Findings Of Fact On August 31, 1994, the Respondent received and opened bids for its Project No. HSMV 92044000, Repairs, Art Sutton Drivers' License Office, Miami, Florida (the Project). The bid specification documents (the Specifications) for the Project included requirements for a Base Bid and for specific alternate proposals with respect to three defined items of alternate work. Section 01100 of the Specifications stated that "[a]ll Alternates described in this Section are required to be reflected on the Bid Form as submitted by the bidder." Part 2 of that section provided: ALTERNATE NO. 1 A. Provide a deductive price to the base bid for the removal of existing window units and the installation of new units as indicated in plans and specification Section 08520. ALTERNATE NO. 2 A. Provide a deductive price to the base bid for the provision of communications conductors see specification Section 16400. ALTERNATE No. 3 A. Provide a deductive price to the base bid for the installation of all landscape materials as indicated on plans and as per specification Section 02960. Also included in the Specifications as Exhibit 4 was a Proposal Form. The Specifications required each bidder to submit this form in triplicate on the bidder's letterhead. With respect to alternates, the Proposal Form required: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add or Deduct $ Alternate No. 3 Add or Deduct $ The Respondent's architect received four bids on August 31, 1994. As recorded on the Bid Tabulation and Notice of Award Recommendation, three bidders provided specific prices for the three alternates, as well as a Base Bid. The Bid Tabulation shows that two bidders provided specific prices for the three alternates and included the alternate prices in their Base Bids. The Petitioner provided specific prices for the three alternates, but excluded the alternate prices from its Base Bid. The fourth bidder provided a specific price for only one alternate and excluded that alternate price from its Base Bid. (The fourth bidder was disqualified as non-responsive for failing to submit prices on all three alternates.) In pertinent part, the Petitioner's proposal read: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications: Alternate No. 1 Add or Deduct . . . $4,400.00 Alternate No. 2 Add or Deduct . . . $1,158.00 Alternate No. 3 Add or Deduct . . . $2,084.00 These Alternates were in addition to the Petitioner's Base bid of $204,322.00. The proposal form submitted by the Petitioner comports with Exhibit 4 to the Specifications, which was the mandatory Proposal Form. On August 31, 1994, William Phillip Austin, Peitioner's President, wrote the architect: Per our telephone conversation this date regard- ing the confusion relating to the Add/Deduct for Alternates 1, 2 and 3 for the above project, please be advised that our base bid did not include the work described in the Alternates. As stated if you want work described in Alternates 1, 2 and 3, you must add the cost to our base bid. The base bid including Alternates 1, 2 and 3 would, therefore, be $211,964.00. If we can provide additional information, please do not hesitate to contact us. The Respondent's architect completed and submitted the bid Tabulation and Notice of Award Recommendation to the Respondent in early September. The document clearly discloses the amounts of each bidder's Base Bid and Alternate proposals. Using plus (+) and minus (-) signs, the Bid Tabulation further shows each bidder's method of calculation. The record is devoid of evidence that the Respondent had any problem in evaluating the bids and identifying the lowest bidder. The Petitioner was the lowest bidder on any combination of base bid plus or minus any or all alternates. Subsequently the Petitioner received a NOTICE OF AWARD RECOMMENDATION dated October 4, 1994. The Notice informed the Petitioner that the Respondent "has recommended that the contract be awarded to your firm in the total amount of $211,964.00, accepting the Base Bid and Alternates #1, #2 & #3. The Administrator of Contracts Design and Permitting, Division of Building Construction, Department of Management Services, State of Florida will consider this recommendation." Larry R. Coleman, Construction Projects Administrator, signed the letter. The Petitioner acknowledged receipt. A representative of the second lowest bidder, Kalex Construction, then contacted the Respondent, complaining of the Award Recommendation. The grounds for the Kalex complaint are not in the record. However, on October 14, 1994, H. R. Hough, the Respondent's Contracts Administrator, sent the Petitioner a letter "to notify you of the State's decision to reject all bids on the above referenced project due to ambiguities in the specifications." Mr. Hough's reasons for the rejection are "other than those stated by the protestor," Kalex. The Respondent's Rule 60D-5.007, Florida Administrative Code, states: Determination of Successful Bidder. All projects except where competitive bidding is waived under the provisions of Rule 60D-5.008 will be publicly bid in accordance with the provisions in the project specifications bidding documents. Award of contract will be made to the responsive bidder, determined to be qualified in accordance with the provisions herein and meeting the requirements of the bidding documents, that submits the lowest valid bid for the work. The lowest bid will be determined as follows: The lowest bid will be the bid from the responsive bidder that has submitted the lowest price for the base bid or the base bid plus the additive alternates or less the deductive alternates chosen by the Agency to be included in or excluded from the proposed contract, taken in numerical order listed in the bid documents. The order of the alternates may be selected by the Agency in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. Under the above-quoted rule, the Respondent compares bids beginning with the lowest "base bid." The Respondent is of the view that for this comparison to be fair and equal, all bidders must include the same scope of work in the "base bid." The Respondent does not interpret the above-quoted rule to allow deductive alternates from some bidders and additive alternates from others. (For reasons discussed in the Conclusions of Law which follow, the Respondent's interpretation and application of the above-quoted rule is erroneous.) The Specifications contain some ambiguous and inconsistent language regarding whether alternates should be treated as additive or deductive. The ambiguous and inconsistent language did not provide any bidder with an advantage or a disadvantage, nor did it otherwise affect the fairness of the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services issue a Final Order in this case awarding a contract for the subject project to the Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner Paragraph 1: This is primarily a statement of position and is addressed in the Preliminary Statement. Paragraphs 2 through 10: Accepted in substance with a few unnecessary details omitted. Proposed findings submitted by Respondent Paragraphs 1 through 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as constituting a conclusion which is not warranted by the evidence. Third sentence is accepted as an accurate statement of how Respondent has been interpreting the subject rule, but is not accepted as constituting a correct interpretation of the rule. Paragraph 8: Rejected as misleading and confusing because the "scope of work" to be performed under the contract can only be determined after the Respondent decides which alternates to include and which to exclude. Paragraph 9: The first two sentences are accepted in substance. The last sentence is rejected as constituting a conclusion which is not warranted by the evidence. COPIES FURNISHED: Timothy J. Armstrong, Esquire Armstrong & Mejer Suite 1111 Douglas Centre 2600 Douglas Road Coral Gables, Florida 33134 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of General Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Both DOT and Weekley submitted proposed Recommended Orders. Their proposed findings of fact have generally been adopted here but are addressed in detail in Appendix A, attached and incorporated in this Recommended Order. On or before July 31, 1985, DOT received sealed bids from three bidders for State Project Nos. 86070-3492 and 93220-3403, involving landscaping of interchanges in Broward and Palm Beach counties. Marvin's Garden was the apparent low bidder, with a total of $389,112.19 shown on the face sheet of the bid blank form. Weekley was the next lowest bidder with a total of $419,899.56, and P. J. Constructors, Inc., was the highest bidder with a total of $458,805.90. After review of the bid documents for compliance with DOT bid procedures, a discrepancy was found in the Marvin's Garden bid and DOT notified the parties by letter dated August 20, 1985, that Weekley was the apparent low bidder on the project. The discrepancy was found on page 001 of the bid blank form submitted by Marvin's Garden. For item 570-11, "Water for Plant Establishment," under the column, unit price written in words, Marvin's Garden showed "fourteen thousand two hundred eighty two dollars and sixty six cents." The column, unit price in figures, showed "14,282.66," and the final column, headed "amounts" showed "14,282.16." The bid item was supposed to show the unit price for a thousand gallons of water (which price was to be written in both words and figures) and a total, or extension price for 3,743.125 thousand gallons of water. When the unit price on Marvin's Garden's bid was multiplied by 3,743.125 (number of units), the resulting total price for that bid item was $53,461,781.71. This figure was entered on the form in red ink and was initialled by Raymond Patrick Haverty, the DOT reviewer. Marvin's Garden's total bid for the project was then adjusted to $53,836,611.04, a figure far in excess of either Weekley's or P. J. Constructors' bids. Marvin Gross is the individual responsible for preparing and submitting bids for his corporation. He has been doing bid work for DOT for approximately 20 years and is thoroughly familiar with the bid procedures, forms and standard specifications. He attributes the irregularity on his submission to his "tunnel vision." Unit prices are significant because the quantity designated by DOT is merely an approximate, best guess by the Department engineers. For item 570-II, unpredictable weather conditions will ultimately dictate exactly how much water will be necessary to successfully complete the landscape project. That exact quantity times the unit price will be the basis of payment to the contractor. DOT found no violations of bid requirements in the bids of Weekley and P. J. Constructors, Inc., and none have been raised in this proceeding.
Recommendation For the foregoing reasons, a final order should be issued declaring Weekley the lowest responsible bidder on project Nos. 86070-3492 and 93220-3403, and the contract awarded accordingly. DONE and ORDERED this 2nd day of December 1985, in Tallahassee, Florida. Hearings Hearings MARY CLARK, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 2nd day of December 1985. APPENDIX In accordance with Section 120.59(2) Florida Statutes, the following are recommended rulings on proposed findings of fact submitted by Respondent and Intervenor in this case. Respondent's Paragraph: Corresponding R. O. Paragraph or basis for rejection: The corporate status and the addresses of the bidders are not material. See Paragraph 1, R.O. See Paragraph 2, R.O. and Conclusion of law 2, R.O. See Paragraph 3, R.O. See Conclusion of law 2, R.O. See Paragraph 3, R.O. See Paragraph 6, R.O. See Paragraph 2, R.O. Intervenor's Paragraph: Corresponding R.O. Paragraph or basis for rejection: See Paragraphs 1 and 2, R.O. Facts which relate to the composition of bid packages are not material. See Paragraph 3, R.O. See Paragraph 3, R.O. See Conclusion of law 2, R.O. See Paragraph 3, R.0. See Conclusion of law 5, R.O., relating to the specifications of the department. The remainder of the paragraph proposed is immaterial. See Paragraph 5, R.O. COPIES FURNISHED: Thomas E. Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 A. J. Spalla, Esquire General Counsel 562 Haydon Burns Bldg. 605 Suwannee Street Tallahassee, Florida 32301 Mr. Marvin Gross, President Marvin's Garden and Landscape Services, Inc. 37 North McIntosh Sarasota, Florida 33582 Mel L. Wilson, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 Harry R. Detwiler, Jr., Esquire HOLLAND & KNIGHT Post Office Drawer 810 Tallahassee, Florida 32302
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 Whether Saxon Business Products, Inc.'s ("Saxon") response to the Department of General Services' invitation to bid for walk-up convenience copiers should be disqualified on grounds that: Saxon's omission of a supply price list was a material deviation from the bid specifications and conditions; and Saxon's walk-up convenience copier, model "Saxon 300," failed to prove two-sided copy capability.
Findings Of Fact I. Invitation to Bid On June 10, 1981, DGS issued invitation to Bid No. 544-600-38-B ("ITB") entitled, "Walk-Up Convenience Copiers; Bond Paper and Magazine Finish Bond Paper." The ITB proposes an annual contract under which state agencies and institutions can purchase copying machines. It contains general and special conditions and specifications, and warns vendors that bids that do not comply with such conditions "are subject to rejection." (Testimony of Celnik) The ITB specifications divide copiers into two groups: Group I, plain bond copiers, Group II, magazine finish copiers. The copiers are further categorized by type: Type I indicates minimum features; Type II indicates two- sided copying capability; Type III indicates one reduction capability; and Type IV indicates two or more reduction capabilities. These types are further separated into 12 classes on the basis of speed and volume (P-1.) The ITB special conditions instruct bidders to submit bid sheets 2/ breaking down all copying costs to a per-copy basis. Bids are to be evaluated and contracts awarded to bidders submitting the, lowest cost per copy in each category of copier. Cost per copy is calculated by using a specific cost formula. (P-1.) The ITB cost formula contains three components: machine cost, labor cost, and supply cost. DGS proposes to disqualify Saxon's bid in several categories of copiers for failure to supply a supply price list required by the supply cost component. This component provides, in relevant part: C) SUPPLY COST - The bidder shall compute supply costs on the Manufacturer's Brand. If there is an existing state con- tract for supplies for the manufacturer's brand equipment, the state contract price may be substituted. Supply costs will be rounded to six (6) decimal points. All other costs will also be rounded off to six (6) decimal points. The volume price used by the vendor to compute supply cost shall be based on the monthly median vol- ume of the type and class being bid. Supply cost submitted shall be firm for the contract period, except for paper, and all supply costs shall be current market price, verifiable. Vendor must submit supply price lists with his bid to substantiate that correct price vol- umes were used, unless state contract prices were used. A contract award may include supplies if deemed in the best interest of the State. By electing to substitute state contract supplies, the vendor is certifying that his equipment, using said supplies, will meet all per- formance requirements of this bid and of the equipment manufacturer. NOTE - All cost formulas will be verified by the Division of Purchasing and errors in extension will be corrected. In the event incorrect supply cost volumes are used by a bidder, the Division of Purchas- ing will adjust these costs to the median volume range. (e.s.)(P-1.) The purpose of the supply price list requirement, included in DGS's 1980 and 1981 ITB for convenience copiers, is to enable DGS to verify the supply cost figures shown on a vendor's bid sheets; in this way, DGS can insure that all vendors are using correct quantity pricing on their bid sheets. 3/ (In the past, some bidders had used lower supply prices, which were tied to high volume purchases; but those volumes frequently exceeded the state's needs and the median volumes specified by the ITB for each category of copier.) The verification procedure followed by DGS in both 1980 and 1981 involves checking the vendor's bid sheets against the prices shown on the supply price list. 4/ If DGS finds an inconsistency between the two, it "corrects" the bid sheet supply cost upward or downward to reflect the price shown on the supply price list. 5/ Such a bid sheet correction would also change the total median cost per copy, the factor used to evaluate competing bids. DGS also checks the supply list to determine whether it contains current market prices. (Testimony of Hittinger, Eberhard.) If a vendor fails to submit a supply price list, DGS cannot verify that the supply prices used on the bid sheet (to compute total median cost per copy) accurately reflect the median volumes specified in the ITB. Neither can DGS determine whether the supply prices used on the bid sheet are set prices, which do not vary with volume, or volume prices, which do; the bid sheets, on their face, do not reveal which type of pricing is being used. (Testimony of Eberhard; P-1.) After sealed bids are publicly opened, DGS has an established practice of not allowing any bidder to submit additional material which could alter price or other information previously submitted on bid sheets. DGS does, however, accept late information if it can be corroborated by an independent source. For example, a bidder might -- after bid opening -- supply its corporate charter number, which can be easily verified by contacting the Department of State. (Testimony of Hittinger, Eberhard.) The ITB special conditions also require DGS to test and approve copiers prior to bid opening. Copiers which are not tested and accepted by DGS are ineligible for a contract award: EQUIPMENT APPROVAL - Each item of equipment bid shall have been tested by the Division of Purchasing prior to the bid opening time and date for performance and reliability under normal working con- ditions. Any bidder whose equipment has not been tested shall provide a model of the equipment on which he intends to bid to a specified testing station, complete with all supplies, at no expense to the State. Testing will extend for a period of twenty (20) working days. In the event evaluation and acceptance of untested ma- chines has not been accomplished prior to the bid opening date and time, such machine shall not be eligible for an award. (P-1.) II. Bid Opening: Saxon's Failure to Submit Supply Price List Prior to the 1981 bid opening, Saxon failed to submit a supply price list in connection with its bid. This was apparently an oversight on its part; a year earlier, it had furnished a supply price list in response to a similar ITB for convenience copiers. Because of Saxon's omission, DGS was unable to verify the supply prices used by Saxon on its bid sheets or determine whether Saxon was utilizing set or volume prices. (Testimony of Eberhard, Celnik, Hittinger.) After bid opening, Saxon notified DGS that the supply prices shown on its bid sheets were set supply prices -- unit prices which do not vary with volume -- and confirmed that they are the supply prices which it now offers to the state. (Testimony of Celnik.) In its evaluation of the bids, DGS applied the requirement of a supply price list equally to all bidders. All bidders who omitted a supply price list were informed that they were disqualified. Saxon's bid was disqualified in five copier categories: Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II. At least 11 vendors, however, did submit supply price lists with their bid sheets; approximately one-third were set price lists, the remaining were volume price lists. (Testimony of Eberhard; P-3.) If a vendor could submit a supply price list after the bid opening, it could effectively decrease or increase its bid. (This is so because, in case of a conflict between the bid sheet supply price and the supply price list, the price list value will prevail. A change in the bid sheet supply price will change the cost per copy figure the determining factor in awarding contracts.) A vendor submitting a late supply price list would have an unfair advantage since it could change its bid after bid opening while its competitors could not. The competitive nature of the bidding process would be impaired. (Testimony of Hittinger, Eberhard.) Furthermore, if late submittal of a supply price list was allowed, a bidder could disqualify itself by refusing to provide it; the bidder would then have the advantage of revisiting its bid and -- if it chose -- withdrawing it after bid opening. The opportunity to withdraw a bid -- after bid opening -- would be an advantage not enjoyed by those who timely submitted supply price lists with their bids. (Testimony of Hittinger, Eberhard.) In some copier categories, the vendors who omitted supply price lists were the low bidders. If DGS disqualifies them for their omission, it must award the contract to the next highest bidder. The difference between those low bids and the next higher bid is substantial -- in some cases exceeding 23 percent. 6/ (Testimony of Celnik, Eberhard, Nee, Reinhart.) III. Failure of "Saxon 300" to Demonstrate Two-Sided Copying Capability In accordance with the ITB, Saxon submitted its "Saxon 300" copier to DGS for evaluation and testing. Prior to bid opening, DGS conducted a 20-day test of the machine. The "Saxon 300" machine which DGS tested lacked two-sided copying capability. It could reproduce clearly on one side, but not on the other. The "Saxon 300" sales literature and instruction manual submitted with the machine did not represent that the machine had two-sided copying capability. (Testimony of Nee; 1-5, 1-6, 1-7, R-2.) The "Saxon 300" may have two-sided copying capability, but only after special modifications are made to the copier. These modifications include removal of a roller device, replacement of the heating element, and replacement of the blower system. Saxon did not indicate at the time of testing, or in its bid, that the "Saxon 300" required such modification for two-sided copying capability. Neither did it indicate what, if any, additional costs would be charged for such modifications. (Testimony of Nee, Wallace; R-3.) After DGS tested the "Saxon 300," it sent Saxon a form letter indicating that the copier met minimum operating requirements. The letter did not inform Saxon that the machine lacked two-sided copying capability because DGS did not consider the lack of such capability a major malfunction in the equipment. (Testimony of Nee.) If a machine malfunctions, DGS has -- in the past -- allowed vendors to correct the deficiency or substitute another machine. (Testimony of Nee.) The Group I, Type II, Class I category of copiers, requires two-sided copying capability. Saxon bid its "Saxon 300" as a copier which meets this requirement. (Testimony of Celnik, Nee; P-1.)
Recommendation Based on the foregoing, it is RECOMMENDED: That Saxon's bids in Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II be disqualified; and That Saxon's bid in Group I, Type II, Class I be disqualified. DONE AND RECOMMENDED this 26th day of February, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1982.
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
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The Department of Corrections sought bids for construction of a health services building for a correctional facility. A discrepancy existed between the written specifications and the architectural drawings for the project. An addendum was issued to clarify the matter. The low bidder (Intervenor) did not acknowledge receipt of the addendum until several hours after the opening of bids. The Department accepted the Intervenor's bid. The Petitioner timely protested the action. The issue in this case is whether, in accepting the Intervenor's bid, the Department acted contrary to the requirements of law.
Findings Of Fact On July 31, 1990, the Department of Corrections (hereinafter "Department") issued an Invitation To Bid ("ITB") for PR-35-JRA, Project #90015, consisting of the construction of a Health Classification Building at the Columbia County Correctional Institution. In relevant part, the ITB requested price proposals for said construction, provided that the bid would be awarded to the responsive bidder submitting the lowest cost proposal, provided that "in the interest" of the Department, "any informality" in bids could be waived, and provided space on the bid form for acknowledgment of receipt of all addenda to the ITB. Bids were to be filed no later than 2:00 p.m. on September 11, 1990, the time scheduled for bid opening. Documents issued with the ITB included architectural drawings and written specifications for the building. The architectural firm of Jim Roberson and Associates, (hereinafter "JRA") had been employed by the Department to prepare the drawings and specifications. JRA was responsible for preparation and distribution of related addenda. Further, a JRA representative presided over the opening of bids on behalf of the Department. Following release of the ITB and supporting documents, JRA became aware of a conflict between sink faucets required by the drawings and those required by the written specifications. The specifications provided that sink faucets operated by hand levers or foot pedals were to be installed in the facility. The architectural drawings JRA indicated that sink faucets were to operate by means of "electric-eye" activators, rather than by hand levers or foot pedals. On September 10, 1990, JRA issued an addendum (identified as Addendum #2) 1/ to clarify that "electric-eye" type operators were to be included in the bids. The addendum was sent by telephone facsimile machine to all anticipated bidders. In part the addendum provides as follows: "This Addendum forms a part of the Contract Documents and modifies the original Specifications and Drawings, dated 31 July 1990, as noted below. Acknowledge receipt of this Addendum in the space provided on the Bid Form. Failure to do so may subject the Bidder to Disqualification." On September 11, 1990, the eight bids submitted in response to the ITB were opened by the JRA representative. The Intervenor, Custom Construction (hereinafter "Custom"), submitted the lowest bid at $898,898. The Petitioner, David Nixon (hereinafter "Nixon"), submitted the next lowest bid at $900,000. The bid form provided by the Department as part of the ITB materials to prospective bidders provided space for acknowledgment of addenda to the ITB documents. Upon opening the bid submitted by Custom, the JRA representative officiating at the opening noted that the Custom bid failed to acknowledge Addendum #2 in the appropriate space on the bid form. 2/ Robert L. Harris, president of Custom Construction, attended the bid opening. When the JRA representative noted the lack of acknowledgment of Addendum #2, Mr. Harris stated that he was unaware of the addendum. At hearing, Mr. Harris testified that his secretary told him that Addendum #2 was not received by his office. The JRA representative testified that his review of JRA's FAX transmission records indicated that the FAXed Addendum #2 was received by all bidders. The greater weight of the evidence establishes that Addendum #2 was transmitted to and received by, all bidders. Upon leaving the bid opening, Mr. Harris immediately contacted his plumbing subcontractor, Jerry Stratyon, and discussed the situation. Approximately two hours after the bid opening, and after talking with Mr. Stratton, Mr. Harris notified JRA, in a letter transmitted by FAX machine to JRA, that his bid price did include plumbing fixtures required by Addendum #2. Mr. Harris concluded the letter, "[w]hen can we start work. I know you don't want the alternate." On October 8, 1990, JRA recommended to the Department, that the Custom bid be accepted. The letter of recommendation, in part, provides: The apparent low bidder however, did not verify receipt of Addendum No. 2 on the Bid Proposal. Our office did receive a, facsimile after the bid verifying Addendum NO. 2 receipt from the Contractor's Office." However, the actual letter from Custom to JRA states, not that Addendum #2 was received, but that it was included in the price bid by Custom's plumbing subcontractor. Both Nixon and Custom obtained plumbing bids from the same subcontractor, Jerry Stratton. The cost increase attendant to the requirements of Addendum #2 is approximately $2,400 over the plumbing fixtures indicated in the written project specifications. Mr. Stratton was aware of Addendum #2 and testified that the requirements of Addendum #2 were reflected in his price quotes to both bidders. Mr. Stratton provided the same price bid to Nixon and Custom. Mr. Stratton also provided bids to Nixon and Custom for HVAC work. Mr. Stratton was accepted as Custom's HVAC subcontractor. Nixon's bid indicates that another HVAC subcontractor will perform the cork should Nixon receive the contract. The ITB provided that bid modification or withdrawal was permitted on written or telegraphic request received from a bidder prior to the time fixed for opening. Mr. Harris did not attempt to either withdraw or modify Custom's bid prior to bid opening. No bid modification was permitted subsequent to the bid opening. The Department's policy is to waive minor irregularities when to do so would be in the best interests of the State and would not be unfair to other bidders. The evidence does not establish that Custom Construction's failure to acknowledge the addendum was purposefully designed to permit withdrawal of their bid subsequent to the public bid opening. The omission of acknowledgment of Addendum #2 provided Custom an opportunity to withdraw the bid that was not available to other bidders. Custom could have informed the Department that the bid price did not include the requirements of Addendum #2, and the bid could have been withdrawn. Custom was therefore provided with a substantial advantage or benefit not enjoyed by the other bidders. The other bidders, all of whom acknowledged receipt of Addendum #2, had no opportunity to, and would not have been permitted to, withdraw their aids. The fact that Custom did not withdraw the bid is irrelevant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a Final Order rejecting the bid submitted by Intervenor as nonresponsive and awarding the contract to the Petitioner. DONE and RECOMMENDED this 15th day of January, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1991.
The Issue Whether Respondent should sustain Petitioner's challenge to the preliminary determination to reject Petitioner's bid as not responsive to Respondent's Invitation to Bid No. SB 91C-284V and to award the contract to another bidder that submitted a higher bid?
Findings Of Fact Based on the record evidence, the following Findings of Fact are made: On March 12, 1991, Respondent issued Invitation to Bid No. SB 91C-284V (hereinafter referred to as the "ITB") through which Respondent solicited the submission of bids to supply Respondent with prestressed concrete poles for a one year period beginning May 16, 1991. The ITB was a multi-page document with various component parts. Bidders were instructed on the first page of the ITB to complete and "RETURN ONE COPY OF ALL BID SHEETS AND THIS [BIDDER ACKNOWLEDGMENT] FORM." They were advised elsewhere on the first page of the ITB that "[o]ne copy of all bid documents that ha[d] page numbers, and this executed Invitation to Bid [Bidder Acknowledgment] [F]orm [had to] be returned for the Bid to be considered." The advisement concerning the requirement that all numbered pages had to be returned for a bid to be considered was repeated at the bottom of each numbered page of the ITB. Directly beneath the Bidder Acknowledgment Form on the first page of the ITB was the following provision: This Invitation to Bid, General Conditions, Instructions to Bidders, Special Conditions, Specifications, Addenda and/or any other pertinent document form a part of this proposal and by reference are made a part thereof. The ITB further provided, among other things, that "[i]n the best interest of [Respondent], [Respondent] reserve[d] the right to reject any and all bids and to waive any irregularity in bids received." Petitioner and South Eastern Prestressed Concrete, Inc. (South Eastern) submitted the only bids in response to the ITB. In accordance with the ITB'S instructions, Petitioner completed and returned to Respondent the Bid Summary Sheet, on which it indicated its price offer. It also completed and executed the Bidder Acknowledgment Form and returned it, along with the entire first page of the ITB, to Respondent. Petitioner, however, failed to return, as part of its bid submittal, all of the numbered pages of the ITB. Omitted from Petitioner's submittal were numbered pages 3 and 4. These missing pages contained paragraphs A. through N. of the ITB's Special Conditions, which covered the following subjects: A. Scope; B. Delivery; C. Award; D. Term of Contract; E. Brand Name; F. Catalog Cuts; G. Estimated Quantities; H. Bid Exempt; I. Bidders Responsibility; J. Corrections; K. Joint Bidding, Cooperative Purchasing Agreement; L. Withdrawal; 1/ M. Minority Certification Application; and N. Public Entity Crimes. There was nothing on numbered pages 3 and 4 of the ITB that the bidder needed to fill out or sign. While paragraphs M. and N. of the ITB's Special Conditions did make reference to certain forms that the bidder had to complete and submit to Respondent, these forms did not appear on either numbered page 3 or numbered page 4. They were separate documents. Petitioner completed these forms and submitted them to Respondent pursuant to the requirements of the Special Conditions. Petitioner did not propose in its bid submittal any contract terms or conditions that were at variance with those set forth in paragraphs A. through N. of the ITB's Special Conditions. Petitioner did not intend to signify, by failing to return numbered pages 3 and 4, any unwillingness on its part to adhere to contract terms and conditions set forth on those pages. Of the two bids submitted in response to the ITB, Petitioner's was the lowest. A preliminary determination, though, was made to reject Petitioner's bid because Petitioner had not returned numbered pages 3 and 4 of the ITB and to award the contract to South Eastern as the lowest responsive bidder. It is this preliminary determination that is the subject of the instant bid protest filed by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Palm Beach County School Board enter a final order sustaining the instant bid protest and awarding to Petitioner the contract advertised in Invitation to Bid No. SB 91C-284V. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1991. STUART M. LERNER 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, 1991.
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 By Notice To Contractors dated October 4, 1984, Respondent Department of Transportation (DOT) advertised for sealed bids on a number of state road projects for submission by 10:30 A.M. on October 31, 1984. Among the projects were Job No. 97930-9384 in Palm Beach County, and Jobs No. 97890-3323 and 89090- 3513 in Martin County. The Notice to Contractors provided that a proposal guaranty of not less than five percent (5 %) of the total actual bid must accompany each bid in excess of $150,000, and provided that bid bonds shall conform to DOT Form 114-G (Rev. July 1969). It further stated that all work was to be done in accordance with the plans, specifications, and special provisions of the State of Florida, Department of Transportation. (Stipulation, Ranger Exhibit 9, Dickerson Exhibit 3). Petitioner Dickerson Florida, Inc., (Dickerson) of Stuart, Florida is a contractor that frequently submits bids on DOT road projects. Ted H. Tyson is President of the firm and has participated in some 1,000 to 1,200 bids with DOT since 1960. He and his Vice-President, James R. Widmann reviewed the DOT advertisement of October 4, 1984, and determined to bid on several projects, including the Martin County Job No. 97890-3323 and 89090-3513. Accordingly, Widmann directed his Executive Secretary, Sandy MacCallum, to order the bid packages from DOT and to obtain necessary bid bonds. She proceeded to follow her instructions. The bid bonds were ordered from Surety Associates, Inc., in Jacksonville, Florida, a firm that had done business with Dickerson for some 15 years. Surety Associates mailed two (2) bid bonds, including one (1) for the project in question, to Dickerson on October 16, 1984 and they were received by Dickerson on October 18, 1984. The project documents were received from DOT about October 10 and the Dickerson bid was prepared in Stuart, including the signature of Tyson on the bid bond. Tyson and Widmann took the Dickerson bid proposals to Tallahassee on October 30, 1984. They did further work on the bid materials for three (3) projects at their hotel that evening. The next morning, after ascertaining low bids of sub-contractors, they completed work on the bid packages and checked to insure that they were complete, including the fact that the bid bonds were in the envelopes with the three (3) bids. They were then sealed by Widmann and delivered by him at approximately 9:30 A.M. on October 31, to the DOT central administration office. The bid bends had been placed in the bid materials, but not stapled to the other documents. (Stipulation, Testimony of Lynch, MacCallum, Widmann, Tyson, Dickerson Exhibits 1-2). Ranger Construction Industries, Inc., (Ranger) of West Palm Beach, Florida is a contractor that has submitted bids to DOT in the past, and the firm decided to bid on four (4) projects for the October 31, 1984 bid opening. Bid bends for the proposed projects were ordered by Ranger from the George H. Friedlander Company of Charleston, West Virginia on October 18, 1984. They were issued and mailed to Ranger by that firm on the same date, including one (1) for the project in question, Job No. 97930-9384 in Palm Beach County. On October 30, 1984, the Ranger "Bid Team" consisting of representatives of the firm arrived in Tallahassee where they occupied adjoining rooms at a local hotel. They were joined that evening by George Friedlander whose firm had issued the bid bonds for the four (4) projects on which Ranger intended to bid. They worked during the evening on the bid packages and continued the following morning at which time several independent checks for completeness were made by Friedlander, Leo Vecellio, Jr., President of Ranger, and James M. Slade, Executive Vice-President. They made sure that the bid bonds were placed in the already stapled bid documents in each envelope which were thereafter sealed. It was noted during this process that one (1) bid bond was missing, but it was immediately found in the room and also inserted into the appropriate envelope and sealed. Thereafter, Friedlander and Gene Pearson, a Ranger representative, took the bid envelopes to the basement of the hotel and placed them in a bid box maintained by the Florida Transportation Builders Association as a service to association members. The bid box was in a foyer and a representative of the association was present at all times. Immediately prior to placing the envelopes in the bid box, the envelopes were sealed by scotch tape by Pearson. At about 9:45 A.M., they were taken by an employee of the association to the appropriate location for submission of bids at the DOT building. (Stipulation, Testimony of Slade, Vecellio, Stanchina, Friedlander, Brewton, Ranger Composite Exhibit 1, 5-9). On October 31, 1984, DOT personnel followed their customary procedures in processing bids submitted on 53 projects. Lee Schroeder was in charge of the bid opening in place of his supervisor, John Ted Barefield, Chief Bureau Contracts Administration, who was absent that day. Schroeder was assisted by Ray Haverty and about eight (8) other DOT employees. At 10:30 A.M., the various bids were opened by the DOT employees, removed from their envelopes, and stacked on tables by project number. There is no evidence that any of the bids were unsealed prior to opening at the appointed time. Haverty and Schroeder checked the bids for addenda. No check was made at this time for the presence or absence of bid bonds. The bids were then stacked by job number and moved to a higher level in the DOT auditorium where Haverty read the pertinent information from the bids regarding the job, name of bidder, and amount of the bid. Dickerson was the apparent low bidder on Job No. 97890-3323 and 89090-3513 with a bid of $1,010,459.35, and Ranger was the apparent low bidder on Job No. 97930- 9384 with a bid of $1,210,323.66. Dickerson's bid was $75,246.49 lower than the next low bidder, and Ranger's bid was $83,365.93 lower than the next low bidder. After reading the pertinent bid information, a rubber band was placed around the bids for each project and placed in a plastic container. After completing the bid opening procedure, the four (4) or five (5) plastic containers holding all the bids were covered and placed on a cart where they were taken to the contract administration office. The bid envelopes had also been placed in a cardboard box when the bids were opened and they were taken to the same office on the cart. The envelopes were checked for any contents, but nothing was found. (Testimony of Barefield, Schroeder, Haverty, Stipulation, DOT Exhibit 2). During the afternoon of the bid letting, several employees of DOT's minority programs office reviewed all of the bids to determine the presence or absence of required documents concerning the disadvantaged business enterprises and good faith effort submittals in this regard. During the course of this review, pertinent documents were photocopied and, in some instances, it was necessary to unstaple the bid packages to perform this function. A trash can was available in the immediate area for the disposal of any peer copies. The trash cans are emptied each evening by custodial personnel. The minority programs employees finished their review the next morning, November 1, 1984. At this point, Ray Haverty customarily stapled any loose bid bends to the back of the front cover of the bid package so that there would be no loose documents when the bids were given to other employees who served as "checkers" of the bid documents. (Testimony of Haverty). The DOT "checkers" are provided with the bids for one (1) or more projects and they proceed to check the bid documents for appropriate signatures, bends, seals, and the like. The standard procedure is for a checker to write the initials "BB" on the top left side of the front sheet of the bid documents if the bid bend has been included. If not included, the checkers are suppose to clip a note reflecting that fact to the front of the bid package. During the course of checking the bids in question, it was discovered that there were no bid bonds in the Dickerson and Ranger bid packages for the jobs in question. Although different checkers had placed a "BB" on the top front page of each bid package, the specific checkers in question were under the misapprehension that that symbol should be placed there simply because the documents had been checked for bid bonds. The correct procedure is set forth in a checklist that bid checkers are supposed to follow, although the date of inception of its use is unclear. As soon as it was reported to Ray Haverty that the Dickerson and Ranger bonds were missing, he instituted a thorough search of the office, including the minority business programs office, but was unsuccessful in finding the two (2) missing bid bonds. Although it was not precisely established when Haverty was informed of the missing bonds, it was probably on either November 2, or Monday, November 5, 1984. (Testimony of Haverty, Maloy, Daniels, Pilcher, Stipulation, Dickerson Exhibit 2). On November 5, 1984, Dickerson was advised by telephone call to its Stuart, Florida office from DOT's employee, Lee Schroeder, of the Contracts Administration Division, that the bid bond on the Martin County project could not be located. DOT was told by Dickerson that the bid bond had been included in the sealed envelope with its bid and that a copy of the original bid bond and a replacement bid bond would be promptly secured and submitted to DOT. On November 8, 1984, or shortly thereafter, Dickerson submitted a copy of the original bid bond, a replacement bid bond, and affidavits of Tyson, Widmann, and MacCallum concerning submission of the original bid bond. On November 15, 1984, the DOT Contract Award Technical Review Committee met and determined that Dickerson's low bid be rejected as non-responsive for failure to include a bid bond with its bid, and that the contract be awarded to the next low bidder, Hardrives Company of Ft. Lauderdale, Florida. The notice of DOT's intent to award State Job No. 97890-3323 to Hardrives Company was confirmed in a Mailgram dated November 16, 1984, and the formal notice of intent to award to that firm was issued eon December 10, 1984. Dickerson thereafter protested the rejection of its bid. (Testimony of Widmann, Tyson, Parefield, Lynch, Stipulation, DOT Exhibits 3, 6). Similarly, Ranger was advised by telephone call from Schroeder on November 5, 1984 that its bid bend for Palm Beach County-State Project Job No. 97930-9384 could not be located by DOT. By letter of November 6, 1984, Ranger informed DOT that the requisite bid bend had been present in the sealed bid envelope when submitted to the agency on October 31, 1984, and enclosed a duplicate original of the bend. At the November 15, 1984 meeting of the Contract Award Technical Review Committee, Ranger's low bid on the project was rejected as non-responsive due to the failure to submit a bid bend, and the committee voted to award the contract to Hardrives of Delray. By Mailgram, dated November 16, 1984, DOT advised Ranger that its low bid had been declared "irregular" due to its failure to submit a bid bend and stating that Hardrives of Delray, Inc., was new the apparent low bidder on the project. Ranger thereafter protested the decision by letter of December 10, 1984, and on December 18, filed its formal protest of the proposed award. (Testimony of Slade, Friedlander, Stipulation, DOT Exhibits 3, 6; Ranger Exhibits 2-4). The DOT 1982 standard specifications for road and bridge construction which are incorporated as a part of the bid proposal, provide pertinently as fellows: SECTION 1: Definition and Terms. 1-29 Proposal Guaranty. The security designated to be furnished by the bidder as guaranty that he will enter into the contract for the work if his proposal is accepted. SECTION 2: Proposal Requirements and Conditions. Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, . . . or irregularities of any kind. . . . Guaranty to Accompany proposals. No proposal will be given consideration unless it is accompanied by a proposal guaranty of the character and amount indicated in the Notice to Contractors, and made payable to the Governor of the State of Florida. Proposals shall be submitted with the under- standing that the successful bidder shall furnish a contract bond pursuant to the re- quirements of 3-5. SECTION 3: Award and Execution of Contract. 3-2 Award of Contract. 3-2.1 General: The award of the contract, it if be awarded, will be to the lowest responsible bidder whose proposal complies with all the requirements necessary to render it formal. (Testimony of Barefield, DOT Exhibit 5). It was stipulated by the parties that Ranger and Dickerson meet all requirements for the award of the contracts in question if it is determined that they submitted the required bid bonds to DOT in their bid packages on October 31, 1984. Based on the foregoing facts, it is further specifically found that both Ranger and Dickerson submitted the requisite bid bonds on the projects in question in their bid packages on October 31, 1984, and that the cause of the apparent loss of the bonds thereafter cannot be determined by the evidence presented at the hearing.
