The Issue The issues to be resolved in this proceeding concern whether the Petitioner, D. J. Haycook Construction Company (Haycook) was the lowest responsive bidder for an elementary school procurement project known as Elementary School "X," let by the Volusia County School Board and whether the Petitioner should have been awarded the contract.
Findings Of Fact On June 13, 2003, the School Board of Volusia County authorized the issuance of a request for proposal for the construction of a new elementary school known as Elementary School "X." The proposed new school would be located in Orange City, Florida. The school board issued an advertisement for the construction of Elementary School "X" and had it published. The project architect for the Board prepared the solicitation documents constituting a "Phase III specifications" manual and three addenda. The advertisement stated that "the school board expressly reserves the right to reject any and all bids and to waive informalities therein, and to use sufficient time to investigate the bids and the qualifications of the bidders." Section 00430 of the solicitation required that all bidders list the name of the subcontractor for each type of the 12 areas of construction work for Elementary School "X" as follows: 'For each type of work' below, list the name of the subcontractor. List only one name on each line and only one subcontractor for each type of work. Various 'type of work' sub-contracts may have more than one subcontractor (re: roofing; metal roofing and membrane roofing), list each subcontractor accordingly. Use additional sheets, if required. Additionally, Section 00430 provided: The term subcontractor as used herein shall be defined in 2001, Florida Statute 713.01(27) - subcontractor means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of such contractor's contract. The deadline for submission of proposals in response to the solicitation was August 6, 2003. On August 6, 2003, Haycook's bid proposal and that of the second and third lowest bidders were opened and read by the members of the school board's staff. Haycook listed itself as performing or "self-performing" in areas of earthwork, masonry, concrete, and structural steel on the required list of subcontractors form pursuant to section 00430 of the solicitation. Subsequently, the project architect began to investigate the bids for the project. This was done through correspondence and direct contact between Haycook, the project architect, Mr. Daimwood, and the school board staff. This process began on August 8, 2003. As part of the evaluation process the architect verbally requested documentation from Haycook to verify its past and present abilities to self-perform in the four areas of earthwork, concrete, masonry, and structural steel, as well as by letters dated August 12, August 15, and August 25, 2003. Haycook responded to these information requests by letters of August 11, 13, and 28, 2003. The bid documents for the school project included the bidding and contractual conditions, general conditions, technical specifications, and the drawings listed on pages 10D-1 to 10D-2. In order to have a responsive bid a bidder was required to comply with the bid documents when submitting its bid. The relevant bid documents at issue in this dispute are Section 0020, "invitation to bid," Section 00100, "instruction to bidders," Section 00300, "bid form," and Section 00430, "list of subcontractors." The bid documents also required each bidder to deliver a bid bond in the amount of five percent of its bid to accompany the proposal. After acceptance of the lowest responsive bid, and issuance of the contract award, a bidder was required to deliver a payment and performance bond in the amount of 100 percent of the contract price. There is no dispute that Haycook has a bonding capacity of 18 million dollars for a single project and 35 million dollars for aggregate projects and the bonding capacity is not in dispute. The invitation to bid documents require that bidders be required to hold a current Certificate of Pre-Qualification issued by the school board at the time of bid opening. Haycook at all material times hereto held a Certificate of Pre- Qualification and was licensed to perform all work called for by the bid documents including, among others, self-performance of earthwork, concrete work, masonry, and structural steel. The three bids received were in the amounts as follows: (1) D. J. Haycook Construction Company: a base bid of $7,599,000.00; Alternate One, $189,000.00; Alternate Two, $48,800.00; Alternate Three, $21,000.00; (2) Mark Construction Company of Longwood, Florida: base bid of $7,657,000.00, Alternate One, $221,000.00; Alternate Two, $50,000.00; Alternate Three, $20,000.00; (3) Clancy and Theys Construction Company of Orlando, Florida: base bid of $7,840,000.00; Alternate One, $230,000.00; Alternate Two, $50,000.00; Alternate Three, $21,000.00. Section 00430 required each bidder to furnish a list of subcontractors defined as quoted above in the bid form. Section 00430 of the bid form also permitted a bidder to list itself as a subcontractor. The form provides: "A contractor may not list himself as performing a type of work unless he is self- performing and is a Florida licensed contractor for that type of work". Haycook was properly licensed at the time of bidding, and at all relevant times, to self-perform in the four areas of earthwork, structural steel, masonry, and concrete at issue in this case. After the bids were opened and examined, Mr. Daimwood, the architect evaluating bids for the school board, requested that Haycook furnish a list of past projects where it had self- performed earthwork, structural steel, masonry, and concrete work. Haycook provided a list of examples of prior projects for which it had self-performed work in those areas on August 11, 2003. The list included five projects for earthwork, four projects for structural steel, seven projects for masonry, and seven projects for concrete. Thereafter, on August 12, 2003, the architect requested additional information regarding self- performance of work in the four areas at issue. Haycook provided the architect with the requested additional information on August 13, 2003, including a list of each project, the total cost of each project, the completion dates, as well as contact persons with their telephone numbers and including copies of qualifications of the subcontractors listed on Haycook's subcontractor list. On August 25, 2003, the architect requested Haycook payroll records and workers compensation information for two of the listed projects of those Haycook had provided, that for Goldsboro Elementary School and Eustis Elementary School. On August 28, 2003, Haycook sent a letter to the architect explaining that on the Goldsboro job the earthwork was self-performed by a combination of supervising and directing the work with salaried employees, with leasing of labor from an employment service, and hiring of labor by the cubic yard with a cap on the activity. Haycook also explained that structural steel work on the projects was self-performed by a combination of supervising and directing the work with salaried employees, leasing of labor from an employment service, hiring of labor paid by the foot to erect specific components of the job, as well as using salaried employees for the performance of specific activities, and including purchasing of fabricated materials and then hiring crew labor and equipment on an hourly basis to erect them. In the August 28, 2003, letter Haycook also explained, with respect to the self-performed masonry work on both the Eustis and Goldsboro jobs, that those areas of work were self- performed by purchasing fabricated material, supervising and directing the work with salaried employees, hiring labor by the unit price (for instance by the block) to lay the block, and hiring labor from an employee leasing service for specific activities as to those jobs. Haycook also explained in the August 28, 2003, letter that a combination of the methods and means of performing delineated above and in that letter would be used for the activities listed on the subcontractor list on the relevant bid form for Elementary School "X". Haycook explained that it had priced and used its own costs for the activities listed on the bid form to arrive at the bid price for Elementary School "X". Enclosed with the August 28, 2003, letter from Haycook were copies of its purchase orders and cost journals for the Goldsboro School, concerning earthwork, masonry, and structural steel activities and its vendor purchase orders and cost journals for the Eustis Elementary School's masonry work done by Haycook. The enclosures with the August 28, 2003, letter showed that Haycook had purchased the materials, performed the work with its own employees, and performed work using additional outside labor in the areas of structural metals, prefabricated structures, earthwork, cast-in-place concrete, structural steel erection, and masonry work. Haycook also provided its proposals used on the Goldsboro project which consisted of concrete labor and structural steel labor. The architect interpreted the term "self-performance" to mean labor with the contractor's own employees only. Based upon that restrictive interpretation, he concluded that he had not found adequate information demonstrating Haycook's having "self-performed" these types of work previously. Additionally, the architect opined that Haycook's intended self-performance on Elementary School "X" project at issue, in the four work areas in dispute, "is in our opinion, a subcontractor format." Uncontroverted evidence adduced at hearing established that Haycook has extensive public school construction experience. The Petitioner's President, Dennis Haycook, has built more than 35 public schools and Haycook's project manager, Reed Hadley, who is assigned to the Elementary School "X" project, has built over 25 school projects. Dennis Haycook was also a principal of Mark Arnold Construction Company in the past, which was one of the largest public school contractors in Florida. In the past 10 years, with his own company, the Petitioner, Haycook, has built numerous school projects including the Goldsboro school which was a $7,000,000.00 project. The Goldsboro, Eustis, and other Haycook-built schools referenced during the hearing and in the evidence were all projects that were built within the authorized budget, were timely, and were of quality construction. The Board ultimately rejected Haycook's bid on Elementary School "X" because of the architect's interpretation concerning "self-performance," i.e. that all work must be performed by employees on Haycook's payroll. The bid documents did not define "self-performance," nor do the bid documents require that labor used must be on the contractor's payroll in order for his performance to constitute "self-performance." Haycook's witnesses were consistent in their testimony as to the definition of "self-performance": "self-performance," as customarily used in the construction industry, includes the contractor's purchasing of materials, performing part of the work with its own labor force, providing other labor not on the contractor's payroll, and directly supervising the work with the contractor's supervisory personnel. The term "subcontractor" is defined in the custom and usage of the construction industry, however, to mean someone or an entity that provides all labor, material, and equipment necessary to do the complete operation, as well as all supervision. It is more of a "total turn key operation." A subcontractor provides everything necessary to finish the work, including supervision, and then merely answers to the general contractor in terms of responsibility for the quality of the job and its timeliness. The school board's witnesses, expert and otherwise, gave interpretations of the concept of self-performance which were somewhat conflicting. Mr. Daimwood, the architect, opined that self-performance requires the contractors to use employees on its own payroll and make direct payment of workers' compensation for such employees. His opinion was that anything else would be a subcontractor relationship and not self- performance. He later testified, however, that paying labor not actually on Haycook's payroll could still constitute self- performance. Patricia Drago, of the school board staff, testified that if a contractor uses 10 employees on his payroll and uses 10 non-employees, this would be self-performance. If such a contractor has 10 employees and uses 11 non-employees, she was not sure whether this would constitute self-performance. Allen Green testified that self-performance of an area of work requires the majority of that work to be performed by the contractor's own employees, while other work could be performed by contract labor. He later changed his definition to require a contractor to have all employees on the payroll in order to self-perform. In other testimony, however, Mr. Green opined that if a contractor supplemented his labor with a couple of additional masons and paid them by the piece, then he would no longer be self-performing. At still another point in his testimony he added that it would be dependent upon the stage of the project as to whether the contractor's use of contract labor is self-performing or subcontracting. He felt that if the contractor adds some additional masons near the end of a job, as opposed to the beginning, then he could still be self- performing. Gary Parker is the Director of Facilities for the Lake County School Board. He testified that from his perspective, self-performance required the use of employees on the contractor's payroll. This definition, however, was not consistent with Lake County's course of conduct with the job that Haycook performed. Mr. Parker acknowledged that there had been no complaints by the architect or anyone else associated with the Eustis school project where Haycook listed itself as self-performing for masonry work, even though Haycook had retained a different entity to perform masonry labor (although not supply materials or supervision). Scott Stegall, the Director of Capital Outlay for the Seminole County School Board, testified that self-performance would require a contractor to perform all work without the use of outside contractors, including labor. Yet Mr. Stegall acknowledged that Haycook listed itself as self-performing masonry work on the Goldsboro school project and used a firm or entity known as Webber and Tucker to perform some masonry work, and that the Seminole County School Board had no dispute with this approach. Mr. Stegall's evaluation form for Haycook had stated that Haycook did not improperly substitute any subcontractors from the submitted list in that project. He later changed his definition of self-performance to acknowledge that a contractor could bring in laborers individually to perform without a "formal contract"; these informal labor contracts would not take it out of the self-performance category according to Mr. Stegall. The evidence concerning the Lake County District's and Seminole County District's experience as to the Eustis school project and the Goldsboro school project with Haycook's performance, including Haycook's approach to self-performance, was satisfactory in terms of pricing and the quality and timeliness of the work performed. The perceived fear by the Respondent that Haycook's performance might be substandard or that it might "bid shop" amongst potential subcontractors, after the bid opening, if Haycook did not list all subcontractors on the bid response, and self-performed in the manner Haycook described in its evidence, has not been shown to have occurred with regard to any of Haycook's past projects. There has been no demonstration by preponderant evidence that the use of only subcontractors listed or named in the bid response has resulted, in itself, in a lower price or better performance for the public by a contractor situated as Haycook. The architect testified that one method of defining "self-performance" is to determine whether the entity performing work was a subcontractor as defined by the bid documents. If the work is not being performed by a subcontractor, then it is being performed by the general contractor or self-performance. As the term is used in the construction industry, a subcontractor generally furnishes materials, installs the work, and supervises its own work. The bid documents define subcontractor as follows: "subcontractor means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of such contractor's contract." Preponderant, credible, and substantial evidence was presented by Haycook to show that Haycook's use of the term "subcontractor" was an entity that furnishes the materials, provides the labor, and the supervision, and undertakes the entire responsibility for that type or phase of the work. When a general contractor hires contract labor only, this excludes what is occurring from the definition of subcontractor, since the definition of subcontractor prevailing in this proceeding based upon the bid documents, takes out of that subcontractor definition "a materialman or laborer." The preponderant credible evidence shows that when Haycook purchases materials and provides the labor, whether or not the labor is on Haycook's payroll, which Haycook then directly supervises, this, by definition, is not a subcontractor situation under the definition of that concept in the bid documents themselves. The bid documents provide no definition for self- performance, but simply contain the following requirements: "a contractor may not list himself as performing a type of work unless he is self-performing and is a Florida licensed contractor for that type of work." Therefore, if a contractor meets these two requirements, he is responsive to this specification concerning when subcontractors should be listed or need not be listed in the bid response. Haycook meets both of the two requirements for self- performing. Haycook's definition of self-performing work is consistent with and does not conflict with the definition of "subcontractor," which excludes materialmen and laborers. Haycook's expert witness, Mr. Harold Goodemote, is a general contractor with 20 years experience, including 8 years as a project engineer and chief estimator for Foley and Associates Construction Company for many public school projects in the Orlando, Melbourne, and Daytona Beach area. Mr. Goodemote is also Vice-President of "Coleman-Goodemote" which has been in existence for approximately 10 years and has built projects worth multi-millions of dollars for Daytona Speedway related entities. It was established through Mr. Goodemote's testimony that it is customary in the construction industry to self- perform work by the contractor's purchasing of materials and using the contractor's own employees, along with "third party labor," to complete work under the direct supervision and control of the general contractor. The testimony of Mr. Reed Hadley and Mr. Haycook likewise establishes that it is common practice in the construction industry to self-perform work in the manner in which Haycook has performed it in the past. For example, both the Lake County and Seminole County School Boards allowed Haycook to list itself as self-performing where Haycook purchased masonry materials and used contract labor to install the masonry materials and components. "Bid shopping" is a practice whereby a contractor submits a bid for a project and, after winning the bid, goes to its subcontractors or even to new subcontractors, not considered in the bid process, and attempts to get lower prices from them, versus the prices the contractor had when it submitted its bid. This allows more profit to be built into the job for the contractor or, if the contractor artificially bid low in order to get the job, tends to allow the contractor to restore profit to the job for itself. The school board's rationale for requiring pre-bid opening listing of subcontractors is to prevent bid shopping after the bid is awarded in order to protect the competitive integrity of the bidding process. The listing of subcontractors is a practice of the Volusia County School Board and some other school boards in Florida. Ms. Drago, in her testimony, acknowledged that a substantial number of school boards in Florida do not require a list of subcontractors to be provided with bid proposals, and she acknowledged that this does not mean that those school boards' bid processes lack credibility and competitive integrity. She was unaware of any examples in the Volusia County School Board's experience where a contractor listed itself as self-performing and then shopped subcontractors after the bid opening to obtain a better price. The preponderant evidence of record does not establish that this has been the case with Haycook or other contractors on past Volusia County School Board jobs. This is in accord with Mr. Haycook's testimony, who described the detrimental effects such a practice could have on future relationships between a contractors and subcontractors in terms of having them available for later jobs, if a contactor became known for "beating down" subcontractors' prices. If a contractor had a reputation for engaging in that practice, in the future subcontractors' bids to that general contractor would likely be higher, if he could get their bids, and this might result in that contractor having difficulty rendering bid proposals that were low enough to have a chance of being successful. The bid documents give the school board the right to determine if each subcontractor listed by the bidders is qualified to perform the work and if not, to reject that subcontractor and require a replacement subcontractor. It is noteworthy that neither the architect nor the school board rejected Haycook as being unqualified to perform the work in any of the areas in which Haycook, in effect, listed itself as the subcontractor. The bid documents do not provide that the school board may reject "sub-subcontractors" engaged by a subcontractor, nor does the school board examine the history and capabilities of sub-subcontractors that a subcontractor intends to use. Once a subcontractor is acceptable to the Board, there is no further review to determine what means, methods, and procedures the subcontractor uses to perform the work. The subcontractor can contract out all of the work to sub-subcontractors who are actually performing the work, and the Board might not even be aware of it. Therefore, its method or rationale of listing subcontractors and then investigating the subcontractors is no guarantee of ensuring quality of work. In fact, the more areas of work that the general contractor does itself, the more direct control over performance the school board would have. The school board apparently uses a different approach in the instance where a general contractor lists itself as a subcontractor for one or more types of work, i.e. is self- performing. The Board's practice in that situation requires the general contractor to list each contractor who may perform parts of the work. Therefore, the general contractor must list each contractor who will perform the work in each area while this standard is not applied to listed subcontractors. The bid documents do not disclose to bidders the school board's unwritten definition and interpretation of "self- performance." They do not reveal that under the Board's interpretation a contractor must self-perform only with employees on its payroll; that a pre-qualified contractor licensed to perform work in a given area must prove that it has self-performed such work in the past with its own employees only; that general contractors will be treated differently from subcontractors on the subcontractors list, as to the listing of contract labor, and that even though the term "subcontractor" in the bid documents excludes "materialmen" and "laborers," the school board still considers contract labor as a subcontractor or subcontracting, that must be listed for self-performance work. Haycook has substantial experience in bidding and performing work on public school projects, as does Mr. Haycook himself, with both Haycook and a prior company with which he was associated. Haycook had prepared a bid three or four months earlier on a prototype school project similar to Elementary School "X" and had extensive cost information obtained from its work on that project and from subcontractors, including those "bidding" Elementary School "X." Haycook maintains a large database of subcontractors and suppliers experienced in performing work and portions of the work necessary for the Elementary School "X" project, including cost information. It has a database of over 3,000 names useful in obtaining and providing labor for use on parts and subparts of any self- performed work. Prior to the bid, Haycook received the plans and specifications enabling it to determine the quantities of materials needed and the costs per unit for installing the materials and performing the necessary work. Haycook had received subcontractor bids in each of the four areas that it later determined it would self-perform (earthwork, structural steel, concrete, and masonry). Because Haycook's "takeoffs," historical pricing information and recent bid information from another Volusia County prototype school indicated that it could self-perform the work at less cost than using the bids of subcontractors in those four work areas, Haycook elected to self-perform the work and listed itself as the subcontractor in those four work areas. This was not a case where Haycook simply ran out of time to get subcontractors' bids in those four work areas and therefore simply listed itself as performing in the four work areas at issue due to time expediency. It was also not because Haycook intended listing itself as performing in the four subject work areas so that it would create an opportunity to get lower bids from unknown subcontractors after bid opening, in order to enhance its profitability and support a low bid, in terms of putting enough money in the job for itself. As general contractor for the entire project, Haycook intended to provide general supervision of the entire project including subcontractors. With respect to self-performed work, Haycook intended to supply materials and components and to directly supervise and control the means, methods, and procedures of the self-performed work with contract labor. Haycook's definition of "self-performance" for earthwork involved Haycook's renting equipment, retaining contract laborers to clear the site, place the fill (paid by the hour or by the yard), compact the fill, and grade the site. Haycook directly supervises self-performed work and schedules and manages it with Haycook's project manager and on-site superintendent. The testimony of Reed Hadley and Dennis Haycook on behalf of Haycook established that Haycook had self-performed earthwork on other projects in the same manner as described above, satisfactorily for the owners. Specific project names and other project information showing earthwork self-performance by Haycook was provided to the architect as referenced above. Mr. Haycook established that Haycook had "self-performed" earthwork on 50 to 60 percent of its projects in the past. Haycook's definition of self-performance of structural steel included engaging a licensed fabricator, as required by the bid specifications in this instance, hiring experienced labor erection crews, purchasing the materials and component parts, and directly supervising and managing the work, including scheduling of the labor crews. Haycook had performed structural steel on 10 to 15 percent of its past projects. Four examples of projects, self-performed in structural steel, were provided to the architect along with related detailed information. Haycook's self-performance of concrete work included its purchasing of materials, hiring contract labor for footings, paid by the lineal foot, and concrete slabs paid by the square foot, and directly supervising, coordinating, and scheduling the concrete work activities with Haycook's own project managers and superintendent. Haycook has self-performed concrete work on approximately 80 percent of its past projects. The architect was provided a project listing of self-performed concrete work and detailed information showing Haycook's experience in this area. Concrete work is the area of work most commonly self- performed by general contractors in the construction market area in and around Volusia County. Haycook's self-performance of masonry includes Haycook's purchasing of concrete blocks, and reinforcing steel placed within the block, hiring labor on a unit price basis to install it (as, for instance, paid by the block laid), directly supervising the work, and coordinating and scheduling the masonry work activities with Haycook's project manager and superintendent. Haycook has self-performed masonry on approximately 70 percent of its past projects. The architect was provided examples of projects listing self-performed masonry work by Haycook, as well as detailed information depicting Haycook's experience in this work area. Mr. Goodemote, as referenced above, is a local general contractor with school board project experience and is Haycook's expert witness. He established that it is common practice in the construction industry in the Volusia County area for contractors to self-perform work in the manner that Haycook had self-performed it in the past and proposes to do on Elementary School "X." He established with reference to the Board's definition of "subcontractor," which excludes "materialmen" and "laborers," that a contractor's purchase of materials and the hiring of contract labor to install the materials does not come within the definition of "subcontractor" or "subcontracting." He established that a subcontractor is the one who provides all labor, material, equipment, and supervision necessary to complete a work operation. "It's a total turnkey operation. They provide everything to finish the work." Mr. Goodemote's opinion establishes that "self-performance" of the subject work includes a general contractor hiring contract labor to perform a part of the work, because many times there are multiple vendors associated with a portion of the work, and the contractor is still directing and supervising the work and assuming all the risks associated with the work. Mr. Goodemote himself has self- performed as a general contractor and observed other contractors self-perform earthwork, masonry, concrete work, and structural steel work. He demonstrated that if a general contractor uses contract labor to perform a portion of the work, it still remains a "self-performance" by the general contractor, and that the laborers do not have to be on the contractor's payroll in order for the work to constitute self-performance, according to the general practice and usage in the construction industry. When requested by the architect to provide examples of past projects that it had self-performed in the four subject work areas, Haycook listed five projects as to earthwork; four projects in structural steel; seven projects as to masonry; and seven projects as to concrete. In consideration of his restrictive view of what self-performance means (i.e. that self- performance can only mean performance of work by salaried employees on the general contractor's own payroll), the architect (evaluator) requested payroll records and workers' compensation information on two projects only, the Goldsboro Elementary School and Eustis Elementary School. The bid documents do not provide unbridled discretion in the architect/evaluator, or in the school board, to define self-performance in a manner not provided for or inconsistent with the bid documents or to define "subcontractor," to include contract labor and thus require the labor to be listed as a subcontractor on the bid response. There was no notice to any of the bidders that such a restrictive definition would be employed, nor that a contractor listing itself as self- performing, and therefore standing in same position as other subcontractors as to the areas of work it would self-perform, would be treated differently from other subcontractors by, in effect, having to list such persons or entities as those providing contract labor as "sub-subcontractors." There was no evidence that the architect was provided sole discretion to verify self-performance experience as to the two projects only and ignore verification information of self-performance as to the other listed projects provided by Haycook. Although the architect and the Board contended that Haycook's listing of itself as self-performing in the four work areas at issue might allow Haycook to "buy out" subcontractors or to "bid shop," there was no evidence offered to substantiate that this was Haycook's intent or that Haycook or any other identified contractor in Volusia County or the surrounding area had ever attempted to "buy out" subcontractors on Volusia County school projects. Contrarily, Mr. Haycook testified that he does not engage in a practice of "buying out" subcontractors after he has obtained contracts with a winning bid. He explained, as referenced above, that subcontractors and the business relationships that he has with them are crucial to the success of his business. If Haycook made a practice of engaging in such inappropriate operational and pricing conduct when bidding for projects, or entering into related contracts, then subcontractors would either elect not give bids to Haycook at all when Haycook was, in the future, attempting to formulate bid responses, or would not give Haycook their lowest or best price because of their knowledge of such a practice, if Haycook engaged in it. This would obviously have an adverse effect on Haycook's ability in the future to be successful in competitive bid procurements or projects. Haycook has self-performed in the manner intended as to Elementary School "X" for years, as have his competitors. Although the Board apparently feared that Haycook's listing itself as self-performing in the areas of work in question gave it a competitive advantage over other bidders, the evidence does not bear out that fear. The competing bidders had the same opportunity to look at their past cost knowledge and experience, their knowledge of materialmen and suppliers in the area, their knowledge of the labor market and available labor and other data by which they might arrive at an independent evaluation of what a particular area of the work should cost, as well as the methods and means necessary to perform it. They had the same opportunity to evaluate any such knowledge base they have and elect to self-perform one or more areas of the work, as did Haycook. Since they had the same opportunity to do so, the evidence does not show there is any competitive advantage gained by Haycook in this situation which was not available to other bidders as well. As addressed above, the architect's recommendation to reject the Haycook bid was based upon his interpretation that "self-performance" required all work to be accomplished by employees on Haycook's payroll. Using that restrictive definition, the architect concluded that Haycook did not demonstrate, as to the Goldsboro and Eustis projects only, that Haycook had self-performed work with its own employees in the past and therefore that Haycook would self-perform with its own employees on the project at issue. The architect concluded that Haycook's subsequent engagement of contract labor in lieu of using his own payroll employees "could potentially give D. J. Haycook Construction Company an unfair advantage over the other bidders." Neither the architect's testimony nor the Board's other evidence explained, however, how that would give the Petitioner an unfair advantage over other bidders who, as found above, were free to engage in the same proposed self-performance as Haycook. The evidence did not establish how it would harm the public's strong interest in getting the best possible price for a quality construction effort that was completed on time, within the authorized budget, and in accordance with all the contractual terms. The architect's and Board's conclusion in this regard is based upon incorrect and unreasonable interpretations of what is meant by "subcontractor" and the concept of "self-performance." The rationale for finding that Haycook's putative self-performance would give Haycook an unfair advantage, vis a vis, other bidders or would promote bid shopping or buy-out of subcontractors has been shown by the evidence to be based upon speculation and conjecture. Haycook's bid response has been shown to be responsive to the specifications as they were stated, published and furnished to the bidders, including Haycook, in the bid documents at issue. The definition of self-performance employed by the architect and the Board is not supported by the language of the bid documents and has been shown by the preponderant, most credible evidence of record to be an unreasonable definition and manner of evaluating the bids and particularly Haycook's bid. Haycook has been shown to be responsive to the specifications and the relevant portions of the bidding documents and to have the lowest bid by a significant amount, some $241,000.00 dollars as to the base bids of Haycook versus that of Clancy and Theys.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the School Board of Volusia County awarding the contract for Elementary School "X" to the Petitioner, D. J. Haycook Construction Company, Inc. DONE AND ENTERED this 8th day of March, 2004, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 Clerk of the Division of Administrative Hearings this 8th day of March, 2004. COPIES FURNISHED: S. LaRue Williams, Esquire Kinsey, Vincent, Pyle, L.C. 150 South Palmetto Avenue, Box A Daytona Beach, Florida 32114 Theodore R. Doran, Esquire Michael G. Dyer, Esquire Doran, Wolfe, Rost & Ansay 444 Seabreeze Boulevard, Suite 800 Post Office Drawer 15110 Daytona Beach, Florida 32115 William E. Hall Superintendent Volusia County School Board Post Office Box 2118 Deland, Florida 32721-2118
The Issue The issue is whether Petitioner is entitled to an award of attorney's fees and costs under Section 57.111, Florida Statutes, as a prevailing small business party in DOAH Case No. 02-2230BID.
Findings Of Fact Based upon the pleadings, affidavits, stipulations, and the matters officially recognized, the following findings are made: Parties Petitioner is an engineering firm whose principal office is located in Tampa, Florida. Petitioner is certified as a minority-owned business by the State of Florida and the School Board. Petitioner’s majority owner and president is an African-American male. At all times material hereto, Petitioner had less than 25 full- time employees or a net worth less than $2 million. Respondent is a local school district of the State of Florida. Respondent is responsible for the construction, renovation, management, and operation of the public schools in Hillsborough County. To fulfill those responsibilities, Respondent is often required to obtain the services of architects, engineers, and other professionals through competitive procurement under Section 287.055, Florida Statutes, the Consultants’ Competitive Negotiation Act (CCNA). DOAH Case No. 02-2230BID On May 21, 2002, the School Board published a notice in the Tampa Tribune announcing its need for professional architectural and/or engineering services to supplement its in- house staff of architects and inspectors in order to provide increased on-site supervision, management, and inspection on ongoing school construction projects. The notice is a request for qualifications (RFQ), and is subject to the provisions of the CCNA. A report prepared by the Ernst & Young consulting firm based upon its “forensic evaluation and analysis of the District’s construction and maintenance policies, practices, and procedures” had recommended augmenting the District’s staff in the manner described in the RFQ. At the time the RFQ was advertised, the only adopted policy governing the School Board's acquisition of professional services was Section 7.14 of the Hillsborough County School Board Policy Manual (Policy Manaual). Section 7.14 did not specifically reference the CCNA and simply included a general authorization for the Superintendent of the District or his or her designee to “contract for professional or educational services to complete projects or activities authorized or approved by the school board.” The only other description of Respondent’s procurement process under the CCNA in existence at the time the RFQ was advertised was a document entitled "Capital Projects Standard Procedures" which was presented to but never adopted by the School Board. That document references the CCNA in connection with the selection of architects and construction managers, but not engineers, and it only provided a general outline of the selection process. The RFQ did not specifically reference or otherwise incorporate Section 7.14 of the Policy Manual or the “Capital Projects Standard Procedures” document, nor did the RFQ explain the criteria or factors upon which the responses to the RFQ would be evaluated or the weight that would be given to each factor. The RFQ did not specifically inform potential Respondents of their right to file a protest challenging the specifications, nor did it include the language provided in Section 120.57(3)(a), Florida Statutes. Petitioner timely filed a notice of protest and formal written protest challenging the specifications in the RFQ pursuant to Section 120.57(3)(b), Florida Statutes. Among other things, Petitioner challenged the absence of evaluation criteria in the RFQ and the absence of a formally-adopted policy governing the procurement process. Petitioner’s protest was referred to the Division, where it was assigned DOAH Case No. 02-2230BID. A formal administrative hearing was held on the protest, and on September 6, 2002, a Recommended Order was issued in DOAH Case No. 02-2230BID (hereafter “Specification Protest Recommended Order”). The Specification Protest Recommended Order agreed with Petitioner that the specifications in the RFQ were deficient and, more specifically, concluded that: the School Board's current selection process is deficient because neither the RFQ or the School Board's existing policies and procedures specify in advance the factors upon which the responses will be evaluated nor do they identify the weight which the School Board will give to each criteria. The process is also deficient because the selection committee members do not utilize a uniform method of evaluating the respondents. These deficiencies affect the integrity of the School Board's selection process and subvert the policies underlying Section 287.055 and competitive procurement generally. Accordingly, Petitioner met its burden of showing that the RFQ specifications are arbitrary and contrary to competition. Specification Protest Recommended Order, at 36 (paragraph 85) (emphasis in original). That conclusion was consistent with the report prepared by Ernst & Young, the following excerpts from which are pertinent here: [W]e have identified significant shortcomings related to ranking the professional service providers that have submitted bids for either architectural design, engineering, or construction management services. * * * [T]he architects and construction managers within the [architectural/ engineering/construction (A/E/C)] community do not understand how vendors are evaluated or ultimately rank ordered [sic] by the District to arrive at a list of the three highest ranked respondents. As a matter of fact, the District has moved away from using a score sheet or "score card" with pre-established evaluation criteria and a weighted point structure, and toward a rather subjective process whereby a selection committee simply appoints professional service providers either based upon past performance on a similar type of project (i.e. replicate design) or based upon the District's desire to equitably distribute work amongst the A/E/C community. This type of evaluation and selection process, as currently utilized by the District, while effective at distributing work amongst the A/E/C community, does not ensure that the best or most qualified vendor will be selected for each of the proposed school district projects. The current vendor selection process could permit abuse and favoritism as the selection committee could be influenced by School Board input, personal relationship [sic] and lack of objective criteria. Although we found no evidence of undue influence, the subjective nature of the process offers the District little credibility. * * * E&Y [Ernst & Young] found that the vendor selection process being utilized by [the District] lacks credibility in that it remains highly subjective as new projects are allocated without respect to numerical analysis of prior performance, company financial condition, proposed project management team, etc. Moreover, the selection committees do not rotate sufficiently to eliminate the possible influence from senior [District] Administrators or Board Members. * * * Upon comparison to each of the peer and contiguous school districts, Ernst & Young found that only [the District] engages in a vendor selection process in the absence of pre-established or pre-determined evaluation criteria and a numerically-based scoring system which permits a numerical ranking of each interested professional service provider. E&Y found that the vendor selection process being utilized by [the District] lacks credibility in that it remains highly subjective as new projects are allocated without respect to numerical analysis of proper performance, company financial condition, proposed project management team, etc. . . . * * * The District's vendor selection process can be more objective and better understood within the A/E/C community by developing standard evaluation criteria and a numerically-based scoring system. Such a system will permit the District to numerically rank each interested professional service provider and thus eliminate bias and potential favoritism of the [District] selection committee. Evaluation criteria should include, among other things, prior performance, company financial condition, proposed project management team, etc. . . . E&Y Report, at 27-29, 107, 117. The Ernst & Young report was formally transmitted to the School Board on May 17, 2002, which is four days prior to the date that the RFQ was published in the Tampa Tribune. The Specification Protest Recommended Order and the Ernst & Young report were not critical of all aspects of Respondent’s procurement process. Both concluded that the procedural elements of the evaluation process utilized by the School Board were consistent with the procedural requirements in the CCNA. Specifically, the Ernst & Young report stated “[o]ur review of [the District’s] vendor’s [sic] selection process indicates in many respects, that the process follows traditional requirements established by SREF [State Requirements for Educational Facilities] and Florida Statute[s] . . . [and], in many instances, the procedures mirror those utilized by peer and contiguous school districts” (E&Y Report, at 27), and the Specification Protest Recommended Order similarly concluded that: the School Board's current selection process, although not detailed in a formally-adopted rule or policy, is consistent with the procedural requirements of the CCNA. The only material difference is that the School Board has consolidated the second and third steps in the process -- i.e., qualification and competitive selection -- by interviewing every respondent and not just three pre-qualified firms as required by Section 287.055(4)(a). Accordingly, Petitioner failed to show that specifications of the RFQ are contrary to the School Board's governing statutes (i.e., Section 287.055) or its rules or policies. Specification Protest Recommended Order, at 35-36 (paragraph 84). Nevertheless, based upon the deficiencies in the RFQ described above, the Specification Protest Recommended Order recommended that: the School Board issue a final order that rescinds the request for qualifications published May 21, 2002, and reformulates the specifications of the request in a manner that, at a minimum, advises potential respondents in advance of the factors upon which the responses will be evaluated and the weight that will be uniformly given to each factor by the selection committee. Id. at 37. The School Board adopted the Specification Protest Recommended Order at its meeting on October 1, 2002, and consistent with the recommendation therein it rescinded the RFQ. DOAH Case No. 02-3138RP In response to the Ernst & Young report and Petitioner’s challenge to the RFQ specifications (and while DOAH Case No. 02-2230BID was pending), the School Board initiated the rulemaking process under Chapter 120, Florida Statutes, to adopt new policies and summaries of procedures to govern the acquisition of professional services pursuant to the CCNA. Petitioner timely challenged the proposed new policies and summaries of procedure pursuant to Section 120.56(2), Florida Statutes. The challenge was assigned DOAH Case No. 02- 3138RP. A formal administrative hearing was held, and on October 11, 2002, a Final Order was issued in DOAH Case No. 02-3138RP (hereafter “Rule Challenge Final Order”). The Rule Challenge Final Order dismissed Petitioner’s challenge to all of the proposed new policies and summaries of procedures except for that portion of proposed Section 7.31 of the Policy Manual which provided that interviews are optional for projects costing less than $1 million. The procedural aspects of the new policies and summaries of procedure are essentially the same as the practice followed by the School Board in the past pursuant to Section 7.14 of the Policy Manual and the unadopted “Capital Project Standard Procedures” document. However, the new policies and summaries of procedure addressed the deficiencies in the substantive elements of the School Board’s procurement process. In this regard, the Rule Challenge Final Order included the following observation: [T]he Proposed Rules address the fundamental deficiencies in the School Board's procurement process that were identified in the Ernst & Young report and the Recommended Order in DOAH Case No. 02-2230BID. The Proposed Rules require the factors/criteria upon which the applicants will be evaluated and the weights [sic] that will be given to each factor to be formulated and provided to the applicants in advance of each solicitation, and they require uniformity in the evaluation and scoring of the applicants by the Committee. The Proposed Rules also provide the necessary framework for the preparation of the project-specific forms and materials which will be prepared in connection with each RFQ/RFP, and they provide a discernable standards against which to judge those materials in the event of a Section 120.57(3) protest of the specifications of the RFQ/RFP or the award of the contract arising therefrom. Rule Challenge Final Order, at 57-58 (paragraph 145). The Rule Challenge Final Order was not appealed. Attorney’s Fees and Costs Incurred by Petitioner Petitioner was represented in DOAH Case No. 02-2230BID by attorney George Kickliter. Mr. Kickliter spent 25 hours on Petitioner’s behalf in DOAH Case No. 02-2230BID, and he charged Petitioner a fee of $200.00 per hour. Accordingly, Petitioner incurred a total of $5,000.00 in attorney’s fees in DOAH Case No. 02-2230BID. Petitioner incurred costs in the amount of $563.00 in DOAH Case No. 02-2230BID. That amount is attributable to the cost of the Transcript of the final hearing in that proceeding. Respondent stipulated that the attorney’s fees and costs incurred by Petitioner in DOAH Case No. 02-2230BID were reasonable.
Findings Of Fact On February 7, 14 and 21, 1989, respondent, School Board of Pinellas County (Board), published a legal advertisement in an area newspaper inviting prospective bidders to submit proposals for certain construction work to be performed on two elementary schools, Walsingham and Cross Bayou, located in Largo and Pinellas Park, Florida, respectively. The bidders were advised that their bids must be "prepared and submitted in accordance with the drawings and specifications" and that such drawings and specifications could be obtained from the Board. Such bids were to be filed with the Board no later than 2:00 p.m. on March 6, 1989. The notice also provided that the bids would be opened the same day. Bids were timely filed by at least five contracting firms, including petitioner, Prelude Construction Company, Inc. (Prelude), and intervenors, Lincoln Construction Company (Lincoln) and Bandes Construction Company (Bandes). In filing these proposals, each bidder represented he had "thoroughly examined all of the contract documents." After the bids were opened and reviewed by Board personnel, Lincoln, Prelude and Bandes were ranked first, second and fourth, respectively, based upon the dollar amount of their proposals. 2/ Thereafter, the Board issued its notice of intended action on March 7, 1989, wherein it advised all parties of its intention to award the contract to Lincoln. In doing so, the Board concluded that, although a bid bond accompanying Lincoln's proposal was not dated March 5 or 6 as required by the specifications, the deviation was minor and could be waived. That action prompted Prelude to file its protest. Through testimony of Lincoln's vice-president, it was established that the Board staff intended to change its initial position and to recommend to the Board that Lincoln's bid proposal be rejected and the contract awarded to Bandes. This change was prompted by the Board staff's discovery on the day of hearing (April 3) that, with the exception of Bandes, all bidders had failed to list the, roofing subcontractor on their bid proposals. The Board staff accordingly concluded that all bidders except Bandes should be disqualified. The bid specification upon which the Board relies to award the contract to Bandes is found in Part One, paragraph 1.1 of section 07511 of the bid specifications. The requirement is a relatively new one and imposes the following requirement upon bidders: NOTE: The contractor is required to list the name of the roofing subcontractor on the form of proposal, Section 1C. Section 1C is entitled "Form of Proposal" and includes the following section on page 1C-3 to be filled in by the bidder: The following subcontractors will be contracted with on this project. Type of Subcontractor Name of Subcontractor (Trade Specialty) (Company/Firm) The column on the left side is intended to identify the subcontractor by specialty, such as plumbing or roofing, while the blank spaces in the right hand column are to be filled in by the bidders with the name of the subcontractor who will perform the specialty. The Board has not been consistent in requiring bidders to list the name of subcontractors on the bid documents. According to the uncontroverted testimony of Lincoln, the Board requires the listing of subcontractors on some projects but not on others. For example, on the specifications for the recently let contract for the prototype new media center at four elementary schools, the left hand column on the above form was filled in by the Board with five types of subcontractors who were required on the project, including roofing. This meant that the bidder was to fill in the blanks in the right hand column with the name of the subcontractor who he intended to use on each specialty. However, on other contracts, including the one under challenge, both columns in the Form for Proposal have been left blank, and Lincoln construed this to mean that the name of the subcontractor was not required. Indeed, Lincoln pointed out, without contradiction, that on a recent contract which left both columns blank, as was true in this case, it was awarded the contract even though it did not identify the roofing subcontractor on its proposal. Because of this prior agency practice, Lincoln assumed the same policy would be used again. However, Lincoln conceded it had failed to read the requirement in paragraph 1.1 of section 07511 before preparing its proposal. There was no evidence that Lincoln gained any substantial advantage over other bidders by this omission. Also relevant to this controversy is Paragraph 10A of the General Requirements. This item is found on page 1B-11 and reads as follows: Each bidder shall indicate the names of specific major Subcontractors if called for on the form of proposal. If listing of Subcontractors is required and the Bidder fails to list them, the bid may, at Owner's option, be disqualified. (Emphasis added) This authority to waive the requirement is reinforced by language in Paragraph 21 of the General Requirements which provides in part that "(t)he owner reserves the right to waive minor technicalities." According to the Board's outside architectural consultant, who was the author of a portion of the contract specifications including section 07511, the omission of the name of the roofing subcontractor is a "minor" technicality that can be waived. However, the consultant had no personal knowledge as to whether the provision had actually been waived by the Board on prior contracts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding the contract in question to Bandes Construction Company. DONE AND ORDERED this 20th day of April, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 20th day of April, 1989.
