified that his company has been bidding on Department work, and that he has never before seen a provision similar to Developmental Specification 6-3.3.1. Mr. Mulford directed his estimator to obtain clarification from the Department, to be sure that the bidders were required to purchase the limerock base from Vulcan. One reason for Mr. Mulford's concern was the "exorbitant" rate charged by Vulcan in comparison to other vendors. The restriction to a single supplier was so abnormal, and that supplier's rate was so out of line with the market, that Mr. Mulford decided to seek guidance from the Department through the question and response internet bulletin board provided by the Department for its projects. The question posed by Mid-State was as follows: Does the contractor have to use Vulcan materials for the limerock base at a rate of $16.93 per ton as stated in the Developmental Specifications 6-3.3.1? If so from which location is the material to be picked up? Is it also true that payment to the vendor (Vulcan Materials) will be due immediately upon receipt of the materials? I wanted to clarify this issue as it is unusual for the contractor to be limited to the use of only one vendor. The Department's response was as follows: The unit rate for the Material can be found at the following website: http://www.dot.state.fl.us/construction/ Aggregate/Aggregate.htm Pickup locations for the Material can be found at the following website: http://www.dot.state.fl.us/construction/ Aggregate/Aggregate.htm Payment should be issued by the Contractor to the Vendor (Vulcan Construction Materials LP) upon receipt of the materials as defined in Developmental Specification 6-3.3.1. Because the Department's response did no more than redirect him to the Department's website, Mr. Mulford decided to look at the website in more detail. He investigated the hyperlinks, including the Vulcan contract with the Department. When he clicked on the hyperlink titled "Aggregate Vendor Contract Usage," he found a document that provided as follows, in relevant part: Aggregate Vendor Contract Usage by Districts With the execution of the contract with Vulcan Construction Materials LP, contract number BDH50, Vulcan has committed to provide aggregate in the types and quantities defined in the contract (attached). The process for this contract in Districts 1, 5, and 7, is as follows: Include in the projects identified in the attached spreadsheet the appropriate special provision beginning with the July 2007 lettings. The District Specifications Engineer and District Construction Office will need to coordinate this effort. There are two special provisions for the purpose of notifying construction contract bidders of the Department's intention toward the aggregate. The first special provision is the mandatory version that will direct the bidder to obtain aggregates for the specified work from Vulcan. The second special provision provides the bidder an option to obtain its aggregates from Vulcan. * * * After these projects have been awarded, the contractor is required to notify FDOT and Vulcan a schedule of its aggregate needs for the project. After receiving this schedule, FDOT's Resident Engineer will issue written authorization to the contractor, with copy to Vulcan. This authorization is required before Vulcan will release aggregate to the contractor. Payment to Vulcan will be from the contractor. FDOT will pay cost of aggregate on progress estimates as part of the contractor's bid price for the work. The contractor is required to include in its bid price for the work the cost of the aggregate at the Vulcan rate. The Vulcan rate will be posted on the FDOT State Construction Website showing the rate. When adjustments are made to the Vulcan rate, FDOT will make adjustments in the construction contract unit price. . . . (Emphasis added.) Mr. Mulford testified that he understood the underscored language in the hyperlinked document to be a directive to the bidders and therefore a mandatory requirement of the bid specifications. He did not ask the Department for further clarification because he believed the requirement was clearly stated in the hyperlinked document. David Sadler, the director of the Department's office of construction, testified that the hyperlinked document was developed by his office to offer guidance to the districts as to the concept behind and use of the aggregate vendor contract. The document was not a part of the bid solicitation document. Mid-State's bid price was $7,429,398.44. Mid-State's price for Base Group 09 was $619,645.80, or $19.30 per square yard. This price reflected the Vulcan rate for limerock base of $16.92 plus tax and Mid-State's costs for the work associated with Base Group 09. 19. K & R's bid price was $7,370,505.24, or $58,893.20 lower than the bid price of Mid-State. K & R's price for Base Group 09 was $256,848.00, based on a stated unit price of $8.00 per square yard for limerock base. K & R's price for Base Group 09 was $362,797.80 lower than that of Mid-State, accounting for more than the differential between the overall bids of Mid-State and K & R. Marcus Tidey, Jr., K & R's vice president in charge of its Florida division, testified that K & R was well aware that the Vulcan price for limerock base was $16.93, and that K & R understands its obligation to pay that price to Vulcan should K & R be awarded Contract T1285. Mr. Tidey testified that at the time of bid submission, he cut K & R's bid price to $8.00 per square yard as a competitive strategy to win the contract. Mr. Tidey made a conscious decision that K & R would absorb the difference between $8.00 bid price and the Vulcan price of $16.93. Mr. Tidey testified that K & R needed to win this job in order not to have its crews and equipment sit idle during the economic downturn, and therefore decided to take all of its markup, roughly $250,000, out of the bid. He could have made the $250,000 cut on any item or items in the bid, but decided on Base Group 09 because the limerock base was a big item and therefore easy to cut by a large amount. Mr. Tidey also testified that the contract provides a $400,000 incentive payment for early completion of the job, meaning that K & R will be able to work "faster and smarter" and make up for the price reduction at the end of the job. Mr. Tidey testified that he obtained the Vulcan prices from the Department's website as instructed by Developmental Specification 6-3.3.1. He did not click on the hyperlinks, which appeared to reference the contract between the Department and Vulcan and therefore was of no concern to him. The Department and K & R dispute Mid-State's assertion that the underscored language of the hyperlink set forth in Finding of Fact 15 was a requirement of the bid specifications, based on Mr. Sadler's direct testimony and the underlying illogic and unfairness of requiring bidders to seek out hidden specifications. The Department and K & R concede that if the bid specifications did in fact require the bidders to include in Base Group 09 the full costs associated with obtaining the limerock base from Vulcan, then K & R's bid is nonresponsive. Developmental Specification 6-3.3.1 directed bidders to the Department's webpage for the purpose of obtaining the current Vulcan rate quote. It did not instruct the bidders to investigate the hyperlinks or to assume that the information contained therein was mandatory. Absent an instruction to bidders to review the information contained in the hyperlinks, the Department could not make such information mandatory without placing less curious bidders at a competitive disadvantage. The Department had no intent to play hide-and-seek with the bid specifications in the manner suggested by Mid-State. In addition, K & R points to three line items of the bid specifications in which the Department eliminates competition, instructing the bidders not to bid and inserting a fixed unit price and bid amount for all bidders as to those items. K & R reasonably asserts that the Department was fully capable of treating Base Group 09 in the same fashion, had it intended to require the bidders to pass through to the Department all the costs associated with obtaining the limerock base from Vulcan. However, the Department supplied the bid quantity (31,106 square yards) and left it to the bidders to determine the price per unit they would bid. K & R's bid was responsive. Nothing in the bid specifications prevented K & R from absorbing part of the cost of the Vulcan limerock base and passing the savings on to the Department, or required bidders to pass on to the Department the full costs of complying with the bid specifications regarding Base Group 09. The sole remaining issue is whether K & R's bid, though facially responsive, was materially unbalanced. The Department routinely conducts reviews of bid line items that appear "unbalanced," i.e., for which there appear to be significant differences between the price bid and the Department's cost estimate, in order to determine whether the price difference is due to a quantity error by the bidder. The Department's review confirms that the bid quantity specified on the bid blank is accurate. If a quantity error is found, the bids are recalculated using the bidders' unit prices and the correct quantities to determine whether the bid rankings would change. A bid for which there is a discrepancy between the bid and the Department's estimate is termed "mathematically unbalanced." A mathematically unbalanced bid that affects the ranking of the low bid is "materially unbalanced." A mathematically unbalanced bid is acceptable, but a materially unbalanced bid affords the bidder an unfair competitive advantage and must be rejected. The Department followed its usual procedure in analyzing the K & R bid to determine whether it was unbalanced. Philip Gregory Davis, the Department's state estimates engineer, testified that there were some unbalanced items in the K & R bid, but no quantity errors that would have changed the ranking of the bids. Richard Ryals, the project designer who conducted the unbalanced bid review, testified that the quantities were correct for Base Group 09. As noted above, K & R's low bid for Base Group 09 was an intentional strategy, not the result of a quantity error. K & R's current bonded capacity qualification with the Department is $258 million in contracts at any one time. K & R posted a bid bond, and has more than enough capacity to comfortably perform this contract. There is no economic danger to the Department in accepting K & R's low bid.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Mid-State's formal written protest and awarding Contract T1265 to K & R. DONE AND ENTERED this 9th day of January, 2009, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of January, 2009.
Findings Of Fact The Department of General Services, (hereinafter "DGS") is a state agency, the responsibilities of which include the management of state construction project. It accomplishes such management through its Division of Building Construction. The Divisions responsibilities include, negotiation of architect/engineer contracts, review of plans and specifications, contract administration, and contract management. One such project is Project No. MA-87080010, the subject matter of which involves repairs and alterations to the National Guard Armory in Fort Lauderdale, Florida, hereinafter referred to as the Armory Project. Certain portions of the bid specification for the Armory Project were prepared by the project architect, Mr. William D. Tschumy, Jr. Other portions, specifically the portions dealing with bidding conditions and contractual conditions, were provisions provided by DGS for inclusion in the specifications. The project architect was not familiar with all of the bid specification provisions provided by DGS. Prior to submitting its bid on the Armory Project, James P. Moran, Inc., had been prequalified for bidding on the project. Such prequalification did not obviate the need for James P. Moran, Inc., to meet the experience requirements in the bid specifications and in Rule 13D-11.904(2)(a)(8), Florida Administrative Code. The bid specifications for the Armory Project include the following provisions: 1/ Section B-2, page 9: 8. Firm experience - must have successfully completed no less than two project of similar size and complexity within the last three years. and; Section B-22, page 16: The owner reserves the right to reject any and all bids when such rejection is in the best interest of the State of Florida and to reject the proposal of a bidder who the owner determines is not in a position to perform the contract and to negotiate the contract in accordance with its Rule 13- D11.08 if the low qualified bid exceeds the project construction budget. James P. Moran, Inc., timely submitted its bid on the Armory Project and was subsequently notified that it had been recommended for contract award by the Director of the Division of Building Construction. This recommendation was made on the basis of a recommendation by the project architect that the bid be awarded to James P. Moran, Inc. At the time of making his recommendation, the project architect was not aware of the firm experience provision in either the bid specifications or the applicable rules. A timely protest was filed by another bidder on the Armory Project, in which the protesting bidder raised the issue of the firm experience of James P. Moran Inc. DGS concluded that the protest was valid and after further deliberation made the determination to reject all bids. All the bids other than the bid submitted by James P. Moran, Inc., exceeded the funds available for construction of the Armory Project. Because the other bids all exceeded the available funds, DGS decided that the best course of action would be to modify the scope and nature of the work involved in the project and then re-bid the project. It is reasonable to expect that the proposed modifications to the project will result in lower bids, because the modifications would permit the work to be done quicker and at less cost to the contractor. James P. Moran, Inc., was incorporated in 1981. However, prior to the summer of 1988, it had submitted no bids acquired no permits, and had neither started nor completed any jobs. The qualifying contractor for James P. Moran, Inc., is Mr. James P. Moran who, for many years prior to the summer of 1988, was an employee, officer, and shareholder of Frank J. Moran, Inc. Mr. James P. Moran holds a State of Florida building contractors license, a State of Florida electrical contractors license, a Dade County electrical masters license, a Broward County electrical masters license, and a State of Maine electrical contractors license. While employed by Frank J. Moran, Inc., Mr. James P. Moran was also the qualifying contractor for that corporation. While so employed, Mr. James P. Moran's primary duties were those of project director and estimator. He was also a corporate officer of Frank J. Moran, Inc. During his employment with Frank J. Moran, Inc., Mr. James P. Moran was the project manager on projects of similar size and complexity to the Armory Project. The construction budget for the Armory Project is approximately 250,000. The dollar values of construction jobs are valid indicators of the comparative sizes of construction jobs. The dollar values of the two largest construction jobs completed by James P. Moran, Inc., are approximately $161,000 and $112,000, respectively. The two largest construction jobs completed by James P. Moran, Inc., are not of similar size to the Armory Project. While DGS is concerned about the qualifications of the personnel employed by a contracting firm, DGS is also concerned about the track record of the firm itself, and, therefore, requires that a firm have completed projects in its own name in order to qualify for a bid award. In other words, a new firm cannot "take credit" for work performed by one of its employees at a time when the employee was working for another firm. Also, DGS does not allow "stacking" of the dollar value of several small jobs in order to demonstrate completion of a job of similar size to the job that is the subject of a bid. The purpose of the experience rule is to require a contracting firm to have completed at least two jobs of similar dollar size to the dollar size of the job being contracted. Among, the reasons stacking is not allowed is that completion of a job of any given size is a more complicated and complex undertaking than completion of a series of smaller jobs that total up to the same dollar value as the job of given size. DGS has now modified the scope of the project and has amended the plans and specifications in such a fashion that it will take less time to complete the modified Armory project and may reasonably be expected to result in lower bids closer to or below the construction budget. The modified Armory project may reasonably be expected to result in a savings of both time and money.
Recommendation For all of the foregoing reasons it is RECOMMENDED that the Department of General Services issue a final order in this case rejecting the bid of James P. Moran, Inc., as being non-responsive, and rejecting all other bids, in order to modify the scope of the project and rebid it. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of March 1990. MICHAEL M. PARRISH 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 2nd day of March, 1990.
