Findings Of Fact Petitioner obtained bid specifications and submitted the lowest bid on Department of Transportation project No. 12075-3408 to construct rest station facilities on the I-75 in Lee County. The specifications established a goal of 15 percent of the subcontracts be let to Disadvantaged Business Enterprises (Exhibit 1). If the successful bidder failed to meet this goal, he must show a good faith effort to meet the goal was made else his bid would be deemed non-responsive and rejected. Rules 14-78.01 through 14-78.09, Florida Administrative Code, which became effective in June, 1984, were the controlling regulations at the time the bids for the project were solicited. These rules eliminate the former classification of Minority Business Enterprises comprised of minorities and women and replaces it with a Disadvantaged Business Enterprise (DBE) and a Women's Business Enterprise (WBE) classifications. In the instant contract a goal was established only for DBE. Actions to be taken by the bidder to meet these goals were contained in the bid package, as were the criteria by which the bidder's good faith efforts to meets these goals would be evaluated by DOT. The bid specifications required the contractor, if he failed to meet the DBE goal established, to submit all documentation to support his claim that a good faith effort had been made. With his bid Petitioner submitted only a list of 28 subcontractors from whom it had solicited bids, of which 6 were WBEs. That list showed the date request for bid was sent by certified mail by Petitioner, the date return receipt was received, whether a bid was received, and date back-up phone call was made. That document showed three listed companies submitted bids. DBE/WBE utilization form No. 1 (Exhibit 1) submitted by Petitioner showed no bids were received. Petitioner explained this discrepancy at the hearing, that he had rejected the three bids received because they were more than one percent higher than the bid submitted by another subcontractor. Documentation of this fact did not accompany Petitioner's bid. Upon receipt of Petitioner's bid showing no DBE subcontractor, the bid was submitted to the Good Faith Effort Committee at DOT to evaluate the information contained in the bid to determine if Petitioner had submitted documentation to support his good faith efforts to meet the DBE goal. That committee found Petitioner had not provided adequate documentation of its efforts and recommended the bid be declared non-responsive (Exhibit 8). Prior to Rules 14-78.01 through 14-78.09, Florida Administrative Code, becoming effective in June 1984, the rules allowed the contractor an additional ten days after bid opening to submit evidence that good faith efforts had been made to meet DBE goals. After June 1984 all documentation of good faith efforts are required to be submitted with the bid where DBE goals are not met. In the event the DBE goal is not met by the contractor in his bid submission, the bid specifications (Exhibit 1) require the contractor to submit sufficient information to demonstrate he made good faith efforts to meet the goal. Those bid specifications further list nine items the Department will consider in evaluating the contractor's good faith efforts. These include submitting written notice by certified mail to all certified DBEs which perform the type work which the contractor intends to subcontract; whether the contractor selected economically feasible portions of the work to be done by DBEs; whether the contractor provided assistance to DBEs in reviewing plans and specifications; whether DBE goals were met by other bidders; whether contractor submits all quotations received from DBEs and, for those not accepted, an explanation of why not; whether contractor assisted DBEs in obtaining required bonding, lines of credit or insurance; whether contractor elected to subcontract types of work meeting capabilities of DBEs; whether contractor's efforts were merely proforma; and whether contractor has, on other contracts within the past six months, utilized DBEs. A list of certified DBEs is contained in Exhibit 7, which was available to Petitioner. Therein are listed many DBEs other than those on the list submitted by Petitioner with his bid. At the hearing return receipts for certified mail soliciting bids from DBEs by Petitioner were admitted into evidence, over objection, as Exhibit 3. Since the rules require all documentation of good faith efforts be submitted with the bid, that exhibit is not relevant. However, that exhibit clearly shows all certified DBEs were not solicited by Petitioner. Of those nine items Petitioner was notified would be considered by the Department in evaluating his good faith efforts to obtain the DBE goal, the evidence submitted with Petitioner's bid showed compliance with none. This gas the first bid submitted by Petitioner to Respondent. Other bidders met the DBE goals and the bid was awarded to the second low bidder.
Findings Of Fact On October 17, 1994 Petitioner, in order to be recertified, submitted its Application for Certification as a DBE to the Department. Following an initial review of Petitioner's application, the Department determined that the application as submitted was incomplete. On October 27, 1994, the Department sent Petitioner a certified letter requesting additional information including: A copy of Petitioner's financial state- ment for the year ending December 31, 1993, showing its gross receipts. Answers to questions 24, 25 and 26, of Petitioner's Application. Copies of Petitioner's State Quarterly Unemployment Tax Report (LES Form UCT-6) for the last three quarters. A copy of Petitioner's annual report submitted to the Department of State, Divi- sion of Corporations, for 1994. A completed code sheet indicating the Petitioner's area of specialty. Documentation indicating Petitioner's ethnic status. The Department's request for additional information was received by Petitioner. The Department's request for additional information notified Petitioner that it must submit the requested information within thirty days if it was to be considered by the Department in its determination of recertification. All of the additional information requested by the Department was critical in determining Petitioner's inclusion in the DBE Program. Specifically it pertained to whether Petitioner continued to be qualified as a Small Business Concern. The Petitioner failed to respond to the Department's request for additional information. The Petitioner did not request an extension of time for filing a response to the Department's request for additional information. On January 10, 1995, having reviewed no response to its request for additional information, the Department processed Petitioner's application as it was originally provided. The Department notified Petitioner of its intent to deny its Application based on Petitioner's failure to demonstrate that it is a Small Business Concern. On January 30, 1995, Petitioner requested a formal hearing pursuant to Section 120.57(1), Florida Statutes. However, as indicated above, Petitioner failed to appear for the properly noticed hearing and presented no evidence that it qualified as a Small Business Concern. Petitioner has constructively abandoned its request for recertification as a DBE.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying Petitioner's Application for Certification as a DBE. DONE and ENTERED this 4th day of June, 1996, in Tallahassee, 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 4th day of June, 1996. COPIES FURNISHED: Murray M. Wadsworth, Jr. Assistant General Counsel Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Surack D. M. Singh, President S. D. Mass Singh Contracting, Inc. 5425 South Semoran Boulevard, Suite 1-A Orlando, Florida 32822 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Thornton J. Williams, General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
The Issue The ultimate issue for determination at formal hearing was whether the intended decision by the Florida Department of Transportation to award the bid on State Project No. 79002-3429, for construction of a highway project, SRI- 95/11th Interchange, in Volusia County, Florida, to PCL Civil Constructors, Inc., departs from the essential requirements of law.
Findings Of Fact The Florida Department of Transportation (Respondent) issued an Invitation To Bid (ITB) on State Project No. 79002-3429 (Project), construction of a highway project--SRI-95/11th Interchange in Volusia County, Florida. The project is 100 percent federally funded. On July 28, 1993, the bid letting was held. The apparent lowest bidder was Martin K. Eby Construction Co., Inc. (Petitioner), with a bid of $10,480,685.71, and the apparent second lowest bidder was PCL Civil Constructors, Inc. (Intervenor), with a bid of $10,794,968.22 1/ Included as a requirement of the bid by Respondent was a Disadvantaged Business Enterprise (DBE) goal of 12 percent. On its face, Petitioner's bid met and exceeded the DBE goal with an intended DBE utilization of 12.2 percent. However, one of Petitioner's DBEs, Gearing Engineering (Gearing), was not certified by Respondent as a DBE. Without Gearing, Petitioner fell short of the DBE goal. The bid specifications in the ITB provided in a section entitled "Special Provisions for Disadvantaged Business Enterprises" that only DBEs certified by Respondent at the time that the bid is submitted will be counted toward the DBE goal. At the time Petitioner submitted its bid, Gearing had for the first time filed an application with Respondent to be certified as a DBE. At no time prior to this had Gearing been certified as a DBE by Respondent even though it had received certification as a minority business from local government. By the bid letting, Gearing had not been certified as a DBE by Respondent. On July 29, 1993, representatives of Respondent contacted Petitioner to inform it of the DBE problem and to inquire about its good faith efforts to meet the DBE goal. Petitioner responded the same day by written communication indicating, among other things, that it had contacted Gearing about its DBE status and that Gearing informed Petitioner that Respondent's DBE office had informed Gearing that it was appropriate for Gearing to submit a proposal and that certification was required, not at the time of submitting the proposal, but at the time work began. In the communication, Petitioner offered to substitute two certified DBEs for Gearing if Respondent determined Gearing could not be used. Also, Petitioner included with its response a letter from Gearing outlining the communication it (Gearing) had had with Respondent. Petitioner is no stranger to Respondent's bid process as it has prequalified to contract with Respondent and has been doing business within the State of Florida full-time for approximately five and one-half years. 2/ At no time prior to submitting its bid, did Petitioner contact Respondent's DBE office to determine Gearing's DBE status. Petitioner depended wholly upon the representation made by Gearing. Petitioner's division manager, who approved Petitioner's bid proposal for submission, directed his subordinates to only use DBEs certified by Respondent and appearing in Respondent's DBE Directory (Directory) when Petitioner was attempting to reach a DBE goal set by Respondent in a bid. The subordinates knew that Gearing was not in the Directory but failed to inform the division manager of Geary's non-certificate, deciding instead to depend on the representation made by Gearing. Had the division manager known of Geary's non- certification, he would have chosen another DBE from the list of DBEs on his selection list that were certified. Once a business becomes certified by Respondent as a DBE, it is added to a list of certified DBEs maintained by Respondent. A printed list of Respondent certified DBEs--DBE Directory--is provided to bidders, prior to the submitting of bids, so that bidders will know what businesses are certified and when their current certification expires. If a business appears in the DBE Directory for a bid, even though its certification may be listed as expiring before the bid letting date, the business can be included as a DBE on the bid. This procedure is used by Respondent because a renewal application may have been timely filed by a certified DBE, but Respondent may not have completed its renewal process at the time of printing of the Directory or that Respondent may not have timely furnished a certified DBE with a renewal notice or may not have received notification by return receipt that the DBE had received the renewal notice. Therefore, the DBE is retained on the list during Respondent's review process. 3/ Even if a DBE is found by Respondent to no longer meet the DBE requirements, if that DBE was on the DBE Directory at the time of a bid submission and used by a bidder for a project, the bidder would not be penalized. Furthermore, a business not appearing on the DBE Directory may become certified after the list is printed, but before bid submission deadline, and, therefore, be eligible to submit a proposal to a bidder for the particular project named. The DBE Directory also contemplates this situation by directing bidders on the first page of the Directory to contact Respondent directly if the status of a business, as a certified DBE, is in question, whether the business is listed or not. Moreover, Respondent informs bidders in the front of the Directory, printed in noticeable type, i.e., all capitalizations and boldtype, that only DBEs certified by Respondent will be counted towards meeting Respondent's DBE goals. At no time did Respondent's DBE office inform Gearing that it could submit a proposal on the Project without first receiving certification from Respondent as a DBE. The testimony of Respondent's operations and management consultant in its DBE office, who is the individual with whom Gearing communicated, is credible that anyone inquiring about a business submitting a proposal as a DBE to a bidder must first be certified by Respondent as a DBE in order to submit proposals on Respondent's contracts. Further, Respondent's continuous practice and procedure is to require DBE certification before a business can submit a qualified proposal as a DBE. Moreover, it is readily apparent that there was a miscommunication between the principals (husband and wife) of Gearing, causing a misinterpretation of what Gearing could or could not do before being certified. The subordinate principal (husband) who directly communicated telephonically with the DBE office denied that the DBE office informed him that Gearing could submit a proposal as a DBE before it was certified; whereas, the majority principal (wife) believed that he (husband) had informed her that Gearing could submit a proposal as a DBE during the pendency of its DBE application and she so informed Petitioner. On August 4, 1993, Respondent's Good Faith Efforts Review Committee reviewed the bids, including Petitioner's documents submitted on July 29, 1993. Its recommendation was (a) to declare Petitioner's bid nonresponsive due to Petitioner not meeting the DBE goal and not being able to document a good faith effort in attempting to meet the goal and (b) to award the bid to Intervenor. When the DBE goal is not met, the bid specifications in the section entitled "Special Provisions for Disadvantaged Business Enterprises" provide that awarding the contract is conditioned upon the bidder demonstrating that good faith efforts were made to meet the goal, with the documentation being submitted with the bid. Furthermore, the said section enumerates what information will be considered in evaluating good faith efforts and provides that failure to show good faith efforts will result in disqualification of the bidder. The bid documents contain a DBE Utilization Summary form which displays a notice providing that, if the DBE goal is not met, documentation must be included with the bid to demonstrate good faith efforts to meet the DBE goal, and if they are not included, the bid may be considered nonresponsive. Although good faith effort documents are to be submitted with the bids, generally, they are not because a bidder believes the goal has been met, as evidenced by its DBE percentage. Consequently, no bidder has been able to document good faith efforts when a good faith effort question arises after bid submission. Petitioner did not submit good faith effort documents with its bid because it believed that it had met, and even exceeded, Respondent's DBE goal. On August 11, 1993, Respondent's Technical Review Committee reviewed the bids and the accompanying recommendation. It concurred with the recommendation of the Good Faith Efforts Review Committee. On August 17, 1993, Respondent's Contract Award Committee reviewed the bids and the recommendations. It concurred with the recommendation of the Technical Review Committee, i.e., declaring Petitioner's bid nonresponsive for failure to meet the DBE goal and awarding the contract to Intervenor. On September 3, 1993, Respondent posted its notice of intent to award the contract for the Project to Intervenor. Petitioner timely filed a protest to the intended action. Respondent has filed a proposed rule change which would change the way it handles bidders attempting to meet DBE requirements.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Transportation enter its final order awarding State Project No. 79002-3429, for construction of a highway project, SRI-95/11th Interchange, in Volusia County, Florida, to PCL Civil Constructors, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 28th day of December 1993. ERROL H. POWELL 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 28th day of December 1993.
The Issue The issue in this case is whether the Respondent, the Department of Transportation (DOT), should award State Project No. 97160-3320 to Intervenor, Smith & Company (Smith), notwithstanding the bid protest filed by the Petitioner, Hubbard Construction Company (Hubbard), alleging that its bid was responsive and lower than Smith's bid.
Findings Of Fact State Project No. 97160-3320 (the project) is for work on the Polk County Parkway in Polk County. This project is funded entirely with state funds. It had a Disadvantaged Business Enterprise (DBE) goal of twelve percent, consisting of four percent black, and eight percent non-minority female. The Florida Department of Transportation (DOT) manages two separate DBE programs--a federal DBE program for federally funded projects, and a state DBE program for state-funded projects. The state program is based upon a disparity study conducted by MGT of America for the DOT in 1993. This study was conducted as a result of the case of City of Richmond v. J. A. Croson Co., 109 S.Ct. 706 (1989), which determined that a preferential contract system which was not based on actual discrimination was unconstitutional. The MGT disparity study found that there was evidence of disparate treatment by DOT in Florida, and in a very small number of counties outside of Florida. As a result, the state DBE program only certifies DBEs with home offices in Florida or the other counties identified in the disparity study. The DOT publishes a DBE directory for each bidding cycle. The DBE Directory includes DBEs certified or in the process of renewing expired certifications at the time the directory is published. The DBE directory includes DBEs for both the federal and state DBE programs but clearly indicates which DBEs are approved only for projects with at least some federal funding. Under DOT's policies and practices, a bidder can use any approved DBE listed in the directory even if the DBE's certification expires between publication and the bid letting. The deadline for submission of bids for the project was October 29, 1997. Hubbard's initial bid included a DBE Utilization Summary form indicating that it would achieve the DBE goal established for the project. The DBE Utilization Summary form gave Hubbard notice that another DBE Utilization Summary form listing the DBEs Hubbard would use, along with the dollar amounts of the subcontracts for each DBE listed, together with completed DBE Utilization forms for each DBE, had to be received by the DOT no later than 5 p.m. on the third business day after the bid letting. The DBE Utilization Summary form also gave notice that, otherwise: "Bids may be declared non-responsive . . . ." On November 3, 1997, Hubbard submitted a completed DBE Utilization Summary form, together with completed DBE Utilization forms. These forms stated that Hubbard stated would be using Suncoast Fabrics for erosion control work to meet $160,000 worth of the non- minority female goal for the project. Without the subcontract with Suncoast Fabrics, Hubbard would fall $160,000 short of meeting the non-minority female goal. In fact, Suncoast is not certified as a DBE for projects funded entirely by the State (i.e., without any federal funding). As a result, Hubbard's bid was $160,000 short of meeting the non-minority female goal for the project. After November 3, 1997, Hubbard discovered its error in relying on Suncoast Fabrics as a DBE for the project and on November 5, 1997, submitted another DBE Utilization Summary form and DBE Utilization form stating that, instead of paying Suncoast $160,000 for erosion control work, it would pay Margie Woods Trucking an additional $160,000. Hubbard's bid was reviewed by the DOT's Good Faith Efforts Committee of the DOT's Minority Programs Office for compliance with the project's DBE goals and was found to be non- responsive because Hubbard's DBE utilization forms relied on Suncoast Fabrics, which was not an approved DBE for state-funded projects and because, without Suncoast Fabric's participation, Hubbard's bid did not meet the project's DBE goals. Hubbard did not submit a package to demonstrate good faith efforts to meet the DBE goals (because Hubbard thought its bid met the DBE goals). The Good Faith Efforts Committee found that Hubbard's bid did not demonstrate good faith efforts to meet the DBE goals, a finding which Hubbard does not dispute. The Good Faith Efforts Committee did not consider Hubbard's November 5, 1997, submission attempting to substitute Suncoast Fabric's participation with an increase in Margie Woods Trucking's participation because it was submitted after the deadline for submitting DBE utilization forms. The findings and recommendations of the Good Faith Efforts Committee were submitted to the DOT's Technical Review Committee. The Technical Review Committee concurred with the Good Faith Efforts Committee that the apparent low bid and second low bid were non-responsive and that the project should be awarded to Smith. The findings and recommendations of the Technical Review Committee were submitted to the DOT's Contract Awards Committee. The Contract Awards Committee concurred with the Good Faith Efforts Committee and the Technical Review Committee that the apparent low bid and the apparent second low bid were nonresponsive, and awarded the contract to Smith. None of the DOT committees reviewing Hubbard's bid in the process of deciding to award the contract to Smith gave specific consideration to the question whether Hubbard's failure to timely submit DBE utiJization forms meeting the project's DBE goals should be waived as being a minor irregularity. The Department's policy is to strictly enforce the three-day period for submission of completed DBE utilization forms and to consider failure to submit DBE utilization forms meeting a project's DBE goals to be a material error mandating rejection of a bid as non- responsive. From January 1995 through December 1997, the Department rejected 18 out of 254 problem bids because the bids failed to meet DBE goals. The DOT rejected the bid of Edward M. Chadbourne and Associates in a prior letting on facts very similar to those in this case. Chadbourne proposed Suncoast Sod Farms, Inc., a DBE firm based in Alabama, for a project wholly funded by the state. As reflected in the DBE Directory for that letting, Suncoast Sod was not eligible for non-federally funded projects. In two prior state-funded projects for the Polk County Parkway, Suncoast Fabrics had been used by a contractor in its DBE submissions. The Department allowed the use of Suncoast Fabrics to count towards the contractor's DBE percentage because the DBE Directory for those projects erroneously failed to indicate that Suncoast Fabrics was certified as a DBE only for federally-funded projects. Similarly, the DOT awarded a contract to Murphree Bridge Corporation in a prior letting although Murphree did not meet the three percent DBE goal for that project. In that case, DOT advertisements prior to the letting erroneously stated that the goal was two percent, and Murphree met the advertised goal but not the actual 3 percent goal. In the two prior instances involving Suncoast Fabrics and the prior instance involving Murphree Bridge, the DOT declined to penalize the contractors for DOT's errors. However, there was no change in DOT's policy regarding the three-day period for submission of completed DBE utilization forms that meet a project's DBE goals. In addition, in those instances, DOT was unable to count the DBE utilization for purposes of its affirmative action program, for which it must report to the legislature. Suncoast Fabrics apparently did not realize it was not approved for state-funded contracts, and it misled Hubbard when Hubbard inquired as to Suncoast's DBE eligibility. But regardless whether Suncoast had an excuse for its erroneous belief, it was Hubbard's responsibility to use the DBE Directory to verify whether a DBE is authorized for use on a particular project, and the applicable DBE Directory clearly noted that Suncoast Fabrics was not approved for this project. In fact, Suncoast Fabrics was appropriately identified as not qualifying for state-funded projects in each DBE Directory since March 1997. DOT made no statement, representation or indication of any kind to Hubbard that would have misled Hubbard to think that Suncoast Fabrics was qualified as a DBE for State Project No. 97160- 3320. In this regard, Hubbard's situation is significantly different from the two prior instances involving Suncoast Fabrics, the prior instance involving Murphree Bridge. The Department did not intend for bidders to use the three- day period for submission of completed DBE Utilization forms to shop DBEs' prices, attempt to drive DBEs' prices down, or continue to solicit quotes from DBEs. The Department has no statute, rule, procedure, or policy permitting substitution of DBEs more than three days after a bid letting and before work begins. The Department does not permit substituting DBEs after an award is posted unless the DBE fails to perform, and then only with the express prior approval of the Department. Allowing a bidder the ability to shop DBEs' prices, attempt to drive DBEs' prices down, or continue to solicit quotes from DBEs after the three-day period could give the bidder a competitive advantage over bidders who do not. The amount of the bid submitted by a contractor can be affected by the bids it received from DBEs. The bid submitted may be based upon quotes received from particular DBEs. If one contractor were allowed to use an unqualified DBE whose price was low, and the other contractors did not rely on such quote, knowing that the DBE was unqualified, the first contractor could enjoy a competitive advantage. Although Hubbard asserted that it did not decide which DBEs to use until after its bid was submitted, the possibility of an advantage exists. Hubbard also contends that its failure to submit DBE Utilization forms meeting the DBE goal for the project is similar to Smith's alleged error in submitting a single DBE Utilization Summary form for both of the split goals (black and non-minority female), contrary to the instructions for the form. Suffice it to say that submitting the information on a single form is different from Hubbard's error. It is clear from Smith's submission that Smith's bid met the project's DBE goals; it was clear from Hubbard's bid that Hubbard's did not. DOT's decision to reject Hubbard's bid for failure to comply with the DBE requirements was not contrary to statute, rule, policy, practice or the bid specifications. Hubbard did not show that the Department's action was clearly erroneous, contrary to competition, arbitrary, or capricious.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, RECOMMENDED that the Department of Transportation enter a final order awarding State Project No. 97160-3320 to Smith & Company. RECOMMENDED this 1st day of May, 1998, in Tallahassee, Leon County, Florida. J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 1998. COPIES FURNISHED: F. Alan Cummings, Esquire Cummings & Thomas, P.A. Post Office Box 1116 Ft. Lauderdale, Florida 33302-1116 Paul Sexton, Esquire Chief, Administrative Law Section Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 Donna H. Stinson, Esquire Broad & Cassel 215 South Monroe Street Suite 400 Tallahassee, Florida 32301 Thomas F. Barry, Secretary Attention: Diedre Grubbs Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact The Florida Department of Transportation (DOT) is required by state and federal law to ensure that a certain percentage of funds available for construction, design and consulting service contracts be provided as opportunity for utilization by small business concerns owned and controlled by socially and economically disadvantaged individuals (DBEs). DBE contract goals are established by the DOT for each construction contract. Every bidder must submit a form to the DOT which either documents compliance with the DBE contract goal or, if compliance is not met, must provide sufficient information to demonstrate that good faith efforts were made by the bidder to meet the goal. Prior to June of 1984, it was the practice of the DOT to allow contractors ten days after the bid letting to correct their DBE forms or to submit their good faith effort documentation. After holding numerous workshops throughout the State, the DOT amended its rules relating to participation by disadvantaged business entities. As pertinent to this proceeding, the amendment requires that all DBE documentation be submitted at the time of the submission of the bid proposal. Bidders are notified that: ".... Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected." Rule 14-78.03(2)(b)4, Florida Administrative Code. This rule became effective on May 23, 1984. All prequalified bidders were mailed a copy of the rule amendments prior to their effective date. Petitioner received a copy of the new rule prior to May 23, 1984. By notice dated June 28, 1984, contractors were advised that sealed bids would be received on July 25, 1984, on various road projects. The bid documents advised that the DBE goal for Project Number 50020-3516 was 10 percent. Form 932-10 entitled "Disadvantaged/Women Business Enterprise Utilization Affirmative Action Certification" advised bidders that Form 1 is required to accompany the bid documents. The specifications for Job Number 50020-3516 contain extensive provisions with regard to compliance with the DBE contract goals. Among these provisions is the following language contained in Section 2-5.3.2: "... Award of the Contract shall be conditioned upon submission of the DBE and WBE participa- tion information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals." (Emphasis added.) The specifications lists as grounds for disqualification of bidders "failure to satisfy the requirements of 2-5.3." On July 25, 1984, Petitioner submitted a bid in the amount of 8171,370.51 for Job Number 50020-3516. Attached to the bid was Form 932-10 and Form No. 1, the latter indicating that petitioner's proposed utilization of DBEs was 7.6 percent of the total contract amount. While noting that two other DBEs were contacted without success, petitioner provided no further documentation regarding its good faith efforts to comply with the 10 percent contract goal. Three contractors submitted bids on this project. The next lowest bidder was Baxter Asphalt & Concrete, Inc., which submitted a bid of $191,540.92 and demonstrated compliance with the DBE contract goal. The third bidder, Capital Asphalt, Inc., submitted a bid of $204,651.35, fell below the 10 percent DBE contract goal and, like the petitioner, failed to demonstrate that it made a good faith effort to comply. The DOT engineer's estimate on this project was approximately $147,000.00. By notice dated August 17, 1984, the DOT advised that all bids received on Job Number 50020-3516 had been rejected. Two reasons were given for the rejection: that "the low bidder failed to meet DBE Contract Requirements" and that "awarding to the second low bidder is not in the best interest of the State." During June, July, and August following the adoption of the new rules regarding DBE requirements, it was the general policy of the DOT Awards Committee to reject all bids on a project if the low bidder failed to meet DBE requirements and there was more than a one percent difference between the first and second low bids. Beginning in September or October, 1984, this policy was changed to one of awarding to the second or third most responsible bidder as long as the bid was within the State estimate. Consequently, the DOT has now determined to award this challenged bid to Baxter Asphalt & Concrete, Inc. In another bid letting occurring on May 30, 1984, on Project Number 55160-3517, petitioner failed to submit with its bid proposal the forms for demonstrating compliance with the DBE requirements. By letter dated May 30, 1984, and received on June 4, 1984, petitioner was advised to forward, without delay, the necessary Form No. 1. The Form returned by petitioner showed 8 percent DBE participation. Since the contract goal was 10 percent, petitioner was afforded another opportunity to comply, did comply and receive approval on June 11, 1984, and was later advised that yet another DBE form needed to be completed. On July 17, 1984, petitioner received a letter from the DOT advising that the contract had been awarded to petitioner as of July 16, 1984. For all bid lettings occurring since June or thereafter, the DOT has rejected bids from contractors who have not submitted evidence with their bid proposal of either DBE compliance or a good faith effort to comply. New forms have been utilized to require such submittals with the bid proposal and removing the prior 10 day grace period language. Also, on August 22, 1984, the DOT sent a "Notice to All Contractors" that: "... all submittals for evaluating Good Faith Efforts in meeting DBE/WBE goals must be submitted with the bid proposal in order to be considered for award of the contract. Failure to submit the Good Faith Effort documentation with the bid may result in rejection of the bid."
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that a Final Order be entered rejecting as non-responsive the bid submitted by petitioner on Job Number 50020-3516, and awarding the contract to Baxter's Asphalt & Concrete, Inc. Respectfully submitted and entered this 27th day of February, 1985, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Michael P. Bist, Esquire 300 Lewis State Bank Building Tallahassee, Florida 32301 Larry D. Scott, Esquire Haydon Burns Building, MS-58 Tallahassee, Florida 32301-8064 Frank A. Baker, Esquire 204 Market Street Marianna, Florida 32446 Paul Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
Findings Of Fact Based on the stipulations of the parties, on the exhibits received in evidence, on the testimony of the witnesses at the hearing, and on the deposition testimony received in evidence, I make the following findings of fact: On October 30, 1985, the Florida Department of Transportation ("FDOT") received and opened sealed bids on State Project Number 72270-3431, in Duval County, Florida. Five bids were submitted for this project. The lowest bid, in the amount of $6,235,948.35, was submitted by Hubbard Construction Company ("Hubbard"). The amounts of the other bids were as follows: the second low bidder, $6,490,796.91; the third low bidder, $6,519,447.90; the fourth low bidder, $7,470,941.74; and the fifth low bidder, $7,477,038.49. All bids submitted were more than seven per cent over FDOT's estimate of the project price. The two lowest bids also appeared to be unbalanced and, as set forth in more detail below, the Hubbard bid was in fact unbalanced in several particulars. It is FDOT policy to give special review to bids that are more than seven per cent above the estimated price of the project. All bidders were made aware of this policy by the following language on the first page of the Notice To Contractors: Bidders are hereby notified that all bids on any of the following projects are likely to be rejected if the lowest responsive bid received exceeds the engineer's estimate by more than seven per cent (7 percent). In the event any of the bids are rejected for this reason, the project may be deferred for readvertising for bids until such time that a more competitive situation exists. Upon review of the bids submitted on the subject project, FDOT decided to reject all bids. By notices dated December 6, 1985, all bidders were advised that all bids were rejected. The stated reasons for the rejection of all bids were as follows: All bids were too high; the apparent first and second low bidder's bids were unbalanced and the apparent first low bidder failed to meet the WBE Requirements. Hubbard submitted its formal written protest to the FDOT regarding the proposed rejection of its bid on the subject project on January 3, 1986. This protest was made pursuant to Section 120.53, Florida Statutes (1985), the instructions to bidders and bid information provided by the Department, and rules of the Department, including Rules 14-25.04 and 14-25.05, Florida Administrative Code. Unbalancing occurs when a contractor puts a higher price on a particular item of work in the project in anticipation of using more of that item than the FDOT has estimated will be required. Unbalancing can also occur when a lower than estimated price is placed upon a particular item. When a bid appears to be unbalanced, the bid is submitted to the Technical Awards and Contract Awards committees for review. In this case, the FDOT's preliminary estimate personnel discovered six items that were unbalanced within Hubbard's bid. The first item of concern was an asphalt base item for which the FDOT's estimate was $4.00 per square yard and the Hubbard bid was $19.29 per square yard. The second item was clearing and grubbing for which FD0T's estimate was $50,000 and Hubbard's bid was $200,000. The third item was removal of existing structures for which FDOT's estimate was $190,762 and Hubbard's bid was $38,000. The fourth item was installing new conductors for which FDOT's estimate was $251,000 and Hubbard's bid was $141,000. The fifth item was removal of existing pavement for which FDOT's estimate was $78,000 and Hubbard's bid was $153,000. Finally, the sixth item was surface asphalt items for which FDOT's estimate was $98,000 and Hubbard's bid was $169,000. The FDOT has a policy that any bid that is seven per cent or more over the estimate will go before the Awards Committee for review. Further, the FDOT has a policy that whenever the bids are more than seven per cent higher than the estimate, the FDOT's Bureau of Estimates will then review their estimate and the apparent low bidder's bid to determine whether the original estimate was correct. The FDOT maintains a Women's Business Enterprises ("WBE") program. The FDOT's program requires that successful bidders provide for participation of women owned and controlled business in FDOT contracts. The program is implemented by the setting of so-called "goals" for certain projects. The goal is stated as a percentage of the total dollar bid for each project. Thus, the WBE goal for a project requires that the bidder utilize FDOT certified WBE's in constructing the project to the extent that the FDOT's goal is a percentage of the total bid. The FDOT has implemented rules to effectuate its WBE program. Rule 14- 78, Florida Administrative Code (amended effective May 23, 1984). In submitting a bid, the rules offer the bidder the option of meeting the WBE goals or submitting proof of a good faith effort to meet the goal and if a good faith effort is sufficient, the FDOT may waive the goal. The FDOT's bid package and specifications, as furnished to contractors, in no place referred to the Department's rule providing that only 20 percent of the amount of subcontracts with WBE suppliers shall count toward the goals on Federal aid projects. The specifications clearly state that WBE suppliers may be counted toward the goals. The specifications as furnished by the Department also imply that the 20 percent rule applies only to non-federal aid jobs. The project in question in this case is a Federal aid project. There is a conflict between the rule and the language of the specifications which creates an ambiguity in the specifications, as well as a trap for the unwary bidder who overlooks the requirements of the rule. The FDOT is in the process of amending the specifications to make them conform to the rule. The Special Provisions contained within the bid specifications established certain minority participation goals for this project--ten per cent for Disadvantaged Business Enterprises (DBE) and three per cent for Women Business Enterprises (WBE). FDOT personnel analyzed the bid documents submitted by Hubbard according to the criteria set forth at Rule 14-78, Florida Administrative Code, and determined that Hubbard exceeded the DBE goal but failed to meet the WBE goal. Hubbard's WBE participation was two per cent. All other bidders on the project met both of the DBE and WBE goals. When Hubbard submitted its bid on this project, Hubbard thought that it had complied with the three per cent WBE goal by subcontracting 3.5 per cent of the contract price to WBE certified firms. However, 2 per cent of the contract price was to be subcontracted to a WBE for supplies to be furnished by a WBE who was not a manufacturer. Accordingly, when the 20 per cent rule discussed above was applied to that 2 per cent, the total amount of WBE participation which could be counted toward Hubbard's compliance with the rule was approximately 2 per cent, which was less than the 3 per cent goal. Once it was determined that Hubbard had failed to meet the WBE goal, FDOT personnel analyzed Hubbard's good faith efforts package pursuant to Rule 14-78, Florida Administrative Code. Hubbard's good faith efforts package failed to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Similarly, Hubbard's evidence at the hearing in this case was insufficient to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Most telling in this regard is that all four of the other bidders on this project were successful in meeting or exceeding the DBE and WBE goals.
Recommendation For all of the foregoing reasons, it is recommended that the Florida Department of Transportation issue a Final Order rejecting all bids on Federal Aid Project No. ACIR-10-5 (76) 358 (Job No. 72270-3431). DONE AND ORDERED this 24th day of March 1986, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 24th day of March 1986. APPENDIX TO RECOMMENDED ORDER IN DOAH CASE NO. 86-0O24BID The following are my specific rulings on each of the proposed findings of fact submitted by each of the parties. Rulings on findings proposed by the Petitioner, Hubbard Construction Company The substance of the findings of fact proposed by the Petitioner in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, and 8. The substance of the first sentence of paragraph 6 is accepted. The remainder of paragraph 6 is rejected as an unintelligible incomplete statement. Paragraph 7 is rejected as not supported by competent substantial evidence. (The Standard Specifications for Road and Bridge Construction were not offered in evidence.) Paragraph 9 is rejected for a number of reasons, including not being supported by competent substantial evidence, being to a large part irrelevant, being predicated in part on an erroneous notion of which party bears the burden of proof, and constituting in part legal argument rather than proposed findings of fact. The first and third sentences of paragraph 10 are accepted in substance. The second and fourth sentences of paragraph 10 are rejected as irrelevant. The last sentence of paragraph 10 is rejected as irrelevant and as not supported by competent substantial evidence. Paragraph 11 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 12 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 13 is rejected as not supported by competent substantial evidence and as being contrary to the greater weight of the evidence. Rulings on findings proposed by the Respondent, Department of Transportation The substance of the findings of fact proposed by the Respondent in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, 6, 7, and 8. Paragraph 9 is rejected as irrelevant. COPIES FURNISHED: John E. Beck, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Larry D. Scott, Esquire Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301-8064 Thomas Drawdy, Secretary Department of Transportation Mail Station 57 605 Suwannee Street Tallahassee, Florida 32301-8064
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-10., below. Stipulated Facts A call for bids was published by Respondent, Florida Board of Regents, for BR-198, Veterinary Medicine Teaching Hospital Expansion - Phase II (BR-198), located at the University of Florida, Gainesville, Florida, in the publication known as the Florida Administrative Weekly. Sealed bids were received on February 21, 1991, at which time the bids were publicly opened and read aloud. On February 27, 1991, Dooley and Mack Constructors, Inc. (Petitioner) was informed by the University of Florida that the first and second apparent low bidders for the project did not meet MBE requirements, and that Petitioner was now the apparent low bidder for the project. The University requested that Petitioner submit its MBE good faith efforts for review. On March 1, 1991, Petitioner was informed by the University of Florida that it failed to meet the MBE good faith effort requirements, and therefore, its bid was rejected. The reason for rejection of Petitioner's bid was that Petitioner's advertisement for MBE participation, as part of its demonstration of good faith effort, did not appear in the media at least seven days prior to bid opening. Intervenor, the next apparent low bidder, submitted good faith efforts for review by the University and was determined to be the lowest responsive bidder. Intervenor was awarded the project by the Chancellor of the Florida Board of Regents on March 18, 1991. By letter dated March 19, 1991, Petitioner was advised that the Chancellor had awarded the contract to Intervenor. Petitioner was provided an opportunity to file a notice of protest pursuant to Section 120.53(5), Florida Statutes. Petitioner filed a timely notice of protest with Respondent on March 22, 1991. Petitioner timely filed a formal bid protest in regard to this project which was received by Respondent on March 27, 1991. By facsimile (FAX) letter dated February 13, 1991, Petitioner requested that the Gainesville Sun, a newspaper in Gainesville, Florida, run an advertisement for one day to solicit bids from qualified MBE companies for BR- 198. The advertisement was published in the February 18, 1991 edition of the newspaper. The Project Manual, Section 1-3 of 1-10 Pages, Special Conditions section, paragraph 1.7.2.2., provides that advertisements for minority business enterprises must run or be published on a date at least seven days prior to bid opening. Other Facts The Project Manual is an assembled volume which contains instructions to bidders, bidding requirements, sample forms, and contract conditions and specifications for BR-198. A special condition of the bid requires that at least 15 percent of the project contract amount be expended with MBEs certified by the Department of General Services. 1/ In the absence of compliance with this requirement, a bidder must demonstrate that good faith efforts were expended to comply. A contractor desiring to demonstrate that a good faith effort was undertaken to meet the 15 percent goal is required by the bid's special conditions to have advertised to inform MBEs of subcontracting opportunities. The importance of advertising is to alert the minority community regarding projects that are out for bid and are available to subcontractors. The advertisements must have been run in trade association, or minority-focus media, or a local newspaper with a minimum circulation of 25,000. Advertisements must be run or published a minimum of seven days prior to bid opening. Petitioner's advertisement in a local newspaper, the Gainesville Sun, was not published until February 18, 1991, only three days prior to the February 21, 1991 bid-opening. Further, the advertisement was not faxed to the newspaper until February 13, 1991, and then with the written request to "please place as soon as possible and run for one day." A letter from the newspaper to Petitioner stated that the legal notice advertisement was published on February 18, 1991, as opposed to February 16, 1991, due to a date error on their FAX machine. The latter date, even if publication had occurred, would not have complied with bid requirements. Petitioner also submitted a project notice published in the construction industry bulletins F.W. Dodge Reports, dated February 1, 1991; CMD Reports, dated February 18, 1991; and the Mid State Notifier, dated February 1, 1991. The notices listed Petitioner as well as other bidding contractors. However, it is specifically found that no direct admissible evidence supports Petitioner's responsibility for initiating publication of these notices, a requirement of the good faith effort. Specifically, the notices were published as the result of information received by the publications from the University of Florida. Therefore, good faith efforts on Petitioner's behalf may not be established by either publication, regardless of publication date. Moreover, the F.W. Dodge Reports, CMD Reports, and the Mid State Notifier are private subscription publications directed toward the construction industry in general as opposed to any particular trade in the construction industry. Further, these publications are not directed to or focused on minority businesses. A trade association publication is generally published by not-for-profit associations, such as the Association of General Contractors, and various trade unions. Petitioner did not comply with advertising requirements related to a good faith effort, a prerequisite for bid award. Petitioner's failure to comply with constitutes a material defect in Petitioner's bid response.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in BR-198 to Intervenor as the lowest responsible bidder. DONE AND ENTERED this 27th day of June, 1991, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 27th day of June, 1991. APPENDIX TO RECOMMENDED ORDER CASE NO. 91-2703BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-10. Adopted in substance, although not verbatim 11.-14. Rejected, unnecessary. Adopted in substance, though not verbatim. Rejected, unnecessary. Rejected, unnecessary, argumentative Adopted. Intervenor's Proposed Findings. 1.-16. Adopted in substance, though not verbatim. 17-18. Rejected, unnecessary. Respondent's Proposed Findings. 1.-10. Adopted in substance. 11.-22. Adopted in substance, though not verbatim. 23.-24. Rejected, unnecessary. 25.-40. Adopted in substance, though not verbatim. COPIES FURNISHED: William R. Dooley, Esq. 2070 Ringling Blvd. Sarasota, FL 34237 Jane Mostoller, Esq. Florida Board of Regents Suite 1522 325 West Gaines St. Tallahassee, FL 32399-1950 Alfred J. Malefatto, Esq. 777 South Flagler Drive Suite 310-East West Palm Beach, FL 33401 Chancellor Charles B. Reed State University System of Florida 107 West Gaines St. Tallahassee, FL 32399-1950
The Issue This proceeding concerns the Respondent's rejection of all bids for construction of its new middle school "FF". Petitioner has challenged that intended action, arguing that it was arbitrary and capricious and contrary to the law. The parties disagree as to the basis for the intended action. Initially the School Board considered rejecting all bids for failure to meet MBE/WBE goals, and Petitioner protested. Later, the Respondent determined that significant revisions to the construction documents were required, and the bids were all rejected on that basis. Petitioner protested again, but contends that the original basis for intended action is still at issue. For reasons set forth in the following recommended order, the MBE/WBE goal issue is moot. The central issue for determination, therefore, is whether Respondent properly rejected all bids based on its determination that substantial changes are required, and Petitioner's motion to consolidate its two protests is DENIED.
Findings Of Fact Petitioner, Mark C. Arnold Construction Co., (Arnold), is a commercial general contracting firm located in Orange County, Florida, but well-experienced in building public facilities throughout the state. Arnold currently is engaged in constructing school "EE" for Respondent, Orange County School Board (School Board, or Board). In January 1992, the school board promulgated an advertisement for bid soliciting bids for the construction of a new school project known as Middle School "FF". The advertisement for bid was published five (5) times in the Orlando Sentinel on January 7, 14 and 28 and on February 4 and 1, 1992. The board also compiled a project manual which among other things contained a copy of the advertisement for bid and instructions to bidders which governed the bidding process. The advertisement for bid reserved the school board's "right to reject any or all bids and to waive any informality or irregularity in any bid received". (Joint Exhibits 1 and 2) The instructions to bidders also reserved the school board's "right to reject any and all bids when such rejection is in the interest of the school board of Orange County, Florida...". (Joint Exhibit 5) The project manual also contained a bid form to be used by bidders. In it the bidder agrees "that the Owner reserves the right to reject this bid, or to waive informalities in any bid,...". Such language was contained in the bid submitted by Arnold. (Joint Exhibits 7 and 9) By addendum dated February 5, 1992 the school board amended and replaced Section A-12 of its project manual and instructions to bidders. Such amendment, among other things, established goals for minority/womens business enterprise (MBE/WBE) subcontractor and supplier participation in the project, and it required any bidder who failed to attain the goals to demonstrate a good faith effort to do so; otherwise, the bid of such bidder would be rejected. (Joint Exhibit 8) Arnold's bid showed that Arnold had no MBE/WBE subcontractor or supplier participation. (Joint Exhibit 9) Arnold's bid was the lowest of eleven bids received by the school board. Arnold's bid was in the amount of $10,977,000.00. The next lowest bid was in the amount of $11,075,000.00. After bids were opened, Arnold promptly contacted the MBE/WBE manager of the school board, and was advised by her to try to obtain MBE/WBE participation to meet the goals; within several days after bid opening Arnold was able to get a total of about 13.5% MBE/WBE subcontractor/supplier participation. Contrary to the MBE/WBE manager's instruction, the addendum to the project manual and bid instructions proscribed any effort after bid opening to attain the MBE/WBE goals and to thereby make a bid responsive. In spite of Arnold's attempt to demonstrate to the MBE/WBE manager that it had made a good faith effort to attain the goals prior to bid opening, the MBE/WBE Manager determined that no sufficient good faith effort was shown by Arnold. On March 5, 1992 the school board furnished to Arnold a written notice of its intended decision to reject all bids because of the failure of all contractors (bidders) to attain the MBE/WBE goals and/or to show compliance with the good faith effort requirement of the contract documents. (Joint Exhibit 11) On March 10, 1992 Arnold and its attorney attended a meeting of the school board for the purpose of appealing the MBE/WBE manager's decision that Arnold had not demonstrated a good faith effort to meet the goals. Mark C. Arnold spoke at length to the school board itemizing actions which Arnold contended showed its requisite good faith effort to solicit MBE/WBE participation. Arnold's attorney also made a presentation at the meeting. By a 6 to 1 vote, the board initially sustained the findings of the MBE/WBE manager that a good faith effort was not shown by Arnold, and rejected all bids because of the failure of all contractors (bidders) to meet the minority participation goal and/or to show compliance with the good faith effort requirements of the contract documents. (Joint Exhibits 12 and 15) Following a work session after its initial meeting on March 10, the board convened again in regular session on March 10, at which time it unanimously voted to reconsider its earlier action of rejecting all bids, and it voted to postpone action of the award of a contract for the construction of Middle School "FF". The effect of that action was to rescind its earlier action rejecting all bids and determining that Arnold had not shown a good faith effort to solicit MBE/WBE participation; and also to postpone action on the entire matter to a future time. (Joint Exhibit 13). On March 20, Arnold filed Formal Protest directed to the board's March 5th Notice of Intended Decision and directed to the March 10 action rejecting Arnold's bid. During or about the first week in April, engineers for the school board met with the school board's attorney, William M. Rowland, Jr., to inform him that significant revisions needed to be made in the site work and sewer plant plans for the Middle School "FF" project. The engineers recommended that because of the need to make such revisions all bids for the project should be rejected and the project should be rebid after the plans were revised. As a result of the early April meeting with the engineers, the board's attorney prepared and delivered a memorandum dated April 7th advising the school board of its engineers' recommendations. The attorney also submitted a resolution which, if adopted, would serve to reject all bids and require a rebidding of the project. (Joint Exhibit 16) On April 10th the school board furnished to Arnold an amended notice of intended decision, which by its express terms replaced, amended and superseded its prior notice of intended decision dated March 5th, and notified Arnold of its intent to reject all bids on the project because of the need to make significant revisions in the construction documents. (Joint Exhibit 17) Said amended notice rendered moot the March 20 formal protest filed by Arnold. At its meeting held on April 14th, the board considered the April 7th memorandum from its attorney. At that meeting, the board heard from its staff engineer, Chuck Greif, who pointed out the revisions needed to the site plans for the Project. (Joint Exhibit 20, pages 59-62, 77-78) Mark Arnold also spoke, contending that the site revisions could be handled by change orders if Arnold's bid were accepted. (Joint Exhibit 20, pages 76-77) Bob Gallardo, the school board Director of Facilities and Planning, advised of problems encountered in the site work and of the need to make significant revisions in the site plans. (Joint Exhibit 20, pages 87-92) As the geotechnical engineer on the job, Charles Cunningham stressed the significance of the site plan changes. (Joint Exhibit 20, pages 96-97) Derek Burke, engineer on the project, confirmed that major redesign needs to be done. (Joint Exhibit 20, page 64) Attorney Rowland advised that the prior intended decision to reject all bids because of failure of all bidders to comply with the MBE/WBE requirements of the bid documents, was moot and no longer before the board for action, and that the only resolution before the board for action was the resolution to reject all bids because of the need to make significant site plan revisions for the project. (Joint Exhibit 20, pages 72-76) The school board unanimously adopted that resolution. (Joint Exhibit 20, pages 97-99; Joint Exhibit 18) On April 23rd Arnold timely filed the written formal protest which is the subject of these proceedings. At the time of the meeting held by on April 14th, there was a need to make significant changes in the site work and sewer plant for the Middle School "FF" project. Such changes formed a valid and legitimate reason for the board to reject all bids. Even at the time of this administrative hearing, some details regarding the site work still needed to be worked out. For example, an outfall is needed for the percolation pond underdrain but it was not included in the project design. The site work and sewer plant changes and revisions could have been handled by change orders between Arnold and the school board, had the board accepted Arnold's bid, since any changes in a project can be accomplished by change orders; however, revising the nature and quantity of construction work by change orders involves the potential for excessive cost to the project owner and change orders always require agreement between the parties. Prudence dictates that when it is known that changes must be made, the bid advertisement should include those changes up front to remove the uncertainty of costs and to put all bidders on equal footing. There has been no showing of any illegality, fraud, oppression or misconduct in the actions of the school board in rejecting all bids on the Middle School "FF" Project and in opting to seek new bids for the project. There has been no showing in these proceedings that the school board's rejection of all bids had the purpose or effect of defeating the object and integrity of competitive bidding.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That a Final Order be entered dismissing the bid protests by Petitioner. DONE AND RECOMMENDED this 10th day of July, 1992, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Charles Evans Davis, Esquire 170 East Washington Street Orlando, FL 32801 MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of July, 1992. William M. Rowland, Jr., Esquire 1786 North Mills Avenue Orlando, FL 32803 Dr. James L. Schott, Superintendent Orange County School Board P.O. Box 271 Orlando, FL 32802
The Issue The issue in this case is whether the Respondent, the Department of Transportation (DOT), should award State Project No. 89030-3528 to The Cone Corporation, notwithstanding the bid protest filed by the Petitioner, The Murphy Construction Co., alleging that its bid was responsive and lower than The Cone Corporation's bid or, in the alternative, if its bid was nonresponsive, that The Cone Corporation's bid also was nonresponsive, and that the project should be re-bid. 1/
Findings Of Fact State Project No. 89030-3528 (the project) is for work on SR Bridge No. 890941 over Warner Creek in Martin County. The DOT solicited bids for the work and established December 5, 1990, as the deadline for submission of bids. The DOT established, as its Disadvantaged Business Enterprise (DBE) goal for the project, a goal of ten percent participation by DBEs. The Petitioner, The Murphy Construction Co., submitted a bid for the work in the amount of $1,026,222.96. It was the apparent second lowest bid. The Tom Quinn Company, Inc., was the apparent low bidder, at $846,216.87, but it did not meet the ten percent DBE goal and did not demonstrate good faith efforts to achieve the goal. The next lowest bidder, after the Petitioner, was The Cone Corporation's bid of $1,083,672.95. There was one other bidder. The Petitioner asserted that $110,360, or 10.75%, of the work would be done by DBEs. The Petitioner alleged in its bid that $26,571 worth of DBE work would be done by Advance Barricades & Signing, Inc. (Advance Barricades). The Petitioner's DBE Utilization Form for Advance Barricades & Signing, Inc., identified the DBE by name but left blank the parts of the form designated "Item No." and "Description (note if item qualifies for SUPPLIER)". As a matter of agency policy, the DOT has required that the portion of the form designated as "Description (note if item qualifies for SUPPLIER)" be completed. A description of the work to be performed by the DBE has been considered essential. The DOT has required the description of the work to be performed by the DBE because: first, the DOT interprets the applicable rules to require it; and, second, because the purpose of the rule and policy is to enable the DOT's Minority Programs Office to monitor the performance of the contract to be sure that the representation as to DBE participation is carried out--i.e., not only that the representation as to the percentage of DBE work is met but also that the DBE does the work the contractor represents that the DBE will do. Monitoring is significant because it can prevent the bidder, if successful, from trying to take advantage of the DBE by asking the DBE to do work that the DBE is not prepared or equipped to do or by asking the DBE to do more work for the money than contemplated by the DBE at the time of the bid. It also can insure that bidders will not, in essence, pay a DBE for doing nothing. Although the Petitioner's DBE Utilization Form gave the name of the DBE, it did not purport to describe the work the DBE was going to do. Although listing the name Advance Barricades and Signing, Inc., identified some of the work Advance Barricades does, it did not identify all of the work Advance Barricades does and, more importantly, did not identify the work the Petitioner was proposing that Advance Barricades was to do on the project in question. The DOT could have assumed what work Advance Barricades would do for the Petitioner, but it could not effectively monitor based on the assumption. Sometimes a DBE subcontractor will complete and sign the DBE Utilization Form for the bidder. Sometimes, the DBE will telephone the bidder with its price, and the bidder will complete the form. In the latter case, if the form is completed, the DOT Good Faith Efforts Committee will, as a matter of policy, telephone the DBE to confirm the information. In this case, Advance Barricades provided the Petitioner with a written price for the work, but the Petitioner itself prepared and submitted a form for inclusion in its bid on the project and did not include Advance Barricades's written price. Because the Petitioner left blank the parts of the form designated "Item No." and "Description (note if item qualifies for SUPPLIER)", the Good Faith Efforts Committee did not telephone Advance Barricades to confirm or supplement the information submitted by the Petitioner with its bid. The Cone Corporation's bid also included the representation that Advance Barricades would be doing work on the job that would qualify towards the DBE goal. Under the part of the form designated "Description (note if item qualifies for SUPPLIER)," The Cone Corporation stated, "SEE ATTACHED." Attached to the form was a proposal from Advance Barricades giving specific item numbers and descriptions of temporary barricades and signing, advance warning arrow panels, flashing lights, temporary pavement markings, and special detour signing to be furnished at a price of $20,805.45. In this case, The Cone Corporation's bid included a copy of the Advance Barricades proposal, which provided an adequate description, including item numbers, of the work Advance Barricades would do for The Cone Corporation. Despite the reasons for the DOT policy described in the preceding finding, the DOT has slipped into a practice of not requiring that the portion of the DBE Utilization Form designated "Item No." be completed. In addition, one-word generalizations--such as "pipe" or "trucking"--in the part of the form designated "Description (note if item qualifies for SUPPLIER)"are accepted by the DOT even though they may be insufficient to enable the DOT's Minority Programs Office to determine what kind of pipe or trucking is meant. Indeed, the DOT would have accepted description "barricades and signing" in the Petitioner's case. But these descriptions are inadequate to serve the purpose of the rule that the DBE work be described in the bid documents. For example, the word "pipe," without item numbers, does not identify the type or quantity of pipe to be provided. Indeed, the DOT's DBE Utilization Form gives evidence that more of a description initially was contemplated by the DOT. The form provides a space designated "Item No." In addition, the part of the form provided for the description of the DBE work also states: "(note if item qualifies for SUPPLIER)." (Emphasis added.) The form infers that the description will include the item number. Otherwise, it would be very difficult, and in some cases impossible, for the Minority Programs Office to effectively monitor the progress of construction. In this case, The Cone Corporation's bid included a copy of the Advance Barricades proposal, which provided an adequate description, including item numbers, of the work Advance Barricades would do for The Cone Corporation. But its DBE Utilization Form for H.S. Thompson described $85,702 worth of DBE work as "concrete, rebar and pipe." Under the column marked "Item No.," The Cone Corporation put, "various." If H.S. Thompson were going to do all of the "concrete, rebar and pipe" on the project, it would have been doing more like $540,000 worth of work for The Cone Corporation. Like the Petitioner's DBE Utilization Form for Advance Barricades, the H.S. Thompson form was inadequate to serve the monitoring purposes of the DOT's policy. The DOT now is in the process of considering whether to amend its rules, perhaps to provide that all proposed DBE participation be confirmed by telephone in order to avoid outcomes like the one its Good Faith Efforts Committee, Technical Review Committee, and Contract Awards Committee recommended in this case--the rejection of a bid as nonresponsive in favor of a higher bid that proposes a smaller percentage of DBE participation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order rejecting all bids on State Project No. 46090-3511. RECOMMENDED this 12th day of March, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 March, 1991.
Findings Of Fact The Florida Department of Transportation is the state agency charged with the responsibility to develop and adopt criteria for a DBE program, and administer the DBE program. Burkett is a Florida corporation whose sole stockholder is a white female American. She meets the criteria of a socially and economically disadvantaged individual. Burkett applied for certification as a DBE on July 12, 1991, and on October 1, 1991, the Department denied Burkett certification. Burkett submitted additional information and made changes in its internal organization to better conform to the Department's requirements; however, the Department has denied Burkett the designation based upon the owner's lack of expertise in the critical areas of the firm's operation, to wit; she does not possess education or experience in engineering. The parties stipulate that Burkett is substantially effected by the rules being challenged, and possesses standing to bring this rule challenge. In determining the qualifications of an applicant for DBE status, the Department utilizes Sections 334.044(2), 337.137, 339.05, and 339.0805, Florida Statutes; 49 CFR Part 23; the United States Department of Transportation administrative decisions; guidelines and training manuals from USDOT or the Federal Highway Administration (FHWA); and its own rules. At the recommendation of a representative from FHWA, the Department amended the rules being challenged regarding qualifications for DBE certification to explicate the requirement for ownership control, as required by Section 339.0805(1),(c), supra, and 49 CFR Part 23.53, to include the concept of "expertise in critical areas of operation of the business" which is required by the USDOT. The terms "expertise" and "critical areas of operation" are not defined in the Florida Statutes or DOT's rules. The DOT interprets "critical areas of operation" to mean the technical area in which the DBE certification is being sought. Management limited to the day-to-day normal business operations is not considered to be a "critical area of operation." The DOT's evaluation of "expertise" changes from business to business based upon the applicant's type of work. The department expects to see education and experience on the part of the disadvantaged owner in the technical area of operations of the business. The Department denied the Petitioner DBE certification because the disadvantaged owner did not possess engineering experience or education.
