The Issue The central issue in this case is whether Petitioner should be awarded Bid No. 432-730-310-W for configurations 1, 2, and 3, Service Area 1.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: The ITB for Bid No. 432-730-310-W consisted of three sections: general conditions, special conditions, and technical specifications. Bidders were evaluated on their technical and non-technical responses to the ITB. Once the Department determined the bidders to be compliant with their non-technical responses, they were ranked according to the evaluation award criteria described in Appendix F of the ITB. Once ranked, the Department forwarded the bid responses to the engineering staff of the Division of Communications for a technical review. This technical review consisted of verifying a lowest compliant bidder and a competitive compliant bidder. To complete the technical review the engineering staff considered the responses submitted on the ITB forms, technical literature provided by the bidder, and technical responses submitted to supplement other information. To the extent that an ambiguity in one response was satisfactorily explained elsewhere in the bid documentation, the bidder was given the benefit of the doubt and found to be responsive to the ITB. Prior to submitting bids, all bidders were given an opportunity to raise questions regarding the ITB at a pre-bid conference conducted by the Department. Petitioner's representative attended the conference and received a copy of the specimen bid. The ITB required specific mandatory responses. Failure to include the mandatory information resulted in the disqualification of the bid. An equipment list for the baseline system was a mandatory requirement of the ITB. Identification of the manufacturer and the part number, if any, were required to be provided. Another mandatory feature required by the ITB was a "handsfree" intercom. The ITB defined this feature as follows: Handsfree answer and talk back on intercom: Enables a station user to answer an intercom call through the station instrument's internal speaker/microphone without lifting the instruments handset. (This feature shall not be controlled by the calling party instrument intercom button.) Speed-dialing was another mandatory feature of the ITB. This feature could be provided at the station (an individual telephone) or by the system. If at the station, there was no requirement that the instrument retain memory in the event of a power outage. The central memory of the system, however, had to retain its memory in the event of a power failure. The ITB prohibited a method of programming which required access to the inside of the Key Service Unit (KSU) to make switch settings or set a switch to enter and/or leave the program mode. All mandatory operational service features of the ITB were listed on page 27, Section 3.4. Optional operational service features and equipment were listed on page 34, Section 3.16.8 of the ITB. An optional operational feature listed was "Station Message Detail and Equipment." The bidding of an SMDR or an option for an SMDR was not required. No bidder was disqualified because it failed to bid an SMDR or an SMDR option. All bidders were required to submit a spare parts price list. Any bidder failing to submit the list was disqualified. Any bidder which submitted the list automatically met the requirement. The lists were not evaluated as art of the bid criteria and no bidder was disqualified based upon the content of the information supplied on the list. Configuration 1 The Department determined Petitioner to be the seventh lowest bidder for configuration 1. Lower bidders, in order of their ranking, were Henkels & McCoy, Southern Bell Advanced, St. Joe Communications, Inter-Tel, Lanier Business, and Tel-Plus Communications. Tel Plus was considered the low compliant bidder and Inter-Tel was the competitive compliant bidder. Following a complete review of the bid responses, the parties agreed that Southern Bell Advanced, St. Joe Communications, and Lanier Business were non-compliant for configuration 1. The Henkels & McCoy bid provided a "handsfree" feature as described above in paragraph 8. The Henkels & McCoy bid did not provide an SMDR or an SMDR option. The Inter-Tel bid did not provide an SMDR or an SMDR option. The Tel Plus bid included a spare parts price list. The Tel Plus bid included an equipment list for the baseline system, however, such list did not completely and accurately describe the baseline system. The discrepancies with the equipment list were fully explained elsewhere in Tel Plus' bid response. Configuration 2 The Department determined Petitioner to be the fourth lowest bidder for configuration 2. Lower bidders, in order of their ranking, were Inter-Tel, Tel Plus Communications, and St. Joe Communications. St. Joe was determined to be non-compliant, leaving Tel Plus as the low compliant bidder and Inter-Tel as the competitive compliant bidder. The Inter-Tel bid provided a statement indicating the equipment bid would be modified to relocate a "DIP" switch to the outside of the KSU. This modification was necessary to comply with the requirement described in paragraph This modification is a minor, simple procedure done by many technicians. No documentation was provided as to how Inter-Tel intended to make the modification. The parties agreed, however, that the modification could be done. The Inter-Tel bid provided the speed-dialing feature described in paragraph 9 at the station. The findings of fact relating to configuration 1 and the Tel Plus bid are applicable to configuration 2. Configuration 3 The Department determined Petitioner to be the seventh lowest bidder for configuration 3. Lower bidders, in order of their ranking, were Business Telephone Systems, Henkels & McCoy, Marcom Telecommunications, Lanier Business, Tel Plus Communications, and Inter-Tel. Inter-Tel was determined to be the low compliant bidder with Henkel & McCoy the competitive compliant bidder. Following a complete review of the bid responses, the parties agreed that Marcom, Tel Plus and Lanier were non- compliant for configuration 3. The Business Telephone bid included a spare parts price list. The Business Telephone bid failed to include on the baseline equipment list the surge protector part number, however, such information was provided elsewhere in the bid response. The Business Telephone bid failed to include a part number for wiring, however, the part number for wiring was not required. The Henkels & McCoy bid included a spare parts price list. The Henkels & McCoy bid failed to list a console card on the baseline equipment list, however, this was to be provided with the console which was properly described elsewhere in the bid response. The findings of fact relating to configuration 2 and the Inter-Tel bid are applicable to configuration 3. Petitioner's bid for configuration 1 was $3641.08. The lowest responsive bid was $2343.00. Petitioner's bid for configuration 2 was $5407.97. The lowest responsive bid was $4723.00. Petitioner's bid for configuration 3 was $12,136.90. The lowest responsive bid was $9271.00. The parties stipulated that Petitioner timely filed its notice of intent to protest and the formal protest of bid award.
Recommendation Based on the foregoing, it is RECOMMENDED that the Department of General Services enter a Final Order dismissing the formal protest of the Petitioner. DONE and ENTERED this 5th day of January, 1988, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1988. APPENDIX Rulings on Findings of Fact submitted by Petitioner: Paragraph 1 is accepted. Paragraph 2 is accepted. Paragraph 3 is accepted in part. The information requested on the spare parts price list was for planning purposes only. Response of hourly rate etc. was not required to comply with the ITB. Paragraph 4 is accepted; see Finding of Fact paragraph 13. Paragraph 5 is accepted. 6 With regard to paragraphs 6-8, to the extent such paragraphs track the language of the ITB they are accepted; however, the SMDR or SMDR option was not a mandatory item of the bid. It was indicated as an optional operational feature. To the extent paragraph 9 sets forth optional operational features (as described in Section 3.16.8 of the ITB) it is accepted; however this specific proposed Finding is irrelevant and unnecessary to the conclusion of issues raised in this proceeding. Paragraph 10 is accepted. Paragraph 11 is rejected. The SMDR or SMDR option was an optional operational feature. No bidder was disqualified because it did not have the SMDR or an SMDR option. Paragraph 12 is accepted. Paragraph 13 is accepted. Paragraph 14 is accepted. Paragraph 15 is accepted. Paragraph 16 is accepted. Paragraph 17 is accepted. With regard to paragraphs 18-20, to the extent such paragraphs track the information on p.23 of ITB they are accepted; however, the listing of the printed circuit card may not be required when bid as a component of the console which is properly described in the bid response. Paragraphs 21-23 are accepted, however, speed dialing may be provided at the station which does not require memory retention. Paragraph 24 is accepted. Paragraphs 25-26 are accepted. Paragraphs 27-29 are accepted. Paragraphs 30-33 are rejected. Each paragraph makes a conclusion contrary to the weight of evidence. Paragraph 34 is accepted. Paragraph 35 is rejected as unnecessary. For the reasons explained in the conclusions of law, whether Petitioner was or was not compliant is not material. Assuming, arguendo, Petitioner was compliant, it still lacked sufficient standing to challenge the awards. Paragraph 36-38 are rejected as contrary to the weight of evidence. Paragraphs 39-40 are accepted. Paragraphs 41-44 are rejected as contrary to the weight of the evidence. Rulings on Findings of Fact submitted by the Department. Paragraphs 1-7 are accepted. Paragraph 8 is accepted to the extent it rephrases the definition found in the ITB. Paragraphs 9-11 are accepted. With regard to paragraph 12, the system was required to retain memory. Accordingly, that reference is accepted, however, the station was not required to retained memory. Paragraphs 13-15 are accepted. Paragraphs 16-18 are accepted. Paragraphs 19-21 are accepted. Paragraph 22 is accepted in part as it correctly restates the ranking of the bidders; the rest of the paragraph is rejected as argumentative. Paragraph 23 is accepted in part as it correctly states the ranking of the bidders and disqualifications; however the rest is rejected as argumentative. Paragraph 24 is accepted in part as it correctly states the ranking of the bidders, however, the rest is rejected as argumentative. Paragraph 25 is rejected as unnecessary. Paragraph 26 is accepted. COPIES FURNISHED: Edward W. Dougherty, Jr., Esquire Post Office Box 11127 Tallahassee, Florida 32302-3127 Susan B. Kirkland, Esquire Department of General Services 453 Larson Building Tallahassee, Florida 32399-0955 Joseph W. Lawrence, II, Esquire Post Office Box 589 Tallahassee, Florida 32302-0589 Ronald W. Thomas, Executive Director Department of General Services Room 133, Larson Building Tallahassee, Florida 32399-0955
Findings Of Fact In order to meet its need for new equipment in the new district administration building, the School Board advertised for competitive bid proposals for clerical, professional task, guest and conference chairs (task seating). Five bids were timely received by the School Board, two of which were determined to be responsive. The bid opening occurred on April 17 1990, and the Knoll Source was determined to be the lowest responsive bidder. In spite of this determination, the bid was rejected by the Director of Purchasing or the appointed designee because sales tax was not included in the bid. The Notice of Award was issued to Haworth, who submitted its bid showing the price it was willing to accept for the sale of the task seating, with and without sales tax. The initial decision to reject the Knoll Source bid, which was $10,393.72 less than Haworth in Sequence I; $12,231.94 less in Sequence II; and $994.17 less in Sequence III, was based upon Section 9.2.2.a in the "Instructions to Interior Bidders". This section of the bid documents provided that the contract for purchase of the task seating would not be exempt from sales tax. This bid specification is incorrect because the School Board does not pay sales tax on acquisitions of furnishings for the Pinellas County School System. Knoll Source was aware of the School Board's sales tax exemption prior to its bid submission. As Section 9.2.2.a of the instructions was inappropriate, the vendor relied on Section 9.2.2.c, and excluded sales tax from the bid because the cost of such tax was not applicable. Section 9.2.2.c instructed bidders to exclude inapplicable taxes from their bids. Pursuant to Section 5.3.1 of the bid instructions, the School Board has the right to waive any irregularity in any bid received and to accept the bid which, in the Board's judgment, is in its own best interest. The Knoll Source and Haworth bids can be comparatively reviewed, and Knoll Source is the lowest responsive bidder if the failure to include sales tax in the bid amount is waived by the School Board. It is in the Board's best interest to waive Knoll Source's failure to include a sales tax in the bid because sales tax does not apply to this purchase.
The Issue Whether the Barton-Malow Southern, Inc., deviated from the bid requirements, and if so, whether such deviation consists of a minor deviation which may be waived by the respondent, or whether Ron A. Royal, Inc., should be awarded the elementary school "C" project as the lowest responsive bidder.
Findings Of Fact On April 20, April 27, and May 4, 1986, the Board advertised its Notice of Call for Sealed Bids, soliciting bids for the construction of Elementary School "C". The notice advised that the contract to be awarded would require approval of subcontractors by the Board and stated that the Board "reserves the right to reject any and all bids received and to waive any and all informalities in regard thereto." A pre-bid conference was held on May 15, 1986, at which time the potential bidders were advised that page 14 of the bid documents entitled "List of Subcontractors" would be deleted and addendum #1 would include a more specific list of subcontractors to be completed by the bidder. The original list of subcontractors stated: The undersigned, hereinafter called "Bidder", list below the names of all the subcontractors who will perform under the Bidder. Any work item (Trade) not included will be assumed by the owner as being performed by the Bidder's own forces." A space was provided for the bidder to state the work item and the name of the subcontractor who would perform the work. Addendum #1 instructed the bidders to delete the original page C.14 and insert the enclosed sheet C.14 (addendum #1) "List of Subcontractors" for submission with the sealed bids. The substituted list of subcontractors provided as follows: The undersigned, hereinafter called "Bidder", lists below the names of the subcontractors who will perform under the Bidder. In the event the general contractor will perform one of the phases listed with his own personnel, he shall state by "general contractor". The form listed 20 specific areas of work, such as site work, iron and steel work, roof decks, and electrical, and provided a space for the bidder to fill in the firm name and address of the subcontractor for each specific area. Bids were submitted to the Board by nine (9) general contractors. The lowest bid by $310,000, was submitted by Barton-Malow; the second lowest bid was submitted by Royal. On the list of contractors submitted with Barton Malow's bid, Barton- Malow listed "G.C". (General Contractor) for the work areas described as site work, concrete work, masonry work iron and steel work, and lathing and plastering. Barton-Malow listed a subcontractor and "G.C." for phases described as hard tile and electrical. For the work areas described as "roof decks" and "roofing and sheet metal" three (3) subcontractors were listed for each of the areas. The list submitted by Royal with its bid provided that the concrete work would be performed by the general contractor and listed a single subcontractor for each of the other 19 areas of work specified. Barton-Malow was the only bidder who listed multiple subcontractors for a specified work area. In the blanks provided for the subcontractors' addresses, Royal listed the city where each subcontractor was located; Barton-Malow did not provide any addresses bout stated at the top of the column "will be advised upon request." None of the bidders provided street addresses for the subcontractors, however, only one bidder other than Barton Malow failed to provide the city in which the subcontractor was located. Immediately after the bids were opened and read, 1/ the meeting was adjourned and Mr. Derryberry, Mr. Collins, and two other people reviewed the bids. Mr. Derryberry concluded that the Barton-Malow bid was not in compliance with the bid requirements due to the manner in which Barton-Malow had filled out the subcontractor list. Mr. Derryberry therefore recommended to the Board that the Barton-Malow bid be rejected because of the perceived irregularities and the bid of Royal be accepted. The recommendation of the architect was adopted as the recommendation of the school administration and presented to the Board at a public meeting on June 3, 1986. The Board received the report of the architect and the administration, heard from the attorneys and representatives of Barton- Malow and Royal, and then voted to waive any irregularities and accept the Barton-Malow bid. The original page C.14 was approved by the Board in about 1980 and used since that time. However, there had been some difficulty with that form on two different jobs within the last six months, and therefore it was decided to clarify the purpose of the form by specifically listing all the major subcontracting areas. The intent was to require all bidders to list the primary subcontractor in each of the major work areas, and thus prevent bid shopping after the bids were opened. The architect, Mr. Derryberry, prepared and included the amended form C.14 as part of Addendum #1 to the bid documents. Although the Board never formally approved the amended form, Mr. Derryberry had the authority to clarify any of the bid documents by addendum. Page C.14 (Addendum #1) lists 20 major subcontracting areas; however, in almost all of the areas it would be possible for more than one subcontractor to perform the designated work, and in several areas it would be unlikely that one subcontractor would perform all the required work. For example, site work includes paving, earth moving, culvert work, fencing, and irrigation, and one subcontractor would not normally do the work in all those areas. The amended page C.14 does not state that only one subcontractor should be listed for each specified work area. The bidders were not advised at the pre-bid conferences or subsequent thereto, that only one subcontractor should be listed in each category. The only information the bidders received regarding the list of subcontractors was the information contained on the revised page C.14. In other words, the bidders were simply directed to list "the names of the subcontractors who will perform under the Bidder", and to list general contractor when "the general contractor will perform one of the phases listed with his own personnel." In the subcontractor list submitted with their bid, Barton-Malow listed "Batten Electric Co./G.C." for the subcontract "Electrical", and listed "Bauer & Assoc./G.C." for the "Hard Tile" subcontract. The listing of a subcontractor and the general contractor in these areas is not a deviation from the bid requirements. There is no indication on the list submitted by Barton- Malow that the listing of a subcontractor and the general contractor in the hard tile and electrical categories meant anything other than both the subcontractor and the general contractor would perform the work required in those areas, and there was no evidence presented at the hearing that would require a different conclusion. 2/ Categories 5 and 6 on the subcontractor list are "roof decks" and "roofing and sheet metal." Although listed as two separate categories, the same subcontractor would have to perform both due to the bid requirements. Further only one subcontractor can perform the roofing work; it is not an area that is divisible into subcategories that can be performed by different subcontractors. For categories 5 and 6, Barton-Malow listed "H. H. Robertson/Architectural Exteriors/Commercial Roof Decks." As admitted by Barton-Malow, that all three subcontractors "will perform" the subcontract is an impossibility. 3/ From the list submitted by Barton-Malow it cannot be determined who will perform and be responsible for the roofing work. When asked at the hearing who was going to perform the roofing work for Barton Malow, the vice-president of operations for Barton-Malow responded, "One of those three would have done it." He indicated that a submission would have been made to the Board designating the subcontractor. By listing three subcontractors for the two roofing categories, Barton-Malow deviated from the bid requirements. The subcontractor list contained one basic requirement, that the subcontractors listed "will perform." By listing three subcontractors for the roofing, when only one subcontractor could performs Barton-Malow would be able to bid shop for subcontractors after the bid submission. This would give Barton Malow a definite advantage over the other bidders who complied with the bid requirements and listed only the one contractor who would perform the work. The other bidders would be bound to use the subcontractor listed and therefore, would be unable to negotiate for a better price after obtaining the contract. However, by listing multiple subcontractors, Barton-Malow would be able to negotiate for a better price because it had not committed itself to any one subcontractor. In five categories, site work, concrete work, masonry work, iron and steel work, and lathing and plastering, Barton Malow listed general contractor. About an hour after bid opening, Mr. Derryberry called Mr. Polso, the Vice- President of Operations for Barton-Malow, to inquire about the bid because it was so much lower than the other bids. Mr. Polso assured Mr. Derryberry that there had been no mistake in the amount bid. Mr. Derryberry then asked about the listing of general contractor for the iron and steel work because he had never known of a general contractor doing that type of work. Mr. Polso stated that he had not had time to determine the low bidder in that category and was still getting prices. He also said that Barton-Malow would not be doing the lathing and plastering. However, when Mr. Derryberry advised that he was recommending that the bid be disqualified due to the incompleteness of the subcontractors form and asked whether Barton-Malow wished to withdraw its bid, Mr. Polso stated that Barton-Malow had no intention of withdrawing its bid. Subsequently, Mr. Polso met with Mr. Derryberry and Mr. Collins at the school offices and advised them that Barton-Malow had every intention of performing the work where general contractor had been listed. Barton-Malow is a wholly owned subsidiary of Barton Malow Company and has the resources of Barton-Malow Company available when necessary. In 1985, Barton-Malow did between 60 and 70 million dollars of construction work; Barton- Malow Company had a dollar volume of 600 million dollars. Barton-Malow has the capacity to perform work in the areas where it listed general contractor. Barton-Malow prepares its bid by estimating the value of the total project and the value of the majority of the specific trades involved. If Barton-Malow does not receive a bid from a subcontractor that it feels is competitive in a particular trade area, it performs that work itself. The C.14 (Addendum #1) form permitted a bidder to list "general contractor" in any or all subcontract areas in which it would perform the work with its own personnel. Once the bids are opened, the bidder cannot unilaterally substitute a subcontractor for the general contractor. The general contractor would be required to do the work unless it received authorization to substitute a subcontractor based upon a showing of good cause. The evidence does not support a finding that Barton-Malow was incapable of performing the work in the areas in which it listed "general contractor." Therefore Barton- Malow did not deviate from the bid requirements by listing "general contractor" in five of the twenty specified areas. Although Baron-Malow deviated from the bid requirements by failing to list any addresses on its subcontractor list, this was a minor irregularity which did not give Barton-Malow any competitive advantage over the other bidders. In Division C, Article 5, Section 5.3.1., the bid documents provide: It is the intent of the owner to award a Contract to the lowest responsible Bidder provided the Bid has been submitted in accordance with the requirements of the Bidding Documents....The Owner shall have the right to waive any informality or irregularity in any Bid or Bids received and accept the Bid or Bids which in his judgment, is in his own best interests.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: On May 10, 1991, respondent, School Board of Collier County (Board), issued a written invitation to various contractors inviting them to submit proposals for certain construction work to be performed on Naples Park Elementary School in Collier County, Florida. The invitation in question is more specifically identified as Bid No. 120-5/91 Site Development/Naples Park Elementary School. The bidders were advised that their bids must be submitted no later than 2:00 p.m. on June 4, 1991. Bids were timely filed by five contracting firms, including petitioner, A2M2R Construction, Inc. (AMR), and Haas Construction, Inc. (Haas). On June 4, 1991, various school personnel, including Dallas Disney, Board architect, Vicki McKinney, Board assistant director of purchasing, and Pat Humphrey, a Board secretary, and the Board's engineering consultant, Glen Bridges, met for the purpose of opening the sealed bids. They agreed that the five bids would be opened in alphabetical order. This meant that AMR's bid was opened first while Haas' bid was opened fourth. Bridges was assigned the task of opening the bids and reading the dollar amount of each bid. In the case of AMR, it proposed a base bid in the amount of $174,815. When Bridges opened Haas' bid, he said words to the effect that he could not clearly make out the amount of the base bid. This was because the original number had been changed by Haas prior to the submission of its bid, and it could not be clearly read. Accordingly, Bridges handed the proposal to McKinney, who read the number as $146,500. She then handed the bid document to Disney who also concluded the bid was in that amount. At that point, the president of Haas, who was present at the bid opening, was asked if the amount was indeed $146,500. When he confirmed that it was, he was asked to place his initials next to the base bid number. He did so even though paragraph (6)(a) of the Bid Instructions provides that "(a)ny erasures or other corrections in the proposal must be explained or noted over the signature of bidders". According to AMR, this provision required that Haas initial the amount before it sealed and filed its bid. This interpretation of the Bid Instructions was confirmed by Board personnel. Thus, AMR contends that by Haas initialing its bid amount after the bids were opened, Haas violated the Bid Instructions and should have its bid proposal rejected. As it turned out, the bid amount submitted by Haas was the lowest dollar bid on the project, and the Board has proposed to award the contract to Haas. According to the Board's assistant superintendent for business affairs, Robert Wilson, who has supervised hundreds of bid lettings over the last several years, the circumstances in this case were "unusual" in that Haas initialed the bid amount after the bid documents were opened. However, Wilson considered this to be a minor irregularity which, by the terms of the Bid Instructions, could be waived by the Board. Further, he did not find such action to give Haas an undue advantage in the bidding process or place AMR and other bidders at a disadvantage. This was not contradicted. On the bid form used by the bidders, there is a line left blank before the space where the numerical amount of the bid is inserted. AMR contends that the purpose of this space was to be used by a bidder to spell out in words the amount of its bid, and because Haas did not spell out in words the dollar amount of its bid, the proposal should be rejected. However, there is no requirement in the Bid Instructions that the dollar amount be spelled out in words nor was there a school policy imposing such a requirement. Therefore, as to this contention, no irregularity in the bidding process occurred.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent awarding the contract in question to Haas Construction, Inc. DONE and ENTERED this 19th day of July, 1991, in Tallahassee, Florida. DONALD R. ALEXANDER 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 19th day of July, 1991. APPENDIX TO RECOMMENDED ORDER Respondent: 1-2. Adopted in finding of fact 3. Adopted in finding of fact 2. Adopted in finding of fact 4. 5-7. Adopted in finding of fact 3. Rejected as being unnecessary. Adopted in finding of fact 3. Adopted in finding of fact 4. Adopted in finding of fact 3. COPIES FURNISHED: Mr. James R. Powell, Jr. P. O. Box 150340 Cape Coral, FL 33915 Thomas W. Franchino, Esquire 700 Eleventh Street, South Suite 203 Naples, FL 33940-6777 Dr. Thomas L. Richey, Superintendent Collier County School Board 3710 Estey Avenue Naples, FL 33942
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1992.
Findings Of Fact The Department issued an invitation to bid (ITB) and solicited bids for district-wide miscellaneous property management maintenance services pursuant to ITB-DOT-94-95-4004. Kemp Services, Inc. (Kemp), submitted the lowest bid for the subject ITB. Petitioner, Urban Group, Inc., submitted the second lowest bid for the subject ITB. Section 1.1 of the ITB provided: Invitation The State of Florida Department of Transport- ation requests written bids from qualified firms to MAINTAIN RIGHT-OF-WAY STRUCTURES AND VACANT LOTS BY PROVIDING CLEAN-UP SERVICES, LAWN SERVICES, LANDSCAPE SERVICES, SECURING OF BUILDINGS, AND OTHER MISCELLANEOUS HANDYMAN AND SKILLED LABOR SERVICES. ALSO PROVIDE SERVICES FOR SIGN REMOVAL FOR STRUCTURES ILLEGALLY ON THE DEPARTMENT'S RIGHT-OF-WAY OR ILLEGALLY ON PRIVATE PROPERTY IN THE FOLLOWING FIVE COUNTY AREA: BROWARD, MARTIN, PALM BEACH, ST. LUCIE AND INDIAN RIVER COUNTIES. For the purpose of this document, the term "bidder" means the prime Consultant acting for itself and those individuals, partnerships, firms, or corporations comprising the bidder's team by joint venture or subcontract. The term "bid package" means the complete response of the bidder to the Invitation To Bid, including properly completed forms and supporting documentation. [Emphasis in text.] The services were to be provided on an as-needed basis for the term of the agreement, two years. Section 1.7.1 of the ITB provided: Qualifications 1.7.1 Bidders must meet the following minimum qualifications: BIDDERS MUST HAVE AT LEAST TWO YEARS EXPERIENCE PROVIDING AT LEAST TWO (2) OF THE SIX SERVICES OUTLINED IN THE SCOPE OF SERVICES IN EXHIBIT "A". BIDDERS MUST HAVE BEEN IN CONTINUOUS BUSINESS FOR THE PAST TWO (2) YEARS AND COMPLETE FORM "F" WITH THE INFORMATION REQUESTED REGARDING WORK EXPERIENCE AND REFERENCES. ALL REFERENCES WILL BE CHECKED. FAILURE TO PROVIDE FORM "F" AND THE WORK EXPERIENCE REQUESTED WILL CONSTITUTE A NON- RESPONSIVE BID. [Emphasis in text.] Section 1.7.4 of the ITB provided: Qualifications of Key Personnel Those individuals who will be directly involved in the project must have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise accepted by the Department's Contract Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the bid package. Section 1.7.5 of the ITB provided: Authorizations and Licenses The Consultant must be authorized to do business in the State of Florida. Such authorization and/or licenses should be obtained by the bid due date and time, but in any case, will be required prior to award of the contract. For corporate authorization, contact: Florida Department of State Division of Corporations The Capitol Building Tallahassee, Florida 32399 (904)487-6052 Other than the provisions above, no other licensure or authorization to do business was required by the ITB. Section 1.8.2 of the ITB provided: Responsiveness of Bids All bids must be in writing. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid. Bids found to be non-responsive shall not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons, including, but not limited to, failure to utilize or complete prescribed forms, conditional bids, incomplete bids, indefinite or ambiguous bids, improper undated or unsealed signatures (where applicable). Section 1.8.4 of the ITB provided: Other Conditions Other conditions which may cause rejection of bids include evidence of collusion among bidders, obvious lack of experience or expertise to perform the required work, or failure to perform or meet financial obligations on previous contracts, or in the event an individual, firm, partnership, or corporation is on the United States Comptroller General's List of Ineligible Contractors for Federally Financed or Assisted Projects. Bids will be rejected if not delivered or received on or before the date and time specified as the due date for submission. Section 1.8.5 of the ITB provided: Waivers The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregular- ities are defined as those that will not have an adverse effect on the Department's interest and will not affect the price of the Bids by giving a bidder an advantage or benefit not enjoyed by other bidders. Section 1.18.1 of the ITB provided: Award of the Contract The Department intends to award a contract to the responsible and responsive bidder who bids the lowest cost as identified in Form "C", Bid Blank, attached hereto and made a part hereof. The ITB did not specify a minimum number of employees, vehicles or hours of service for a bidder to be deemed responsible or responsive. At all times material to this case, Kemp has been in continuous business for the past two (2) years, and completed form "F" with the information requested regarding work experience and references. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. At all times material to this case, Kemp had at least two years experience providing at least two (2) of the six services outlined in the scope of services. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. While Mr. Gentile was authorized to check with all references listed by Kemp, the failure to do so does not discount the information obtained from the sources that were checked. Kemp had an appropriate occupational license to perform work in the tricounty area, but did not have occupational licenses with the City of Hollywood or Broward County. At all times material to this case, Kemp maintained a warehouse to secure the equipment to be used such as lawnmowers, trimmers, and cleaning supplies/equipment. After the bid protest was filed, the Department verified that Kemp had used the warehouse as it claimed. No evidence to the contrary was presented. The mailing address Kemp listed on the first page of its bid response was 8637 S. Sutton Drive, Miramar, Florida. Mr. Faluade resides at that address. He listed that address for mail purposes. The business address for Kemp listed on the bid response was 6200 Johnson Street, Miramar, Florida. This address is a store-front facility with limited office equipment and furniture. Kemp maintains an office at this location but stores its equipment elsewhere as noted above. Kemp was the lowest responsive, responsible bid for ITB-DOT-94-95- 4004.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Transportation enter a final order dismissing Petitioner's challenge to the award of ITB-DOT-94-95-4004 to Kemp Services, Inc. DONE AND RECOMMENDED this 14th day of February, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. 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 14th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5967 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 4, 6, and 8 are accepted. With regard to paragraphs 5, 7, and 16 noting that the additional emphasis is not in the text and that the citations are incomplete (and perhaps misleading), they are accepted. Paragraph 9 is rejected as contrary to the weight of credible evidence. Paragraph 10 is rejected as contrary to the weight of credible evidence. Paragraph 11 is rejected as incomplete, and therefore, misleading. Corporate documents may have been filed on that date, however, the weight of the credible evidence established that Kemp had been in business the requisite amount of time. Paragraph 12 is rejected as incomplete, and therefore, misleading. The business conducted by the Kemp personnel continued regardless of the business entity structure that was used. Paragraph 13 is rejected as contrary to the weight of credible evidence. Paragraph 14 is rejected as contrary to the weight of credible evidence or irrelevant. Paragraph 15 is rejected as contrary to the weight of credible evidence. Paragraph 16 is rejected as contrary to the weight of credible evidence. Moreover, no credible evidence was presented to establish that Kemp did not provide services as described in the ITB or that it was not in business the requisite time. Paragraph 17 is rejected as incomplete, and therefore, misleading. The mailing address listed by Kemp was a residential address. Paragraph 18 is rejected as irrelevant. Paragraph 19 is rejected as contrary to the weight of credible evidence. Paragraph 20 is rejected as irrelevant. Kemp probably does not have a Leon County occupational license either. It did have an appropriate occupational license at all times material to this case. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 29 are accepted. COPIES FURNISHED: Thomas H. Duffy Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Mitchell B. Polay Mark H. Klein 750 S.E. Third Avenue Suite 205 Fort Lauderdale, Florida 33316 Thornton J. Williams General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: In March of 1993, the Department issued an Advertisement for Bids (hereinafter referred to as the "Advertisement") through which it solicited the submission of bids on a construction project (Department Project No. NV-30A, which is hereinafter referred to as the "Project") involving the expansion of the water treatment facility at the Martin Correctional Institution. The Advertisement, along with the other bid documents issued in conjunction with the Advertisement, including, but not limited to, the Instructions to Bidders (hereinafter referred to as the "Instructions") and the Proposal Form, were compiled in a two-volume Specifications Manual (hereinafter referred to as the "Manual") that was made available for public inspection. Section B of the Manual's first volume contained the Instructions. Section B-2 2.A.(11) thereof provided that "Section 01420 as contained in the Technical Specifications must be submitted and the qualifications listed therein must be satisfactory to the Owner and the Engineer. " "Section 01420 as contained in the Technical Specifications" was a "Bidder's Qualification Form, Reverse Osmosis Treatment System Component" (hereinafter referred to as the "R.O. Form"), on which the bidder was to provide "R.O. [Reverse Osmosis] System Supplier" information. The R.O. Form repeated the directive that the bidder was to "[r]eturn [the] [c]ompleted [R.O.] Form [w]ith [its] proposal." Section B-14 of the Instructions addressed the subject of "preparation and submission of bids" and provided, in pertinent part, as follows: Each Bidder shall copy the proposal form on his own letterhead, indicate his bid prices thereon in proper spaces, for the Base Bid and for alternates on which he bids. . . . Proposals containing . . . . items not called for or irregularities of any kind may be rejected by the Owner. Section B-16 of the Instructions addressed the subject of "disqualification of bidders" and provided, in pertinent part, as follows: More than one bid from an individual, firm, partnership, corporation or association under the same or different names will not be considered. Reasonable grounds for believing that a Bidder is interested in more than one proposal for the same work will cause the rejection of all proposals in which such Bidders are believed to be interested. The subject of "contract award" was addressed in Section B-21 of the Instructions, which provided, in pertinent part, as follows: . . . 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 qualified bidder submitting the lowest bid will be that bidder who has submitted the lowest price for the base bid, or the base bid plus additive alternates or less deductive alternates, taken in the numerical order listed in the bid documents in an amount to be determined by the Owner. The Order of the alternates may be accepted by the Owner in any sequence so long as such acceptance does not alter the designation of the low bidder. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner. Section C of Volume I of the Manual contained the Proposal Form that all bidders were required to use to indicate their bid prices. The following statement appeared at the bottom of the second page of the Proposal Form: There is enclosed: A certified check, cashier's check, treasurer's check, bank draft or Bid Bond in the amount of not less than five (5) percent of the Base Bid payable to the Department of Corrections, as a guarantee. An executed Trench Excavation Safety Certification, Section F-13. An executed Experience Questionnaire and Contractor's Financial Statement and Public Entity Criminal Conviction Form, Section L. An executed Bidder's Qualifications Form (Reverse Osmosis), Technical Specification Section 01420. While one completed R.O. Form had to accompany each bid, there was no provision in any of the bid documents issued by the Department requiring a bidder to submit only one such completed form and no more. Petitioner, McMahan and R.J. Sullivan Corporation (hereinafter referred to as "Sullivan") were among the contractors that timely submitted bids in response to the Advertisement. McMahan's and Sullivan's bids were each accompanied by more than one completed R.O. Form. Petitioner, on the other hand, provided the Department with only one completed R.O. Form along with its bid. Of the bids submitted, McMahan's was the lowest, Sullivan's was the second lowest and Petitioner's was the third lowest. McMahan's base bid price was $857,000.00. Petitioner's was $905,000.00. McMahan's total price, including the nine additive alternates accepted by the Department, was $948,000.00. Petitioner's was $1,032,600.00, $84,600.00 more than McMahan's. By letter dated July 1, 1993, the Department advised McMahan of its intent "to award the contract [for Department Project No. NV-30A] to [McMahan] as the lowest responsive bidder." On July 9, 1993, Petitioner filed a formal written protest of the preliminary determination to award the contract to McMahan alleging that McMahan was not a responsive bidder inasmuch as McMahan "submitted Reverse Osmosis ("R.O.") Qualifications Forms for more tha[n] one vendor." According to Petitioner, "[t]his [was] not in conformance with the Bid Documents and gave [McMahan] an unfair advantage."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a final order finding Petitioner's bid protest to be without merit and awarding McMahan, as the lowest responsive and qualified bidder, the contract for Department Project No. NV-30A. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of September, 1993. STUART M. LERNER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1993.
The Issue Whether the Department of Management Services' (Department) intent to award the contract pursuant to Invitation to Bid (ITB), Bid Number 33-840-980-E, to Frebon International Corporation, (FREBON), the second low bidder by price discount, and to reject the bid offered by Telecom Response, Inc. (TELECOM or TRI), the low bidder by price discount, was contrary to the Department's governing statutes, rules, policies, or the ITB? Further, whether the Department's proposed action was clearly erroneous, contrary to competition, arbitrary, or capricious? See Section 120.57(3), Florida Statutes.
Findings Of Fact The ITB During the spring of this year, the Department developed an ITB for video teleconferencing equipment and video bridging equipment for all State of Florida agencies and other eligible users. Department staff developed the specifications for the ITB. The ITB was a revision of the existing contract held by TRI, which expired on August 20, 2000, rather than a new contract. During the ITB/specifications review process, a new condition was added to require vendors to give a percentage discount from a list price to aid users in getting more choices and complete systems. On May 9, 2000, the Department advertised ITB 33-840- 980-E actively soliciting bids. The bid title refers to "videoteleconferencing equipment." Vendors were notified that bids would be opened on June 14, 2000, at 2:00 p.m. and that the bid tabulations would be posted on July 20, 2000. The ITB contains two (2) pages of general conditions which are used in most if not all Department ITB solicitations. The ITB also contains special conditions which, among other things, provide for the "purpose" and "scope" of the bid. "The purpose of this bid is to establish a 12-month contract for the purchase of Video Teleconferencing Equipment & Video Bridging Equipment by all State of Florida agencies and other eligible users in accordance with the Eligible Users paragraph, General Conditions." (emphasis added). Under the "scope" section, the Department provided: The objective of this Invitation To Bid (ITB) is to establish a contract for the purchase, installation and a maintenance of video teleconferencing systems and bridging equipment. The prospective bidder must offer the complete line of videoconferencing products and/or video bridge products to configure desktop and/or room videoconferencing systems, for each manufacturer bid. In addition the bidder must provide replacement parts as needed for repairs. In accommodating the specific agencies needs for auxiliary hardware necessary to make the videoconferencing equipment and video bridges operationally complete, the bidder must also provide and support the Optional Bid Items as shown in the Price Sheets section of this bid. (bold emphasis in original). This section requires the bidder to offer the complete line of a manufacturer's products to configure desktop and/or room videoconferencing systems for each manufacturer bid, and to further provide optional equipment by brand name, which could include more than one manufacturer. The "prices" section of the ITB also states: [p]rices shall be submitted in the form of a percentage(%) discount off manufacturer's current published price list. Only a single discount may be offered for each category. List Prices & percentage discount will remain firm for the entire contract period. Discounted prices shall be firm net delivered price to ordering agency. A copy of the Manufacturer's unaltered list price sheet as originally published, in general distribution and in effect on the date of bid opening must be submitted with the bid. Failure to include this with bid package will result in rejection of bid. (bold emphasis in original). The "evaluation/award" special condition provides: "Award shall be by manufacturer's products, based on the highest discount given from the manufacturer's list price sheet for each item, on a multiple award basis. If the same manufacturer's brand is bid by more than one bidder, only the bid with the highest discount percentage shall be considered for an award. All other provisions of Awards Paragraph, General Conditions, shall prevail." (emphasis added). Compare with Findings of Fact 12. The Department also provided several specific specifications for video teleconferencing equipment. Subsection 1.1 provides that the specifications were specifically written for two (2) categories of equipment: "(1) Videoconferencing Systems (includes Set-top, Desktop & Room Systems) (2) Video Bridging Systems." There were two types of commodities listed, i.e. videoconferencing equipment and video bridging equipment, types 1 and 2, respectively. Vendors, including TRI, understood that they could bid on either type or both at their choosing. The Department offered detailed specifications for the videoconferencing systems, category one. Specification 3.1.1 deals with "completeness of systems" and provides for room, set- top, and desktop systems. No other systems are discussed in the ITB. "A typical room system would include the codec, monitor(s), rollabout cart, and control unit." "A typical set-top system would include an integrated codec/camera unit; an external microphone pickup, and a control unit." A desktop system would "minimally include the PC codec card, a desktop video camera, a microphone/headset, and all associated cables for network connections & required peripherals." The remaining specifications, Sections 3.1.2 through 3.1.12.8, provide additional requirements for the room, set-top and desktop systems. Specification 3.3 provides for "optional bid items" which are provided for the convenience and benefit of the contract users as well as the awarded vendors. The optional bid items allow the purchaser a 'one-stop' procurement mechanism, as well as facilitating the ability of a contractor to provide a 'complete system' for the purchaser. It is incumbent on the purchaser to 'shop' the contract and purchase products that meet their needs at the lowest net delivered costs. The optional bid items shall never exceed the manufacturer's suggested list price (MSRP). Vendors must list all options to the contract that are to be offered as indicated on the attached bid sheets. The list must describe the item brand name/manufacturer, model number, and the net prices (see optional bid items price sheets). These "optional bid items" are products, which are not subject to the discount referred to in the "prices" or "evaluation/award" sections of the ITB. The ITB contains a price sheet for "videoconferencing systems" which, among other things, requires the vendor to provide the manufacturer's name bid, brand name bid, and the discount to be used with the manufacturer's price list. The price sheet has a "note" which provided: "Percentage discount applies to the entire manufacturer's line of videoconferencing equipment." (emphasis added). Immediately following the price sheet, the Department provided the vendor with a sheet to be used for "optional bid items" which required an item description, brand name, model number, and net price to be filled in by the vendor. The ITB does not require the vendor to apply the discount to the optional items. The ITB also contains a "manufacturer's certificate." A "special condition" provided: "All bids submitted, must include a certification executed by the manufacturer, stating that the bidder is an authorized dealer/representative of the manufacturer. Manufacturers must complete this form even if they own their own equipment. Dealer agreements shall not be accepted in lieu of manufacturer certification. Bids requiring manufacturer certification will not be considered if certification is not submitted with the bid." (bold emphasis in original). The certificate provided a "NOTE" which stated: "THIS MUST BE EXECUTED BY THE MANUFACTURER. DEALERS/REPRESENTATIVES ARE NOT AUTHORIZED TO SIGN THE CERTIFICATION FORM ON BEHALF OF THE MANUFACTURER. THIS CERTIFICATION MUST BE EXECUTED BY THE MANUFACTURER EVEN IF THEY ARE BIDDING THEIR OWN EQUIPMENT. FAILURE TO SUBMIT THIS CERTIFICATION WITH YOUR BID SHALL RESULT IN DISQUALIFICATION OF BID." The manufacturer certifies that the vendor is authorized to represent the manufacturer in the State of Florida. TRI did not believe the ITB, including the specifications and conditions, were unreasonable. There was no challenge to the ITB. TRI Inquiry On May 31, 2000, at the request of Mr. Brown of TRI, Ms. Brock of TRI, asked Mr. Hinson whether bidders were required to submit a bid response for categories one and two, mentioned above. Mr. Hinson advised her that a vendor could bid on either category. On June 12, 2000, and less than ten (10) days before the bid opening, Ms. Brock asked Mr. Hinson to clarify whether the Department was asking for a single or multiple discount, as to the set-top, desktop, and room teleconferencing systems. However, the general conditions of the ITB, paragraph 7, interpretations/deputes, provides that "[a]ny questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening." This letter was untimely submitted pursuant to paragraph 7. The Department's Interpretation of the ITB Mr. Steve Welsh is an engineer. He received a Bachelor of Science degree in electrical engineering and a Master of Science degree in civil engineering. He has been employed by the Department's state technology office two and one-half years. He is not an expert in videoconferencing systems and this ITB was his first exposure to video teleconferencing systems. Mr. Hinson has been a purchasing specialist with the Department for more than five (5) years. He currently administers twelve (12) to thirteen (13) state contracts including the State's existing video teleconferencing contract with TRI. Mr. Welsh drafted the technical specifications for the videoconferencing equipment or systems in the ITB, including pages eleven (11) through seventeen (17), excluding Section 3.3, Optional Bid Items, which were prepared by Mr. Hinson. Mr. Welsh also drafted pages nineteen (19)(price sheet) and twenty (20)(optional bid items), with Mr. Hinson. Pages twenty-one (21) through twenty-seven (27) are standard forms. Set-tops, desktops, and room systems are three (3) generic types of videoconferencing systems. The definitions of these systems were general. Mr. Welsh was unaware of any industry standard regarding desktop, set-top, and room systems. The specifications required each vendor to offer a complete line of the manufacturer's videoconferencing equipment and systems, which might be included under these categories. The Department intended that the percentage discount apply to the complete manufacturer's line of videoconferencing equipment. Conversely, a vendor's offer of a manufacturer's partial line of equipment under "optional bid items" would be inconsistent with the objective of the "scope" section of the ITB. In general terms, Mr. Welsh knew that state agencies have differing needs for videoconferencing equipment and systems to communicate more effectively. However, he was able to give only one example; he knew that community colleges were looking for videoconferencing equipment for distance learning-type needs. Nevertheless, it was important for each vendor to offer a manufacturer's pre-configured or packaged systems, or configured systems from components and prices as the customer needed, or both. The ITB was not written to specifically address health care systems. Mr. Welsh did not consider certain industry specialties, such as education and health care systems, when he drafted the specifications, and there are no specifications expressly relating to videoconferencing products for use in educational or health care settings nor any mention of education or health care systems. However, it was his intent to draft flexible and wide-open specifications, so there may have been several types of industry specialties that he did not consider. The eligible users of this contract include any state, city, or county government, community and state universities, private colleges and universities, and any federal agency located within the State of Florida. The Department intended to award one contract with multiple manufacturers. The vendor could bid either category of equipment. The contract would be awarded to the vendor giving the highest discount for a particular manufacturer's products within each category. If a vendor did not offer a complete line of the manufacturer's products, the vendor could offer a greater discount and achieve a competitive advantage over other vendors who may have provided a more complete list. It was important to the Department to be able to compare each vendor's manufacturer's price list and then apply the vendor's discount in order to appropriately compare their bids. The Department was unable to compare TRI's bid because it submitted a discount for only one (1) page of Tandberg products versus the twenty-two (22) pages of discounted products offered by FREBON. Mr. Hinson explained that Tandberg's complete manufacturer's list price must consist of all items offered by Tandberg. However, Mr. Hinson did not know of the complete line of Tandberg video teleconferencing equipment and/or bridging equipment. The Department interprets the word "includes," which appears on TRI Exhibit 1, page 11, paragraph 1.1(1) of the specifications, to mean that desktop, set-top, and room systems could be included as part of a manufacturer's product line. However, it was not meant to be exclusive. The Department asserts that TRI's bid was non- responsive because TRI did not submit a complete, unaltered price list for all of Tandberg's video telecommunication products at a discount. TRI would have been awarded the contract for the Tandberg products if the bid had been responsive. On the other hand, the Department contends that FREBON's bid, containing approximately twenty-two (22) pages seemed complete and appeared to have included a complete line of Tandberg products. But, like TRI, GLOBAL's bid containing eight (8) pages, and DIGITAL's bid containing twelve (12) pages of discounted Tandberg products, were likewise non-responsive for being incomplete. TRI's one-page price list would not have been complete, in the Department's view, even if TRI had submitted a complete line of Tandberg products in the options portion of TRI's bid because TRI did not offer the discount for the options. Mr. Buddy Barker explained that a minor irregularity is a deviation from a specification which does not affect price and does not give one vendor a competitive advantage over another. He did not consider TRI's omission of other Tandberg's products to be a minor irregularity. The Tandberg Products There appears to be a major distinction between Tandberg videoconferencing systems, such as desktops, set-tops, and room systems, and Tandberg special "Application" products, such as health care and education products, in both appearance and functionality. Mr. Richard Grace is an Executive Vice President employed by the Applications Group at Tandberg, Inc. The term "Applications" within Tandberg, Inc. refers to market segments within their business. In this case, "Applications" pertains to distance education and health care products. During his deposition, admitted over objection as TRI Exhibit 18, Mr. Grace reviewed several documents, which were identified as DMS 0001, DMS 0006-0027, DMS 0029, and a memorandum dated June 9, 2000. These DMS numbered documents appear in TRI Exhibit 5. The DMS labeled documents were submitted with FREBON's bid. DMS 0006-0027 is the price list for the "Business Solutions" products manufactured by Tandberg, as well as the maintenance costs for various products, and also include the Tandberg health care and education products. These documents include the entire product lines price list for Tandberg's "Business Solutions" and "Applications" products. DMS 0006 is the first page from FREBON's bid and lists the "systems" products from Tandberg's "vision products price list." Tandberg's "vision products" are considered Tandberg "Business Solution" products, i.e., standard CODEC's or what Tandberg refers to as "off-the-shelf roll-abouts or set-top boxes." Off the shelf products are standard video conferencing systems that Tandberg designs and sells. They are also called roll-abouts, set-tops, and CODEC's. According to Mr. Grace, the Department's ITB asked vendors to offer to bid, material here, Tandberg's "Business Solutions" systems products. Mr. Grace said that Tandberg "education" and "health care" products would be considered room systems, but "the nature of the bid was looking for a more traditional answer of roll-abouts, which are administrative-type devises," and the "roll-abouts" are the systems referenced on TRI Exhibit 5, DMS 0006 and 0007, above the line, "Tandberg Educator," which were offered by TRI and FREBON. The products listed on TRI Exhibit 5, DMS 0006 to DMS 0007, above the notation "Tandberg Educator," are the videoconferencing systems manufactured and sold by Tandberg and, from a systems standpoint, are all of the "Business Solutions" products sold by Tandberg. The "systems" listed on these pages, (TRI Exhibit 5, DMS 0006 and the top of DMS 0007), include the only desktop, set-top, and room systems manufactured by Tandberg. Except for the omission of three (3) portable products listed in TRI Exhibit 5, DMS 0006 and 0007, of the FREBON bid, TRI's Tandberg "vision product price list" contained the same "systems" products as in FREBON's bid. (TRI Exhibit 2, BID 0033). The portables listed in FREBON's bid at DMS 0007, are not desktop, set-top, or room systems. TRI Exhibit 5, DMS 0007 through DMS 0013, lists accessories and optional items that can be attached to videoconferencing systems. DMS 0014 through DMS 0017, appear to be the maintenance pricing for the "Business Solution" products. DMS 0018 and 0019 refer to the "Application" products for Tandberg. DMS 0020 through DMS 0023 refer to the maintenance and service prices for the "Application"-based products, such as education systems, tutor products, and health care systems. Currently, Tandberg only focuses on the education and health care systems as part of its "Application" products. DMS 0024 through DMS 0027 are fees for the installation and on-site support for the Tandberg system throughout the world. Tandberg only manufactures the products listed on TRI Exhibit 5, DMS 0006-0027. However, Tandberg sells, but does not manufacture, other products such as "accord bridges," which are not included on these DMS pages. The Bids TRI TRI has been selling Tandberg video teleconferencing systems since February of 1998. TRI currently has the contract with the State of Florida for video teleconferencing equipment. TRI submitted a pricing sheet for videoconferencing systems and, in part, proposed to offer a 29.4 percent discount for "Tandberg Vision Business Solution Systems," the brand name for the bid. The discount applied to the "systems" products listed in the one-page, April 1, 2000, Tandberg price list. TRI's one-page price list, (TRI Exhibit 2, BID 0033), is the same as the first page of FREBON's Tandberg price list. (TRI Exhibit 5, DMS 0006). However, the second page of FREBON's price list (TRI Exhibit 5, DMS 0007), includes three (3) portable products which were included with the FREBON bid, but not included in the TRI bid. TRI felt that portables were not desktop, set-top, or room systems. Further, the products listed on TRI Exhibit 5, DMS pages 0007 (after the "portables" section) through DMS 0027, included by FREBON, were not included by TRI because they are not desktop, set-top, or room systems. TRI defines video teleconferencing systems to include only desktop, set-top, and room systems. Also, the terms videoconferencing systems and equipment are used interchangeably. Accordingly, TRI, consistent with its understanding of the Department's ITB, submitted a one-page price list for Tandberg desktop, set-top, and room system products. Having reviewed the ITB, TRI thought the Department, in requesting bids for video teleconferencing systems, was requesting a manufacturer's, here Tandberg's desktop, set-top, and room "systems" products only, and not the manufacturers, here Tandberg's, special "Application" products. TRI also offered a price list for optional items, which were accessories that could be attached and used as part of a system, with brand names including, but not limited, to Panasonic, Tandberg, and ELMO. TRI also provided a price schedule, 4.1.00, Exhibit A, which provided net prices for described systems, portables, CODEC's, for example. TRI's 29.4 percent discount does not apply to these items. FREBON, GLOBAL, and DIGITAL Three other vendors submitted bids offering discounts for the Tandberg line of video teleconferencing equipment. FREBON offered a 22.3 percent discount off Tandberg's price list consisting of twenty-two (22) pages of Tandberg products. Page one of FREBON's submission (TRI Exhibit 5, DMS 0006), provides the same information set forth in TRI's one (1) page price list, Exhibit B (TRI Exhibit 2, BID 0033). The remaining pages (TRI Exhibit 5, DMS 0007-DMS 00027), were not provided by TRI. GLOBAL offered a 21 percent discount off of Tandberg's price list for eight (8) pages of Tandberg products. (TRI Exhibit 5, DMS 0031-0038). DMS 0031-0032 provide the same information as TRI's price list, although GLOBAL adds three (3) products under the heading "portables," which are omitted from the TRI price sheet. DIGITAL also submitted a bid for video teleconferencing equipment offering the Tandberg line of products. However, DIGITAL offered multiple discounts. DIGITAL provided twelve (12) pages of Tandberg products. The Initial Bid Tabulation Posting On July 20, 2000, the Department posted the initial bid tabulation form for the video teleconferencing equipment. TRI received a copy of the bid tabulation. DIGITAL'S bid was deemed non-responsive because DIGITAL offered multiple discounts within the same product line, whereas the bid called for a single discount. The Department accepted the GLOBAL and FREBON bids. The Department rejected TRI's bid with a discount of 29.4 percent because TRI did not supply, at a discount, the complete, unaltered manufacturer's (Tandberg) price list with the bid offering all of the videoconferencing equipment and products manufactured by Tandberg, i.e., the twenty-two (22) pages offered by FREBON. This was the sole reason given by the Department for finding TRI's bid to be non-responsive. TRI's bid complied with all the other technical requirements required of the ITB. TRI filed a timely notice of protest, followed by a formal petition, challenging the Department's intended action to award the bid the FREBON and finding TRI's bid non-responsive. The Second Bid Tabulation Posting Unknown to TRI, on August 1, 2000, the Department posted a second bid tabulation involving the same bid and the same vendors. During the interval between the first and the second postings, the Department re-reviewed the bids. In the second posting, the Department again noticed its intent to award the contract to FREBON as an "SBN" i.e., "single bid negotiated," having determined that FREBON was the only responsive bidder. This was the only factor considered by the Department. In fact, the Department acknowledged that the products were available from multiple sources. Also, this bid was not an "exceptional purchase." Aside from the reference to "single bid negotiated" in the second tabulation, there is no written explanation for the Department's decision. See Section 287.057(4), Florida Statutes (". . . The agency shall document the reasons that such action [negotiate if less than two responsive bids are received] is in the best interest of the state in lieu of resoliciting competitive sealed bids. . . ."); Florida Administrative Code Rule 60A-1.002(5)(requiring, in part, the agency to document the conditions and circumstances when less than two (2) responsive bids are received). The Department changed its mind about the responsiveness of the GLOBAL bid and found GLOBAL's bid to be non-responsive on the ground that GLOBAL did not supply the complete manufacturer's price sheet with the bid. Mr. Hinson said that DIGITAL's bid was rejected on the same ground, although there is no documentation to support this testimony. The Department did not furnish TRI with a copy of the second posting nor notify TRI of the posting because the Department felt, pursuant to an unwritten policy, that TRI was not adversely affected by the decision, because the Department previously found TRI's bid non-responsive. FREBON and GLOBAL were notified of the second posting pursuant to the same policy. Resolution of the Conflict Between TRI and the Department It is undisputed that FREBON offered a discount for the entire product line price list for all of the "Business Solutions" and "Applications" products manufactured by Tandberg. The price lists include, among other products, Tandberg health care and education products. Conversely, TRI offered a discount based on a complete, unaltered price list for all of the videoconferencing systems manufactured by Tandberg, and, from a systems standpoint, all of the "Business Solutions" products sold by Tandberg. Specifically, TRI offered a discount for all of the desktop, set-top, and room systems manufactured by Tandberg. The resolution of this matter is not without some difficulty. We have heard from only one (1) vendor, TRI. All of the vendors offered different discounts for various products manufactured by Tandberg and no two vendors furnished the same Tandberg price list for the same products, although there was some overlap among the vendors. Yet no one, including TRI and the Department, suggests that the ITB was ambiguous or not clearly understood. Nonetheless, the ITB is not a model of clarity and, on this record, the ITB did not convey the intent of the Department expressed during the hearing. Notwithstanding the Department's expression of intent articulated during the final hearing, a plain reading of the entire ITB leads to several conflicting conclusions. The stated material objective of the ITB is to establish a contract for the purchase, installation, and maintenance of video teleconferencing systems, not video teleconferencing equipment, although the bid title says otherwise, and the purpose of the bid is to establish a contract for the purchase of video teleconferencing equipment. Another objective required each vendor to offer the complete line of videoconferencing products to configure desktop and/or room videoconferencing systems. Further, each vendor was required to offer a percentage discount for the entire Tandberg line of videoconferencing equipment. Stated differently within the ITB, the award is made by manufacturer's products, based on the highest discount given from the manufacturer's list price sheet for each item. But which item? The terms "videoconferencing systems" and "videoconferencing equipment" are used interchangeably in the ITB. The specifications were written specifically for two (2) categories of equipment, material here, videoconferencing systems, which include, set-top, desktop, and room systems, the only "systems" discussed within the four (4) corners of the ITB. The "systems" products offered by TRI, for a discount, are the only desktop, set-top, and room systems manufactured by Tandberg, and, from a systems standpoint, are the only videoconferencing systems that Tandberg manufactures. Thus, it follows that TRI provided the Department with a discount for the complete, unaltered list price sheet for these Tandberg products. While a decision to award the contract to TRI is contrary to the Department's intent expressed in the final hearing through its representatives, it is consistent with the ITB. The Manufacturer's Certificate A special condition of the ITB required each bidder to furnish a manufacturer's certificate, which certifies that a bidder is authorized to sell the manufacturer's equipment in the State of Florida. Mr. Hinson was advised by Mr. Grace of Tandberg that as of June 14, 2000, FREBON was authorized to sell and service Tandberg "Application" products, i.e., Tandberg's health care and education series products, only to the federal government in the State of Florida, and not to state governments, including the State of Florida. However, the Department accepted FREBON's certificate based solely on the representations made by Tandberg regarding FREBON's authorization. The Department feels it is unnecessary to investigate the veracity of a manufacturer's certificate because the Department can pursue a remedy against the vendor, here FREBON, if the vendor is not authorized after the contract is awarded. When he signed the manufacturer's certificates for the three (3) vendors, including FREBON, Mr. Grace meant the vendors were authorized resellers of Tandberg's products. Mr. Grace sent a memorandum of June 9, 2000, to any vendor who sent him the State of Florida's manufacturer's certificate for signature authorizing them to participate in the bid. Mr. Grace explained in his memorandum and during deposition, that authorization to act as an "Applications" dealer did not allow the vendor to sell "Business Solutions" products and vice-versa. For example, FREBON was limited to selling the Tandberg "Business Solution" products to the State of Florida and could not sell the Tandberg health care and intern products or education and tutor products to the State of Florida. Tandberg is in the process of discussing with FREBON to expand their capabilities of selling the "Application" products. Mr. Grace would discuss additional authorization with any vendor who wins the bid. Mr. Grace received and signed manufacturer's certificates for TRI, FREBON, and DIGITAL, because they were "authorized resellers of Tandberg's product that was being asked for in the statement of the work," i.e., for the "Business Solution" products that, in his judgment, the Department was requesting in the bid, and he "would sign them again under that" premise. TRI and DIGITAL are authorized to sell Tandberg's "Business Solution" and "Applications" products to the State of Florida.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services enter a final order and award the contract to TRI because TRI offered the lowest discount for the required Tandberg products. If the Department declines to award the contract to TRI, it is further recommended that the Department re-bid the contract because an award to FREBON cannot be justified as a "single bid negotiated." DONE AND ENTERED this 14th day of December, 2000, in Tallahassee, Leon County, Florida. CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of December, 2000. COPIES FURNISHED: F. Alan Cummings, Esquire Daniel Te Young, Esquire Cummings & Thomas, P.A. 1004 DeSoto Park Drive Post Office Box 589 Tallahassee, Florida 32302-0589 Terry A. Stepp, Esquire Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Cynthia Henderson, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact Background On May 6, 1988, Respondent, Department of Insurance and Treasurer (Department), issued an invitation to bid (ITB), numbered DIT-87/88-26, whereby it sought to establish a 12-month germ contract for the purchase of Unisys personal computers, peripheral equipment and accessories. On May 9, 1988, Petitioner, Palm Beach Group, Inc., requested a copy of the ITB from the Department, and was mailed a copy of the ITB that day. Petitioner received its copy of the ITB on May 14, 1988, and filed its bid with the Department on May 19, 1988. By May 20, 1988, the bid opening date, three bids had been filed with the Department. Pertinent to this case are the bids of Unisys Corporation, which bid total unit prices of 140,792.00, and petitioner, which bid total unit prices of 16, 753.002 On May 23, 1988, the bid results were posted by the Department. The bid results revealed that the bid of petitioner had been rejected as nonresponsive to the ITB because it did not include page 13 of the ITB, and therefore did not include a bid on the 14 items listed on that page of the ITB. The bid results further revealed that the Department proposed to award the contract to Unisys Corporation. Petitioner timely filed its notice of protest and formal protest with the Department. On May 24, 1988, petitioner submitted to the Department page 13 of its bid, and proposed to supply the 14 items listed on that page at "no charge." The bid documents The ITB consisted of 18 consecutively numbered pages. Page 1 included the bidder acknowledgment form an some of the general conditions of the bid. Page 2 Included the remainder of the general conditions. Notably, page 1 of the ITB conspicuously provided that it was "Page 1 of 18 pages." Pertinent to this case, the ITB contained the following general conditions: SEALED BIDS: All bid sheets and this form must be executed and submitted in a sealed envelope....Bids not submitted on attached bid form shall be rejected. All bids are subject to the condition specified herein. Those which do not comply with these conditions are subject to rejection. * * * BID OPENING:...It is the bidder's responsibility to assure that his bid is delivered at the proper time and place of the bid opening. Bids which for any reason are not so delivered will not be considered....A bid may not be altered after opening of the bids... PRICES, TERMS, AND PAYMENT * * * (c) MISTAKES: Bidders are expected to examine the specifications, delivery schedule, bid prices, extensions and all instructions pertaining to supplies and services. Failure to do so will be at a bidder's risk.... INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No Interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Any actual or prospective bidder who disputes the reasonableness necessity or competitiveness of the terms and conditions of the Invitation to bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006 Florida Administrative Code. Fail to file a protest within the time prescribed in Section 120.53(5), Florida statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. NOTE ANY AND ALL SPECIAL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH VARY FRONT THESE SPECIAL CONDITIONS SHALL HAVE PRECEDENCE. ATTACHMENTS: Special Conditions-Page 3 Bid sheets-pages 4-16 Minority Certification-Page 17 Attachment to all bids, etc.-page 18 Among the special conditions which appeared on page 3 of the ITB were the following The purpose of this bid is to obtain competitive prices per unit for the purchase of UNISYS personal computers, peripheral equipment and accessories for the Department of Insurance. * * * No substitutes or equivalents will be acceptable to the Department. The bid shall be awarded on an "all or none" basis using the low total bid price comprised of the total of all sections. Following the special conditions of the ITB appeared the bid sheets; pages 4-16 of the ITB. These sheets were divided into 10 sections: processors, displays, display controllers, keyboards, diskette drive, hard disk drives, memory, operating systems, miscellaneous devices, and lan options. Under each section the Department listed by part number and description the items that must be bid. The last page of the bid sheets, page 16, provided space to total the prices bid on sections 1-10. Notably, the following language appeared at the bottom of page 16: NOTE. RETURN ENTIRE UNIT PRICING, SECTION 1 THRU 10, PAGE 4 THRU 15 WITH THIS BID SHEET FOR EVALUATION AND AWARD PURPOSES. Petitioner did not protest the bid specifications or conditions within 72 hours after receipt of the ITB, nor did it raise any question or seek any interpretation of the conditions or specifications. The bid protest At hearing, petitioner contended that it should be excused for failing to include page 13 of the ITB in its bid and to bid those items, because such page was not included In the ITB forwarded to it by the Department or, alternatively, that its to include page 13 and to bid those items was a minor irregularity that could be cured by its submittal, after bid opening, of page 13 with an offer to supply the items on that page at "no charge." Petitioner's contentions and the proof offered to support them are not persuasive. First, the proof failed to establish that page 13 was not included in the ITB forwarded to the petitioner. Second, there was no ambiguity in the ITB. Rather, the ITB clearly provided as discussed supra, that the bid sheets consisted of pages 4-16, and that the bid sheets must be submitted to the Department for evaluation and award purposes. Under such circumstances, even if page 13 had been missing from the ITB forwarded to the petitioner, petitioner can not be excused for its failure to include page 13 and to bid the items on that page, and the Department's invalidation of petitioner's bid for such failure cannot be deemed arbitrary, capricious, or an abuse of discretion. A minor irregularity? Minor irregularity is defined by Rule 13A-1.002(10), Florida Administrative Code, as: ...a variation from the invitation to bid... which does not affect the price of the bid..., or give the bidder... an advantage or benefit not enjoyed by other bidders..., or does not adversely impact the interests of the agency. Variations which are not minor can not be waived. The items listed on page 13 of the ITB were an integral part of this bid, which was to be awarded on an "all or none" basis. Under such circumstances, the deficiency cannot be deemed minor, because it could affect the price of the bid or give petitioner an advantage not enjoyed by other bidders. Succinctly, petitioner could revisit its bid after the bids had been made public and, considering how badly it wanted the contract, bid or not bid the omitted items. If it elected not to bid the items, petitioner could effectively disqualify itself and withdraw its bid. The other bidders who timely submitted their bids would not have an opportunity to revisit their bids to the Items listed on page 13 or to withdraw their bids, but would be held to the provision of the ITB that prohibited such withdrawal for 45 days after bid opening.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the formal protest filed by Palm Beach Group, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1988. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1988.
