Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Department of Transportation (D0T) advertised for bids on State Project Number 97879-3336 in July of 1986. The project involves new roadway construction with specified materials, drainage installation, curbs, gutters and sidewalks adjacent to the Orange Bowl in Dade County. The D0T set a disadvantaged business enterprise (DBE) participation goal for this project of fifteen percent. In order to comply with this goal, a bidder must state its intention to subcontract with a D0T certified DBE an amount of work equal to or greater than fifteen percent of the total dollar value of its bid. The D0T opened the nine bids received for this project on July 30, 1986. The intervenor Capeletti Brothers, Inc. (Capeletti), submitted the apparent low bid in the amount of $2,044,000.18, and the petitioner Russell, Inc. (Russell), submitted the apparent second low bid of $2,047,503.00 The remaining bids ranged between $2,124,527.32 and $2,851,657.26. Bidders indicate compliance with the minority participation goals established for a project through the submittal of "DBE/WBE Utilization Form No. 1," which is submitted with the bid. In this case, Capeletti provided information on Form No. 1 that it would subcontract with Ivory Modernized Services to do "trucking" and "aggregates" at a dollar amount of $307,622.00, or 15.05 percent of the total contract amount. Russell indicated on Form No. 1 that it would subcontract with Community Asphalt Corporation to do "asphalt paving" at a dollar amount of $352,151.00, or 17 percent of the total contract amount. During the bid letting process, it is the practice of the DOT to conduct a facial review of the "DBE/WBE Utilization Form No. 1" submitted with the bid to determine whether the named subcontractor is a certified DBE or WBE and whether the participation goal set for that project has been met. Prior to awarding the contract, the DOT does not make a separate investigation to determine whether a listed DBE subcontractor is actually capable of performing the work for which the bidder has indicated. Any such investigation is made at or after the time a contractor actually submits to the DOT a request for authorization to sublet, which occurs after the DOT has awarded the contract to the bidder. The DOT considers the successful bidder to be bound to pay a DBE at least the amount listed on Form No. 1 submitted with its bid. If, for some reason, the DBE listed cannot perform the work for which it has subcontracted to perform, the DOT will require the prime contractor to either pay that amount to the listed DBE or subcontract with another DBE for that work. Ivory Modernized Services, Inc. (Ivory), is a DOT certified DBE. In its application to the DOT for certification, it listed "trucking (hauling of aggregates)" as the nature of its business. The DOT requests such information on the application because it publishes a directory of certified DBEs for the use of bidders on state contracts. Prior to submitting its bid, Capeletti and Ivory agreed that if Capeletti were the successful low bidder on this project, Ivory would furnish and deliver aggregates to the job site. It was agreed that the responsibility for obtaining and delivering the aggregates to the project site would rest with Ivory. The sum of $307,622.00 was derived by estimating the quantities of the various types of aggregates needed for the project, the material cost per ton, the hauling cost per ton and the amount and charge for on-site hauling. In the past, Capeletti has directly purchased rock from mining pits in the area. While Capeletti has never before purchased fill from Ivory, Ivory has performed one D0T job where it was responsible for both the buying and hauling of aggregates. Ivory does not own any fill land, pits or fill material, does not do any active pit excavation and does not plan to stockpile aggregate materials for this project. Ivory intends to negotiate with the rock pit owner for the required amounts, types and purchase prices of the aggregates needed, pick up those aggregates from the pits and transport them to the job site. The precise methods of payment for the aggregates has not yet been determined. In order to avoid any potential markups in the price of limerock and aggregates, Russell deals directly with the rock pits in purchasing its materials. Truckers are hired separately to deliver the materials to the job site, and they do not purchase the fill. In its bid, Russell did not list a DBE trucker or hauler because the fifteen percent participation goal could not be reached with amounts expended for trucking alone. It has been the past practice and policy of the DOT to allow all material costs to be included in meeting the DBE participation goal where the DBE subcontractor assumed the actual and contractual responsibility for the provision of the materials and supplies. For example, where a DBE grasser or concrete finisher also assumes responsibility for purchasing and obtaining the sod or concrete and responsibility for supplying those materials to the project site, the costs of the sod or concrete are included in meeting the DBE participation goal. The prime purpose of limiting payments which can be included in the case of "suppliers" who perform some commercially useful function is to prevent mere brokerage or pass-through services as qualifying for full participation in meeting DBE goals. "Commercially useful functions" performed by a "supplier" can include the stockpiling and transporting of materials.
Findings Of Fact The Department administers the CDCSAP Act (the "act"). The Florida legislature makes annual appropriations to fund the CDCSAP. These funds are used to finance activities of qualified CDCs. CDCs are community-based organizations which, in concert with state and local governments and private enterprise, facilitate or financially support revenue-generating business for the purpose of community economic development, redevelopment, preservation, restoration and revitalization. To this end, the Department's line staff person for the CDC program, James Fox, who is a planner employed by the Department, reviews applications, gives technical assistance workshops on rules and gives statewide speeches to CDC programs and at their annual meetings. Fox is familiar with the community development corporations statewide and the activities of each CDC program. He has been instrumental in assisting local entities prepare applications to become CDCs to include filing their non-profit corporate status with the Secretary of State. He has authored a pamphlet for the Department which has been distributed to entities desirous of achieving CDC status entitled "How to become a CDC". (Respondent's Exhibit 1). This pamphlet is widely utilized by entities seeking CDC status and provides all of the basic information needed to become a CDC. The act empowers the Department to administer the CDCSAP and authorizes issuance of one and three year administrative grants, planning grants and loans to fund the activities of eligible CDCs. The act requires the Department to monitor expenditures of CDC funds and to provide technical assistance to CDCs. In addition to CDCSAP grants and loans, CDC has also received funding from private foundations and local governments. The Department has adopted Chapter 9B-14, Florida Administrative Code. That chapter implements the act and establishes regulations and procedures governing the CDCSAP. CDCs fiercely compete annually for administrative grants when filing their applications with the Department. These grant applications are reviewed by Fox. There are approximately fifty CDCs statewide and they annually submit applications for grants. Once these applications are received, Fox reviews and scores them pursuant to Rule 9B-14, Florida Administrative Code. In so doing, the Department uses three reviewers and the reviews are individually conducted. In reviewing the grant applications, a funding matrix is used. Using the matrix, a score and rank is made for each application. Next, the division director goes over each application and the matter is discussed with the Department's Secretary. Later a letter of intent is given (to either grant or deny the application). The score lists the rank and order and is not an entitlement to funding. After the applications are reviewed, the Department's senior management lists a "pre-appeal" score and ranking for each applicant. Once the CDCs are notified in writing of the score and ranking in the pre-appeal scoring matrix, they are also advised that the number and amount of administrative grants awarded will be contingent upon passage of a state budget and appropriation for the fiscal year. Applicants are also advised of rights to pursue an appeal regarding the correctness of the scores pursuant to Section 120.57, Florida Statutes. (Respondent's Exhibit 3). If an appeal is initiated, an administrative proceeding is conducted usually under the informal provisions of Section 120.57(2), Florida Statutes. A hearing officer assigned by the Department conducts a hearing and issues a recommended order. A final order is then entered by the Department's Secretary. Thereafter, each applicant is assigned a final score and ranking in the matrix which determines funding order priority. The final scores are usually determined prior to adoption of an appropriations act by the legislature. As noted, the final score does not establish whether a particular CDC will be funded. Section 290.036(3), Florida Statutes and Rule 9B-14.007(3) and 9B- 14.009(11)(a)-(c) provide the parameters within which the Department determines the number, type and amount of administrative grants it will award. When grant applications are submitted and evaluated, the Department is, at the time, unaware of the amount of money available for upcoming grants because the legislature has not passed an appropriations bill for the fiscal year. Final decision with respect to the number and amount of administrative grants is made after the final appropriation bills and summary statement of intent is transmitted to the Department. "Proviso language" is passed by the legislature as part of the appropriations bill. It is signed by the governor, has the force of law and is binding on the Department. Legislative statement of intent language is transmitted to the governor at a date after passage of the appropriations act by chairpersons of the House and Senate committees on appropriations. The intent language is the statement of how the legislature, in its considered opinion, thinks the appropriated funds should be spent. It guides the Department regarding use of appropriated funds. The Department considers and relies on applicable legislative proviso or intent language in deciding its final determination as to number and amount of administrative grants. Absent extraordinary circumstances, the Department follows the statement of intent language in reaching its final funding decision. Over the years, a pattern has emerged which evidences that the Department carefully considers applicable proviso or statement of intent language. Specifically, from a historical perspective, for the 1983-84 funding cycle, the legislature appropriated $1,175,000 for the CDCSAP but did not include either proviso or legislative statement of intent language. The governor vetoed $200,000.00 of that sum leaving $975,000 to fund the program. The Department awarded administrative grants in varying amounts to 23 CDCs. Subsequently, the legislature amended the statute to allow the Department to fund no more than 18 CDCs. (Respondent's Exhibit 7 and Chapter 84-240, Laws of Florida). For the 1984-85 funding cycle, the legislature appropriated $1,600,000 for the CDCSAP and included proviso language directing that no more than 16 CDCs be funded. In accordance with that proviso language, the Department awarded administrative grants of $100,000 each to 16 CDCs. For the 1985-86 funding cycle, the legislature appropriated $1,600,000 for the CDCSAP but included neither proviso nor statement of intent language. The Department awarded grants of $100,000 to 16 CDCs. For the 1986-87 funding cycle, the legislature appropriated $1,600,000 for the CDCSAP and included proviso language directing that no more than 16 CDCs be awarded administrative grants and that a specific CDC be awarded a training grant. Pursuant to that proviso language, the Department awarded administrative grants of $85,000 each to 16 CDCs, and a $40,000 training grant to the specified CDC. For the 1987-88 funding cycle, the legislature appropriated $1,337,156 for the CDCSAP and included proviso language directing that no more than 16 CDCs be funded. Pursuant to that proviso language, the Department awarded grants of $83,338 each to 15 CDCs. Another $83,338 was divided to provide grants of $41,669 each to two eligible CDCs which received identical scores for the last funding slot. For the 1988-89 funding cycle, the legislature appropriated $1,337,156 for the CDCSAP and included proviso language directing that no more than 16 CDCs be funded. Pursuant to that proviso language, the Department awarded grants of $72,380 each to 16 CDCs. For the 1989-90 funding cycle, the legislature appropriated $1,337,156 for the CDCSAP and included statement of intent language directing that no more than 16 CDCs be funded. The Department awarded grants of $83,572 each to 16 CDCs. For the 1990-91 funding cycle, the legislature appropriated $1,699,600 for the CDCSAP and included statement of intent language directing that no more than 18 CDCs be funded. The Department followed the statement of intent and awarded grants of $90,564 each to 17 CDCs which scored above the minimum point threshold as set forth in the matrix. For the 1991-92 funding cycle, the legislature appropriated $1,600,000 for the CDCSAP but included neither proviso nor statement of intent language. The Department awarded grants of $88,888 each to 18 CDCs. Final scores and ranking does not establish entitlement to funding under the program. The final score establishes whether a CDC is eligible to receive either a one or three year administrative grant depending on the total number of points received. The score also results in ranking of each CDC so that depending upon legislative appropriations and expressions of intent regarding funding, a funding priority is established. Prior to 1991, the act provided only for the award of one year administrative grants. In 1991, the Florida legislature amended the act to permit the award of multi-year administrative grants and planning grants. (Chapter 91-263, Laws of Florida). The provisions of the act relative to funding provides: The amount of any administrative grant to a community development corporation in one year shall be any amount up to $100,000. The Department may fund up to 18 Community Development Corporations this year as provided for in the general appropriations act. The Department shall develop a diminishing scale of funding each year based on the annual appropriation to ensure compliance with this section and Section 290.0365. See Section 290.036(3), Florida Statutes (1991). To incorporate the 1991 statutory changes into Rule 9B-14, Florida Administrative Code, the Department initiated rulemaking pursuant to Section 120.54 in September 1991. Several workshops were held to gain input from CDCs regarding proposed changes to the rule. In addition, a public hearing was held in January 1992 at which the Department received oral and written comments from CDCs regarding the proposed rule challenges. Amendments were adopted and took effect on March 22, 1992. During the rulemaking process, no comment was submitted regarding the proposed changes to Rule 9B-14.009(11). No party initiated a rule challenge to the proposed amendments pursuant to Section 120.54(4), Florida Statutes. Rule 9B-14.007(3), which was not affected by the 1992 amendments, states in relevant part that "[n]o grant will be awarded for funds exceeding $100.000." Respondent's Exhibit 2 at Rule 9B-14.007(3). Rule 9B-14.009(11), as amended in 1992, now authorizes the award of two types of administrative grants of one and three years duration in addition to planning grants. The pertinent portion of this rule provides: A maximum of 18 administrative grants may be awarded in any fiscal year pursuant to Section 290.036(3), Florida Statutes. Applicants which receive a score of 150 or more points will be awarded a three year administrative grant. Applicants which receive a score of at least 100 points but less than 150 points will be awarded a one year administrative grant. For the 1992-93 funding cycle, prior to the application deadline and after the amendments to Rule 9B-14 were adopted, public application workshops were held in Tallahassee and Miami. At the workshops, representatives of the Department discussed the recent statutory and rule changes to the CDCSAP as well as the proper way to complete applications. The application deadline for administrative grants for the 1992-93 grant cycle was April 1, 1992. The Department received 29 timely applications. When the 1992-93 grant applications were received, evaluated and given tentative scores and rankings, the Department was unaware of the amount of legislative appropriations for the CDCSAP and whether any proviso or statement of intent language would accompany the appropriation. After the applications were evaluated, the preappeal scores and rankings derived and the applicants were notified of the results, several CDCs including Petitioners appealed their scores. Informal hearings were held during late May 1992. The hearing officer's recommended orders were issued June 25, 1992 followed by the Department's final orders on July 8, 1992. Thereafter, each applicant was assigned a final score and ranking. For the 1992-93 funding cycle, 21 CDCs scored above the 100 point minimum threshold. Of these 21, 12 CDCs scored above 150 points and 9 CDCs scored above 100 points but less than 150 points. Each of the Petitioners scored above 100 points but less than 150 points. In late June 1992, the legislature passed an appropriations act which was signed into law on July 2, 1992. On July 14, the Department received a copy of the appropriations act and the accompanying statement of intent regarding the disbursements of appropriated funds of the CDCSAP. The Department requested funding of $1,800,000 for the CDCSAP grant and loan program for fiscal year 1992-93. However, the legislature reduced that funding request to $800,000 for the CDCSAP grants and included a statement of intent language directing that those CDCs which received sufficient point scores under Rule 9B-14 to qualify for a three year administrative grant be funded. The intent language states: It is the intent of the legislature that funds provided in specific appropriation 293A shall be used to award administrative grants in accordance with the provisions of Section 290.036, Florida Statutes, of equal amounts, to those Community Development Corporations that receive a sufficient point score under the Department of Community Affairs evaluation of FY 1992-93 grant applicants to qualify for a three year administrative grant pursuant to criteria established in Chapter 9B-14.009(11) (b), F.A.C. In reaching its decision respecting funding, the Department considered whether to follow the statement of intent language and award 12 grants of $66,666 each, or instead to award 18 grants at $44,444 each. The Department's Secretary ultimately decided to follow the statement of intent language and award grants of $66,666 each to the 12 CDCs which qualified for three year grants under Rule 9B-14. The action of the Secretary was within the discretion accorded by Section 290.036(3), Florida Statutes and Rule 9B-14.009(11)(a) to award "up to" 18 grants. The Department has not issued any type of statement which indicates that, in future funding cycles, it will award only three year administrative grants. The Secretary's decision relates only to the 1992-93 fiscal year. Section 290.036(3), Florida Statutes and Rules 9B-14.007(3) and 9B- 14.009(11)(a), Florida Administrative Code commands the Department to award between 0 and 18 administrative grants each year, provided no single award exceeds $100,000. Flexibility is given to the Department based on the uncertainties each year surrounding the legislative appropriations process. Due to the vagaries of the appropriations process, it is not practical or feasible for the Department to adopt a rule which requires it to award a specific number of administrative grants annually. Nor is it feasible or practicable for the Department to wait for the appropriations bill to be passed before initiating an order on the number of grants it will award. The Department strives to get the administrative funds to the CDCs expeditiously. At a minimum, rulemaking takes several months and would accordingly substantially delay transferring grant monies to the CDCs.
The Issue Whether Petitioner's bid on State Job No. 86075-3459 was non-responsive and Respondent's award of the bid to the next lowest responsible bidder was arbitrary, illegal or dishonest.
Findings Of Fact Petitioner timely submitted its bid on State Job No. 86075-3459 and this bid was the lowest received by DOT on this project. The DBE requirement on this bid was 11%. This means each bidder had to show on its submittal that at least 11% of the project cost would go to a minority business subcontractor. With its bid submittal, on the Disadvantaged Business Enterprise (DBE) Utilization Summary (Form 275-020-003 Minority Prog. 11/87), Petitioner listed as DBE subcontractors Reliable Trucking, Inc. with $100,000 as the dollar amount for DBE goal and $280,000 for Community Asphalt Corporation. (Exhibit 1.) These two figures exceeded the 11% minimum DBE requirement. Community Asphalt Corporation had been a certified DBE subcontractor in early 1990 but in May 1990 its certification expired and was not renewed. Accordingly, at the time of the bid opening, Community Asphalt was not listed on the list of certified DBE subcontractors DOT provided to bidders with the bid forms to complete for this project. Petitioner had initially shown only Reliable Trucking, Inc. on Exhibit 1 with $400,000 as the dollar amount for the DBE goal. Reliable Trucking is a certified DBE. Petitioner received a late quote from Community Asphalt and just before submitting its bid added Community Asphalt to its DBE Utilization Summary, interlining the $400,000 amount for Reliable Trucking and changed this amount to $100,000. Although Petitioner still intended to use Reliable Trucking for work on this project in excess of $400,000 its policy, which was here followed, is to show on its DBE Utilization Summary submitted with its bid only a small percentage over the required minimum. Therefore, when Community Asphalt was added as a DBE subcontractor, the dollar amount to Reliable Trucking was reduced. Petitioner's employee who added Community Asphalt to the DBE Utilization Summary checked to see that Community Asphalt was a certified DBE but, unfortunately, looked at the list of certified DBE subcontractors furnished by DOT for an earlier bid--not the current list. The current list which had been supplied to Petitioner did not list Community Asphalt as a certified DBE. When the bids received were first checked by the DOT employee who reviews bids to see that DBE requirements are met, she approved the bid but set it aside for further check. Later, after realizing Community Asphalt was not on the approved list of DBE's she disapproved the bid and it proceeded to the Good Faith Efforts Committee for review. Petitioner submitted no documentation of any good faith efforts to comply with the DBE requirements. This is understandable as Petitioner thought when the bid was submitted that Community Asphalt was a certified DBE and its bid complied with the DBE requirements. In reviewing and accepting bids for DOT projects, Respondent relies entirely on the documentation submitted with the bid and does not allow bidders to supplement the bid after opening.
Recommendation It is recommended that the protest of Bergeron Land Development, Inc. to the rejection of its bid submitted on State Job No. 86075-3459 be dismissed with prejudice. DONE and ENTERED this 23rd day of October, 1990, in Tallahassee, Leon County, Florida. KEN N. AYERS 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 23rd day of October, 1990. APPENDIX Respondent's proposed findings are generally accepted, except for: Rejected. The DBE forms submitted by Petitioner, as corrected by Petitioner before submittal, showed Reliable Trucking, Inc., a certified DBE, to receive only $100,000 in subcontracts, far less than the 11% DBE participation required. Rejected. Whether Reliable Trucking had a firm contract with Petitioner to provide in excess of $400,000 subcontracting work on this project is immaterial if the DBE utilization form submitted with the bid fails to show the DBE utilization goal is attained or documentation of good faith efforts are not included. Rejected that the mistake by Petitioner was a non-material mistake. Bids have to be accepted as received. Rejected. Rejected. Rejected. Accepted as an accurate quote of Rule 14-78.003,Florida Administrative Code. The legal conclusion that the ruledoes not require evidence of good faith efforts be included withthe bid submitted is rejected. The conclusion of law that Respondent violated its own rule is rejected. COPIES FURNISHED: John H. Beck, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Paul J. Martin, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 John Radey, Esquire Post Office Drawer 11307 Tallahassee, Florida 32302 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation 605 Suwannee Street, Room 562 Tallahassee, Florida 32399-0458
The Issue The issue in this proceeding is a formal protest by Sovran Construction Company, Inc. regarding the Florida Board of Regents' intent to award to Indus Construction Company a contract for construction of the student union building at the University of Central Florida. The protest is based on Petitioner's allegation that Indus Construction Company's bid should be rejected as non-responsive for failure to meet minority business enterprise (MBE) participation or good faith effort requirements.
Findings Of Fact These facts stipulated by the parties in their prehearing statement filed on March 5, 1993, are adopted here: A Call For Bids was issued by the Respondent, Florida Board of Regents, for Board of Regents ("BR") project numbered 452, University of Central Florida, Student Union Building, in Florida Administrative Weekly, Vol. 18, No. 44, October 30, 1992. A pre-solicitation/pre-bid meeting was held on November 17, 1992, at 2:00 p.m. at the University of Central Florida. Gregory Toepp and Shahid Nassir from Indus Construction, and Chuck Adair from Sovran Construction attended the meeting. Sealed bids were received on December 1, 1992, at which time they were publicly opened and read aloud. A total of ten construction contractors submitted bid proposals to the University of Central Florida for BR-452. Indus Construction Company was the low apparent bidder, at base bid plus alternates 1 and 2, for a total of $8,265,000.00. Sovran Construction Company was the second low apparent bidder, at base bid plus alternates 1 and 2, for a total of $8,310,900.00. The monetary difference between Indus Construction and Sovran Construction bids for BR-452 is $45,900.00. Indus Construction did not meet the 15% minority business participation requirement for BR-452. Indus did not have any minority business participation at the time of bid opening. Indus Construction timely submitted its good faith efforts documentation to the University of Central Florida on December 31, 1992. The University of Central Florida MBE Advisory Committee reviewed the Indus good faith effort documentation and determined compliance. The University of Central Florida recommended award of the contract for BR-452 to Indus Construction as the low responsive bidder. The Florida Board of Regents reviewed the recommendation of University of Central Florida and the good faith efforts submittal of Indus, concurred with the University, and awarded the contract to Indus Construction Company. The Board of Regents notified by letter dated 1/20/93, all bidders of its award of contract for BR-452 to Indus Construction. Petitioner, Sovran Construction timely filed a notice of protest on January 21, 1993. On January 29, 1993 Petitioner timely filed its Formal Written Protest and Request for Formal Administrative Hearing. In addition, these facts are found from the evidence presented at hearing: The bidding requirements, sample forms, contract conditions and specifications for state project no. BR-452 are compiled in a two-volume project manual. (Joint Exhibit #2) The manual provides: The expenditure of at least 15 percent of the Base Bid with certified Minority Business Enterprises is a requirement of this contract, unless Good Faith Effort, as identified in Paragraph 1-7 can be demonstrated by the Bidder. (Joint Ex. #2, p. I-1.) Of the ten bidders, three met or exceeded the 15 percent MBE goal. Seven failed the goal. Two, Indus and the third lowest bidder, had 0 percent participation; Sovran's bid reflected 14.5 percent participation. Over the last fiscal year the Board of Regents has awarded 21 competitive bid projects; 11 actually had full MBE participation and 10 met good faith effort requirements. Zero MBE participation does not disqualify a bidder so long as good faith effort is established. Good faith effort is described in paragraph 1-7 of the project manual described above. Paragraph 1-7 is broken into several sub-parts specifying eight statutory elements and the implementation and documentation required by the Board of Regents for each of the eight elements. 1/ The good faith documentation from Indus contained a copy of the pre- bid solicitation meeting sign in sheet which indicated that Shahid Nassir, president of Indus attended the meeting on November 17, 1992. At that meeting, representatives from the University of Central Florida discussed the Board of Regents MBE program, handed out instructions and pointed out the requirements of the project manual. The meeting participants were given a packet with the MBE check list, a list of certified MBE's, and a list of minority organizations. Indus immediately placed notices in the Orlando Sentinel and Orlando Times (a minority newspaper) inviting MBE's to participate in their bid on the project. On November 17, 1992 Indus sent letters to the entire list of certified MBE's (over 200) soliciting their participation. Those letters state the project title and number, the bid opening deadline, the places where the specifications or plans may be viewed, and a phone number for inquiries and address for bid submittals. The letters also provide these scopes of work for the project: Clearing Paving Irrigation Cabinets Str/MiscSteel Earthwork Painting Electrical HVAC Alum/Glass Plumbing Carpentry Masonry Roof Trusses Doors/Frames Utilities Flooring Specialties Landscaping Concrete Work Tile Thermal and Moisture Protection Studs/Drywall (Joint Ex. 15) Follow up letters were sent to the same full list of MBE's by Indus on November 23, 1992. In addition to the letters to individual MBE's, similar letters were sent to eight minority business development organizations in the central Florida area and in Tallahassee. Between November 20 and November 30, 1992, Indus received telephone calls or letters from thirteen MBE's stating that they would not be bidding on the project. Three positive responses were received on November 30, 1992, two by telephone message and one by letter. Shahid Nassir spoke to each by telephone, briefly, on November 30, stating generally that Indus would be happy to accept their bids and wishing them good luck. The three sub-contractors did not ask for a meeting nor did Mr. Nassir suggest one at the time of the telephone conversation. Rather, he sent letters dated November 30 to each, inviting them to meet to go over the plans and specifications and answer questions. Since bid opening was December 1st, the following day, typically a hectic, busy time for contractors assembling last minute quotes for their bid submittals, the letters inviting a meeting were a meaningless formality. Indus received approximately eleven responses from MBE's on bid day, quoting figures for various parts of the projects. No MBE quote was low on any scope of work and none was incorporated by Indus in the bid it submitted at the bid deadline. Indus prepared a spread sheet describing the MBE bids received and an explanation why each was rejected, with the low quote included. Evidence of each step in the MBE solicitation process and its rejection of quotes was submitted by Indus to the University of Central Florida. The university's MBE Advisory Committee reviewed Indus' documentation and recommended that the Board of Regents find good faith effort compliance. Patricia Jackson, Projects Administrator with the Board of Regents, a ten-year veteran of the Board of Regents' MBE program, performed her independent review of Indus' documentation. She concurred that the good faith efforts complied with the criteria in the project manual and she recommended award to Indus as the low bidder for the project. In particular, Ms. Jackson considered that Indus properly had a breakdown of scope of work when it sent notice letters to all of the MBE's selected by the university in various categories of work, and it also included a breakdown of scope in its solicitation letter. Ms. Jackson did not have a problem with the fact that the letters suggesting a meeting were mailed one day before bid opening because Indus was contacted by the three MBE's at the last minute, and there was no time left. She did not expect Indus to "negotiate" better quotations from the MBE's as the agency discourages what it terms "bid shopping". That is, the agency expects that an MBE quotation will be rejected if it is not the low quotation. It discourages the practice of approaching an MBE with another firm's lower bid and giving the MBE an opportunity to go lower. As Indus' president, Shahid Nassir, explained, the practice of soliciting a lower bid from an MBE, or giving the MBE the last opportunity to make a lower bid, is considered favoring one subcontractor over another with the negative effect of assuring higher bids from these subcontractors on the next project. That is, when a contractor is known to "shop the number", subcontractors either stop bidding to that contractor or they bid high with the anticipation that they will have to cut their numbers later. The "negotiation" requirement of the statute is not, therefore, interpreted by the Board of Regents to mean negotiation on price. The university staff and the Board of Regents conducted separate thorough reviews of Indus' good faith efforts and reasonably determined that it met the requirements of the MBE program. Although it is always preferable to achieve MBE participation in construction projects, and, even though one step in Indus' process (the letters inviting a meeting) was merely pro forma, there is no evidence in this proceeding that the Respondent acted fraudulently, arbitrarily or illegally in determining the bid should be awarded to the lowest bidder, Indus.
Recommendation Based upon the foregoing, it is hereby RECOMMENDED That the petition of Sovran Construction Company, Inc. be dismissed and a final order entered awarding the bid in project BR-452 to Indus Construction Company, Inc. DONE AND ORDERED this 7th day of May, 1993, in Tallahassee, Florida. 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 7th day of May, 1993.
Findings Of Fact John Keene was elected Clerk of the Court for Clay County, Florida, in November, 1988, and was reelected in 1992. He has served as Clerk of the Court at all times relevant to this proceeding. Ronald Stotler served on the Board of County Commissioners for Clay County (Board) from 1982 to 1992, and served as Chairman of the Board from approximately November, 1991 to November, 1992. Based on his experience as a County Commissioner, he is familiar with the preparation and implementation of the Clay County budget. After going off the Board, he remained interested and active in Clay County politics. As Clerk of the Court, Mr. Keene is the chief financial officer of Clay County. With the assistance of his financial director, he prepares the tentative budget to be presented to the Board. The Clerk's revenue projections are based on various factors including advalorem tax assessments, fine and foreiture and license funds, and State funding. Preparation of the budget requires projection of revenues and expenditures six to eight months prior to realization of those revenues or expenditures. The Board must approve the budget and can make changes to the budget presented by the Clerk. The budget estimates for the 1992-1993 fiscal year, which included estimates of cash carried forward, were prepared by the Finance Director at that time, Arnold Herwick, who had served as Finance Director since 1975. The budget for the 1992-1993 fiscal year was approved by the Board, chaired then by Commissioner Stotler. In the fall of 1992, Arnold Herwick became ill and was unable to remain with the County as Finance Director. Sometime in October, 1992, Donald Moore contacted Mr. Keene to apply for the vacant position. Mr. Moore was the managing partner of a local CPA firm, Jones, Moore, Johnston, and Williams (Jones-Moore). His firm specialized in governmental accounting and auditing, tax, and write-up work. In the summer of 1992, the Jones-Moore firm had been awarded a four-year contract to do audit work for the Board beginning September 30, 1992. Mr. Moore's partner, Walter Johnston, did the actual work on the audit, not Mr. Moore. Mr. Keene notified Mr. Moore in November, 1992, that he would be hired as Finance Director. Beginning, December 1, 1992, Mr. Moore began working part- time as the Finance Director in order to assist the County with the purchase of a local utility. On December 8, 1992, Mr. Keene introduced Mr. Moore as the new finance director at a public meeting of the Board. In mid December, 1992, Mr. Moore sold his practice to the accounting firm of Magers, Nichols. Walter Johnston joined the Magers, Nichols firm and continued working on the Board's audit. On December 15, 1992, the Jones-Moore firm ceased all billable activities and started the process of collecting and paying on its accounts. As part of the sale of the Jones-Moore firm, Mr. Moore was to continue to receive a portion of the collections on his client list, which included governmental clients. Mr. Moore and the Magers, Nichols firm agreed that Mr. Moore would not receive any compensation related to the audit contract with Clay County; however, this portion of the agreement was not memorialized until approximately a year after the original agreement. In January, 1993, the Magers, Nichols firm was renamed Magers, Nichols, Moore, and Johnston. The "Moore" in the firm name referred to Donald Moore. The Magers, Nichols, Moore and Johnston firm had unilaterally and temporarily issued one share of the firm in Mr. Moore's name in order to be able use Mr. Moore's name in the firm name. Mr. Moore did not sign for the share and was unaware that he had been issued a share. However, Mr. Moore did concede the original agreement called for him to purchase a share in the newly formed Magers, Nichols firm. Mr. Moore was listed in the State Board of Accountancy Records as a partner or shareholder in the Magers, Nichols, Moore and Johnston firm. The Jones-Moore firm received the following payments related to the audit for the Board: (a) $2,000 by check dated 10-13-92 for work performed through 9-30-92; (b) $1,200 by check dated 11-10-92 for work performed through 10-31-92; (c) $15,000 by check dated 12-22-92 for work performed through 11-30- 92; and (d) $2,780 by check dated 1-26-92 for work performed through 12-31-92. According to Mr. Moore, the Jones-Moore firm stopped performing actual work by December 15, 1992; thus, the January check would have been for work performed prior to December 15. The Magers, Nichols, Moore and Johnston firm received the following payments related to the audit contract for the Board which had been awarded to the Jones-Moore firm: $3,000 by check dated February 23, 1993 and $2,475 by check dated April 13, 1993. Mr. Moore did not receive any compensation for work performed after December 15, 1992, relating to the Board audit. Mr. Moore was officially sworn in as Finance Director on January 5, 1993, at which time he began his full-time duties as Finance Director. In February 1993, Mr. Moore determined that the audit work for the Board previously provided by the Jones-Moore firm should be assigned to a firm with which he had no prior relationship. He identified Duval & Company as the accounting firm rated highest by the Board during the summer of 1992 that was still in existence in 1993. When the Jones-Moore firm was awarded the contract in the summer of 1992, the Board had ranked three CPA firms, with the Jones- Moore being first and the Duval firm being third. The second firm dissolved after the award. Mr. Moore discussed the matter with Mr. Keene, who instructed him to contact the Duval firm to determine if the firm would be willing to accept an assignment of the contract. On February 4, 1993, Mr. Moore wrote a memorandum to Mr. Keene indicating that because of public perception that the audit contract should be assigned and that the Duval firm had agreed to finish the audit at no cost to the County. On February 9, 1993, at a regular public meeting, the Board approved the transfer and assignment of the audit contract to Duval & Company. The audit was completed and delivered to the Board in March, 1993. The cover letter to the audit was dated January 23, 1993, which represented the last date that substantial field work was done. In January, 1993, Mr. Keene reviewed a cash fund balance report for the 1991-1992 fiscal year and detected account balances that were lower than expected. He compared the last check run of the 1991-1992 fiscal year with the previous year and found the check run was 1.2 million dollars greater in the 1991-1992 fiscal year. In February, 1993, Mr. Keene notified the Board of the possible 1.2 million dollar difference. In March, 1993, Mr. Keene received the audit of the 1991-1992 fiscal year and compared the adopted budget to the actual budget. The comparison revealed that revenue in the form of cash carried forward was overestimated by Mr. Herwick in the amount of 7.6 million dollars. Mr. Keene prepared a proposal for the Board in which he recommended, among other things, that the County reduce its expenditures by 2.9 million dollars in order to balance the budget. He presented his proposal to each Board member individually and to the Board's Budget and Finance Committee as a group on April 21, 1993. On or about April 22, 1993, Mr. Keene referred the budget matter to the State Attorney's Office to determine whether Mr. Herwick's errors resulted from malicious intent. On April 27, and May 11, 1993, the Board held public meetings and discussed, among other things, the Budget and Finance Committee's recommendation concerning handling the budget shortfall. On June 10 and 17, 1993, concerned citizens met at the office of attorney Terry Jones to discuss the budget issues and to prepare statements to be presented at the June 22 meeting of the Board. Mae Byers and Eugene Alphonse were among the persons at the meetings. Mr.Stotler did not attend the meetings. On June 18, 1993, the accounting firm of Purvis & Gray, at Mr.Keene's request, verified the legality and appropriateness of the proposals offered by Mr.Keene to resolve the budget shortfall. On June 22, 1993, at a regular public meeting, the Board considered and approved Mr.Keene's recommendations to cure the budget shortfall by a vote of 4-1, with Commissioner Jett voting in opposition. Mrs. Byers, Mr. Alphonse and others made presentations at the meeting in opposition to Mr. Keene's recommendations. At Board meetings on July 13 and August 12, 1993, the Board, Mr. Keene and citizens discussed the 1992-1993 budget shortfall and ways to avoid future shortfalls. On September 3, 1993, Mr. Keene wrote the State Attorney, Harry Shorestein, a letter offering support for any investigation and encouraging a grand jury inquiry if such an inquiry was found to be necessary. In the fall of 1993, Mr. Stotler called Patricia Surman, who was a CPA and had been employed as an internal auditor for the Clerk's Office prior to her dismissal. Mr. Stotler was inquiring about the budget shortfall and the hiring of Donald Moore. Ms. Surman informed Mr. Stotler that her understanding was that the budget error resulted from the revenues collected falling short of the estimates and that Mr. Moore had handled the transfer of the county audit correctly under accounting practices. On September 20, 1993, Mrs. Byers invited Mr. Stotler to a private meeting to discuss a presentation to State Attorney Harry Shorestein concerning the budget issues. Mr. Alphonse and others also attended the meeting. During the meeting the issue of media coverage was discussed. Mr. Stotler stated that he did not want to make the visit to the State Attorney a media event. After the September 20 meeting but prior to the actual meeting with the State Attorney, Mr. Stotler and Mrs. Byers prepared an addendum to the presentation to the State Attorney. Mr. Stotler discussed the budget issue with Mrs. Byers and Commissioner Jett on several occasions. Mr. Stotler, Mrs. Byers, and Mr. Jett are friends and political allies. On September 30, 1993, a group of citizens, including Mr. Stotler, Mr. Alphonse, and Mrs. Byers, met with Harry Shorestein to discuss the budget issues and to request an audit. Unbeknownst to Mr. Stotler at the time, Mrs. Byers had contacted several television stations and newspapers concerning the meeting, resulting in extensive media coverage of the meeting. After the September 30 meeting, Mr. Shorestein advised Mr. Stotler that he would refer the matter to either the Governor's office or the Joint Legislative Auditing Committee. Within one or two weeks, Mr. Shorestein did convey the citizen group's concerns to Terry Shoffstall, Staff Director for the Joint Legislative Auditing Committee. On October 4, 1993, Mr. Keene sent a letter to the Auditor General of the State of Florida explaining the circumstances of the budget shortfall and investigations surrounding it. Further the letter encouraged an audit by the Auditor General's Office, if it found one necessary. On October 7, 1993, Mr. Keene sent a letter to the Joint Legislative Auditing Committee along with a packet of information concerning the budget issues. He requested that the Auditor General's Office perform an audit of Clay County's financial records and procedures, stating, "[t]he purpose of this audit should not be to lay the blame, but to restore public confidence in Clay County government by a factual statement of financial conditions and procedural review." Shortly thereafter, Mr. Stotler spoke to Mr. Shoffstall, who advised Mr. Stotler that he may wish to consider contacting the Commission on Ethics. In a letter dated August 12, 1994, Mr. Shoffstall reiterated his previous comments and stated: Committee staff has reviewed your concerns, along with information contained in the 1993, as well as 1992, audit reports. Some of the concerns you raised address possible violations of the Code of Ethics for Public Officers and Employees, pertaining to the actions of the independent auditors and the Finance Director. The Commission on Ethics is statutorily charged with the responsibility of investigating alleged violations of the Code of Ethics, Part III, Chapter 112, Florida Statutes. I suggest that you contact the Commission if you would like to obtain information on how to initiate a formal complaint. On October 5, 1993, Mr. Keene called a press conference during which he again made a presentation explaining the budget measures taken and confirming the soundness of the County's budget and financial condition. On October 12, 1993, at a public meeting of the Board, Mr. Keene presented the fiscal budget for the prior eleven months and explained how he had corrected the prior overestimates made by the previous Finance Director. In October of 1993, Mr. Keene discovered that an audit by the Auditor General would cost the County $40,000 to $50,000. At that time Mr. Keene approached the Clay County Legislative Delegation and requested that the Auditor General's audit be delayed until after the results of the County's regular, annual independent audit were made known in March of 1994. The Clay County delegation requested that the audit be delayed. Mr. Stotler was unaware that Mr. Keene's reason for asking for the delay of the Auditor General's audit was based on the costs of the audit. Mr. Stotler was concerned about the delay and expressed his concern to others. In November, 1993, Mr. Stotler wrote to Representative Joseph Tedder of the Joint Legislative Auditing Committee requesting him to consider the citizen's concern over the need for an audit. On December 2, 1993, Mr. Stotler wrote a letter to the Department of Business and Professional Regulation (DBPR), requesting an investigation of alleged inappropriate conduct on the part of Donald Moore. As a result a formal investigation was begun. Mr. Stotler also filed a similar complaint with DBPR against Steve Duval, the accountant who was performing the Board's 1991-1992 audit as a result of the assignment of the contract from the Jones-Moore firm. After their investigation, DBPR found no inappropriate conduct by Mr. Moore. On February 3, 1994, Mr. Stotler and Mrs. Byers met with State Attorney Shorestein who did not commit to doing anything about the issues they raised. On February 4, 1994, Mr. Stotler filed a Complaint with the Commission on Ethics (Commission) against Mr. Moore as Finance Director for Clay County, asserting independence and conflict of interest issues relating to Mr. Moore's hiring, the transfer of the independent audit responsibilities from the Jones- Moore firm to the Duval firm, and payments to Mr. Moore's former and successor CPA firms. On February 4, 1993, Mr. Stotler filed an identical Complaint with the Commission against Mr. Keene as Clerk of the Court of Clay County. Prior to filing the Complaint against Mr. Keene, Mr. Stotler's attorney reviewed the Complaint and advised Mr. Stotler that the Ethics Commission was the appropriate place to take his concerns, that Mr. Stotler's concerns were valid, and that his concerns were not frivolous. Mr. Stotler had discussed the budget issues and the assigning of the audit contract from the Moore-Jones firm to the Duval firm with Eugene Alphonse, who is a Certified Public Accountant practicing in Clay County. Mr. Alphonse had some concerns about the accounting ethics concerning the hiring of Mr. Moore. Unbeknownst to Mr. Stotler at the time of their discussions and prior to his filing the Ethics Complaint against Mr. Keene, Mr. Alphonse had been employed by Mr. Moore and Mr. Duval and had been fired by both men. Mr. Stotler was also unaware that Mr. Alphonse had also filed complaints with the Department of Professional Regulation against Mr. Duval and those complaints had been dismissed. Prior to the filing of the Complaint against Mr. Keene, Mrs. Byers told Mr. Stotler that she and Mr. Jett had discussed the payments to the Magers, Nichols firm with the Sheriff and that the Sheriff had indicated there could be possible criminal fraud involved. Prior to filing the Complaint against Mr. Keene, Mr. Stotler did not discuss the issues with Mr. Keene, Mr. Moore, Steve Duval, anyone from the Jones-Moore firm, or anyone from the Magers, Nichols firm. On February 22, 1994, the Executive Director of the Commission reviewed Mr. Stotler's Complaint against Mr. Keene and concluded that the allegations failed to indicate a possible ethics violation by Mr. Keene. As a result, the Executive Director recommended that the Complaint be dismissed as legally insufficient without investigation. On March 10, 1994, the Commission adopted the recommendation of the Executive Director and dismissed the Complaint for failure of legal sufficiency. The Commission also dismissed the Complaint filed by Mr. Stotler against Mr. Moore. In March, 1994, the independent audit of the 1992-1993 fiscal year was completed by Duval & Company. The audit was an "unqualified report" which meant it was a clean audit with no reportable conditions, comments, or recommendations. On March 15, 1995, the accounting firm of Purvis & Gray, at the request of Mr. Keene, reviewed and confirmed the findings of Duval & Company's audit of the 1992-1993 fiscal year. Mr. Keene incurred legal fees and costs totaling $33, 264.21 relating to the Ethics Complaint filed by Mr. Stotler and in the prosecution of the fee petition. As of February 25, 1994, the legal costs relating to the Complaint and this proceeding totalled $3,155.21. The total amount for reasonable fees for legal services is $30,109.00. Mr. Keene retained the firm of Marks, Gray, Conroy & Gibbs to represent him in this matter. Bill Thompson of that firm spent 45.8 hours representing Mr. Keene and Mr. Barbour spent 179 hours representing Mr. Keene. Law clerks spent 9 hours and paralegals spent 16.2 hours. The amount of time spent by the firm is reasonable. A reasonable hourly rate for Mr. Thompson is $150, for Mr. Barbour is $130, for law clerks is $60, and for paralegals is $45.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered denying John Keene's petition for attorney's fees and costs against Ronald Stotler. DONE AND ENTERED this 15th day of September, 1995, in Tallahassee, Leon County, Florida. SUSAN B. KIRKLAND, 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 15th day of September, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1907FE 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: Keene's Proposed Findings of Fact. Paragraph 1: The first and last sentences are accepted in substance. The second sentence is rejected as unnecessary. Paragraph 2: Rejected as unnecessary. Paragraph 3: Accepted in substance. Paragraph 4: The first sentence is accepted. The remainder is rejected as unnecessary. Paragraph 5: The first sentence is accepted in substance. The remainder is rejected as unnecessary. Paragraph 6: The first two sentences are accepted in substance. The remainder is rejected as unnecessary. Paragraph 7: The first sentence is accepted in substance. The remainder is rejected as unnecessary. Paragraph 8: The first sentence is accepted in substance. The remainder is rejected as unnecessary. Paragraph 9: Accepted in substance. Paragraph 10: The first two sentences are accepted in substances. The remainder is rejected as unnecessary. Paragraphs 11-17: Accepted in substance. Paragraph 18: Accepted in substance except as to being dissolved. The firm was not legally dissolved. Paragraphs 19-22: Accepted in substance. Paragraph 23: The last sentence is rejected as constituting a conclusion of law. The remainder is accepted in substance. Paragraphs 24-25: Accepted in substance. Paragraph 26: Rejected as constituting argument. Paragraphs 27-41: Accepted in substance. Paragraph 42: Rejected as unnecessary. Paragraphs 43-49: Accepted in substance. Paragraphs 50-52: Rejected as subordinate to the facts found. Paragraph 53: Accepted in substance. Paragraphs 54-55: Rejected as subordinate to the facts found. Paragraph 56: Accepted in substance. Paragraphs 57-62: Rejected as subordinate to the facts found. Paragraphs 63-64: Accepted in substance. Paragraph 65: Accepted in substance except as to the purpose of the meeting. The purpose of the meeting was to discuss the budget issues. Paragraph 66: The last sentence is accepted in substance. The remainder is rejected as not supported by the evidence if it refers to the original packet of information discussed at the meeting at Mr. Myers home. Paragraph 67: The first sentence is accepted in substance. The remainder is rejected as not supported by the evidence. Mr. Stotler testified that he reviewed and considered documents that were presented to him and to which he had access. Paragraph 68: Accepted that that was Mr. Conroy's testimony but rejected as to the truth of the testimony based on the greater weight of the evidence. Paragraph 69: Accepted in substance to the extent that Stotler, Byers, and Alphonse were part of a group that went to the State Attorney's office to discuss the budget issues. Rejected as not supported by the greater weight of the evidence that Stotler led the group. The last sentence is accepted in substance. Paragraph 70: Rejected as constituting argument. Paragraph 71: Accepted in substance. Paragraphs 72: Rejected as subordinate to the facts found. Paragraph 73-76: Accepted in substance. Paragraph 77: Rejected as unnecessary. Paragraph 78: The first two sentences are accepted in substance. The remainder is rejected as not supported by the greater weight of the evidence. Mr. Stotler was unaware of Mr. Alphonse's employments and the filing of the complaints when Mr. Stotler filed the Ethics Complaint. Paragraph 79: Accepted in substance that they met with the State Attorney but rejected that the State Attorney confirmed that an investigation was still under consideration. The State Attorney did not commit to do anything. Paragraph 80: Rejected as subordinate to the facts found. Paragraphs 81-82: Accepted in substance. Paragraphs 83: The first portion of the paragraph is accepted in substance. The remainder is rejected as not supported by the evidence because Mr. Stotler did have his attorney review the compliant before it was filed. Paragraph 84: Rejected. Mr. Stotler consulted his attorney. Paragraph 85: Rejected as subordinate to the facts found. Paragraph 86: Accepted in substance. Paragraph 87: Rejected as subordinate to the facts found. Paragraph 88: The first part of the paragraph is rejected as not supported by the evidence. Mr. Stotler did scan Chapter 119 prior to filing the complaint. The remainder is subordinate to the facts found. Paragraphs 90-92: Accepted in substance. Paragraphs 93-94: Rejected as constituting argument. Paragraph 95: Accepted in substance. Paragraph 96: Rejected as constituting argument. Paragraph 97: Rejected that any negative media attention resulted from the efforts of Mr. Jett, Mrs. Byers, Mr. Alphonse or Mr. Stotler. The last sentence is rejected as subordinate to the facts found. Paragraphs 98-99: Rejected as not supported by the greater weight of the evidence. Paragraph 100: Rejected as constituting argument. Paragraph 101: Accepted in substance. Paragraph 102: Accepted in substance that the discussion concerned the checks to the Magers, Nichols firm but rejected that it was an investigation of Mr. Keene. Paragraphs 103-105: Accepted in substance. Paragraph 106: Rejected as constituting argument. Paragraph 107: Rejected as not supported by the greater weight of the evidence. Paragraphs 108-115: Accepted in substance. Stotler's Proposed Findings of Fact. (Stotler's Findings of Fact are not numbered; however, they are addressed in the order that they appear.) Paragraph 1: Accepted in substance. Paragraph 2: The first sentence is rejected as constituting argument. The remainder is accepted in substance. Paragraph 3: Rejected as unnecessary. Paragraph 4: Rejected as constituting argument. Paragraph 5: The last sentence is rejected to the extent that the Clerk's office calculated all the revenue projections. Some of the information was provided by the State. The remainder is accepted in substance. Paragraph 6: Accepted in substance. Paragraph 7: The last sentence is rejected as unnecessary. The remainder is accepted in substance. Paragraph 8: Sentences 5 and 6 are accepted in substance. The fourth sentence is rejected as constituting argument. The remainder is rejected as unnecessary. Paragraph 9: Sentences 1, 2, 4 are accepted in substance. Sentence 5 is rejected as constituting argument. Sentence 3 is rejected as unnecessary. Paragraph 10: Rejected as constituting argument. Paragraph 11: Rejected as subordinate to the facts found. Paragraph 12: The first part of the first sentence is accepted in substance. The second part of the first sentence is rejected to the extent that it implies that legally the last day of existence was December 31, 1992. The second sentence is accepted in substance. The third sentence is rejected as not supported by the evidence to the extent that it implies that Mr. Moore received compensation relating to the Board audit for work performed after December 15, 1992. Paragraph 13: Accepted in substance to the extent that in January, 1993, he did receive payment for audit work for the Board performed by the Jones-Moore firm through December 15, 1992 and that he was working part time for Clerk in December, 1992. He did not continue to receive payment for the Board audit work performed after December 15, 1992. Paragraph 14: Accepted in substance. Paragraph 15: Rejected as unnecessary. Paragraph 16: The first sentence is accepted in substance. The second sentence is accepted in substance except as to the last portion which is rejected as unnecessary. The third, fourth, and sixth sentences are accepted in substance. The fifth and seventh sentences are rejected as constituting argument. Paragraph 17: The first sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 18: The first sentence is subordinate to the facts found. The remainder is rejected as constituting argument. Paragraph 19: The first sentence is rejected to the extent that it implies there was a conflict. The second sentence is rejected as constituting argument. Paragraph 20: The first and fourth sentences are accepted in substance. The quotation is rejected as unnecessary. The third sentence is rejected as constituting argument. The fifth sentence is rejected as constituting argument. Paragraph 21: The first sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 22: The first sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 23: The fourth sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 24: Accepted to the extent that the audit report reflects the last date of the field work; the remainder is rejected as constituting argument. Paragraph 25-28: Rejected as constituting argument. Paragraph 29: The last sentence is accepted in substance. The remainder is rejected as constituting argument. Paragraph 30: The first sentence is rejected as constituting argument. The remainder is accepted in substance. Paragraphs 31-37: Rejected as constituting argument. Paragraphs 38-41: Accepted in substance. Paragraph 42: The first sentence is rejected as constituting argument. The remainder is rejected as unnecessary. Paragraph 43: The last is rejected. Sheriff Lancaster's deposition was not filed. The remainder is accepted in substance. Paragraph 44: Accepted in substance. Paragraph 45: Rejected as constituting argument. COPIES FURNISHED: Carrie Stillman Complaint Coordinator Commission on Ethics Post Office Box 15709 Tallahassee, Florida 32317-5709 William L. Thompson, Jr. Esquire Jeptha F. Barbour, Esquire Post Office Box 447 Jacksonville, Florida 32201 Robert L. McLeod, II, Esquire First Union Bank Building 24 Cathedral Place, Suite 500 St. Augustine, Florida 32084 Bonnie Williams Executive Director Florida Commission On Ethics Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Phil Claypool, Esquire General Counsel Ethics Commission 2822 Remington Green Circle, Suite 101 Post Office Drawer 15709 Tallahassee, Florida 32317-5709
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
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 Was Petitioner responsive to the bid solicitation for Project E-2B59, Duval County (the project) by Respondent? Did Respondent act appropriately in rejecting all bids for the project?
Findings Of Fact Respondent solicited numerous firms to bid for a contract to conduct roadside mowing and litter removal under terms of the project. This included the edging of sidewalks, curbs, and gutters. The estimated cost of this project for budgetary purposes was $300,000. The project was to be completed within 365-calendar days with a renewal option. Only four firms responded to the bid solicitation notice. Petitioner and Intervenor were among those firms. In particular, the bid solicitation notice informed the bidders about the DBE goals for the project wherein it stated: This contract has minimum DBE goals of 10% Black and/or Hispanic. The DBE Utilization Summary Form 275-020-003, Rev. 10/95 must be included with the bid submission or the bid will be declared non-responsive. In addition, all DBE Utilization Form(s) S275- 020-004, Rev. 10/95 must be completed and received by 5:00 P.M. on the third business day following the letting or the bid will be declared non-responsive. In addition to other comments concerning 275-020-003, DBE Utilization Summary Form and 275-020-004, DBE Utilization Form, the bidders were provided the following instructions for completing those forms in relation to the project: Revised 5/96 INSTRUCTIONS FOR COMPLETING UTILIZATION FORMS 275-020-003 and 275-020-004 (REVISED 10/95) NOTE: THESE FORMS MUST BE COMPLETED IN ACCORDANCE WITH RULE CHAPTER 14-78, FLORIDA ADMINISTRATIVE CODE FORM 275-020-003, DBE UTILIZATION SUMMARY This form must have all information requested including total goal in dollars and total goal in percentage. No signatures are required. If the project has one DBE goal use one form. If the project has a split goal (i.e. 4% Black 4% Non-minority Women) use two forms, one for each goal. The completed form if not submitted with the bid, must be received by the Minority Programs Office no later than 5:00 p.m. on the third business day after the letting. Electronic transmittals (e.g. facsimiles) sent directly to the Department will not be accepted. FORM 275-020-004, DBE UTILIZATION FORM Complete the form indicating prime contractors, state project number and DBE name, address and phone number. Submit one form for each DBE utilized on the project. Make additional copies if necessary. The form submitted to the Department must be completed, signed by an authorized representative of the DBE and received by the Minority Programs Office by 5:00 p.m. on the third business day following the letting. Electronic transmittals (e.g. facsimiles) sent directly to the Department will not be accepted. The columns for "Item No." and "Description" shall include the same information as per the "Request to Sublet" form. The amount paid to a certified DBE supplier must be factored by 60% to attain the amount to be applied toward the DBE goal. Complete line showing "Total to DBE." It can be seen that the explanation provided by Respondent in its bid solicitation notice and the instructions for completing utilization forms are in conflict in relation to the time for submitting 275-020-003, DBE Utilization Summary Form. The bid solicitation notice mandated the provision of that form with the bid submission or the bid would be declared non- responsive. Whereas, the instructions for completing that form would allow a bidder until 5:00 P.M. on the third business day after the letting for receipt of that information by the Minority Programs Office in the event that the information had not been submitted with the bid. The bidders for the project were also provided with excerpts of Chapter 14-78, Florida Administrative Code, in relation to participation by socially and economically disadvantaged individuals in Department of Transportation contracts. Rule 14-78.003, Florida Administrative Code, was part of the excerpt. At 14-78.003 Subpart 2(b)3., provided to the project bidders, it states: For all contracts for which DBE contract goals have been established, each bidder shall meet or exceed or demonstrated it could not meet, despite its good faith efforts, the contract goal set by the department. The DBE participation information shall be submitted as outlined in 14-78.003(2)(b)3.a. and b. below. . . . Failure to satisfy information requirements shall result in contractor's bid being deemed non-responsive and the bid being rejected. The contractor's bid submission shall include the following information. . . and shall be submitted on a completed Disadvantaged Business Enterprise (DBE) Utilization Form, Form 275-020-004, Rev. 10/95 and Disadvantaged Business Enterprise (DBE) Utilization Summary Form, Form 275-020- 003, Rev. 10/95: The names, addresses, and current telephone numbers of the certified DBE firms that will participate in the contract; and A description of the work each named DBE certified firm will perform; and The dollar amount of participation by each named DBE certified firm; and Any documentation required by the contract or applicable rules as evidence of certified DBE participation; and Signature of an authorized representative of the certified DBE firm confirming the DBE utilization information; and Evidence that the DBE goal for the project has been met. If the DBE goal is not met, sufficient information must be provided to demonstrate that the contractor made good faith efforts to meet the DBE goals. In lieu of a completed Disadvantaged Business Enterprise (DBE) Utilization Summary Form, Department of Transportation Form 275- 020-003, Rev. 10/95, and a Disadvantaged Business Enterprise (DBE) Utilization Form, Department of Transportation Form 275-020- 004, Rev. 10/95, the contractor will submit a Disadvantaged Business Enterprise (DBE) Utilization Summary Form which indicates that either the contractor will achieve the DBE goal established for the project for which the bid has been submitted, or that the contractor has submitted sufficient information to demonstrate that the contractor made good faith efforts to meet the DBE goal as part of the bid submission. If the contractor has submitted a Disadvantaged Business Enterprise (DBE) Utilization Summary Form on which the contractor has indicated that the DBE goal will be achieved, the contractor will provide to the Minority Programs Office by 5:00 P.M. on the third business day following the bid letting day (Electronic transmissions, such as a FAX, sent directly to the Department will not be accepted): An updated Disadvantaged Business Enterprise (DBE) Utilization Summary Form listing the DBE subcontractors that will be utilized on the project to meet the DBE goal, the dollar amount of the DBE goal subcontracted to each DBE, and the total dollar amount for the DBE goal; and Disadvantaged Business Enterprise (DBE) Utilization Forms shall be completed and signed by an authorized representative of the DBE, for each DBE subcontract utilized on the project to achieve the DBE goal. Disadvantaged Business Enterprise (DBE) Utilization Forms that are not signed by an authorized representative of the DBE firm, will be rejected and will result in the bid being non-responsive. The bid solicitation notice tended to coincide with Rule 14-78.003(2)(b)3.b, Florida Administrative Code, with the exception that the bid solicitation notice did not call for the submission of an updated Disadvantaged Business Enterprise (DBE) Utilization Summary Form by 5:00 P.M. on the third business day following the bid letting. The Disadvantaged Business (DBE) Utilization Summary Form 275-020-003 provided to the bidders, in relation to paragraph 6.a. states: This form must be included in the bid submission and must be completed in accordance with one of the following options: Goal achieved with the following information completed (Note: All signed DBE Utilization forms 275-020-004 must be received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, no later than 5:00 p.m. on the third business day after the letting). Later the form states: NOTE: Bids shall be declared non-responsive if the DBE Utilization Summary form providing all information listed in 6.a. above, and all completed DBE Utilization forms are not received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, by 5:00 P.M. on the third business day following the letting. Electronic transmittals (e.g. Faxes) sent directly to the Department will not be accepted. This form is internally inconsistent in that it initially states that the Disadvantaged Business Enterprise (DBE) Utilization Summary Form must be included with the bid submission and later states that the DBE Utilization Summary Form providing the information will not be declared non-responsive if received by the District Office on the third business day following the letting. By contrast, consistent with the bid solicitation notice, the Disadvantaged Business Enterprise (DBE) Utilization Form 275-020-004, provided to the bidders for the project stated: NOTE: All DBE Utilization Forms submitted to the Department must be completed, signed by an authorized representative of the DBE and received by the District Contracts Office, 1901 S. Marion St., Lake City, Florida 32025, by 5:00 P.M. on the third business day following the letting. . . . Bids will be declared non-responsive if all DBE Utilization forms are not received by the District Contracts Office by 5:00 P.M., on the third business day following the letting. . . . Petitioner and Intervenor were represented at the pre- bid conference conducted by Respondent. From the discussion held in the pre-bid conference, Intervenor in the person of its President Bilal Saleem, understood that the Utilization Summary Form 275-020-003, was to be provided with the bid submission or the bid would be declared non-responsive. Consistent with that understanding Intervenor provided the DBE Utilization Summary Form with its bid submission. Petitioner did otherwise. When Intervenor submitted its bid response, it included the Disadvantaged Business Enterprise (DBE) Utilization Summary Form 275-020-003 reflecting its full quote of $241,971.40, in that Intervenor is a DBE firm. Petitioner provided a DBE Utilization Form 275-020-004 with its bid submission which was not signed on the signature line by the DBE representative submitting the quote found within Petitioner's submission. The submission of the Utilization Form noted that the amount to be paid to the DBE subcontractor was $59,200, out of a total price quote of $229,279. The unsigned Utilization Form described the activity as "mowing large machines" to be done by R & L Cleaning Services (Black), 2090 South Nova Road, Daytona Beach, Florida 32115, telephone no. (904) 761-1001. Petitioner's provision of the unsigned DBE Utilization Summary Form 275-020-004 with its bid submission was not in keeping with any instructions or explanations provided by Respondent concerning the manner in which DBE utilization would be described by bidders. Upon the third day following the bid opening, Petitioner submitted a DBE Utilization Summary Form 275-020-004 signed by the Vice President of R & L Cleaning Services, reflecting the same information as had been provided on the Utilization Form provided with Petitioner's bid submission. In addition, upon the third day following the bid opening, Petitioner provided the DBE Utilization Summary Form 275-020-003, reflecting R & L Cleaning Services as being the DBE subcontractor for a DBE goal of $59,200, representing 26 percent of the total project "price quotation," which was also reflected on that form. Given the inconsistencies in the information provided to Petitioner and other businesses solicited to bid on the project, the question arises whether Petitioner has sufficiently conformed to the expectations of Respondent for reporting information on DBE compliance. The issue of compliance by the reporting of DBE goals by Petitioner was promoted by action of the Respondent at the bid opening for the project on August 20, 1998, in which Intervenor whose price quotation was $241,971.40, second low quote, was declared the responsive low bidder for the project and a recommendation made to award the contract to Intervenor. This was followed by correspondence of August 31, 1998, from Respondent to Petitioner in which Jane E. Jones, District Contract Administrator for Respondent, District 2 informed Petitioner that its bid had been found non-responsive for the following reason: DBE Utilization Summary form was not completed and submitted with your bid. As per our advertisement and Florida Administrative Code 14-78, the DBE Utilization Summary form #275-020-003 must be submitted with your bid. Your bid did not include this form. In turn, Patrick Daugherty, Secretary and Treasurer for Petitioner, wrote Ms. Patsy Elkins of the Florida Department of Transportation on September 1, 1998, concerning Petitioner's response to the requirement for providing information on DBE compliance. This correspondence pointed out the instructions for completing Utilization Forms 275-020-003 and 275-020-004 as constituting the reason why Petitioner had taken advantage of the three-day period in which to submit DBE forms. This was followed by the Notice of Protest for the project dated September 2, 1998 and ultimately the Formal Protest dated September 9, 1998, by Petitioner. Although, submission of the unsigned Disadvantaged Business Enterprise (DBE) Utilization Form 275-020-004 with the bid documents did not comport with any instructions or information provided from Respondent to Petitioner, it does not matter. Beyond the submission of incomplete information on the wrong form at the time of the bid submission, Petitioner complied with the Respondent's instructions for completing the Utilization Forms 275-020-003 and 275-020-004 within the third business day after the letting. These facts are found in a setting in which Ms. Jones as District Contract Administrator, and policymaker, acknowledged the confusion in the instructions that had been given to the bidders concerning the submission of DBE compliance information and the lack of an explanation for declaring Petitioner non-responsive for failure to submit needed information, other than to state that some part of the instructions called for Petitioner to submit the DBE Utilization Summary Form 275-020-003 at the time the bid was submitted. On balance, the facts established Petitioner's compliance with the requirements to state DBE goals. Therefore, Petitioner is the apparent responsive low bidder. Rejection of All Bids Respondent through its bid tabulation had begun its posting on August 31, 1998, following its decision finding Intervenor the responsive low bidder. Respondent then determined as of September 3, 1998, to reject all bids "due to conflicting information in the bid package." This notice rejecting all bids was posted on September 3, 1998, with an ending date for posting of September 8, 1998. Addendum 4 also informed bidders that all bids had been rejected for the project "due to conflicting information in the bid package." While Intervenor had supported Respondent's decision to reject Petitioner's bid, Intervenor was in agreement with Petitioner's September 9, 1998 Formal Protest of the Respondent's decision to reject all bids. In the context of the decision to reject all bids, Ms. Jones discovered that only one of the four bidders on the project had received Addendum 3. Addendum 3 was dated August 7, 1998, and was only received by Intervenor among the four bidders. Addendum 3 stated: Addendum No. 3, Financial Project No. 21477217232, E-2B59 Attached are the Approximate Quantities with a brief explanation that these quantities are for one cycle and that the begin date for this contract will be January 1, 1999. Also, attached is a revised Bid Blank and Calendar of Events for this project. These forms must be utilized when bidding on this project August 20, 1998 at 2:00 p.m. Please sign, date and fax a copy of this addendum back to me by close of business today to indicate receipt. Also, include a copy of this addendum with your bid. As Ms. Jones explains, Addendum 3 was important in that it attempted to establish "posting rules" that had been left out before. Ms. Jones also expressed concern in that in the absence of receiving Addendum 3, Petitioner had not included a copy of Addendum 3 with Petitioner's bid submission. All participating bidders had received a copy of Addendum 1 for the project. Addendum 1 stated approximate quantities in relation to places and hectares to be addressed by the contractor. Addendum 1 in describing the attachment of that information stated: Attached are location sheets for the roadside mowing and litter removal, edging of sidewalk and curb and gutter sections for the above referenced project. Addendum 3 by its attachment pertaining to approximate quantities mirrored the attachments to Addendum 1, but its attachment had the following information in addition to that found within the attachment to Addendum 1: THE QUANTITIES LISTED ARE APPROXIMATE QUANTITIES FOR ONE CYCLE THE BID QUANTITIES ARE APPROXIMATE AND ARE GIVEN AS AN AID TO THE CONTRACTOR. THE ESTIMATED QUANTITIES OF WORK TO BE PERFORMED MAY BE INCREASED, DECREASED, OR OMITTED. THE CONTRACTOR WILL BE PAID FOR WORK COMPLETED AND ACCEPTED. THIS CONTRACT WILL BEGIN JANUARY 1, 1999. The calendar of events that was referred to in Addendum 3 as an attachment stated the following: FIN Project Number 21477217232 Contract Number E-2B59 Roadside mowing and litter removal, edging of sidewalk and curb and gutter sections. Duval County 06-29-98 Mailed Bid Solicitation Notice. 06-29-98 Published Advertisements in Florida Times Union, 07-06-98 Gainesville Sun, Tallahassee Democrat & Tampa Tribune 07-15-98 a MANDATORY PREBID CONFERENCE @ 2:00 p.m. Jacksonville Urban Office 2250 Irene Street Jacksonville, Florida Kelly Stroupe 904-381-8777 08-20-98 Bid opening - 2:00 P.M. - Large Conference Room 1901 South Marion St., Lake City, FL 32025 08-27-98 Evaluation committee meeting, Encumber funds. 08-31-98 Presentation of bid results to Executive Committee 08-31-98 4:15 p.m. - Begin Posting of Bid - 72 hours 09-07-98 5:00 p.m. - End Posting of Bid - 72 hours 09-30-98 Contract to Contractor for Signature 10-09-98 Execution of Contract and mail to Contractor(2), District Office Fiscal(2), Maintenance/Construction(3) District Office File(1) The Calendar of Events referring to the bid opening on August 20, 1998, was information found in Addendum 2. Obviously some of the events that were described in the calendar attached to Addendum 3 had already transpired before the August 7, 1998 preparation date of Addendum 3.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered finding that Petitioner submitted a responsive bid for the project but upholding Respondent's decision to reject all bids. DONE AND ENTERED this 1st day of March, 1999, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 1999. COPIES FURNISHED: Joseph A. Lane, Esquire Lowndes, Drosdick, Doster, Kantor and Reed, P.A. Post Office Box 2809 Orlando, Florida 32802 Brian F. McGrail, Esquire Department of Transportation Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Bilal Saleem, Personal Representative Saleem Lawn Service, Inc. Post Office Box 26736 Jacksonville, Florida 32226 Thomas F. Barry, Secretary C/O James C. Meyers, Clerk Department of Transportation Haydon Burns Building Mail Station 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
