The Issue The issue is whether Kelly Services is the lowest responsive bidder on Bid No. 89-23 and should be awarded the bid.
Findings Of Fact On June 2, 1988, the School Board of Bay County issued Bid Request No. 89-23 for garbage collection services at thirteen locations. A quotation sheet was included in the bid package. The quotation sheet indicated the thirteen locations with a blank next to each location and a dollar sign in front of each blank where each bidder was to indicate its average monthly total charge for each location. There was also a quotation schedule where the bidder was to indicate the calculations which went into the total bid for each location. The bid request provided: The Board reserves the right to waive formalities and to reject any and all bids or to accept any bid or combination of bids deemed in the Board's best interest and the decision of the Board will be final. Bidders desiring that their bid be considered on an all-or-none basis, either in whole or part, shall so indicate. It is the intent of this bid request to secure prices and establish contracts for garbage collection services for the twelve schools specified herein and the District Maintenance Department. Awards will be made by location and will be based on an average monthly total charge as calculated on the quotation sheet. The bids were opened at 10:00 am., June 13, 1988, at the offices of the Bay County School Board. Three completed bid packages were submitted. Kelly Services, Argus and M&O each submitted a completed bid quotation sheet containing the bid for each location. M&O also submitted a letter which stated: We would like to submit this bid on an all- or-nothing basis as specified in paragraph four of the cover letter to the bid. For an estimated cost of $3,391.84. The quotation sheet and quotation schedule submitted by M&O did not reflect the all-or-nothing bid amount. Instead, the quotation sheet and quotation schedule showed a total bid of $3,738.24 when calculated by location. Based on the bids submitted by each bidder as shown on the quotation sheet add quotation schedules, Kelly Services was low bidder on five locations (Callaway, Tyndall, Waller, Southport, and Cedar Grove) ; Argus was low bidder on six locations (Parker, Hiland, Haney, Mosley, Beach and Merritt Brown); and M&O was low bidder on two locations (West Bay and the District Maintenance Department). Prior to the deadline for submitting bids, John Harrison, Purchasing Agent for the Board, responded to an inquiry from M&O by advising M&O that it could submit two bids, one as specified in the Bid Request by location and one as an all-or- nothing bid. No other bidders were advised that they could submit two bids. At the bid opening, M&O did not submit a quotation sheet or schedule for its all-or-nothing bid. A bid which did not have a breakdown per dump per container per facility would not be acceptable to the Board and does not meet the specifications in the Bid Request. The breakdown per dump per container per location is necessary to verify proper invoicing for specific locations on months when there is a change in the number of dumps or containers at that location. After opening the bids, the Board compiled the low bid for each location and then totaled that list. That total of $3,606.09 was greater than the all-or-nothing bid by M&O. Because M&O's all-or-nothing bid failed to meet the specifications by not having a location breakdown the Board contacted M&O to determine if its "estimated" bid was firm and to request a breakdown on the quotation schedule form for the all- or-nothing bid. On June 15, 1988, two days after the bid opening, M&O submitted a letter to the Board clarifying that its all-or- nothing bid was a firm bid for each location and M&O submitted a quotation schedule for each location per dump per container (see page 7 of Joint Exhibit 1 and the last page of Joint Exhibit 2). The charge for each location in this quotation schedule is different than the quotation schedule submitted by M&O at the bid opening and is for the most part lower per location than either M&O's first quotation schedule or the low bids taken from the quotation schedules submitted at the bid opening. Based on the letter and all-or-nothing quotation schedule filed by M&O on June 15, 1988, the Board determined to award the bid for garbage collection services to M&O for the all- or-nothing bid of $3,391.84.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that The School Board of Bay County enter a Final Order rejecting all bids and readvertising the bid request for garbage collection services as specified in Bid Request No. 89-23. DONE and ENTERED this 13th day of September, 1988, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of September, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-3768BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Kelly Services: 1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3); 4-6(3); 7-11(7-11); and 12 (9) Specific Rulings on Proposed Findings of Fact Submitted by Respondent, School Board of Bay County: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(2); 3(10&11); and 5(8). Proposed findings of fact 6, 7, and 9 are irrelevant. The first sentence of proposed finding of fact 2 is unsupported by the competent, substantial evidence. The remainder of proposed finding of fact 2 is adopted in substance as modified in Finding of Fact 3. Proposed finding of fact 4 is rejected as being unsupported by the competent, substantial evidence. The last sentence of proposed finding of fact 5 is rejected as being argumentative, conclusory and unsupported by the competent, substantial evidence. Proposed finding of fact 8 is unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Argus Services, Inc.: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1-3); 6-8(5); 9 & 10(6) 11(3); and 12(11). Proposed findings of fact 1 and 5 are unnecessary. Proposed findings of fact 13-17 are rejected as constituting argument and not findings of fact. COPIES FURNISHED: Jeffrey P. Whitton Attorney at Law Post Office Box 1956 Panama City, Florida 32402 Franklin R. Harrison Attorney at Law 304 Magnolia Avenue Panama City, Florida 32401 Scott W. Clemons Attorney at Law Post Office Box 860 Panama City, Florida 32402 School Board of Bay County Post Office Drawer 820 Panama City, Florida 32402-0820 M&O Sanitation, Inc. 266 N. Star Avenue Panama City, Florida 32404
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: In January of 1994, FDOT issued an Invitation to Bid ("ITB") for contracts FE2494Z1 and FE2494Z2 to provide storm shutters for the FDOT facilities in Zones 1 and 2 of the Florida Turnpike. The ITB was entitled "Storm Shutters, Removable, Manufacture, Furnish and Install." Prospective bidders for the contracts were provided with a packet which included General Conditions, Special Conditions, Specifications and General Special Provisions. The General Conditions set forth the procedures for submitting and opening the bids. The Specifications called for custom-sized removable storm shutters and detailed the materials and installation procedures that were required. The bid package contained the following pertinent language in the Special Conditions, Section 1.0, entitled "Description", and in the Specifications, Section 1.0, entitled "Scope of Work": Work under this contract consists of providing all labor, materials, equipment, tools and incidentals necessary to manufacture, furnish and install galvanized steel storm panels and accessories for all of Zone 1 & Zone 2 buildings and locations as identified in the building listing listings document, see Exhibit "A" Zone 1 & Exhibit "A" Zone 2. The bid package contained the following pertinent language in Special Conditions Section 8.1, entitled "Required Documents": Bidders are required to complete and return the State of Florida "Invitation to Bid" form as well as the bid sheet(s). These forms must be signed by a representative who is authorized to contractually bind the bidder. All bid sheets and the "Invitation to Bid" form must be executed and submitted in a sealed envelope. At a mandatory pre-bid conference on February 17, 1994, the Department's representatives were available to answer questions regarding the bid package. During the pre-bid conference, John Vecchio of the Department orally advised the prospective bidders that they should return the whole bid package, including the specifications, when they submitted their bid. No written amendment to this effect was issued. The bids were opened on March 3, 1994 in Fort Lauderdale. Bids were received for each contract from at least three bidders, including Accurate and Hurst. The apparent low bidder for both contracts was Broward Hurricane Panel Co. ("Broward"). Prior to the bids being posted on March 28, 1994, Broward's bid was determined to be nonresponsive and Broward was therefore disqualified. After Broward was disqualified, Accurate was the apparent low qualified bidder for Zone 2 and Hurst was the apparent low qualified bidder for Zone 1. Hurst's bid for the contract for Zone 2 was $85,000. Its bid for the Contract for Zone 1 was $36,000. Accurate's bids for the contracts were $84,854.82 and $36,287.16, respectively. Hurst was awarded the contract for Zone 1 and that decision has not been challenged. At the same time the Department announced the award of the Contract for Zone 1 to Hurst, the Department announced its intent to award the contract for Zone 2 to Accurate. Hurst timely filed a notice of protest and a formal written protest of the proposed award of the contract for Zone 2 to Accurate. Initially, FDOT raised as a defense that Hurst had not posted a protest bond as required by Section 287.042(2)(c), Florida Statutes. At the hearing in this matter, FDOT conceded that Hurst had subsequently posted a protest bond which had been accepted by FDOT. Hurst contends that Accurate's bid should have been deemed nonresponsive because Accurate does not have the ability to "manufacture" the specified product in its own facility. The 2 inch corrugated shutter required by the ITB has to be shaped on a special type of machine that rolls, presses and forms the metal. Hurst owns and maintains at its Opa-Locka facility a rolling mill capable of forming the panels to the bid specifications. Accurate is in the business of supplying the types of products sought by the ITB in this case. However, Accurate does not own the kind of machine necessary to shape the metal. The evidence established that for many years, Accurate has had a continuing business relationship with a local subcontractor, Shutter Express, that rolls, presses and forms raw material supplied by Accurate in accordance with Accurate's specifications. Shutter Express has the capability of fabricating shutters with a 2 inch corrugation in accordance with the ITB. Accurate is equipped to attach the headers and sills, drill the necessary holes, complete the assembly and install the final product. The ITB in this case did not preclude subcontracting any or all of the work specified. While the description of the work in the ITB includes the term "manufacture", this reference should not be read to mean that only those companies that were able to fabricate the entire product at their own facility could properly respond to the ITB. There is no logical justification for such a narrow interpretation. Only a few companies have the ability to completely fabricate the shutters on their own property. At the prebid conference, there was discussion amongst the prospective bidders about subcontracting the fabrication work and the FDOT representatives did not raise any objections to such an arrangement. It was widely understood by the parties present at the pre-bid conference that the Department was not interpreting the ITB in the restrictive manner now urged by Hurst. Such a reading of the ITB would have precluded from the bidding process a number of companies such as Accurate that routinely supply and install shutters. Hurst also contends that the bid proposal submitted by Accurate should be deemed nonresponsive because Accurate failed to include the entire ITB with its proposal in accordance with the oral instructions at the pre-bid conference. Hurst's proposals included the entire ITB. As discussed below, Accurate's proposal did not include the entire ITB. FDOT determined that all essential pages were included in Accurate's response and the evidence did not establish that this conclusion was arbitrary, capricious or fraudulent. Paragraph 6 of the General Conditions of the ITB provided: ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and affect and are inapplicable to the bid. As noted above, at the prebid conference held on February 17, 1994, an FDOT employee told all prospective bidders to return the entire bid package when making their submittals. This request that the entire bid package be returned was simply meant as a protection for the bidder to ensure that all the necessary documents referenced in Section 8.1 of the Specifications were submitted. Other than those documents referenced in Section 8.1 of the Specifications, FDOT had no interest in having the remaining portion of the ITB submitted with a proposal. Accurate's submittal contained every document required by Section 8.1 of the Specifications. Accurate's proposal did not contain pages 3 through 12, 14, 15 and 17 through 20 of the ITB, but did include pages 1 and 2, 13, 16, 21 and 22 along with a signed Form PUR 7068 and a signed acknowledgment of Addendum In other words, the submittal contained a signed and completed Bidder Acknowledgment, completed Bid Price Forms for Zones 1 and 2, a signed copy of Addendum #1, a completed copy of the Ordering Instructions, and a signed, but not notarized, statement regarding public entity crimes. 1/ In addition to the "REQUIRED DOCUMENTS," set forth in Section 8.1 of the Specifications and quoted in Findings of Fact 6 above, the ITB included Section 8.2, "PUBLIC ENTITY CRIMES STATEMENT" which provides: Any person submitting a bid or proposal in response to this invitation should execute the enclosed form PUR 7068, SWORN STATEMENT UNDER SECTION 287.133(A), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES, including proper check(s) provided, and submit it with the bid/proposal or within 72 hours of the bid opening. Page 7 of the ITB provided in pertinent part: 10.0 BID PREFERENCE IDENTICAL TIE BIDS - Preference shall be given to businesses with drug-free workplace programs. Whenever two or more bids which are equal with respect to price, quality and service are received by the State or by any political subdivision for the procurement of commodities or contractual services, a bid received from a business that certifies that it had implemented a drug-free workplace program shall be given preference in the award process. . . . Accurate's proposal did not include a certification that it was a drug-free workplace in accordance with this provision. However, such a certification is only used by the Department as a tie-breaker. In other words, in the event of identical bids, any firm with a drug-free workplace would get preference. Since there were no tied bids in this case, certification was totally irrelevant. When the bids were opened, Mary Bailey, the contracts administrator for the Department, noticed that Accurate's submittal was thinner than the others and asked Accurate's representative, Richard Johnson, about the remaining pages. Mr. Johnson replied that the other pages were in his truck and offered to retrieve them. Ms. Bailey told him there was no need to do so. Section 10 of the General Conditions in the bid package provides as follows: As the best interest of the State may require, the right is reserved...to reject any and all bids or waive any minor irregularity or technicality in bids received... It does not appear that Accurate has obtained any competitive advantage as a result of its failure to include the entire ITB with its bid proposals. Even if the oral instructions at the pre-bid conference are deemed to have modified the ITB so that the entire bid package should have been submitted, Accurate's failure to include the entire ITB with its response should be considered a minor technicality, pursuant to Section 10 of the General Conditions cited above, that can and should be waived in evaluating the responsiveness of the bid. Similarly, the failure to have the Form PUR 7068 notarized may have rendered Accurate's bid proposals incomplete, but not necessarily nonresponsive. This oversight can be easily corrected without giving Accurate a competitive advantage.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the bid submitted by Accurate to be responsive and dismissing the challenge filed by Hurst. DONE and ENTERED this 24th day of June 1994, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of June 1994.
The Issue The issue in this case concerns whether the Florida Department of Transportation's (FDOT's or Department's) proposed action to award a contract to Couch Construction, L.P., is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications.
Findings Of Fact The Florida Department of Transportation (Department) issued an Invitation to Bid (ITB) for road resurfacing on State Road 10/US 90 in Columbia County, Florida; Financial Project No. 208406-1-52-01 (The Project). Four companies submitted responses to the ITB. Couch was low bidder at $2,271,354.81, and Petitioner was second low at $2,278,263.07. The ITB incorporated the plans and specifications for the proposed highway resurfacing. The price proposal specifications stated in pertinent part: Item Number 2102-10. . .Approximate Quantity. . . 4,320.00 hours Item Number 2102-74-1 . Approximate Quantity . . .75,780.00 each day Item Number 2102-99 . . Approximate Quantity . . . 720.00 each day None of the bidders filed a timely objection to the price proposal specifications. Article 2-6, of the Florida Department of Transportation Standard Specifications for Road and Bridge Construction states: A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alternations of form, additions not called for, conditional or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. After the bids were opened, each bid was reviewed by the Department to determine whether the bid was mathematically and/or materially unbalanced. The Department's Preliminary Estimates Engineer conducts an unbalanced review of the bids to determine if the bids are mathematically unbalanced. A bid is considered to be mathematically unbalanced if the prices quoted are significantly different from the approximate cost of the item to the contractor. It is very common for bids on construction projects to contain some item prices that are mathematically unbalanced. Bid prices that are mathematically unbalanced are considered by the Department to be non-material irregularities if they do not affect the order of the bidders. In determining whether a mathematically unbalanced price is material, the Department follows a policy set out by the Federal Highway Administration (FHWA). The Department has been following the same policy since at least 1992. The FHWA does not allow for materially unbalanced bids to be accepted by the Department on projects that are federally funded. A materially unbalanced bid is one in which there is a reasonable doubt as to whether award to the bidder submitting the mathematically unbalanced bid will result in the ultimately lowest cost to the Department. The Department has developed an Unbalanced Program Logic for its computer analysis of the bids. The program flags the items that are mathematically unbalanced. It flags the item with an "A" for those items that are above the tolerance window, "U" for under the tolerance window, and "F" as front-loaded items. The flagged items which are short-listed by the computer program are sent to the designer of record to verify the quantities and to verify whether the correct pay item was used. The designer of record verified that the quantities were correct for this Project. As part of the bid review, the Department does a statistical average or mean average for each of the bid items. A standard and a-half deviation either side of the mean is established. The bid items outside that standard and a-half deviation, positive or minus, are discarded. The remaining bid items are re-averaged and this second average is referred to as the "serious average." A front-end loaded item is an item for which work is performed early in the contract. Mobilization is considered a front-end loaded item. Couch's Mobilization item 2101-1B was flagged by the computer analysis. The Department did an analysis of the Mobilization item. The Department started with the difference between Couch's bid and the Petitioner's bid on this item, $18,0000.00. That amount was multiplied by the current interest rate, 10 per cent, and then multiplied by a factor of .5, which spread it over half the contract, times 180-day contract period divided by 365, one calendar year. The result was $434.84, which represents the potential advantage that could result from paying the $18,000.00 amount early in the contract. That amount, $434.84, did not materially unbalance Couch's bid. The three items identified by Petitioner as unbalanced (paragraph 3, above) were low and did not present any detriment to the Department. If those three items overran at the rate established, it would be an advantage to the Department. In evaluating unbalanced bids, the Department follows the guidance in a May 1988 memorandum from the FHWA, which addresses bid analysis and unbalanced bids. The memorandum provides that where unit prices for items bid are either unusually high or low in relation to the engineer's estimate of the price, the accuracy of the estimated quantities of the items are to be checked. If the quantities are reasonably accurate, the bid is to be further evaluated to determine whether the mathematical imbalance is materially unbalanced such that there is "reasonable doubt that award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to the Government." The analysis of a mathematically unbalanced bid to determine if it is materially unbalanced considers the effect of the unbalanced bid on the total contract amount; the increase, if any, in the contract cost when quantities are corrected; whether the low bidder will remain as the low bidder; and whether the unbalanced bid would have a potential detrimental effect upon the competitive process or cause contract administration problems later. In this case, the Department compared the unit prices (line item prices) by each bidder on the bid proposal sheet to the average unit price for that item. The average unit price is based upon an average of the bidders' unit prices bid for a given pay item and the Department's estimated unit price for that item. If an individual bidder's unit price is significantly greater or less than the average price, the Department's computer flags the item as mathematically unbalanced. Such a bid then receives further evaluation by the Department to ensure the accuracy of the original estimates of the quantities of those items for which an unbalanced unit price has been submitted. The Department also reviews the project plans for accuracy. The more in-depth review is performed to determine if there is a potential for a cost overrun or if there is an error in the Department's estimated quantities which would result in an increased cost to the Department for the project. In this case, Couch and Anderson submitted bid proposals for each of the individual line item prices contained on FDOT's form. Couch's unit price for the off-duty law enforcement item was $0.25/hour. The Department's average price for the off-duty law enforcement item was $25.22/hour. The Petitioner's quotation for off-duty law enforcement was $26.00/hour. The Department's computer analysis of Couch's bid flagged the off-duty law enforcement item as mathematically unbalanced. The quote by Petitioner for the off-duty law enforcement item was not unbalanced, and therefore was not flagged for further review by the Department. The same analysis was applied to the barricades and variable message sign items, with similar results. The Department also did an in-depth review of item 2101-B, Mobilization, for front-end loading. The result of that analysis was that, as a result of front-end loading, there was the probability of increased cost to the Department of $443.84. This small increase in the cost to the Department was not large enough to change the order of the bidders. Therefore, it was not a materially unbalanced item. The Department then made a more in-depth review of the three mathematically unbalanced items in Couch's bid and determined that none of those items were materially unbalanced, because none of them had the potential to increase the cost to the Department and none of them had the potential to change the order of the bids. In sum, the Couch bid was not materially unbalanced. The evidence in this case is insufficient to support a basis for rejecting the Couch bid.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Florida Department of Transportation issue a final order in this case dismissing the Petitioner's Formal Protest and Request for Hearing; denying all relief requested by the Petitioner; and awarding the subject contract to the Intervenor, Couch Construction, L.P. DONE AND ENTERED this 7th day of May, 1999, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 7th day of May, 1999.
Findings Of Fact On March 15, 1988, the Department of Agriculture and Consumer Services issued an Invitation to Bid (ITB) number DOF-ADM-48. The Invitation to Bid's purpose was to secure a contractor to service and install water filters on private drinking water wells located in eight counties within the State of Florida. The filters were required to be installed by the Department for the removal of ethylene dibromide (EDB) from contaminated drinking water obtained from private wells. EDB is a constituent of pesticides and is a suspected carcinogen. The filter systems operate by running the water through a tank containing a pleated paper filter similar to a coffee filter. The pleated paper filter contains granular activated carbon (GAC). The GAC absorbs impurities such as EDB. The water is also passed through a sterilizer unit. The sterilizer unit disinfects the water by bombarding it with ultraviolet light. For instances of heavy pollution the water may be filtered through a double tank system or require pretreatment with another media filter in order to remove more concentrated impurities from the water. The Department sent its ITB to a number of vendors. The ITB invited the submittal of bids and set a bid ending date of April 27, 1989. The bid included the standard State of Florida Invitation to Bid Bidder Acknowledgment form, number PUR 7028, also referred to as a "yellow sheet." The acknowledgment form provides spaces for the vendor to list identify information and to sign the bid. It also sets forth, general conditions applicable to the bidding process. Among the General Conditions contained on the yellow sheet is General Condition 4(d) which states:,, It is understood and agreed that any item offered or shipped as a result of this bid shall be a new, current standard production model available at she time of the bid. ... Further, General Condition 7 provides: Any Manufacturers' names, trade names brand names, information and or catalog numbers listed in a specification are for information and not intended to limit competition. The bidder may offer any brand for which he is an authorized representative which meets or exceeds the specifications for any items(s). If bids are based on equivalent products, indicate on the bid form the manufacturer's name and number. ... The ITB also contained a number of terms, specifications and special conditions geared towards the specific purpose of the contract. These included the following Additional Bid Conditions: PROOF OF EQUIVALENCY: Vendor shall provide written, documented proof of equivalency for their equipment where it differs from the named brands and equipment specified in the bid specifications. EQUIPMENT, COMPONENTS, SPECIFICA- TIONS AND DOCUMENTATION: Vendor shall provide full documentation and specifications on all equipment and components to be used in providing the GAC filter systems and maintenance as specified in the bid. In this case, proof of equivalency of equipment is important to maintain the integrity of the water filter systems, and to insure cost-effectiveness in servicing the system. The bid specification also contained civic requirements for the GAC. The GAC specifications governed such items as moisture content, particle size and distribution absorptive capacity. Absorptive capacity was measured by an iodine number. An "iodine number" reflects the milligrams of iodine absorbed per gram of carbon. The higher thin iodine number, the more absorptive the carbon. In this case, the GAC requirements ware as follows: Granular activated carbon, with thee exception of the standards below, shall comply with the "American Water Works Association Standard for Granular Activated Carbon" (AWWAC B604-54). The GAC standards are as follows: Impurities - No soluble compounds should be present that are capable of causing adverse effects on the health of the consumer. Moisture - Shall not exceed two (2) percent by weight of listed container contents. Apparent Density - Shall be 28.5 - 31.0 pounds/cubic foot. Particle size distribution - should range between U.S. standard sieve size NO. 8 and NO. 30. A maximum of 15% of the particles can exceed 8 in size and a maximum of 4% can, be less than NO. 30 in size. Abrasion Resistance - Retention of average particle size shall not be less than 75 percent as determined by either the stirring abrasion or the RO-Tap abrasion test. Adsorptive Capacity - The "iodine number shall not be less than 950 or equivalent adsorptive capacity. The GAC must be packed and rinsed at the successful vendor's facilities not at the well site. Virgin GAC must be stored in facilities that will protect it from weather and vandalism. The Department had used a GAC manufactured by Ceca Division of Atochem, Inc. The carbon was known as Cecacarbon GAC 30WE. GAC 30WE had consistently met the Department's requirements. Atochem labelled or named the carbon, "GAC 30WE," because it met certain product quality standards and in order to differentiate the carbon from other types of GACs it manufactures, such as GAC 830WE. GAC 830WE is the same size carbon particle as GAC 30WE, but it has a lower adsorptive capacity, i.e., iodine, than 30WE. About two years prior to this bid, Atochem quit intentionally manufacturing she carbon it labelled Cecacarbon GAC 30WE. At that time the current contractor, Continental, unilaterally, and without informing the Department, substituted another GAC for Cecacarbon GAC 30WE. The Department therefore has been using a GAC of unknown manufacture for the past two years without complaint. Section II of the ITB indicated that the UVL disinfectant light source "must be an Aquafine Model NO. DW-400 or its equivalent." It further stated that the water flow meter required as apart of the filter system must be "a badger Model 15 The ITB required that specifications for the individual equipment components "MUST BE PROVIDED WITH YOUR BID OR THE BID WILL BE DECLARED INCOMPLETE AND INELIGIBLE FOR CONSIDERATION." Section III of the ITB, concerning the "Type II" systems (those consisting of two filter tanks), contained the same provisions as to UVL sterilizer units, water meters and component specifications as Section II. The Aquafine DW-400 was the UVL system currently being used by the Department's contractor. The ITB also contained a pricing sheen for vendors to list unit prices on 20 different components of the filter system. By multiplying the unit price by the Department's estimate of the respective numbers needed of each limited component, a total bid price was arrived at by the bidder. On April 17, 1989, the Department issued the first addendum to the ITB. Addendum number 1 changed the estimated number of pleated paper filters on the pricing sheet from 6500 to 10,200. A new bid opening date of May 23, 1989 was bet. On May 23 1989, the Department issued the second addendum to the ITB. In addition to establishing a new bid opening date of June 21, 1989, the second addendum made several substantive changes. It required bidders to submit with their bid an EDB isotherm for the GAC medium being bid by each bidder. An isotherm is a graph showing the adsorptive capability of the GAC. Since the Department would have no knowledge of the performance capabilities of a previously unused carbon, the EDB isotherm was "critical" where the carbon proposed for use had not been used on a Department contract before. For a known GAC, i.e. one the Department had used before, the isotherm was not material. The second addendum also changed the "designated model number for the water meter from the Badger Model 15 or equivalent to the Badger Model 25L or equivalent. The water meter model number was changed because the Badger model 15 was no longer being produced. Additionally, the model number of the freeze housing was changed from the "AMTEK big blue filter" to the "AMTEK NO. 20 or equivalent." The freeze housing was made an optional component of the bid. The third addendum, dated June 13, 1989, reinstated the freeze housing as a required component of the budget but provided that the housing could be of either fiberglass or aluminum construction. It also clarified the testing required to justify installation of a media filter on a system, and clarified that upgrades of systems from Type I to Type II. A new bid opening date of June 28, 1989 was set. Due to the entry of a temporary restraining order by a circuit court judge, the June 28, 1989, bid opening did not transpire. When the restraining order was later lifted, the Department issued Addendum IV, which set a bid opening date of September 28, 1989, and which gave bidders who had submitted bid prior to the June entry of the restraining order the opportunity to submit a new bid. Petitioner, Continental Water Systems, Inc., (Continental) a Florida corporation, timely submitted a bid of $895,877.50 to the Department in response to the Department's Invitation to Bid. Intervenor, Global Marketing, Inc., a North Carolina corporation, doing business in the State of Florida, timely submitted a bid of $784,431.50 to the Department in response to the Department's Invitation to Bid Number DOF-ADN- 48. Petitioner and Intervenor were the only two bids submitted. The Department made a preliminary determination that both bids were responsive, and posted its bid tabulation on October 30, 1989. Global was the apparent low bidder and was awarded the contract by the Department. In its bid, Global indicated that it would use the Aquafine DW-400 UVL sterilizer unit and the Badger Model 15 water meter. It also indicated that it would use Cecarbon GAC 30WE. Global did not include an EDB isotherm with its bid. Continental's bid included specifications for both the Aquafine DW-400 and a UVL system manufactured by "Ultra Dynamics Corporation known as Model Number DW-15. For the GAC, Continental bid Alamo ABG-CWF a GAC medium manufactured by Calgon as Filtrasorb 300 GAC. The bid contained an EDB isotherm for the GAC product. It also included specification sheets showing its intent to use a Badger Model 25L water meter. Unknown to the Department, the Aquafine Corporation no longer produces the DW-400 UVL sterilizer unit as a standard production model. It ceased production of this model in June or July of 1989. It has enough materials on hand to produce another 45 to 50 units. Aquafine is under contract to sell those units to Continental. If requested to produce more DW-400's, Aquafine might again manufacture the DW-400. However, Aquafine would not begin such production unless ban order for at least 1000 units was made. At present, Aquafine manufactures only one model for drinking water systems. The model is the DW-8. No specifications were included in Global's bid for the DW-8 or any other potentially equivalent sterilizer unit from another manufacturer. In this case, the bid specifications clearly list the DW-400 as an acceptable submission. The evidence did not show that the DW-400 was no longer available, even though the model was no longer being produced. There is no newer prototype of the DW-400. A contract, which an ITB constitutes the offer portion of, must be interpreted to give effect to all of its language and clauses. Therefore, the specific reference to the DW-400 as an acceptable submission must be given effect as an exception to the general requirement that "any item offered or shipped . . . be a new, current, standard production model . . . Since Continental did not challenge the bid specifications in regard to the UVL system, the complaint of non-responsiveness. . . cannot be heard now. Global therefore was responsive to the Department's ITB on the UVL component of its bid. When the Department learned that the Badger Model 15 water meter was no longer being manufactured it decided to change its specifications due to the change in production. The specifications were changed from the "Badger Model 15 or equivalent" to the "Badger Model 25 or equivalent." Global's bid did not list the Badger Model 25, but listed she Badger Model 15. However, Continental did not preserve the issue regarding the responsiveness of Global's bid on the water meter in its Formal Written Protest. Therefore, no findings are made regarding the responsiveness of Global's bid on the water meter component. The heart of the whole filter system is the GAC. The carbon proposed to be used by Global, Cecarbon GAC 30 WE, is no longer produced by the manufacturer. It has not been in production since 1987. Global and the Department did Introduce into evidence a faxed copy of a letter from an Atochem sales representative indicating that an amount of GAC 830 carbon would be available "until the end of 1989" to meet the Department's bid specifications. However, GAC 830 is not the same product as that bid by Global and does not have the same manufacturing standards as the GAC 30WE bid by Global. Neither does Atochem now intentionally produce a carbon that meets the specifications for DOF-ADM-48. Specifically, Atochem does not produce a carbon with an 8 x 30 mesh size that has a minimum iodine number of 950. The 8 x 30 mesh size carbon that Atochem produces, GAC 30, has an iodine number of 900 to 920. Due to variation in the capabilities of different lots of GAC 830, some lots may have a 950 iodine number. The evidence did not show whether the company tests its GAC 830 beyond its manufacturing standards. Nor did the evidence show whether a higher adsorpting GAC 830 lot is available. A letter from a sales representative that such a lot is available does not rise to the level of competent evidence which would support the conclusion that Global had materially meet the Department's ITB on the GAC element. At a minimum the Department or Intervenor would have had to bring the Company's documentation, including an isotherm, for that particular GAC lot to demonstrate responsiveness for a product labelled with a name which carries a lower adsorptive standard. The only carbon manufactured by Atochem which has a minimum iodine number exceeding 950 is a different size carbon. This carbon has a mesh size of 12 x 40, and thus does not meet the DOF-ADN-48 specifications. Both the Aquafine sterilizer unit and the Ultra Dynamics units, bid by Continental, meet the specifications for this ITB. The GAC bid by Continental meets the specifications for this ITB. This particular carbon has also been accepted by the Department for use by continental on a previous Department contract in January 1988, where the specifications for the carbon were identical to those applicable here. Continental did submit an EDB isotherm. Global's bid was not responsive to the ITB. It offered a carbon element which is no longer in production. It will have to substitute another GAC not identified in its bid in order to perform under the contract. Global provided no technical literature with its bid to establish the equivalency of any other GAC. Additionally Global did not provide an EDB isotherm for the carbon it planned on using from Atochem. These omissions were material. Global's bid therefore cannot be said to be responsive to the Department's ITB.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Department enter a final order awarding the bid to Petitioner as the lowest and best bid. DONE and ENTERED this 17th day of April, 1990, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER Hearing officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1990. APPENDIX TO CASE NUMBER 89-6372BID The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, and 27 of Petitioner's Proposed Findings of Fact are adopted in substance, insofar as material. The facts contained in paragraph 27 of Petitioner's proposed Findings of Fact are adopted except for the parts pertaining to the UVL systems unresponsiveness. The facts contained in paragraphs 28 and 29 to Petitioner's Proposed Findings of Fact are irrelevant. The facts contained in paragraphs 1, 2, 3 and 5 of Intervenor's Proposed Findings of Fact are adopted in substance, insofar as material. The facts contained in paragraphs 4, 8 and 9 of Intervenor's Proposed Findings of Fact are subordinate. The facts contained in paragraphs 6 and 7 of Intervenor's Proposed Findings of Fact were not shown by the evidence. COPIES FURNISHED: M. Christopher Bryant, Esquire Oertel, Hoffman, Fernandez, and Cole, P.A. 2700 Blair Stone Road Post Office Box 6507 Tallahassee, Florida 32314-6507 Clinton Coulter, Esquire Department of Agriculture and Consumer Services 515 Mayo Building Tallahassee, Florida 32399-0800 James C. Barth, Esquire Callahan, Barth & Dobbins 5374 Highway 98 East, Suite C-1 Destin, Florida 32541 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Mallory Horne General Counsel 515 Mayo Building Tallahassee, Florida 32399-0800 =================================================================
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, 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 26th day of September, 1996.
The Issue The issue for consideration herein is whether the Respondent's proposed award on BID No. HSMV - 90022010 to Dunn Construction Company, Inc., should be upheld.
Findings Of Fact At all times pertinent to the issues herein, the Department was the state agency responsible for the solicitation of bids for and award of contracts for the construction of state buildings in Florida. Both Greenhut and Dunn are qualified contractors who are certified to bid on state construction contracts in general and this procurement in particular. In December, 1991, the Department issued an advertisement for bids for the project in issue herein, the construction of the Kirkman Complex Addition Data Center in Tallahassee, Florida. According to the Advertisement for Bids, all bids "must be submitted in full accordance with the requirements of the Drawings, Specifications, Bidding Conditions and Contractual Conditions, which may be examined and obtained ..." from the Department's designated architect/engineer, Clemons, Rutherford and Associates, Inc. in Tallahassee. Section B-21 of the request for proposals (invitation to bid) reads, in pertinent part: The recommendation for contract award will be for the bidder qualified in accordance with Section B-2 and submitting the lowest bid provided his bid is responsible and it is in the best interest of the Owner to accept it. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the owner. Bids received on this project were originally scheduled to be opened and read aloud on January 15, 1992 with the tabulation and Bid Award Recommendation to be posted the following days at the location where the bids were opened. The proposal as originally issued called for the submittal of a Base Bid with four Alternates, 1a, 1b, 2, and 3. Alternate 1a was a deduct for merely extending the existing Johnson Controls System to incorporate the new work instead of providing a totally new and independent control system. Alternate 1b called for adding furniture and landscaping for certain of the rooms shown on the drawings; Alternate 2 called for adding a "shelled" fourth floor as described in the proposal; and Alternate 3, as originally issued, called for: Add a complete fourth floor as indicated in drawings including the finished interior partitions with full HVAC, Plumbing and Electrical Service. Include furniture and landscaping for rooms 414 and 419. (Includes items in Alternate No. 2) As a result of questions received from prospective bidders at the pre-bid conference which indicated some confusion as to the meaning and intent of the Department regarding Alternate No. 3, by letter to all prospective bidders, dated January 8, 1992 the Department's architect indicated: Alternate #3 shall be the fourth floor complete, as shown on drawings, which includes items in Alternate #2. Addendum #1 to the request for bids, dated January 10, 1992, clarified Item 1-3.6), PROPOSAL FORM, of the PROJECT MANUAL to ADD to "Alternate #3", "(Include items in Alternate #2)". Item #2-1 of Addendum #2, dated January 16, 1992, deleted the sentence changed by Item #1- 3.6, and revised the sentence to read as follows: This includes any items required in addition to Alternate #2 to complete the remainder of the work for the Fourth Floor. Information contained at the beginning of each Addendum calls the bidders' attention to the change and indicates that failure to incorporate it may result in disqualification. The due date for bids was extended at the instance of the Department. Both Petitioner and Intervenor submitted bids for this project as did several other concerns on January 23, 1992. Greenhut's base bid was $4,139,000 with a deduct of $63,600 for Alternate 1a, and additions for Alternates 1b, 2, and 3 of $69,500, $239,000, and $209,000 respectively. Greenhut's total bid, therefore, through Alternate 3, was $4,592,900. Dunn's base bid was $4,079,000 with a zero deduct for Alternate 1a, and additions for Alternates 1b through 3 of $67,000, and $428,000. Dunn's total bid, therefore, was $4,574,000 for a difference of $18,900. Greenhut's bid was submitted on a form which provided for the base bid, the deduct for 1a, and the additions for 1b. 2 and 3 with the figure for 3 being those costs in addition to those identified in Dunn's bid was submitted on a prior form which provided for a base bid, a 1a deduction if any, (there was none), and additions for 1b, 2, and 3 with the figure for 3 including the figure listed for 2. An initial review of Dunn's bid form, then, showed a base bid of $4,079,000, no 1a deduction, a 1b addition of $67,000, a 2 addition of $311,000, and a 3 addition of $428,000. This letter figure included the $311,000 figure for Alternate 2, which should have been deducted from the bid during tabulation. When the bids were opened on January 23, 1992 by Mr. Everline, each figure on each bid was read off and listed on the bid tabulation form in the appropriate area. No attention was given at that time to the appropriateness or correctness of the figures listed on each bid form, nor was any attention paid to any other technical requirement of the procurement. This was merely a transfer of figures from the bid form to the tabulation form, and when this was done, Mr. Everline announced to all in attendance, including many contractor representatives, that the "apparent low bidder" was Greenhut. In arriving at that conclusion, Mr. Everline added all of Dunn's figures together without deducting the $311,000 listed for Alternate 2, a figure which was included in the $428,000 figure listed for Alternate 3. This resulted in an incorrectly large total bid for Dunn. Sometime later that day, a representative of Dunn contacted Mr. Everline to indicate that Dunn had inadvertently bid on the wrong form which precipitated its misleading presentation. Mr. Everline properly declined to discuss the matter and referred the Dunn representative to the Department's legal counsel. Sometime thereafter, when the bids had been tabulated and reviewed for responsiveness and legal qualification of bidders, Mr. Everline suggested to representatives of DHSMV that in order to forestall a protest, only so much of the project as extended through Alternate 2 be awarded. DHSMV officials, however, had sufficient funds available for the entire project, including some additional funds, if necessary, for cabling, and insisted they wanted the entire project awarded. The Department's legal counsel, upon review of the situation, concluded that the Dunn's actual bid intent was clear to include the amount listed for Alternate 2 within that listed for Alternate 3, and not to consider the two as additives to each other. It further concluded that Dunn's use of the improper form on which to submit its bid was immaterial and afforded it no improper competitive edge over other bidders. Therefore, it was concluded that Dunn was the low responsive bidder and, on February 4, 1992, the Department issued a Notice of Award to Dunn. Thereafter, Greenhut filed its Petition For Hearing taken as a protest to the award. Both the Department and Dunn agreed that Greenhut had standing to protest the award and that the protest was timely filed. It is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Department of General Services enter a Final Order in this case dismissing the protest of Greenhut Construction Company, Inc., in regard to the proposed award of contact in bid number HSMV - 90022010 to Dunn Construction Company, Inc. RECOMMENDED in Tallahassee, Florida this 21st day of April, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of April, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1297 BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 6. Accepted and incorporated herein. 7. - 9. Accepted. Accepted. & 12. Accepted and incorporated herein. Accepted. Accepted. & 16. Accepted and incorporated herein. Accepted and incorporated herein. & 19. Accepted and incorporated herein. Accepted. & 22. Accepted and incorporated herein. Argument and not Finding of Fact except for 1st sentence which is accepted. & 25. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 3. Accepted. 4. - 6. Accepted and incorporated herein. 7. & 8. Accepted. 9. - 12. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. & 17. Accepted and incorporated herein. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Accepted. Accepted. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Irrelevant. Accepted and incorporated herein. Accepted. FOR THE INTERVENOR: Accepted. - 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 15. Accepted. 16. - 19. Accepted. 20. & 21. Accepted. Accepted and incorporated herein. & 24. Accepted. COPIES FURNISHED: Robert A. Emmanuel, Esquire 30 South Spring Street Post Office Drawer 1271 Pensacola, Florida 32596 Sylvan Strickland, Esquire Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Harry R. Detwiler, Jr., Esquire 315 S. Calhoun Street, Suite 600 Tallahassee, Florida 32301 Ronald W. Thomas Executive Director Department of General Services Suite 307, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland General Counsel Department of General Services Suite 309, knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue The issue in this case is whether Respondent properly rejected the bid of Petitioner.
Findings Of Fact Respondent issued on February 28, 1990, an invitation to bid concerning the installation of bleachers at a high school ("ITB"). The ITB was duly advertised. Among the bidders was Interkal, Inc., which is a manufacturer of bleachers. The Interkal bid, which was timely submitted, was executed by its president. The Interkal bid contained a bid bond naming Interkal as principal and a certification from the secretary of Interkal reflecting a corporate resolution authorizing the execution of all bid documents on behalf of Interkal by its corporate officers. The Interkal bid disclosed two subcontractors. The supplier was shown as Interkal, and the erector was shown as Petitioner. Petitioner is the authorized factory representative for Interkal in Florida. As such, Petitioner solicits business and installs and removes bleachers on behalf of Interkal. As compensation, Petitioner receives commissions for such work from Interkal. However, the shareholder and chief executive officer of Petitioner is not a shareholder or officer of Interkal. In addition, Petitioner is not authorized to execute bid documents on behalf of Interkal. Petitioner is no more than a Subcontrator of Interkal. The bidder in this case was Interkal, not Petitioner, even though Petitioner handled much of the paperwork or its manufacturer. When an unrelated bidder was awarded the contract, Petitioner filed a formal written protest in its name. Interkal has not participated as a party in the subject proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Respondent enter a Final Order dismissing the petition of Diversified Design Enterprises. ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1990. COPIES FURNISHED: Ned N. Julian Stenstrom, McIntosh, et al. P.O. Box 1330 Sanford, FL 32772-1330 William Merkel, President Diversified Design Enterprises 321 N.E. Second Avenue Delray Beach, FL 33444 Robert W. Hughes, Superintendent Seminole County School Board 1211 Mellonville Avenue Sanford, FL 32771
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of March, 1992.
Findings Of Fact The Department of Health and Rehabilitative Services currently leases approximately 22,000 square feet of space from Nelson P. Davis. The space is contained in two separate buildings, both located at 417 Racetrack Road, Ft. Walton Beach, Florida. The Department and Davis were involved in a legal dispute involving the currently leased premises, which concluded in 1986 with the entry of judgment in Davis' favor. While some antagonism remains between the parties related to the legal action instituted by Davis, Davis has been an acceptable landlord in all other respects. The current lease expires February 1, 1989. Davis has been aware, since late February or early March of 1988, that the Department would need space in excess of the currently occupied 22,000 square feet, but was not aware of the actual additional space requirements until the issuance of the invitation to bid. In general, the Department's space requirements have increased annually. In response to the anticipated need for additional space, Davis initiated plans for design of a third Racetrack Road building that could meet the additional need, but did not construct the facility. In response to the space requirements of previous years, Davis has constructed additional space. The Department has occupied the additional space in such proportions as to avoid the competitive bidding process, however, the current need for additional space exceeds the maximum which can be leased without competitive bidding. The Department on May 11, 1988, issued an invitation to Bid for approximately 26,165 square feet of space in Ft. Walton Beach, Florida. (HO #1) In response to the invitation, Davis submitted a bid proposal. The Davis proposal, the sole proposal received by the Department, was disqualified by the Department as non-responsive. On June 23, 1988, the sole bid was opened by Joseph Pastucha, HRS District One Facilities Manager, who initially reviewed the Davis bid. Mr. Pastucha identified items of concern related to the responsiveness of the bid and then provided the information to his supervisor, who in turn provided the information to Mr. James Peters. The Department did not contact Davis for further information or to provide the opportunity to correct any defects. James Peters, HRS's District One Manager for Administrative Services has expressed on at least one occasion a desire to avoid entering into business arrangements with Nelson P. Davis. The bases for Peters' opinion is the earlier litigation between the parties. Peters was on the committee which was to have evaluated bids submitted in response to the invitation. However, Peters has stated that his personal opinion would not influence his participation in the bid solicitation process. The evidence did not indicate that Peters based his opinion regarding the Davis bid submission solely on the earlier litigation or that any other person involved in the agency's action permitted personal opinions to affect the decisional process. Davis' bid proposal included the two buildings constituting approximately 22,000 square feet located at 417 Racetrack Road which the Department currently occupies, plus a third building of approximately 4,000 square feet. The proposed square footage and lease cost were acceptable. The third building was to be either a planned, unconstructed building located at the 417 Racetrack Road location or an existing building located "7/l0ths of a mile southeast of the present HRS offices," (the off-site building). However, a memorandum attached to Davis' submission stated that he did not intend to use the off-site building for HRS purposes, (HO #2). Further, Davis had previously indicated in conversation with the HRS manager of the 417 Racetrack Road offices that he planned to utilize the off-site space otherwise. On page one of the bid submittal form Davis indicated the address of the proposed location as 417 Racetrack Road. By letter dated July 5, 1988, the Department notified Davis that his bid offering was deemed non-responsive and that the Department expected to readvertise for space in Ft. Walton Beach. The letter made no mention of any opportunity to protest the determination. The statement, "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes," which is required to be included in the notice of agency decision by Section 120.53(5)(a), Florida Statutes, was omitted by the Department. (HO #3) On or about July 7, 1988, Davis contacted the Department of General Services to express his dismay regarding the disqualification of his submittal. A meeting, held on or about July 19, 1988, between Davis and Department representatives, did not alter the Department's position. On or about July 25, 1988, the written notice of protest and request for hearing was filed. The Department forwarded the request to the Division of Administrative Hearings. The letter dated July 5, 1988, advising Davis that his bid was deemed non-responsive enumerated five reasons for the Department's decision. The reasons stated were: No photograph of the proposed facility was submitted as requested; No floor plan of the facility was submitted as requested; A substituted site was submitted Proposed space was not an existing building and was not measurable; Three buildings in bid proposal constitute three locations and are unacceptable. The letter was signed by Chuck Bates, DHRS Deputy District Administrator, District One. The letter was drafted by James Peters. (HO #3) Mr. Bates relied upon Peters and Pastucha to provide information sufficient to justify the disqualification of the bid, and was satisfied that the action was justified prior to signing the letter. Examination of the bid submittal package reveals that Davis failed to acknowledge by initial the requirements of page seven, but that he did, on that page, appropriately respond to questions related to proposed parking spaces being bid. The Department did not base the disqualification of the bid on the failure to acknowledge the page and did not include the failure to initial the page in the stated reasons for deeming the bid non-responsive. Paragraph 9(a) of the bid submittal form requires the submission of a clear photograph of the exterior front of the building. (HO #2) Davis submitted no photographs. Paragraph 9(b) of the bid submittal form requires the submission of a scaled floor plan showing present configurations with measurements. (HO #2) Davis submitted floor plans for the proposed-to-be-constructed building and for the off-site building, but failed to submit floor plans for the two buildings which the Department currently occupies. The bid also failed to include calculations of net rentable square footage related to the omitted floor plans. The letter to Davis stated that an additional reason for disqualification of his bid from further consideration was the submission of a substituted site, (HO #3). The "substituted site" refers to Davis' inclusion of the off-site building not identified in the bid submission other than by the statement that the building was located seven-tenths of a mile southeast of the present HRS office location. No map, street address, legal description, or other identifying information was submitted. The proposal submitted by Davis included plans to construct a third building at 417 Racetrack Road, which was rejected as not measurable. The invitation to bid states that to be considered, the space must be existing, dry and physically measurable, at the time of bid submitted. (HO #1) The proposed third building clearly fails to meet this requirement. While the Department may permit the correction of minor deficiencies, the deficiencies were adjudged by the Department to be more than minor. The proposal's inclusion of nonexisting space (Racetrack Road building #3) or in the alternative a building, the location of which can not be determined from the bid information and which the bidder apparently intends not to provide, is non- responsive to the specifications of the invitation. As to the fifth enumerated reason for disqualification of the bid (three buildings/three locations) the Department and Petitioner presented extensive testimony related to paragraph 3(b) of page 15 of the bid submittal form. Page 15 of the bid submittal form is titled "Evaluation Criteria" and contains a list of weighted factors which were to be used in the evaluation of bids. (HO #2) Paragraph 3(b) states, as one factor for consideration in evaluation, whether the bid provides for the required aggregate square footage in a single building, and continues, "[p]roposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within yards of each other." (HO #2) The space left for the specification of maximum yardage was erroneously left uncompleted by the Department and the Department did not learn of the error until the bid was submitted. The Department's disqualification of the bid on this basis relies on the Department's assertion that the three buildings included in the Davis proposal constitute three locations and that a responsive bid may contain not more than two locations. The Department's position is that "location" and "building" are synonymous and that paragraph 3(b) of the evaluation criteria prohibits consideration of a bid submission including more than two buildings. The Department's position is rejected as arbitrary. The bid package does not state that proposals including more than two buildings will be disqualified. The sole reference to the number of buildings in a responsive bid submission is as stated and contained on the page of "Evaluation Criteria", wherein it is identified with a weighting factor of five percent of total possible points.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order dismissing Case No. 88-3868BID. DONE and ENTERED this 28th day of September, 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3868BID The following constitute rulings on the proposed findings of fact submitted by the parties. Petitioner: Accepted in part. The use of the word "required in the fourth sentence is rejected. The referenced section relates to evaluation factors, not specific requirements. Accepted. Accepted in part. The third building was proposed as either the off-site building or the planned, non-existent space. Accepted. Accepted. Accepted. Rejected as restatement of testimony. Other testimony indicated that Petitioner planned to use the off-site location for non-HRS purposes. Rejected, immaterial. Accepted. Accepted. Accepted as modified. Accepted in part. The use of the word "technical" is rejected. Accepted. Accepted as modified. Accepted as modified. Accepted. Accepted. Accepted. Accepted as modified. Accepted as modified. Accepted as modified. The change between the two invitations to bid was to clarify the obvious confusion related to the use of terms "location" and "building" and was made not to the bid specifications but to evaluation criteria. Rejected as restatement of testimony. Rejected, conclusion of law. Accepted so far as relevant. While the Davis bid was disqualified as non-responsive, the right to reject any and all bids encompasses the disqualification of a bid as non-responsive to the specific requirements of an invitation to bid. Respondent: Rejected, conclusion of law. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Floor plan of the off-site building was submitted showing that the building is essentially a hollow, box-like structure. Accepted. Accepted. Accepted. Rejected, irrelevant. While the usual distance may be 100 yards, the actual bid specifications do not state such. Further the sole reference to the distance between "locations" was contained in evaluation criteria. At no time prior to the June 23, 1988 bid opening did the Department attempt to identify the preferred distance between locations. Accepted. Accepted. Accepted. COPIES FURNISHED: Bruce A. McDonald, Esquire Post Office Box 887, Suite 105 151 Mary Esther Cutoff Mary Esther, Florida 32569 Rodney M. Johnson, Esquire Acting District One Legal Counsel Post Office Box 8420 Pensacola, Florida 32505-8420 Joseph J. Pastucha 3300 North Pace Boulevard Room 109 Town & Country Plaza Pensacola, Florida 32505 Jan Kline 417 Racetrack Road Ft. Walton Beach, Florida 32548 James V. Peters Department of General Services 160 Governmental Center Fourth Floor, Room 412 Pensacola, Florida 32501 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Tom Batchelor Staff Director House HRS Committee The Capitol Tallahassee, Florida 32399-1300
