The Issue The issues are whether Personnel Pool of North Central Florida, Inc., d/b/a Medical Personnel Pool (MPP), is the lowest qualified bidder on Contract No. R- 2119 or whether Suwannee Valley Medical Personnel Corporation (Suwannee) is entitled to the award of Contract No. R-2119 or is entitled to have all bids rejected and the contract relet for bids.
Findings Of Fact The ITB on Contract No. R-2119 was developed jointly between the Department's Central Office and the Region II contracting staff. The Region II staff sent a draft of the ITB to the Central Office, where it was reviewed by Gerald Ellsworth, the Department's Human Service Program Specialist. Mr. Ellsworth is responsible for reviewing the Department's contracts and plans, as well as for development of the Department's proposed invitations to bid and other related types of documents. Mr. Ellsworth has considerable experience in drafting and reviewing governmental contracts for purchasing of services at the state, local and federal government levels. The ITB was also reviewed by the Department's legal office, the Office of Management and Budget and the Correctional Medical Authority, with regard to both the specifications and the contract language in the ITB. The Department properly published the ITB on or about June 28, 1989. The ITB was published under cover of a formal State of Florida Invitation to Bid for Contractual Services, Form PUR: 7031 (Rev. 10/18/88), containing the State of Florida standard general conditions for bids for contractual services. Among those conditions were detailed requirements regarding the sealed nature of bids, requirements for the execution of bids, requirements regarding the opening of bids and conditions regarding prices, terms and payment, interpretations and disputes, conflict of interest, awards, governmental restrictions, default, legal requirements, advertising, assignment, liability, facilities, cancellation and public records. The same general conditions on the first page of the ITB specifically provided an exclusive mechanism for the bidders to resolve questions and disputes regarding the conditions and specifications of the ITB: INTERPRETATIONS/DISPUTES: Any questions con- cerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. (Emphasis added.) The body of the ITB stated that the Department was soliciting bids for registered and licensed practical nurse services in the Department's Region II, on all shifts, for the care and treatment of inmate patients, as further defined in the ITB's section entitled "Responsibilities of Successful Bidder; Scope of Work." The ITB also contained detailed requirements regarding Nurse Professional Qualifications, Quality Management Standards, Scheduling of Nurses, Records, Invoicing, Insurance, Legal Requirements, Conflict of Interest, Unsatisfactory Performance, Brokering of Contract, Subcontracts, Verbal Instructions, detailed procedural requirements regarding the submission, review and evaluation of the bids, a description of the institutions covered and a copy of the sample contract. One of the procedural requirements in the body of the ITB repeated that: All inquiries from Bidder's [sic] concerning this Invitation to Bid shall be submitted in writing to the office identified on the cover of this Invitation to Bid. Such inquiries shall be received by the office on or before the date indicated above in the Calendar of Events as the "Last Day for Written Inquiries" [July 10, 1989]. (Emphasis added.) The ITB contained a "Bid Price Sheet" which contained separate blanks for RN and LPN services, separate blanks for each service for weekdays and weekend/holidays, and separate blanks for each of these categories for each of the three geographic areas of Region II, in each of the three years of the contract. That Bid Price Sheet stated that prices quoted "shall be firm net prices regardless of travel involved. . . " The body of the ITB specified that bidders must submit "all costs in the format specified on the Price Quote Sheet provided." (Emphasis added.) Further, the "Proposal Evaluations" section of the ITB specified that the figures to be inserted in the blanks on p. 15 were to be "hourly rates" for each type of nursing service. The next paragraph of this section of the ITB, however, stated that "Total cost, and cost breakouts on the Price Quote Sheet shall be clearly stated." The undisputed testimony of Gerald Ellsworth established that the intent of these provisions of the ITB was to require the bidders to state the total cost (i.e., net firm price) for each hour of nursing services in a particular geographic area at a particular point in time. Even though the ITB set forth an estimate of the hours that would be required under the contract, this information was clearly only in the nature of an estimate, and it was never the intent of the ITB to require the bidders or the Committee to project or evaluate, respectively, the total cost of the contract (as opposed to the total cost of each hour of service) by multiplying the bidders' bid costs for each hour of service by the corresponding estimate of hours needed over the three- year life of the contract for each of those categories. The primary reason for this focus upon the cost of an hour of service, rather than the cost of the entire contract, is that the estimated hours needed, as indicated by the ITB, are only estimates. Actual demands for service and workloads are likely to vary considerably, both by type of nursing position and geographic area. These demands could also vary as a result of factors such as the vacancy levels in the Department's own staff of employee nurses or changes in administrative personnel at a given institution. The ITB called for a mix of both objective and subjective evaluation of materials submitted by the bidders. The cost data, submitted in response to p. 7, para. E; p. 12, para. F.2.e; and p. 15, para. 7 was entirely objective, as was the Committee's role in evaluating that data. On the other hand, the information required from bidders under p. 12, para. F.2.a ("Project understanding and statement of work and reference from clients"), and p. 12, para. F.2.b ("Nurse Professional Qualifications"), called for a mix of both subjective and objective information and evaluation. The former, referred to throughout the testimony as "Criterion A," required the bidder to submit "a narrative statement of work to be performed, and references from clients in accordance with the specifications appearing at p. 4, para. 2.A. The latter, referred to in the testimony as "Criterion B," required bidders to: submit professional qualifications, experi- ence, and CPR certification for Department reviewers which documents the Bidders [sic] capability to provide registered and licensed practical nurse personnel that meet the training specifications. as set forth at pp. 4-5, para. 2.B. Within Criterion B, for example, an entirely objective requirement is the proof of the bidders' nurses' CPR qualification. A subjective element of this same criterion would be the quantity and quality of documentation of available nurses. The ITB required the Committee to award points to the respective bidders based on a formula which takes into account each of these objective and subjective criteria. That Formula, at its first level, assigned a point value of 20 points for Criterion A (Project understanding and statement of work, and references from clients), 30 points for Criterion B (Nurse Professional Qualifications) and 50 points for Criterion C (Bid Cost). Specifically as to Criterion C (Bid Cost), this criterion was entirely objective and did not require any subjective analysis by the Committee. The ITB specified that the lowest bidder "shall" be awarded 50 points, based on the average of the three years' quotes for cost of hours of nursing services. The ITB specified that the remaining bidders "shall" be awarded points for bid cost based on the following formula: Points Awarded Equals 50 x (1-A/B) where A equals the difference between the respective bidders' average bid and the lowest average bid, and B equals the lowest bidder's average bid. Unlike Criterion C, the Committee members' evaluation of the bidders' responses to Criteria A and B was left to their judgment and discretion. While the ITB set forth factors that were to be taken into consideration by the Committee members under these criteria, there was no required method by which an evaluator was to assign points for Criteria A and B. Specifically, there was no requirement in the ITB that the evaluators rank the bidders under Criteria A and B. An evaluator was free, for example, to give all bidders full point credit under either criterion, or to assign them any variation of points. This type of point system for mixed weighing of subjective and objective criteria is not unusual in governmental purchasing contracting and competitive bidding and is, in fact, normal procedure. The bid criteria set forth in the ITB, as well as the system set forth therein for evaluation of those bids by a mix of subjective and objective criteria, is rational. Further, and specifically, the ITB's requirement that costs be quoted as a rate per hour of service, by geographic area and point in time, is rational. It would be irrational to evaluate bid cost under this ITB by multiplying each bidder's price quotes for individual hours of service, broken down by geographic area and point in time, by the corresponding estimates of hours needed, set forth at p. 3 of the ITB, and then comparing the resulting "total cost" of the contract under each bid, since the estimated hours were intended to be no more than estimates, and the Department recognizes that these hours are subject to significant variation over the term of the contract. This probable variation would make the latter calculation entirely meaningless and baselessly speculative. It was not the intent of the ITB to find the "lowest and best" bidder. Instead, the intent of this ITB was to find the lowest bidder who met the qualifications and specifications set forth in the ITB. This is not the same as "lowest and best." The Bidders and Their Bids Medical Personnel Pool MPP, the successful bidder on Contract No. R-2119, timely submitted its bid for that contract. MPP's bid showed that MPP is a nationally recognized health care provider, with over twenty years of experience in serving the health care needs of both home health clients and facility clients. Its franchise office in Gainesville, Florida, is one of four offices operated in the Region II area by Mr. Ed Bixby, a former vice president of MPP's parent company, Personnel Pool of America, Inc. Mr. Bixby personally has over fifteen years of experience in medical staffing. All MPP offices follow the same national corporate standards for quality assurance, office operation and general business practice. Further, MPP is a financially sound and viable business, with an ongoing corporate recruitment program that regularly attracts new employees. MPP's client service representatives are on-call and available 24 hours a day, seven days a week, to meet the Department's staffing needs. The agency has been managed since October 1987, by Mr. Duane Gorgas, who has seventeen years of experience in facility clinical laboratory medicine, and who is licensed by the Department of Health and Rehabilitative Services as a clinical laboratory supervisor. MPP demonstrated compliance with Criterion B of the ITB by showing that each of its nurses is carefully and personally screened and tested for nursing skills prior to being sent into the field. In addition, MPP personally verifies all nurses' licenses with the Department of Professional Regulation, as well as their CPR certifications. A minimum of one year's documented current clinical experience is required prior to a nurse's being sent into the field. Further, MPP is itself an approved provider of nursing and other professional continuing education programs (DPR Provider No. 27M0938) and provides continuing education directly to its employees on a regular basis. MPP's Gainesville franchise already provides RN's and LPN's to correctional facilities, hospitals and nursing homes throughout sixteen counties in north central Florida. A list of the prisons and county jails currently and historically staffed by MPP in both Regions II and III was included in the bid, and includes thirteen corrections facilities in those two regions. A broad range of references from these and other clients, both institutional and personal, was included as Attachment II to MPP's bid. Copies of the licenses of 48 experienced MPP nurses, qualified and available to provide the services called for under Contract No. R-2119, were attached to the bid as Attachment III. Suwannee Suwannee's bid was also timely submitted. Whereas Suwannee now protests that the Department's manner of determining bid costs as net cost per hourly unit of service is irrational, that contention is belied by Suwannee's own bid. In the first place, Suwannee did not quote cost as a multiplication of hourly rates times total estimated hours anywhere in its bid, even though its president, Mr. Fortner, now contends this is the only rational way to quote or determine bid cost under the ITB. Further, Mr. Fortner expressly conceded that the ITB did not call for any such calculation of "total cost" by multiplication of rates by estimated hours. Even so, Suwannee has waived any objection or question it may now have as to the method of determining bid cost. Mr. Fortner conceded that he was fully aware of the standards set forth at pp. 1 and 11 of the ITB, requiring that questions or objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB be submitted in writing in a timely manner prior to July 10, 1989. Mr. Fortner nevertheless conceded that he failed to submit any such questions or objections regarding the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, until the filing of his protest after the award of the bid to MPP, and long after July 10, 1989. Having failed to file any timely written objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, therefore, Suwannee has waived any objections to the Department's method of calculating bid costs by averaging each bidder's unit net price for an hour of service by geographic area and point in time, as opposed to Suwannee's after- the-fact preferred method of multiplying these rates by estimated hours to determine Suwannee's definition of "total cost." Suwannee's bid, as supported by its president's testimony, showed that Suwannee was only incorporated in late July 1988, less than a year before the ITB was published. Prior to that time its then-22-year-old president's business experience consisted of operating a video store. Mr. Fortner conceded he had no prior experience whatsoever in providing any sort of nursing or medical services. Prior to the bid letting, Suwannee's sole experience in attempting to staff a correctional facility was at Baker Correctional Institute. Mr. Fortner testified that his first client was Lake City Medical Center, yet no reference from that facility appears in his bid. On the other hand, MPP's bid contains a highly favorable reference from Lake City Medical Center's director of nursing, indicating a completely satisfactory contractual relationship with MPP since 1987. Whereas MPP directly provides continuing education to its nurses under its own provider number, Suwannee takes the position that continuing education requirements are the nurses' responsibilities, and that they must meet these requirements at their own expense. Further, while Mr. Fortner stated that he believes Suwannee tests its nurses, he admitted he did not know how, and Suwannee's bid was silent on this aspect of Criterion B of the ITB. Suwannee's bid was also silent on screening of new nurse applicants. Suwannee has only recently hired a full-time director of nursing. Whereas MPP submitted qualifications for 48 nurses to staff the estimated hours under contract, Suwannee proposed to staff the same number of estimated hours with only 31 nurses. Mr. Fortner testified that the number of licenses in Suwannee's bid constitutes the full complement of nurses he deems necessary to provide the number of hours of service estimated in the ITB. The Bid Evaluation Process Objective Evaluation of Criterion C Initially, because of a confusing misprint in the ITB regarding the mathematical formula for calculating points to be awarded to bidders, other than the lowest average cost bidder, under Criterion C (bid cost), some of the four Bid Evaluation Committee members calculated the ranking of bidders under that criterion differently. That calculation was corrected by Dr. Rechtine, the Committee chairperson, however, in consultation with officials of the Region II office. The correction did not alter the ultimate overall ranking of the bidders, although it made slight differences in the points awarded individual bidders by some members of the Committee, and in one case the second and third bidders under Criterion C were reversed on one evaluator's tally sheet. All four of the Committee members testified that they agreed with the corrected calculation of points to be awarded each of the bidders under Criterion C. At no time was any other part of any Committee member's points awarded altered or changed. Subjective Evaluation of Criteria A and B Steven Smith Committee member Steven Smith, Regional Health Services Administrator for Region II, responsible for assisting institutions in the region with health service issues, including contracting for health services, evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B, Mr. Smith thoroughly reviewed the entire bid document of each bidder and made judgments as to the merits of each bid. His evaluations were based on how the bidders presented their respective documents, including the presentation and content of the narratives. While he did not assign any greater weight to either MPP's or Suwannee's references, Mr. Smith felt that MPP better articulated its understanding of the nature of the work. Mr. Smith was particularly impressed with MPP's understanding of the Department's court-ordered duty to improve access for inmates' to nursing services, which Mr. Smith felt was indicative of MPP's understanding of the contract's service requirements. He was also impressed with MPP's documentation of its 24-hour coverage. In sum, Mr. Smith felt MPP's bid was much clearer than Suwannee's. Cynthia Vathauer Committee member Cynthia Vathauer is a Department accountant, in charge of the inmates' welfare fund, who has previously served as an evaluator of competitive bids. Ms. Vathauer evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B, Ms. Vathauer reviewed the ITB and next performed a detailed analysis of whether the bid components called for by the ITB under Criteria A and B were present in each bid. Her review of the bids under Criteria A and B consisted of listing all of the required components under each criterion and then checking off whether each bidder had adequately provided the required components, making notes where there was partial or questionable compliance and deducting points from the total allowable for each criterion which was missing or incomplete. Whereas Suwannee contends Ms. Vathauer made "no analysis" of the bids under Criteria A and B, simply because Ms. Vathauer stated that she did not read these components of the bids in detail for comparative content, this allegation is not supported by the weight of the competent, substantial evidence. Ms. Vathauer's detailed analysis of the presence or absence of the factors called for by the ITB, supported by her contemporaneous notes, shows that Ms. Vathauer made a rational and reasoned analysis of the bids under those criteria, fully supporting her allocation of points to the bidders under those criteria. She admitted candidly that she was not familiar with the clinical or operational aspects of health service provision. Thus, for example, rather than attempt to compare the relative quality of nurse evaluations (which, incidentally, was not required under the ITB), Ms. Vathauer based her judgment of compliance with this criterion on the presence or absence of valid copies of actual licenses. Dianne Rechtine, M.D. Dianne Rechtine, M.D., is the medical executive director at North Florida Reception Center and acting medical services director for Region II. Dr. Rechtine also performed a rational and reasoned evaluation of the bids under the standards of the ITB. Dr. Rechtine read the respective bids and, with respect to Criteria A and B, assigned points based on her evaluation of those bids. Her notes of how she allocated points under these criteria appear as Joint Exhibit No. 4D and show that Dr. Rechtine actually scored Suwannee higher than MPP under Criterion A and the same as MPP under Criterion B. Suwannee has not been heard to assert that Dr. Rechtine's analysis under these criteria was other than rational and reasoned. Thus, it is found that Dr. Rechtine's analysis and evaluation of the bids was in fact rational and reasoned. Peggy (Richardson) Patray Since Peggy (Richardson) Patray was not called to the witness stand, MPP offered into evidence, without objection, her deposition testimony, taken prior to MPP's intervention and without benefit of cross-examination by MPP or its counsel. Nevertheless, that deposition and Ms. Patray's own evaluation notes appearing as Joint Exhibit No. 4E demonstrate that Ms. Patray, a registered nursing services consultant employed by the Department and previous nursing supervisor at New River Correctional Institute, carefully reviewed the ITB and analyzed and evaluated the bids under Criteria A, B and C prior to awarding points to the bidders. Ms. Patray looked at the types of facilities from which references were obtained and considered, for example, related jail-type experience to be a positive factor. Ms. Patray actually scored Suwannee superior to MPP under Criterion A for reasons related to the bidders' statements of understanding of work. She scored the two bidders evenly under Criterion B, even though she was favorably impressed by one (at the time of her deposition, she could not recall which) bidder's emphasis on pre-employment screening and in-service training, when contrasted with the other bidder's leaving of this responsibility to the individual nurses. Finally, Ms. Patray testified that she was favorably impressed with MPP's sources of references, as opposed to Suwannee's, and that there was not enough information in Suwannee's bid, in her opinion, regarding nurse professional qualifications. In sum, Ms. Patray's testimony and notes in Joint Exhibit No. 4E demonstrate clearly that she also performed a rational and reasoned evaluation of the bids of the parties under the terms and conditions of the ITB. Suwannee's Allegations There is no evidence on the record of this proceeding to support Suwannee's allegations that political or media pressure adverse to Suwannee influenced the decision to award Contract No. R-2119 to MPP. Each Department witness who testified in this proceeding testified that no such political pressure was brought to bear upon them or even attempted. The competent, substantial and unrebutted evidence of record demonstrates clearly that no such pressure or influence occurred or was attempted. In the same vein, Suwannee has alleged that the Committee improperly considered, to Suwannee's prejudice and detriment, factors or information outside of the ITB and the bid documents. The only evidence of record of Committee members having considered information outside of the ITB or the bids was the testimony of several of the Committee members that they either were aware of or considered allegations of past difficulties with MPP, not Suwannee. For example, Mr. Smith testified that he was aware of one past problem with MPP, but none with Suwannee. In any event, he did not consider anything outside of the bid documents in his review. Ms. Vathauer said nothing relating to this issue. Dr. Rechtine testified that she was aware of, and had considered, past problems with MPP, that she had received favorable input as to Suwannee and, to the extent that this knowledge affected her evaluation, she agreed that it did so to the advantage of Suwannee (scored 20 under Criterion A, 20 under Criterion B), and to the disadvantage of MPP (scored 12 under Criterion A, 20 under Criterion B). Finally, even Ms. Patray testified that she had received some negative reports on MPP, whereas she mentioned no such information regarding Suwannee. In sum, there is no evidence of record to support Suwannee's allegations that the Committee members improperly considered, to Suwannee's prejudice and detriment, factors outside the bid documents. Any error which may have occurred in this regard was entirely harmless as to Suwannee, and if it had any effect at all, it worked to Suwannee's benefit. Results of the Bid Evaluation Process The result of the bid evaluation process was that MPP received 88 overall points under the formula set out in the ITB, Suwannee received 85.62, Quality Care received 73.05 and Upjohn received 58.87. MPP was also the low bidder on cost, i.e., Criterion C. The weight and preponderance of the competent, substantial evidence demonstrates that Contract No. R-2119 should have been awarded to MPP, as it was, and that there is an ample, rational, reasoned and logical basis in the record supporting the decision of the Department to award the contract to MPP.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that The Department of Corrections enter a Final Order awarding Contract No. R-2119 to Personnel Pool of North Central Florida, Inc., d/b/a Medical Personnel Pool. DONE and ENTERED this 4th day of December, 1989, in Tallahassee, Florida. DIANE K. KIESLING Hearing Office 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 4th day of December, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-4566BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Suwannee Valley Medical personnel Corporation 1 Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1 (page 5). Proposed findings of fact 2-5, 7-12, 14-16, and 18 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 6, 17, and 19 are unnecessary or irrelevant. Proposed finding of fact 13 is unsupported by the competent, substantial evidence. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Corrections Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2 (3); 3 (19, 25); 4 (page 5); 6 (11); 7 (12); 8 (16); 9 (46); 14 (44); and 15 (45) Proposed findings of fact 1, 5, and 10-13 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Medical Personnel Pool Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 16-50 (1-35) and 53-63 (36- 46) Proposed findings of fact 12-15 are unnecessary or irrelevant. Proposed finding of fact 51 is included on page 5 of the Recommended Order. Proposed finding of fact 52 is subordinate to the facts actually found in this Recommended Older COPIES FURNISHED: John F. Gilroy Attorney at Law Haben & Culpepper 306 North Nonroe Street Tallahassee, Florida 32302 Drucilla E Bell Perri M. King Attorneys at Law Florida Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500 Thomas D. Watry Attorney at Law Parker, Hudson, Rainer & Dobbs 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Richard L. Dugger, Secretary Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500
Findings Of Fact During the month of March 1996, the Pinellas County School Board, pursuant to an advertised invitation for bids, (IFB), solicited bids for the construction of a new facility for John H. Sexton Elementary School (Sexton school). Each party submitting a bid was required to do so on a bid proposal form which was contained in the bid documents prepared by the project architect, Mr. Hoffman, and furnished to each prospective bidder who requested the bid package. One section of the bid proposal form related to "dewatering" potentially required at the construction site, and consistent with that potential two sentences were contained on the bid proposal form relating to dewatering of footings and of utilities, both of which provided for election by checking of an affirmative or a negative, and both of which had been pre-checked in the affirmative by the Board. It was the position of the Board that the pre- checked sentences as to dewatering on the bid proposal form constituted an acknowledgment by each bidder that that bidder's submittal included dewatering in the base bid. In addition to the check, the dewatering section also included blanks for the insertion by the bidder of figures representing lineal feet of header pipe and unit price per foot which figure would constitute a credit given by the bidder to the Board against the total bid price if dewatering were found not to be necessary, both as to footings and to utilities. Even further, the form also contained blanks to be filled in by the bidder for unit prices to be charged the Board in the event additional dewatering was required by virtue of the Board's later inclusion in the project of additional footings or utilities. Prior to the time for bid submittal, the Board conducted a meeting of all prospective bidders at which the project was explained and bidders given an opportunity to ask questions raised by the bid package. Johnson did not ask any questions regarding dewatering or that portion of the package relating thereto. Numerous bids were submitted in response to the proposal, including those from Johnson and Ellis. By stipulation at the hearing, the parties agreed that in all ways other than in that section of the bid proposal form for this project relating to dewatering, Johnson was and is a responsive and responsible bidder, as is Ellis. The bid proposals were opened by the Board at 2:00 PM on April 11, 1996 and the base bid prices on each proposal were read aloud to all in attendance by a Board representative. The project architect was present at the opening and tabulated and reviewed the bid proposals as opened. Johnson submitted the lowest base bid with a price of $7,965,000. The next lowest bid was that of Ellis, whose base bid price was $7,945,200. At the time of opening, no Board representative indicated anything was wrong with Johnson's bid Mr. Hoffman, the project architect, immediately noticed that Johnson had altered the Board's pre-checked bid proposal form by striking out the pre- checked "is" space regarding inclusion of dewatering in the base price of the two dewaterings, and making an X in each of the "is not" spaces. Mr. Hoffman considered that alteration by Johnson as a material alteration of the Board's solicitation which rendered Johnson's bid non-responsive. It must be noted that each change bears the initials, R. Y. Reza Yazdani is Johnson's president who initialed the changes and signed the bid proposal form for the company. In addition, Johnson also inserted a "0" in those spaces which dealt with amount of credit and cost of additional dewatering in the event additional work is required by the Board. In that regard, Hoffman opined that had Johnson not changed the check marks, but inserted the "0" figures as it did, the bid would have been responsive and Johnson would still have been lowest responsive bidder. The reason for this is that the bid form specifically notes that "the unit costs described in A & B above shall in no manner influence the School Board's selection of a firm to whom to award the Contract." The Board now recognizes that there is no part "B", as referenced in the proposal form. Since the "0's" would not influence the selection, use of an unmodified Board form, along with the lowest submitted base price would, in Hoffman's opinion, probably have meant that Johnson would have been awarded the contract. Johnson's representative, Mr. Mohme, who drafted the company proposal, specifically indicated he did not believe dewatering was a potential in this project. He recognized that such dewatering as was necessary was required by other provisions in the project specifications and he could not figure any way to recognize this and yet accurately reflect his belief that dewatering would not be necessary, other than to strike the pre-checked block and insert the check in the alternative block. He felt that by doing so, he was more accurately reflecting Johnson's bid. This reasoning is rather obscure. By letter dated April 12, 1996, written to the Board after the bids were opened, Mr. Mohme reiterated Johnson's position that dewatering is not necessary on this project, but further stated that if dewatering were to be necessary, Johnson would do so solely at its own risk and without any risk of additional cost to the Board. Bids may be clarified by a bidder, but such clarification must take place before the bids are opened. Bids may not be modified after bid opening. Before that letter was written, however, when the bids were opened and Mr. Hoffman observed what he considered was Johnson's alteration of the bid form, Hoffman consulted with a representative of the Board's purchasing department, Ms. Maas, who also reviewed Johnson's bid. Ms. Mass was of the opinion that Johnson may have attempted to qualify its bid, and she and Mr. Hoffman thereafter met with Mr. Rivas, the Board's director of facilities design and construction, to explain the problem. Mr. Rivas took the problem to two other Board personnel to see if there were some way Johnson's bid could be deemed responsive so that the Board could benefit by Johnson's low bid price. Within the context of those aforementioned discussions, Hoffman took the position that the alteration might leave the Board open to a possible change order and additional liability if dewatering were to be required and the Board had accepted Johnson's bid indicating that process was not included in the base price. Mr. Rivas, after consulting with the Board's attorney, also concluded that Johnson's alteration expressly excluded dewatering as an included factor and its exclusion constituted a serious and material deviation from the Board's solicitation. It was deemed material in that the deviation apparently gave Johnson a competitive advantage over other bidders who did not amend the form. This appears to be a valid conclusion and is adopted herein. The decision to recommend rejection of Johnson's bid and acceptance of Ellis's as the lowest responsive bid was ultimately reached by the Board's administrative staff. The Ellis bid was responsive to the solicitation whereas the determination was made that Johnson's was not responsive because of the alteration. It was not the actual act of alteration that caused that determination but rather the potential effect of the alteration. This was consistent with long standing Board policy not to accept a bid which does not conform to a bid solicitation and not to accept bids from bidders who alter the Board's bid proposal form or otherwise attempt to qualify their bids. It is the opinion of the Board personnel that such consistency in bidding procedure has resulted over time in more qualified bidders submitting bids for Board work which, in turn, has resulted in more competitive prices for the work let for bid. This is a reasonable policy. Mr. Gottschalk, Johnson's expert architect, who has designed schools for the Board, offered an alternative disposition to this dilemma. While admitting that Johnson's shifting of the risk of loss as a result of possible dewatering was a material matter, he suggested the Board could have disregarded the dewatering clause on every submittal and thereafter awarded the contract to Johnson, the lowest bidder, whose bid was responsive to the solicitation except for the dewatering provision. Recognizing this solution would have placed each bidder on an equal footing and allowed award to the lowest bidder at a substantial savings to the Board, he nonetheless also understood the decision made by Mr. Hoffman and the Board staff here and could not fault it. He agreed that reasonable men could differ on the issue of responsiveness here and how to deal with it. It is so found. After a review of the evidence submitted, including the testimony indicating the remoteness of the likelihood that extensive dewatering would be required, there appears to be no evidence that the Board, or its staff, acted dishonestly, fraudulently, illegally or arbitrarily in rejecting Johnson's bid on this project and recommending award to Ellis.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Pinellas County School Board enter a final order denying and dismissing G. H. Johnson Construction Company's protest and awarding a contract for the construction of Sexton Elementary School to Ellis Construction Company, Inc. DONE and ENTERED this 8th day of May, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of May, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1942BID To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Johnson's Proposed Findings of Fact. 1.-5. Accepted and incorporated herein. Accepted. Accepted but not a proper Finding of Fact. More a restatement of and comment on testimony. Rejected. Accepted but not a proper Findings of Fact. More a restatement of and comment on testimony. &11. Accepted. Accepted and incorporated herein. First sentence accepted as a literal statement of what appears in the specifications. Second and third sentences accepted but not probative of any material issue of fact. Accepted and incorporated herein. First sentence accepted. Balance not Finding of fact but argument. Ellis' Proposed Findings of Fact. 1.&2. Accepted and incorporated herein. 3.-6. Accepted. 7.-10. Accepted and incorporated herein. 11.-15. Accepted and incorporated herein. 16. Accepted but word "certain" is changed to read "likely." 17.-21. Accepted and incorporated herein. 22. Accepted and incorporated herein. 23.&24. Accepted. 25.&26. Accepted and incorporated herein. 27.-29. Accepted. Accepted and incorporated herein. Not relevant to any material issue of fact. COPIES FURNISHED: Jawdet I. Rubaii, Esquire Clearwater Executive Suites, No. 213 1345 South Missouri Avenue Clearwater, Florida 34616 John W. Bowen, Esquire Pinellas County School Board 301 4th Street S.W. Largo, Florida 34649-2942 E. A. Mills, Jr. Esquire Dale W. Vash, Esquire Fowler, White, Gillen, Boggs, Villareal and Banker, P.A. 501 East Kennedy Boulevard Post Office Box 1438 Tampa, Florida 33601 Pinellas County School Board 301 4th Avenue, S.W. Largo, Florida 34649-2942
The Issue The issue in the case is whether the Department of Transportation's rejection of all bids in this case meets the requirements of law.
Findings Of Fact In August 1996, the Department sought bids for several road projects to be constructed in Bradenton, Florida. The projects were identified as State Project Numbers 13160-3512, 13160-6501, 13160-6502, and 13160-6512. The construction project includes utility relocation work to be performed on behalf of the Manatee County, the City of Bradenton, and GTE, the owners of various utilities within the project area. In preparing for road construction projects, the Department enters into joint partnership agreements with utility owners. The agreements identify the responsibilities of the parties related to performance of utility relocation/construction work related to the road project. Essentially, the owner and Department determine an estimated cost for the utility construction which the owner places into escrow and the Department assumes the responsibility for obtaining bids for the utility work. In the event that the bid exceeds the escrowed estimated cost, the utility owner may withdraw from the agreement. Upon such withdrawal, the joint partnership agreement provides that the owner may perform the work itself or the Department can pay the amount in excess of that which the owner has escrowed. If the Department agrees to pay the "excess" cost, the utility work remains included in the bid project. If the Department does not pay the "excess," the work is performed by the utility owner in accordance with the Department's construction schedule, and is deleted from the final contract negotiated with the winning bidder. Six companies filed bids in relation to the projects at issue in this proceeding, including Gator Asphalt Co., APAC- Florida, MacKenzie E.T. Company, Westra Construction Corporation, Smith and Co., Inc., and the Petitioner. The Petitioner's bid of $6,586,034.13 was the low bid submitted. The Petitioner has been properly prequalified by the Department to perform the work that is the subject of the bid at issue in this proceeding. The date upon which the bids were opened is unclear, but by October 4, 1996, the bids had been opened and tabulated. By letter dated October 4, 1996, the Department notified the City of Bradenton of the bid tabulation. Although the estimated cost of work to be performed on behalf of the city was about $400,000, the letter indicates that the total amount of the deposited escrow should be $534,160.50. The letter provided a deadline of October 10 to provide certification to the Department that the funds had been escrowed. Although the Department's letter of October 4 does not address whether the Department was willing to pay the "excess," the request for additional city funds indicates that the Department was not offering to pay the additional costs associated with the work. By letter dated October 9, 1996, the City of Bradenton withdrew its participation from the project. The city portion of the work was State Project Number 13160-6501. The Department's technical review committee met on October 9, 1996. The committee reviews bid proposals and makes a recommendation to the awards committee. There is no reliable evidence of what occurred during the technical review committee meeting. No one who attended the technical review committee meeting testified at the hearing. At the hearing, a witness who did not attend the meeting reviewed minutes of the committee meeting and testified as to what the minutes appeared to indicate. The minutes were not offered into evidence. The awards committee met on October 15, 1996. There is no reliable evidence of what occurred during the awards committee meeting. No one who attended the awards committee testified at the hearing. Despite the lack of information as to what occurred during the committee meetings of October 9 and 15, the evidence establishes that the Department made no attempt to recalculate the bid amounts after the City of Bradenton withdrawal. On November 4, 1996, the Department posted notice of its intention to reject all the bids for State Project Numbers 13160-3512, 13160-6502, and 13160-6512. Four bids exceeding the maximum acceptable bid established by the Department were rejected. Two bids, including the Petitioner's, were rejected as nonresponsive for failing to meet requirements related to utilization of "Disadvantaged Business Enterprises" (DBE) in the project. The Petitioner filed a timely protest of the Department's proposed rejection of all bids. The Department requires that each bid proposal either meet specific goals for DBE utilization or include an adequate "good faith effort" package identifying the efforts made by the bidder to meet the goal. The DBE goal for these projects was 12 percent of the total bid amount. Failure to either meet the DBE goal or submit an adequate "good faith effort" package renders a bid submittal nonresponsive. The evidence establishes that the Petitioner's bid was nonresponsive for failing to meet the DBE requirements. The parties have stipulated that the Petitioner's proposal did not include an adequate "good faith effort" package. The Petitioner's bid identifies DBE participation as 11.3 percent of its total bid. The Petitioner's total bid amount included the utility work for the City of Bradenton. The Petitioner asserts that a specification set forth in the bid package requires that the Department recalculate the bid proposals by deleting the City of Bradenton work from the project. Article 3-1 of the Supplemental Specifications issued as part of the bid package at issue in this proceeding, states as follow: The Department reserves the right to delete the bid portion of the utility relocation work from the Contract. Deletion of any utility relocation work from the Contract will require the Contract bid tabulations to be recalculated based on the remaining project quantities. According to calculations made by the Petitioner, reducing the amount of his total bid by the cost of utility work related to the City of Bradenton, results in his DBE participation rising to 11.9777 percent of the revised total. The DBE reporting form supplied to bidders by the Department states that the "[g]oal may be rounded to the nearest tenth percent," indicating that his 11.977 percent could be rounded up to 12 percent. The Petitioner asserts that the withdrawal of the City of Bradenton from the project and the rounding of the goal results in his bid meeting the DBE requirement of 12 percent. The language of Article 3-1 of the Supplemental Specifications is applicable, not to bid proposals, but to the contract negotiated between the successful bidder and the Department. In practice, the Department has implemented this provision according to the specification language. Items specifically related to withdrawn utility relocation work are deleted from the contract negotiated with the successful bidder. The evidence fails to establish the Petitioner is entitled to recalculation of his bid proposal.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation issue a Final Order dismissing the protest filed by the Petitioner in this case. RECOMMENDED this 18th day of February, 1997, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 18th day of February, 1997. COPIES FURNISHED: Pamela Leslie, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Brant Hargrove, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Mary S. Miller, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0458
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
Findings Of Fact In February 1994 the School Board, by and through its design consultants, W. R. Frizzell Architects, Inc., and, more particularly, its project architect, Byron Tramonte, issued plans, specifications, and related contract documents associated with additions, remodeling, and reroofing of John F. Kennedy Middle School, Palm Beach County, Florida. At a pre-bid conference conducted at the project job site attended by representatives of the School Board, its consultants, as well as representatives of Petitioner, Respondent, and Intervenor, among others, Petitioner's Greg Hill questioned the sufficiency of the drawings with respect to the earth work requirements associated with Alternate 1. As a result of this inquiry, the owner's design consultant issued Addendum 2 (including an as-built drawing) dated February 23, 1994, which was ". . . made available for grading estimates." The drawing attached to Addendum 2 had two sets of elevation numbers on it. One set of elevation numbers were underlined. The clearest of the underlined numbers were difficult to read. Many of the underlined numbers were impossible to read. The other set of elevation numbers on the subject drawing were boxed. The boxed numbers were all clear and legible. In view of the purpose for which the drawing was attached to Addendum 2, the most logical interpretation of the drawing was that the boxed elevation figures represented the existing elevations. The drawing attached to Addendum 2 also included some circled handwritten information. In large letters the circled information read: "JFK MIDDLE SCHOOL AS BUILT EXIST. ELEV." Immediately below in smaller letters it read: "Note: The 2 softball fields were not constructed. 2/23/94." The circled handwritten information was to some extent ambiguous. But it was an ambiguity that could be resolved by careful site inspection. Careful site inspection would have revealed that the boxed numbers corresponded to existing site conditions and that the underlined numbers, to the extent they were legible, did not. Petitioner's Vice President Greg Hill was primarily responsible for the preparation of the portion of the Petitioner's bid relating to Alternate 1. Greg Hill visited the job site during the prebid conference and also visited the job site on one other occasion after receiving Addendum 2, but before submitting the Petitioner's bid. Greg Hill is an experienced estimator with respect to matters involving the type of work encompassed by Alternate 1. In spite of his experience and in spite of his two pre-bid site visits, Greg Hill misinterpreted the architect's intent and used the underlined elevations on the drawing attached to Addendum 2 as a basis for estimating portions of the work associated with Alternate 1. As a result of this mistake Greg Hill reached erroneous conclusions about the amount of fill that would be required and substantially overestimated the amount of fill. This mistake caused the Petitioner's bid for Alternate 1 to be somewhat higher than it would have been if Greg Hill had based his estimates on the boxed elevation numbers. A similar mistake was made by CSR Heavy Construction-North, Inc., a company that was seeking work as a subcontractor on Alternate 1. On the last day for submitting bids on the subject project, the Intervenor received an unsolicited bid from CSR Heavy Construction-North, Inc., to perform some or all of the work encompassed by Alternate 1. CSR's bid was much higher than the Intervenor's proposed bid for that work, which caused the Intervenor's President to become worried that perhaps he had misinterpreted the drawings attached to Addendum 2. Intervenor's President called the School Board Architect and asked for confirmation of his interpretation to the effect that the bidders should base their estimates on the boxed elevation numbers on the drawing attached to Addendum 2. The architect confirmed that the Intervenor's President had correctly interpreted the drawing. The architect did not call any other potential bidders to tell them they should use the boxed numbers because he thought it was obvious that all potential bidders should use the boxed numbers. The bids for the subject project were opened on March 3, 1994. The Petitioner was the apparent responsive low bidder for the base bid. The Intervenor was the apparent responsive low bidder taking together the base bid and the bids on Alternates 1 and 2. The School Board published notice of its intent to award a contract to the Intervenor for the base bid and Alternates 1 and 2. The Instructions To Bidders portion of the subject bid specifications included the following provisions: BIDDER'S REPRESENTATIONS: Each Bidder, by making his Bid, represents that he has read and understands the Bidding Documents. Each Bidder, by making his Bid, represents that he has visited the site and familiarized himself with the local conditions under which the Work is to be performed. BIDDING PROCEDURES: * * * 3.11 Familiarity with Laws: The Bidder is assumed to be familiar with all Federal, State and Local Laws, Ordinances, Rules and Regulations, that in any manner affect the Work. Public Contracting and Purchasing Process Florida Statute, Section 287.132-.133 (Public Entity Crimes) is applicable. Ignorance on the part of the Bidder will in no way relieve him from responsibility. * * * 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. * * * BID PROTEST PROCEDURES: * * * 10.02 The Bid Documents/"Advertisement tol Bid" will be posted in the office of thel Department of Capital Projects at the time of the solicitation to Contractors. Any person who is affected adversely with respect to the Bid Documents shall file a notice of protest in writing within seventy-two (72) hours after the receipt of the Bid Documents, and SHALL FILE A FORMAL WRITTEN PROTEST WITHIN TEN (10) DAYS AFTER THE DATE HE FILED THE NOTICE OF PROTEST. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under Chapter 120. It is important to the proper functioning of the public works bidding process that all bidders be treated alike. To this end, important information furnished to one potential bidder should be furnished to all other potential bidders.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board enter a Final Order in this case dismissing the protest of the Petitioner and awarding a contract to the Intervenor for the base bid and Alternates 1 and 2. DONE AND ENTERED this 17th day of May 1994 in Tallahassee, Leon County, Florida. 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 May 1994. APPENDIX The following rulings are the specific rulings on all proposed findings of fact submitted by all parties: Findings submitted by Petitioner. Paragraphs 1 through 5: Accepted in whole or in substance. Paragraph 6: Rejected as not completely accurate. The practices described are common, but not universal. Drawings usually have a legend to explain the difference between existing elevations and elevations to be achieved. Paragraph 7: The first sentence of this paragraph is rejected as contrary to the greater weight of the evidence. The remainder is accepted in substance. Paragraph 8: The first sentence of this paragraph is rejected as constituting subordinate and unnecessary details. The last sentence of this paragraph is rejected as constituting inferences or arguments not supported by the greater weight of the evidence. Paragraphs 9, 10, and 11: Accepted in substance, but with some modifications in the interest of clarity and accuracy. Paragraph 12: Rejected as contrary to the greater weight of the evidence. Paragraph 13: Accepted in part. Accepted that if the Petitioner had used the boxed elevation numbers, it's proposal on Alternate 1 would probably have been substantially lower. The remainder of this paragraph is rejected as speculation Paragraph 14: Rejected as not fully supported by competent substantial evidence and as, in any event, subordinate and unnecessary details. Paragraph 15: Rejected as constituting primarily argument, rather than proposed findings of fact. To the extent the material in this paragraph purports to be factual, it tends to be contrary to the greater weight of the evidence. The greater weight of the evidence is to the effect that there were no ambiguities in Addendum 2 that could not have been resolved by careful site inspection. Paragraph 16: Accepted in substance. Paragraph 17: Rejected as constituting subordinate and unnecessary details. Paragraph 18: Rejected as contrary to the greater weight of the evidence; careful site inspection would have confirmed that the boxed numbers represented the existing elevations. Paragraph 19: Accepted. Paragraph 20: Rejected as speculative and as not supported by persuasive competent substantial evidence. Paragraph 21: Rejected as constituting a proposed ultimate conclusion of law, rather than a proposed finding of fact, and as, in any event, a conclusion that is not warranted by the evidence. Findings submitted by Respondent. Paragraphs 1 through 8: Accepted in whole or in substance. Paragraph 9: Rejected as constituting subordinate and unnecessary details. Paragraph 10: Accepted in substance. Paragraph 11: Rejected as constituting subordinate and unnecessary details. Paragraph 12: Rejected as constitution a proposed ultimate conclusion of law, rather than a proposed finding of fact. (The conclusion is warranted, but it is a conclusion nevertheless.) Findings submitted by Intervenor: (No separate proposals; the Intervenor adopted the proposed findings of the Respondent.) COPIES FURNISHED: Robert A. Rosillo, Esquire School Board of Palm Beach County 3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813 Alan C. Brandt, Jr., Esquire Leiby, Ferencik, Libanoff and Brandt Suite 400 150 South Pine Island Road Fort Lauderdale, Florida 33324 Richard B. Warren, Esquire Kelley, Aldrich & Warren, P.A. 801 Spencer Drive West Palm Beach, Florida 33409 Dr. C. Monica Uhlhorn, Superintendent Palm Beach County School Board 3340 Forest Hill Boulevard West Palm Beach, Florida 33406-5869
The Issue Whether Petitioner/Intervenor Hedin's challenge to Respondent's preliminary determination to award Lease No. 590:2241 to 1436 Building, Inc. should be sustained? Whether Petitioner/Intervenor Schlitt's challenge to said preliminary determination should be sustained?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: 1 In March, 1991, after requesting and receiving approval from the Department of General Services, the Respondent issued an Invitation to Bid for Lease No. 590:2241 (hereinafter referred to as the "ITB"). The cover page of the ITB contained the Bid Advertisement, which read as follows: The State of Florida, Department of Health and Rehabilitative services is seeking approximately 17,064 net rentable square feet of office space to lease in Indian River County within the following boundaries: North, to Lindsey Road, South to Olso Road, East to A1A and West to Kings Highway. Space must be in an existing building. Occupancy no later than October 1, 1991, or within 120 days after notification of bid award, whichever occurs last. Desire a five (5) year lease with five (5) one year renewal options. Sealed bids will be received until 3:30 p.m.,, April 24, 199[1] at Riviera Beach, FL. Information and specifications will be provided to all interested parties at a mandatory pre-proposal conference to be held at Department of Health and Rehabilitative Services, 1050 15th Street West, Riviera Beach, FL. 33404, April 5, 1991 at 1:00 p.m. The Department of HRS reserves the right to reject any and all bids received and if necessary to reinstate procedures for soliciting competitive bids. The office space sought by Respondent was to house a client service center that is currently operating out of a 12,000 square foot facility owned by Petitioner/Intervenor Hedin. Respondent needs approximately 5,000 more square feet of office space for this center. Page B-1 of the ITB contained the definitions of various terms used in the ITB. Among the terms defined was "lowest and best bid." "Lowest and best bid" was defined as follows: That bid selected by the District Administrator, designee, or Deputy Secretary upon the recommendation of the bid evaluation committee following an objective and detailed process to evaluate and compare bids. "Lowest" refers to the total evaluation score. Weights for evaluation criteria are prescribed on pages B-7 through 9. Actually, this information was found on pages B-5 though 7 of the ITB, which read in pertinent part as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsiveness, such as use of Bid Submittal Form, inclusion of required information, data, attachments, and signatures. Non- responsive bids will be withdrawn from further consideration. Non-responsive bidders will be informed promptly by certified mail. Responsive bids are presented to a bid evaluation committee for comparison and formulation of a recommendation for award. This is accomplished by a visit to each proposed property and application of the evaluation criteria. The committee's recommendation will be presented to the Department official having award authority for final evaluation and determination of a successful bidder. EVALUATION CRITERIA AWARD FACTORS The successful bidder will be that determined to be the lowest and best. All bids will be evaluated based upon the award factors enumerated below: Associated Fiscal Costs Rental Rental rates for basic term of lease. Evaluated using present value methodology by application of she present value discount rate of 8.74%. 2/ (Weighting: 35 minimum) Rental rates for optional renewal terms of lease. Rates proposed are within projected budgeting restraints of the Department. (Weighting: 5 minimum) Total for rental shall be not less than 40. Moving Costs: a) Cost of relocating communications network computer drop lines as determined by a site survey conducted at each proposed facility by the Department's management information office, or: (Weighting: 5 maximum) b) Cost of relocation of major statewide operational data system as determined by a site survey conducted at each proposed facility by qualified data center management. (Weighting: 6 maximum) Telephone costs as determined by a site survey conducted at each proposed facility by an engineer from the applicable deregulated vendor. (Weighting: 5 maximum) Relocation of furniture and equipment not addressed above. (Weighting: 5 maximum) LOCATION The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of Departmental operations planned for the requested space. Proximity of facility to a preferred area, such as a courthouse or main traffic arteries. (Will not be applicable if there are no preferred areas within the bid boundaries). (Weighting: 5 maximum) Frequency and availability of satisfactory public transportation near the offered space. (Weighting: 5 maximum) Proximity of offered space to the clients to be served by the Department at this facility. (Weighting: 5 maximum) Aesthetics of the building, property the building site [is] on, and of the surrounding neighborhood. (Weighting: 1 maximum) Security issues posed by building and surrounding neighborhood. (Weighting: 1 maximum) PROPERTY Susceptibility of the property's design to efficient layout and good utilization, such as ability of physical structure to house large units together and in close proximity to interdependent units. (Weighting: 15 maximum) Suitability of the building, parking area and property as a whole for future expansion. (Weighting: 5 maximum) Provision of the aggregate square footage in a single building. Proposals will be considered (but fewer points given) which offer the aggregate square footage in not more than two buildings provided the buildings are immediately adjacent to or within 100 yards of each other. If in separate buildings, the structures are connected by enclosed climate controlled walkways. (Weighting: 2 maximum) Prospective bidders were instructed on page B-3 of the ITB that they had to submit their bids on the 22-page Bid Submittal Form, which comprised Section C of the ITB. The Bid Submittal Form (BSF) provided detailed information regarding the needs of the Department and the terms, conditions and requirements that prospective bidders were expected to meet. Among the requirements addressed was that the proposed space be an "existing building," meaning that it was "dry, fully enclosed, and capable of being physically measured." The BSF further indicated that a multistory building would be acceptable, provided that it met certain specified requirements. In addition, pages C-3 through 4 of the BSF informed prospective bidders that, as part of their bid submittal, they would have to provide, among other things, the following: * * * b. A scaled (1/16" or 1/8" or 1/4" 1'0") floor plan showing present configurations with measurements. The final floor plan will be described in the specifications. * * * A scaled site layout showing present location of building(s), location, configuration and number of parking spaces assigned to the Department, access and egress routes and proposed changes. This is to be drawn to scale. Final site layout will be a joint effort between Department and Lessor so as to best meet the needs of the Department. The subject of floor plans was also discussed on page C-11 of the ITB, which provided in pertinent part as follows: Final floor plans will be a joint effort of Departmental staff and the successful bidder. The successful bidder is to provide architectural services by a licensed architect to prepare renovation plans. The final floor plan is subject to Departmental determination and State Fire Marshal review and approval. 3/ Prospective bidders were issued the following advisement and warning on page B-8 of the ITB regarding their protest rights: Any person may dispute any part of the competitive bid process through the filing of a protest. To be considered, a protest must be filed in accordance with Section 120.53(5), Florida Statutes, and Chapter 10-13.11 Florida Administrative Code. Failure to file a protest within the prescribed time limits shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Prospective bidders, who did not want to file a protest, but merely desired clarification regarding a matter relating to the bidding process, were directed, on page B-3 of the ITB, to follow the following procedure: Any questions concerning an interpretation of meaning, ambiguity, or inconsistency on this project are to be received in writing by the project contact person listed on page A-1 [Steven Young) at least 5 working days prior to bid opening so that a written response may be provided to all bidders. 4/ The mandatory pre-proposal conference on the ITB was held as scheduled on April 5, 1991. Petitioner/Intervenor Schlitt, Petitioner/Intervenor Hedin, and Intervenor 1436 Building, Inc. (hereinafter referred to as "`1436") appeared in person or through a representative at the conference. One other prospective bidder, Alan Taylor, was also in attendance. Among the topics discussed at the pre-proposal conference was the present value index discount rate that would be applied in evaluating proposals. The prospective bidders were advised that the rate which appeared on page C-21 of the ITB-- 7.73%--, not the 8.74% rate appearing on page B-5, would be used. Prospective bidders were also told at the pre- proposal conference that the maximum number of total points available for moving costs was not 15 or 16 as a reading of the ITB might suggest, but 21: 5 for item 1)a) (computer drop lines);6 for item 1)b) (statewide operational data system equipment); 5 for item 2 (telephones); and 5 for item 3 (furniture and other equipment). Under the ITB, as originally issued and clarified at the pre-proposal conference (hereinafter referred to as the "Original ITB"), Respondent was to pay its own moving costs, as it had consistently done in the past, without any contribution on the part of the successful bidder and it would award points to each bidder for moving costs based upon what it would cost Respondent, according to its estimates, to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to the facility proposed by that bidder. The less the expense to the Department to relocate these items, the more points a bidder would receive. Accordingly, to the extent that he intended to offer space already occupied by Respondent, Petitioner/Intervenor Hedin had an advantage over the other prospective bidders under the Original ITB. Some time after the pre-proposal conference, David Feldman, 1436's representative, complained to Respondent about this advantage enjoyed by Hedin in the category of moving costs and inquired if anything could be done about it. Steven Gertel, the Respondent's Assistant Staff Director for Facilities Services, Kevin McAloon, the General Services Manager for Respondent's District IX, Louis Consagra, the then Office Operations Manager for General Services for District IX, and Steven Young, the Facilities Services Manager for District IX and the contact person referenced in the ITB, discussed the matter during a telephone conference call held on April 11, 1991. During their discussion, it was decided that it would be in the best interest of the Department, which was operating under severe fiscal constraints, to change the ITB to allow prospective bidders to essentially buy points by agreeing to pay all or a portion of Respondent's estimated moving costs. Such a change, it was thought, would enhance the competitiveness of the bidding process. Before making the change, however, Respondent attempted to quickly estimate what its costs would be if it had to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to another facility in Indian River County within the geographical boundaries prescribed in the ITB. Respondent estimated that it would cost between $25,000 and $30,000 to relocate computer drop lines and statewide operational data system equipment, $35,000 to $45,000 to relocate telephones and $8,000 to $10,000 to relocate furniture and other equipment. In arriving at these estimates, Respondent relied upon agency personnel who, because of their experience, expertise and/or access to contracts with vendors and other pertinent documents, appeared to be reliable sources of information. On April 12, 1991, the day after the telephone conference call and twelve days before the scheduled bid opening, Facilities Services Manager Young, on behalf of the Department, sent by United States Certified Mail, return receipt requested, to all four prospective bidders who attended the mandatory pre- proposal conference on April 5, 1991, the following memorandum: Page C-22 of the Bid Submittal Form has been changed and is enclosed for use in the Invitation to Bid. Please call me if you have any questions on this change/addition or any information that is needed to complete your Bid Submittal on or before 3:30 p.m., April 24, 1991. The "changed" page C-22 of the ITB, which accompanied the foregoing memorandum, provided as follows with respect to moving costs: The bidder will respond to the items as stated in the Bid submittal,, Page B-6, b. Moving Costs: 1) a) b), 2), 3). Department Bidder Estimate Response 1) a) b) $25,000 to $30,000 2) $35,000 to $45,000 3) $8,000 to $10,000 Young also telephoned each of the four prospective bidders and explained to them how moving costs would be evaluated in light of this revision to the ITB. He told them that if they indicated under "Bidder Response" on page C-22 that they would be willing to pay up to $30,000 for item 1, $45,000 for item 2 and $10,000 for item 3, and in Hedin's case, provided he submitted a bid that included the 12,000 square feet of space presently occupied by Respondent, 28% of these amounts, they would capture the maximum number of points available for each of these items, and that if they indicated a willingness to contribute less than these amounts, they would be awarded points in proportion to amount of their proposed contribution. 5/ Respondent's decision to allow Hedin to earn the same amount of points as the other prospective bidders for moving costs by pledging to contribute only 28% of what his competitors had to pledge was based upon square footage considerations. If a bidder other than Hedin was awarded the lease, Respondent would have to move into more than 17,000 square feet of space. If, on the other hand, Hedin submitted a bid that included the 12,000 square feet of space presently occupied by Respondent and he was the successful bidder, Respondents would be occupying only 5,000 or so square feet of space it had not previously occupied, or approximately 28% of the square footage that it would have to move into if the lease had been awarded to another bidder. The ITB, as so revised and clarified by Respondent (hereinafter referred to as the "Revised ITB"), contemplated that the successful bidder would be obligated to pay only Respondent's actual moving costs up to the amounts pledged on page C-22 of the bidder's completed BSF. Moving costs in excess of the amounts pledged by the successful bidder would be borne by Respondent. Respondent wanted to avoid a situation where, because of Respondent's estimating errors, a successful bidder: was forced to bear a cost in connection with its bid that it did not anticipate at the time it had submitted the bid. Respondent, however, was quite confident that the estimates it had made and incorporated in the Revised ITB would not prove to be too low. 6/ All four of the prospective bidders who participated in the mandatory pre-proposal conference submitted timely bids. Each of bids was deemed to be responsive. Facility Services Manager Young then performed the calculations necessary to determine the number of points that each bidder should be awarded for associated fiscal costs, including rental costs and moving costs. This was purely an objective and non-judgmental exercise. Young performed these calculations in accordance with the methodology that had been described to all of the bidders prior to the submission of their bids. Schlitt had the lowest rental rates for the basic term of the lease, as well as for the five option years. Accordingly, he was awarded the maximum 35 points for the former and the maximum 5 points for the latter, for a total of 40 points. The scores received by the other bidders for rental costs were as follows: 1436- basic term: 34.125, and option years: 4.340; Hedin- basic term: 28.865, and option years: 3.710; and Taylor- basic term: 31.938, and option years: 4.575. Schlitt and 1436 indicated on page C-22 of their completed BSFs that they were each willing to pay up to $30,000 for the relocation of computer drop lines and statewide operational data system equipment, up to $45,000 for the relocation of telephones and up to $10,000 for the relocation of furniture and other equipment. Accordingly, they were both awarded the maximum 21 points for moving costs. Hedin indicated on page C-22 of his completed BSF that he was willing to pay up to 28% of these amounts ($8,400.00 for the relocation of computer drop lines and statewide operational data system equipment, $12,600 for the relocation of telephones and $2,800 for the relocation of furniture and other equipment). Accordingly, he too was awarded the maximum 21 points for moving costs. Taylor, who indicated on page C-22 of his completed BSF a willingness to contribute only a small fraction of the Respondent's estimated moving costs, received a total of 1.667 points for moving costs. After computing these scores 7/ Young prepared a written synopsis of all four bids that had been submitted. He gave copies of his synopsis to the four members of the bid evaluation committee, along with score sheets for them to use in their evaluation of these bids. Typed in on each score sheet were the scores the bidders had received for rental costs and moving costs. These scores were accurately reported on the score sheets except for the score that Hedin had been awarded for rental costs associated with the basic term of the lease. The score sheets erroneously indicated that Hedin had been awarded 32.375 points, rather than 28.665 points, for this item. The four members of the bid evaluation committee were: General Services Manager McAloon; Frank Mueller, District IX's chief financial officer; and Kathy Pelaez and Alfred Swanson, two HRS administrators who supervise staff headquartered in Respondent's Indian River County client service center. 8/ Young, because he was the Facilities Services Manager, was prohibited by agency practice 9/ from serving on the bid evaluation committee. The bid evaluations committee visited each of the bidder's proposed facilities before determining the amount of points to award them for the non- economic categories, i.e., location and property, set forth in the Revised ITB. The committee members visited Schlitt's, 1436's and Taylor's proposed facilities on the same day. They subsequently paid a visit to Hedin's proposed property, which consisted of the building presently occupied by Respondent, plus an addition of approximately 5,000 square feet connected to the existing building by a walkway. The delay in visiting Hedin's proposed facility was the result of a determination, later overturned, that the entire facility was not dry and measurable as required by the Revised ITB. Following their visits to Schlitt's, 1436's and Taylor's proposed facilities, the members of the bid evaluation committee met as a group and discussed each of these proposed facilities. They had a similar meeting and discussion about Hedin's proposed facility after their visit to that proposed facility. Applying the criteria set forth in the Revised ITB, the committee members agreed that the following point awards should be made for the categories of location and property: location/proximity to preferred area (evaluation criterion 2.a., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/public transportation (evaluation criterion 2.b., 5 point maximum)- all four bidders: 0; location/proximity to clients (evaluation criterion 2.c., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/aesthetics (evaluation criterion 2.d., 1 point maximum): Schlitt, 1436, and Hedin: 1, and Taylor: 0; location/security (evaluation criterion 2.e., 1 point maximum)- all bidders: 1; property/design (evaluation criterion 3.a., 15 point maximum)- Schlitt: 9, 1436: 15, Hedin: 14, and Taylor 10; property/future expansion (evaluation criterion 3.b., 5 point maximum): Schlitt: 4, 1436: 5, Hedin 3.5, and Taylor 3, and property/square footage in single building (evaluation criterion 3.c., 2 point maximum)- Schlitt, 1436, and Taylor: 2, and Hedin: 1. Each of the members of the evaluation committee then recorded these scores on their individual score sheets. Although they agreed to each award the same number of points, evaluation committee members were free to do otherwise. They were not subjects to any threats or coercion. The members of the evaluation committee made a good faith effort to fairly base their point awards on the evaluation criteria for the categories of location and property prescribed in the Revised ITB. For instance, they awarded Schlitt only nine out of a possible 15 points for property/design because of their reasonable concerns that the space he offered, which was located in a multistory building which would have other tenants in addition to the Department, would not be able to house large units together and in close proximity to interdependent units. The committee members did not have similar concerns about the space offered by 1436. Accordingly, they awarded 1436 the maximum 15 points for this category. The points awarded by the evaluation committee for location and property were added to the points the bidders had previously received for rental and moving costs to obtain a total point award for each bidder. The; results were as follows: 1436- 87.465 total points; Schlitt- 84 total points; Hedin- 83.875 total points; and Taylor- 56.18 total points. 1436's bid was therefore the "lowest and best bid," as defined on page B-1 of he Revised ITB. Consistent with the Revised ITB's pronouncement that "[t]he successful bid will be that determined to be the lowest and best," the evaluation committee recommended to the District IX Administrator that 1436 be awarded Lease No. 590:2241. General Services Manager McAloon, in his capacity as chairman of the evaluation committee, provided the District IX Administrator with a written justification for the committee's recommendation. 10/ The committee's recommendation, as well as its written justification, were adopted by the District IX Administrator, who, by letter dated October 3, 1991, to 1436, gave notice of the Department's intention to award 1436 Lease No. 590:2241. Copies of this letter were sent to all bidders. The Department's preliminary decision to award the lease to 1436 was the product of, not any fraudulent, arbitrary, capricious or unlawful conduct on the Department's part, but rather the honest exercise of the agency's discretion. After receiving their copies of the District IX Administrator's October 3, 1991, letter to 1436, Schlitt and Hedin filed protests and initiated the instant proceedings.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order awarding Lease No. 590:2241 to 1436 over the protests of Schlitt and Hedin. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. STUART M. LERNER Heading 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 February, 1992.
The Issue The issue in this case is whether Respondent properly rejected the bid of Petitioner.
Findings Of Fact Respondent issued on February 28, 1990, an invitation to bid concerning the installation of bleachers at a high school ("ITB"). The ITB was duly advertised. Among the bidders was Interkal, Inc., which is a manufacturer of bleachers. The Interkal bid, which was timely submitted, was executed by its president. The Interkal bid contained a bid bond naming Interkal as principal and a certification from the secretary of Interkal reflecting a corporate resolution authorizing the execution of all bid documents on behalf of Interkal by its corporate officers. The Interkal bid disclosed two subcontractors. The supplier was shown as Interkal, and the erector was shown as Petitioner. Petitioner is the authorized factory representative for Interkal in Florida. As such, Petitioner solicits business and installs and removes bleachers on behalf of Interkal. As compensation, Petitioner receives commissions for such work from Interkal. However, the shareholder and chief executive officer of Petitioner is not a shareholder or officer of Interkal. In addition, Petitioner is not authorized to execute bid documents on behalf of Interkal. Petitioner is no more than a Subcontrator of Interkal. The bidder in this case was Interkal, not Petitioner, even though Petitioner handled much of the paperwork or its manufacturer. When an unrelated bidder was awarded the contract, Petitioner filed a formal written protest in its name. Interkal has not participated as a party in the subject proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Respondent enter a Final Order dismissing the petition of Diversified Design Enterprises. ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1990. COPIES FURNISHED: Ned N. Julian Stenstrom, McIntosh, et al. P.O. Box 1330 Sanford, FL 32772-1330 William Merkel, President Diversified Design Enterprises 321 N.E. Second Avenue Delray Beach, FL 33444 Robert W. Hughes, Superintendent Seminole County School Board 1211 Mellonville Avenue Sanford, FL 32771
Findings Of Fact On or about February 9, 1983, the State of Florida, Department of General Services, Division of Construction and Property Management, Bureau of Property Management ("DGS"), received a certification of need from the Department of Corrections ("DOC") requesting authority for DOC to advertise for competitive bids from private persons interested in providing leased office space needed to house DOC's Bureau of Industries. The Bureau of Industries was then located in leased space with leases which were scheduled to expire June 30, 1983. The Bureau of Industries has been located in DOC's central office area since its creation in 1957. The DOC central office includes the Secretary and Deputy Secretary; the Assistant Secretaries for Operations, Programs, Management, and Budget. All these officials, together with subsidiary bureaus, staff, and other subordinates are located in two adjacent buildings of the Winewood Office Complex on Blair Stone Road in Tallahassee. The prison industry program is under the supervision of the industries administrator who reports directly to the Assistant Secretary for Operations. DOC sought approval from DGS to enter into a lease for privately owned office space because of its perceived need to locate within walking distance of its central office. Programs administered by the Bureau of Industries work closely with other DOC personnel and functions located in the central office in the Winewood Office Complex. Moving any distance from the central office would create problems for the DOC mailing system and would require extra time spent traveling to and from the central office. Personnel in the Bureau of Industries utilize central office files, and confer often with staff located in the central office. Locating outside the general area of the central office would require additional expenses with regard to availability of vehicles, pick up of mail and supplies, and duplication of support services. Accordingly, DGS and DOC determined, and the record in this cause establishes, that it would not be in the state's best interest to require DOC to locate its Bureau of Industries program either in state-owned buildings in the Capitol Center, or in any area beyond walking distance of the central office location. On March 21 and 31, 1983, respectively, DOC published an advertisement in the Tallahassee Democrat inviting all interested persons to submit sealed bids at or before 2:00 p.m. on April 19, 1983, in accordance with the Invitation to Bid and Specifications prepared by DOC for the office space needed to house the Bureau of Industries. A portion of the bid specifications required that office space to be leased be located within a circle drawn on a city map of the City of Tallahassee, Florida, which could roughly be described as the southeastern portion of the city, in the vicinity of the Winewood Office Complex. There were four possible bidders in the area within the circle on the map attached to the bid specifications. Of these four possible bidders, two within the area actually submitted bids--Blairstone Center Partners and Washington Square, Ltd. One of the general provisions of the bid specifications provided as follows: The Department of Corrections reserves the right to reject any and all bids, waive any minor informality or technicality in bids received and to accept that bid deemed to be the lowest and best. . . At or before 11:00 a.m. on April 19, 1983, DOC received sealed bids from Petitioner and Intervenors in response to the aforesaid advertisement, and at 11:00 a.m. on April 19, 1983, DOC opened, tabulated, and published each of the bids. The bid submitted by Petitioner was not responsive to the requirements of the Invitation to Bid and Specifications because the property offered by Petitioner in its response was outside the area indicated on the map annexed to the Invitation to Bid. The bid submitted by Intervenor, Blairstone Center Partners, failed to offer the full services specified in paragraph six of DOC's Bid Submittal Form; failed to offer the exclusive parking specified in the paragraph seven of the Bid Submittal Form; failed to supply the photographs specified in paragraph ten of Respondent's Bid Submittal Form; and failed to supply the information specified in paragraphs one through eight of the Bid Submittal Form. Accordingly, the record in this cause fully establishes that the bids submitted by Petitioner and by Intervenors Blairstone Center Partners, failed to comply with the requirements of the Invitation to Bid and Bid Submittal Form, and that the deficiencies in the bids of Petitioner and Intervenor, Blairstone Center Partners, were so material as to require their rejection. The Invitation to Bid and Bid Submittal Form required that bidders offer for lease 2,683 square feet, plus or minus three percent. The bid submitted by Intervenor, Washington Square, Ltd., offered 2,797 square feet, which is approximately 34 square feet more than allowed in the Invitation to Bid. After this fact was discovered upon opening the bid, DOC personnel contacted a representative of Washington Square, Ltd., and advised the net square footage offered in the bid submitted by Washington Square, Ltd., exceeded the net square footage of space that DOC was authorized to lease and pay for under the Invitation to Bid. Washington Square, Ltd., subsequently agreed to modify its proposal by relieving DOC from any obligation to pay for the extra 34 square feet, and reducing the annual rental for the first year from $26,012.10 to $25,695.90, and for the second year from $27,576.60 to $27,243.18. The record in this cause does not establish any misconduct or collusion between Washington Square, Ltd., and DOC personnel obtaining this modification, nor does the record in this cause establish that any actual or prospective bidders suffered any competitive disadvantage as a result of this modification. The effect of Washington Square, Ltd.'s modification of its proposal rendered that proposal the only bid which was responsive to the Invitation to Bid. On August 18, 1983, Washington Square, Ltd., executed a deed to the property which was the subject matter of its bid to Ben Grace. Washington Square also executed an assignment of the proposed bid award to Grace.
Findings Of Fact On August 31, 1994, the Respondent received and opened bids for its Project No. HSMV 92044000, Repairs, Art Sutton Drivers' License Office, Miami, Florida (the Project). The bid specification documents (the Specifications) for the Project included requirements for a Base Bid and for specific alternate proposals with respect to three defined items of alternate work. Section 01100 of the Specifications stated that "[a]ll Alternates described in this Section are required to be reflected on the Bid Form as submitted by the bidder." Part 2 of that section provided: ALTERNATE NO. 1 A. Provide a deductive price to the base bid for the removal of existing window units and the installation of new units as indicated in plans and specification Section 08520. ALTERNATE NO. 2 A. Provide a deductive price to the base bid for the provision of communications conductors see specification Section 16400. ALTERNATE No. 3 A. Provide a deductive price to the base bid for the installation of all landscape materials as indicated on plans and as per specification Section 02960. Also included in the Specifications as Exhibit 4 was a Proposal Form. The Specifications required each bidder to submit this form in triplicate on the bidder's letterhead. With respect to alternates, the Proposal Form required: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add or Deduct $ Alternate No. 3 Add or Deduct $ The Respondent's architect received four bids on August 31, 1994. As recorded on the Bid Tabulation and Notice of Award Recommendation, three bidders provided specific prices for the three alternates, as well as a Base Bid. The Bid Tabulation shows that two bidders provided specific prices for the three alternates and included the alternate prices in their Base Bids. The Petitioner provided specific prices for the three alternates, but excluded the alternate prices from its Base Bid. The fourth bidder provided a specific price for only one alternate and excluded that alternate price from its Base Bid. (The fourth bidder was disqualified as non-responsive for failing to submit prices on all three alternates.) In pertinent part, the Petitioner's proposal read: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications: Alternate No. 1 Add or Deduct . . . $4,400.00 Alternate No. 2 Add or Deduct . . . $1,158.00 Alternate No. 3 Add or Deduct . . . $2,084.00 These Alternates were in addition to the Petitioner's Base bid of $204,322.00. The proposal form submitted by the Petitioner comports with Exhibit 4 to the Specifications, which was the mandatory Proposal Form. On August 31, 1994, William Phillip Austin, Peitioner's President, wrote the architect: Per our telephone conversation this date regard- ing the confusion relating to the Add/Deduct for Alternates 1, 2 and 3 for the above project, please be advised that our base bid did not include the work described in the Alternates. As stated if you want work described in Alternates 1, 2 and 3, you must add the cost to our base bid. The base bid including Alternates 1, 2 and 3 would, therefore, be $211,964.00. If we can provide additional information, please do not hesitate to contact us. The Respondent's architect completed and submitted the bid Tabulation and Notice of Award Recommendation to the Respondent in early September. The document clearly discloses the amounts of each bidder's Base Bid and Alternate proposals. Using plus (+) and minus (-) signs, the Bid Tabulation further shows each bidder's method of calculation. The record is devoid of evidence that the Respondent had any problem in evaluating the bids and identifying the lowest bidder. The Petitioner was the lowest bidder on any combination of base bid plus or minus any or all alternates. Subsequently the Petitioner received a NOTICE OF AWARD RECOMMENDATION dated October 4, 1994. The Notice informed the Petitioner that the Respondent "has recommended that the contract be awarded to your firm in the total amount of $211,964.00, accepting the Base Bid and Alternates #1, #2 & #3. The Administrator of Contracts Design and Permitting, Division of Building Construction, Department of Management Services, State of Florida will consider this recommendation." Larry R. Coleman, Construction Projects Administrator, signed the letter. The Petitioner acknowledged receipt. A representative of the second lowest bidder, Kalex Construction, then contacted the Respondent, complaining of the Award Recommendation. The grounds for the Kalex complaint are not in the record. However, on October 14, 1994, H. R. Hough, the Respondent's Contracts Administrator, sent the Petitioner a letter "to notify you of the State's decision to reject all bids on the above referenced project due to ambiguities in the specifications." Mr. Hough's reasons for the rejection are "other than those stated by the protestor," Kalex. The Respondent's Rule 60D-5.007, Florida Administrative Code, states: Determination of Successful Bidder. All projects except where competitive bidding is waived under the provisions of Rule 60D-5.008 will be publicly bid in accordance with the provisions in the project specifications bidding documents. Award of contract will be made to the responsive bidder, determined to be qualified in accordance with the provisions herein and meeting the requirements of the bidding documents, that submits the lowest valid bid for the work. The lowest bid will be determined as follows: The lowest bid will be the bid from the responsive bidder that has submitted the lowest price for the base bid or the base bid plus the additive alternates or less the deductive alternates chosen by the Agency to be included in or excluded from the proposed contract, taken in numerical order listed in the bid documents. The order of the alternates may be selected by the Agency in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. Under the above-quoted rule, the Respondent compares bids beginning with the lowest "base bid." The Respondent is of the view that for this comparison to be fair and equal, all bidders must include the same scope of work in the "base bid." The Respondent does not interpret the above-quoted rule to allow deductive alternates from some bidders and additive alternates from others. (For reasons discussed in the Conclusions of Law which follow, the Respondent's interpretation and application of the above-quoted rule is erroneous.) The Specifications contain some ambiguous and inconsistent language regarding whether alternates should be treated as additive or deductive. The ambiguous and inconsistent language did not provide any bidder with an advantage or a disadvantage, nor did it otherwise affect the fairness of the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services issue a Final Order in this case awarding a contract for the subject project to the Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner Paragraph 1: This is primarily a statement of position and is addressed in the Preliminary Statement. Paragraphs 2 through 10: Accepted in substance with a few unnecessary details omitted. Proposed findings submitted by Respondent Paragraphs 1 through 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as constituting a conclusion which is not warranted by the evidence. Third sentence is accepted as an accurate statement of how Respondent has been interpreting the subject rule, but is not accepted as constituting a correct interpretation of the rule. Paragraph 8: Rejected as misleading and confusing because the "scope of work" to be performed under the contract can only be determined after the Respondent decides which alternates to include and which to exclude. Paragraph 9: The first two sentences are accepted in substance. The last sentence is rejected as constituting a conclusion which is not warranted by the evidence. COPIES FURNISHED: Timothy J. Armstrong, Esquire Armstrong & Mejer Suite 1111 Douglas Centre 2600 Douglas Road Coral Gables, Florida 33134 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of General Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
