The Issue The issue in this case is whether the Department of Transportation's proposed award of a contract to Daniels Janitorial Service is contrary to the agency's governing statutes, the agency's rules or policies, or the specifications of the Invitation to Bid (ITB).
Findings Of Fact In April 2004, DOT issued ITB-DOT-04/05-5002-PDW (the ITB) seeking to contract for janitorial services at two state office buildings in DeLand, Florida. The ITB included a "bid blank," upon which vendors were directed to submit their cost proposals. The bid blank was titled "MONTHLY JANITORIAL SERVICES PER SCOPE OF SERVICES." The bid blank included three spaces where each bidder was to provide cost information. The three spaces were titled as follows: "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and "TOTAL YEARLY AMOUNT BOTH BUILDINGS." In response to the ITB, DOT received 18 bids. The bids were opened at 3:00 p.m. on April 29, 2004. The lowest bid was $5,185.76, submitted by Daniels Janitorial Service, including: $4,895.76 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $200.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $5,186.76 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The second lowest bid was $10,686.00, submitted by Jan-Pro Cleaning Systems, including: $9,971.00 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $715.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $10, 686.00 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The third lowest bid was $67,777.77, submitted by the Petitioner. The remainder of the bids ranged between $69,600.00 to as much as $201,464.64. At the time of the opening, Diane Warnock, a DOT District Contract Specialist and Purchasing Agent in charge of the bid opening, observed that two of the bids (the Daniels Janitorial Service and the Jan-Pro Cleaning Systems bids) appeared to be very low in relation to the other bids. Ms. Warnock believed that the two lowest bids submitted were likely set forth on a monthly basis rather than annual amount, and that the bidders had failed to extend the monthly charges to an annual cost. Ms. Warnock contacted David Callaway, a DOT Procurement Analyst with statewide contract responsibilities, to discuss her observations. Mr. Callaway advised Ms. Warnock that she could contact the two low bidders and ascertain whether the bids submitted reflected a monthly or an annual cost. Ms. Warnock separately contacted each of the individuals responsible for submitting the low bids and inquired as to whether the bids reflected a monthly cost or an annual cost. Ms. Warnock learned that each vendor had submitted a monthly bid amount. Ms. Warnock multiplied the monthly amounts submitted by the two vendors by 12 to arrive at an annual cost. On the bid tabulation form, Ms. Warnock included the bid amount submitted by each bidder. For the two bidders who submitted monthly cost information, Ms. Warnock included the monthly costs submitted and the annual cost figures she had calculated. Based on annual costs, the lowest vendor was Daniels Janitorial Service with an annual bid amount of $62,229.12. Section 13.2 of the ITB provides as follows: 13.2 RESPONSIVENESS OF BIDS Bids will not be considered if not received by the Department on or before the date and time specified as the due date for submission. All bids must be typed or printed in ink. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid in accordance with all requirements of this Invitation to Bid. Bids found to be non- responsive will 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 that include, but are not limited to, failure to utilize or complete prescribed forms, modifying the bid requirements, submitting conditional bids or incomplete bids, submitting indefinite or ambiguous bids, or executing forms or the bid sheet with improper and/or undated signatures. Section 13.4 of the ITB provides as follows: 13.4 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 irregularities are defined as those that do not have an adverse effect on the Department's interest and does not effect the price of the bid by giving a bidder an advantage or benefit not enjoyed by other bidders.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order awarding the contract for ITB-DOT-04/05- 5002-PDW to Daniels Janitorial Service. DONE AND ENTERED this 25th day of August, 2004, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 25th day of August, 2004. COPIES FURNISHED: C. Denise Johnson, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Anthony Payne 1031 Eagles Forrest Drive Apopka, Florida 32712 James C. Myers, Clerk of Agency Proceedings Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450
The Issue Whether the Department of General Services should award state contracts for "walk-up convenience copiers" to Xerox Corporation in categories where Xerox was the only responsive bidder, or should reject Xerox's bid and solicit new bids on grounds that competitive bids were not received and there is no basis or excepting the award from competitive bid requirements; Whether the Department should disqualify Xerox's bid in one category for alleged material deviation from bid specifications where Xerox failed to initial a change in its bid price.
Recommendation Based on the foregoing, it is RECOMMENDED: That DGS reject Xerox's single responsive bids and readvertise; and That Xerox's bid for category Group-I, Type 3, Class 12, monthly rental acquisition plan, be rejected as nonconforming. DONE and ENTERED this 11th day of July, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 11th day of July, 1984.
The Issue Whether the bid submitted by VSM of Florida, Inc., under cover of the bid blank issued to VSM, Inc. for the construction on State Project 16070-3511 (the Project), with the Florida Department of Transportation (Department), was the lowest responsive bid. Whether the Department acted arbitrarily, illegally, dishonestly or fraudulently in rejecting the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. for the construction of the Project based on the Department's determination that VSM of Florida, Inc. was not a prequalified contractor. Whether VSM, Inc., has standing to bring this bid protest by and on behalf of its operating subsidiary, VSM of Florida, Inc.
Findings Of Fact Upon consideration of all of the evidence, the following relevant findings of fact are made: Bids submitted on the Project were opened on May 27, 1992 and posted on June 18, 1992. The bid submitted by VSM of Florida, Inc. under cover of the bid blank issued by the Department to VSM, Inc., a prequalified contractor, was the apparent low bid on the Project in the amount of $1,565,565.00. The bid submitted by Leware under cover of the bid blank issued by the Department to Leware, a prequalified contractor, was the apparent second low bid on the Project in the amount of $1,600,000.00. All contractors who seek to bid on Department projects in excess of $250,000.00 must be prequalified by the Department in order to bid on such projects. The Project was in excess of $250,000.00 thereby requiring all bidders to be prequalified contractors. The Department's Contract Administration Office (CAO) is responsible for prequalifying contractors to bid on Department projects in excess of $250,000.00, for issuing bid packages for such projects, and for processing bids for award of a contract. The Department will not issue a bid blank for a project in excess of $250,000.00 unless a request for a bid blank is received from a prequalified contractor. Upon a request being made, the Department first determines that the contractor making the request is prequalified and has the capacity to bid on the project, then the Department prints or stamps the name of the prequalified contractor on the front page (cover sheet) of the bid blank and mails the bid package to the prequalified contractor. Contractors do not have to be prequalified to bid on projects of less than $250,000.00 but the Department's Equal Employment Opportunity (EEO) requirements would be applicable to projects of less than $250,000.00 as well as those in excess of $250,000.00. Contractors do not have to be prequalified to work as subcontractors on a Department project. The Department does not approve subcontractors on Department projects but does review and approve the use of subcontractors on Department projects to ensure that subcontractors do not perform in excess of 49% of the work on the project in violation of Standard Specification No. 8 in the Department's contract. Review of the subcontractors being used on a project is conducted by the Department's District offices and the CAO is not made aware of which contractors are being used as subcontractors an a project. There is no specific language in the application for prequalification that requires a separate application be submitted for each contracting firm seeking prequalification. However, a copy of the Department's rule included in the application package does require that a separate application must be submitted for each contracting firm seeking prequalification. The purpose of the information sought in Question 8 (Question 6 in 1989) of the application concerning the affiliates of the parent company is to: (a) determine if any of the affiliates have been disbarred by other agencies or convicted of contract crimes which would disqualify them or; (b) alert the Department that an affiliate is applying for prequalification independent of the parent company so that the Department can properly audit the financial statements of each applicant. It is not intended to allow or provide for a joint application. The application must be accompanied by an audited financial statement and an equipment list. First-time applicants must also provide resumes and letter of recommendation supporting the applicant's representation that it is qualified and capable of performing the type of work for which it is seeking qualification. The CAO reviews the application for completeness and checks various data bases to determine if the applicant and its affiliates have adverse reports from other contracting agencies. The Department's Internal Audit Section reviews the financial information provided with the application for purposes of developing the Current Ratio and Net Worth Factors for use in calculating the applicant's Maximum Capacity Factor. The Internal Audit Section also reviews the information on corporate subsidiaries provided in response to "Question 8" (Question 6 in 1989) on the application. The Department's Construction Office reviews the equipment and experience information provided with the application to develop an applicant's Ability Factor for use in calculating the applicant's Maximum Capacity Factor. The Internal Audit Section and the Construction Office report their conclusions to the CAO, which issues the Certificate of Prequalification (Certification) to the applicant. Where the Opinion Letter of the applicant's Certified Public Accountant, which must be included with the application, states that the financial statement was audited in accordance with General Accepted Accounting Principles, the Department can rely on the Opinion Letter and the financial statements submitted with the application, unless there is a reasonable basis for the Department to question the financial statements. Where the Opinion Letter identifies the entity and subsidiaries, if any, whose financial condition is reflected in the financial statement, it is the Department's practice and policy to issue the Certification in name of the entity whose financial condition is reflected in the financial statement as indicated by the Opinion Letter. Where the Opinion Letter indicates that the financial condition of both the parent company and subsidiaries are reflected in the financial statement, then the Department will issue the Certification in the name of the parent company and the generic term "subsidiaries" or "subsidiary". Neither the parent company nor the subsidiary would be qualified separately. Under the above circumstances, the Department would accept a bid submitted by the parent company without the subsidiary even though the bid blank had been issued in the name of the parent company and "subsidiary" or "subsidiaries". For example, a Certification was issued by the Department to "Balfour Beatty Construction, Inc. and subsidiary", the bid blank was issued in the same name but the bid was submitted by and awarded to Balfour Beatty Construction, Inc. There was at least one other instance where the Department followed a similar procedure. The Department's justification for this practice is that the parent company has control over its subsidiaries and could submit a bid on their behalf and enter into a contract with the Department that would bind the subsidiaries. Whereas, with the converse, the subsidiary or subsidiaries are normally without authority to submit a bid on behalf of the parent company or enter into a contract with the Department on behalf of the parent company. However, where a prequalified parent company gives proper written authorization to a subsidiary to submit a bid on its behalf and such authorization is attached to bid, then the Department would not consider such bid submitted by the subsidiary as irregular. Where a parent company relies on the assets and experience of its majority-owned subsidiaries in its application for prequalification to which it has access to, and control over, and the Opinion Letter indicates the parent company to be the entity whose financial condition is reflected in the financial statement, then the Department would certify the parent company in its name alone and allow the parent company to bid on Department projects in excess of $250,000.00. Furthermore, the Department would allow the parent company's subsidiaries to perform all of the work on the project for the parent company notwithstanding Standard Specification No. 8 limiting the percentage of work which the subcontractors are allowed to perform on a Department project to 49%. The Department does not consider subsidiaries performing work for a parent corporation on a Department project as subcontractors within the meaning of Standard Specification No. 8 and thus, a parent company could bid on a Department project in its own name and rely solely on its subsidiaries to perform 100% of the work on the project without violating Standard Specification No. 8. For example, VSM, Inc. could bid on a Department project and, if awarded the bid, could rely solely on VSM of Florida, Inc. to perform 100% of the work on the project. It was conceded by the Department that VSM of Florida, Inc. has the expertise, experience and equipment to perform all of the work bid for on the Project. Where the applicant's name on the face of the application does not exactly correspond with the name of the entity whose financial condition is reflected in the financial statement, then the Department will issue the Certification in the name of the entity whose financial condition is reflected in the financial statement as indicated in the Opinion Letter. VSM, Inc. is a Florida corporation that was incorporated in 1988. In 1988 VSM, Inc. formed two subsidiary corporations, VSM of Florida, Inc. and VSM of Virginia, Inc. The parent corporation, VSM, Inc., owns 80% of the stock in both VSM of Florida, Inc. and VSM of Virginia, Inc. Van Monroe is the sole stockholder, sole director and president of VSM, Inc. Van Monroe is also the sole director and president of VSM of Florida, Inc. The remaining 20% stock of VSM of Florida, Inc. is owned by Gregory Monroe, brother of Van Monroe. Gregory Monroe is also vice president of VSM of Florida, Inc. These corporations (VSM, Inc. and VSM of Florida, Inc.) are separate entities with each having a separate Federal Identification Number. Beginning in 1989, VSM, Inc. applied for Certification with the Department to qualify to bid on projects in excess of $250,000.00. In the application form (Question 6), the applicant is requested to: "List the following for all affiliated companies: (a) Name and Address; (b) States Qualified ; and (c) Explain in detail your connection with this company and whether or not this company is qualifying with FDOT. In response to that question, VSM, Inc. answered in pertinent part as follows: (a) VSM of Florida, Inc., P. O. Box 5761, Jacksonville, FL 32247 (58-2916127); (b) Florida and; (c) VSM, Inc. - 80% Stockholder, Gregory B. Monroe - 20% Stockholder (We would qualify VSM of Florida, Inc. as a subsidiary of VSM, Inc.). The Department issued the Certification on April 21, 1989 in the name of VSM, Inc. Each of the applications for renewal of the Certification issued on April 21, 1989 submitted on March 26, 1990, March 26, 1991 and March 30, 1992 requested basically the same information in Question 8, as had Question 6 in the original application, and the answers were basically the same as in the original application. The renewal applications submitted on March 26, 1990 and March 30, 1992 have both VSM, Inc. and VSM of Florida listed as applicants. The Department subsequently lined out VSM of Florida, Inc. on each of these renewal applications and issued the Certification to VSM, Inc. The reason being, that each contracting firm seeking Certification must file a separate application, and the Opinion Letter indicated that the entity whose financial condition was reflected in the financial statement was VSM, Inc. A Certification was issued to VSM, Inc. on April 30, 1990, April 10, 1991 and April 16, 1992, respectively in response to the above renewal applications for Certification. The Certification dated April 16, 1992 expanded the classes of work to be performed under the certificate to include Bascule bridge repair (rehabilitation) work. In each of the above years, Van Monroe, the president of both VSM, Inc. and VSM of Florida, Inc., consciously chose not to seek Certification for VSM of Florida, Inc. independently of VSM, Inc. because VSM, Inc. and its subsidiaries operate as an integrated operation and could not be separated. Beginning in 1990 and each year thereafter, when VSM, Inc. applied for renewal of its Certification with the Department, it included a consolidated financial statement which contained the financial condition of its two subsidiaries, VSM of Florida, Inc. and VSM of Virginia, Inc. The Department chose not to issue the Certification in the name of "VSM, Inc. and subsidiaries" for these years because the Department concluded that the Opinion Letter indicated that the only entity whose financial condition was reflected in the financial statement was VSM, Inc. Although the Department conceded that the Certification could possibly have been issued to "VSM, Inc. and subsidiaries", the Department contended that this would not have changed the result of the bid since under either situation, VSM of Florida, Inc. had not submitted written authorization from VSM, Inc. authorizing VSM of Florida, Inc. to submit a bid on behalf of VSM, Inc. Since 1989, both VSM, Inc. and VSM of Florida, Inc., after requesting and receiving permission from the Department, have used the same vendor (prequalification) identification number. Additionally, the names VSM, Inc. and VSM of Florida, Inc. have been used interchangeably on documents submitted to and received from the Department. The current Certificate of Capacity, required by the Department of all prequalified contractors, was issued in the name of VSM of Florida, Inc. On February 26, 1992 under cover of the bid blank issued to VSM, Inc. by the Department, VSM of Florida, submitted a bid on a Department project in Polk County, Job No. 16630-3601. Because this bid was third lowest bid, no objection or declaration of irregularity to this bid format was made by the Department. On May 27, 1992 under cover of the bid blank issued to VSM, Inc. by the Department, VSM of Florida, Inc. submitted a bid on a Department project in Gadsden County. The Department notified VSM, Inc. by form letter dated June 17, 1992 that the bid proposal had been taken apart and not been stapled back in the same order as when issued and that such errors or omissions could result in a future bid proposal being declared irregular. One of the items (Item 5) on this form letter states "the bidder's name is not as issued per their prequalification application on the front sheet (Bid Blank)". Item 5 was not checked or noted as a deficiency in the bid on the Gadsden County project along with the other noted problem because the name (VSM, Inc.) on the cover sheet had not been altered - it was the same as issued on the Certification. The Gadsden County project bids were posted on June 18, 1992 under the name "VSM,Inc." as irregular but with no reason stated for the irregularity and there is nothing in the minutes of the Department's Bid Review Committees indicating the reason for the irregularity. Again, the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. was not the low bid on the Gadsden County project. On May 27, 1992 VSM of Florida, Inc., under cover of a bid blank issued to VSM, Inc. by the Department submitted a bid on another Department project in Polk County, Job No. 16070-3501, the apparent low bid on the project and the bid in dispute here. The name of VSM, Inc. under which the bid blank was issued by the Department was not altered on the bid submitted by VSM of Florida, Inc. The bid as submitted by VSM of Florida, Inc. was signed by V. S. Monroe and G. B. Monroe as president and secretary, respectively of VSM of Florida, Inc. Although the bid did not contained written authorization from VSM, Inc. authorizing VSM of Florida, Inc. to submit the bid on behalf of VSM, Inc., there is sufficient evidence in the record to show that at the time of the bid submittal VSM, Inc. had knowledge of, consented to and authorized the bid submittal by VSM of Florida, Inc. Also, at the time of the bid submittal, VSM, Inc. and VSM of Florida, Inc. were under the impression (rightfully or wrongfully) that VSM, Inc. and VSM of Florida, Inc. had been previously prequalified jointly by the Department. By letter dated May 29, 1992, the Department advised VSM, Inc. that it needed to file a Disadvantaged Business Enterprise (DBE) affirmative action plan with the Department in order for its bid of May 27, 1992 to be considered responsive. The DBE plan was furnished by VSM of Florida, Inc. and approved by the Department. The Department also requested that VSM, Inc. submit a current capacity rating status so that the Department could determine if the current capacity of VSM, Inc. was such that it was still qualified to perform the work required by the Project. The current capacity rating status was filed by VSM of Florida, Inc. on June 3, 1992. On June 11, 1992, the Department's Technical Review Committee (TRC) recommended that the bid executed and submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. be declared irregular based on the TRC's determination that VSM of Florida, Inc. was not a prequalified contractor. On June 16, 1992, the Department's Contract Awards Committee (CAC) unanimously adopted the recommendation of the TRC and declared the bid submitted under cover of the bid blank issued to VSM, Inc. to be irregular. The CAC voted to post an intent to award the bid on the Project to Leware. The Department rejected the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. on the basis that VSM of Florida, Inc. was not a prequalified contractor. The bid was rejected by the Department without any review of the Department's prequalification file of VSM, Inc., or without any review as to whether the irregularity could be cured by VSM, Inc. ratifying the action of VSM of Florida, Inc. by supplying the Department with written authorization for VSM of Florida, Inc. to submit the bid on behalf of VSM, Inc. There was no evidence that curing this irregularity would provide the Petitioner with such a competitive advantage that it would restrict or stifle competition or that curing this irregularity would violate any rule or statute. The intent to award the Project to Leware was posted on June 18, 1992. VSM, Inc., by and on behalf of its operating subsidiary, VSM of Florida, Inc., filed a timely initial protest to the intent fo award on June 23, 1992 and a timely formal protest on July 1, 1992.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, accordingly RECOMMENDED: That the Department enter a Final Order awarding the contract for the construction of the Project to the Petitioner upon VSM, Inc. curing the technical deficiency in the bid by submitting to the Department authorization for VSM of Florida, Inc. to have submitted the bid on the Project on behalf of VSM, Inc. DONE and ORDERED this 12th day of November, 1992, in Tallahassee, Florida. WILLIAM R. CAVE 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 12th day of November, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 92-4859BID The following constitutes my rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Proposed findings of fact 1 - 4, 6 and 8 - 11 are adopted in substance as modified in the Recommended Order. Proposed findings of fact 5 and 7 are adopted in substance as modified in the Recommended Order, but see Findings of Fact 41 relating to reliance. Proposed Findings of Fact Submitted by the Respondent Proposed findings of fact 1 - 42 and 44 are adopted in substance as modified in the Recommended Order. Proposed finding of fact 43 is rejected as not being a finding of fact but more of an argument as to the weight to be given certain evidence. Rulings on Proposed Findings of Fact Submitted by the Intervenor, Leware 1. Proposed findings of fact 1 - 35 are adopted in substance as modified in the Recommended Order. COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Allen P. Clark, Esquire CAVEN, CLARK, RAY and TUCKER 3306 Independent Square Jacksonville, FL 32202 George M. Meros, Jr., Esquire 106 College Avenue Tallahassee, FL 32301 Carolyn Holifield, Esquire Paul Sexton, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Mary M. Piccard, Esquire CUMMINGS LAWRENCE & VESIMA 1004 DeSoto Park Drive Tallahassee, FL 32302
Findings Of Fact In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows: CONTRACTOR BASE BID ALTERNATE NO. 1-ADD TOTAL Harris 332,000.00 28,649.00 360,649.00 Weston 338,991.00 20,965.00 359,996.00 Hathaway 343,429.00 33,224.00 376,653.00 Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states: "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners." Weston did not submit that information with its bid but did submit that information on October 9, 1975. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows: Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an $11,635 advantage in the bidding. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified." Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.
The Issue The issue is whether the Department of Corrections (DOC) acted fraudulently, arbitrarily, illegally or dishonestly when it decided to award the contract under Bid Number 94-CO-6355, for Inmate Pay Telephones and Long Distance Service (the Contract), to the number two-ranked bidder, North American Intelecom, Inc. (NAI).
Findings Of Fact Background On or about August 12, 1994, the DOC issued Invitation to Bid Number 94-CO-5355, Inmate Pay Telephones and Long Distance Service. Michael H. Johnson, a General Services Specialist, prepared the ITB at the direction of Jim Morris, Chief of the DOC's Bureau of General Services. Johnson developed the evaluation criteria and point allocations in Section 8.0 of the ITB. The document was reviewed and approved by Morris, Jim Biddy, Chief of the DOC's Bureau of Finance and Accounting, and Max Denson of the DOC's Operations Office. Inmate pay telephone and long distance service requires more than just the installation of pay phones in correctional facilities. The service vendor must also provide a means of blocking inmate telephone calls and, when calls are authorized, preventing inmates from making harassing calls to members of the public. Additionally, the ITB includes a provision requiring some means for monitoring and automatically recording inmate telephone calls, and for deactivating the automatic recording function when an inmate calls his or her attorney. A requirement is also included in the ITB that the system limit the length of inmate calls and generate monthly call detail reports. Other mandatory, no cost features to be provided under the Contract include a Personal Identification Number ("PIN") system capability, a three-way call detection and cutoff feature, a pilot site to test the call monitoring/recording system, on-site administrators to free facility staff from all tasks associated with the inmate phone system, and a semi-annual audit to ensure that the provider is meeting all technical and service requirements. The specifications in the ITB for provision of inmate pay telephone and long distance service are some of the most comprehensive in the country, requiring state-of-the-art hardware, software, and service in order to implement specified mandatory system features. Security concerns are prominent among reasons for having adequate service and support for the inmate pay telephone and long distance service. PIN-Driven System One of the primary features specified in the ITB is a PIN-driven system for blocking inmate calls. The PIN system requires each inmate to be assigned his or her own personal identification number for use with the telephone system. An inmate must key in his or her personal identification number before dialing an outgoing call. The system must automatically screen the telephone number dialed to ensure it is one which has received prior authorization for accessibility by the PIN. A PIN-driven system is labor-intensive and requires on-site administration to facilitate assignment of inmate PIN numbers and constant input and modification of each inmate's list of numbers for authorized outgoing calls. Project Staffing The DOC specifically requested the inmate phone system vendor to provide sufficient on-site administrators for a number of reasons including, but not limited to, support for proper administration of the PIN system. Noting that on-site administrators are to relieve DOC staff of all responsibilities relating to the inmate phone system, the DOC stated in the ITB that it did not want its staff to be involved with time-consuming service and maintenance problems. The DOC expressed a preference in the ITB for one on-site administrator being assigned to each major facility, except in those circumstances in which a single individual may cover several facilities in close geographic proximity to one another. Support services are important to maintain the proper functioning of the type of inmate phone system requested by the DOC. The ITB, taken as a whole, is a solicitation for an integrated telecommunications system, encompassing not only hardware, but systems software, service and project support. The ITB did not simply solicit manufacturers and models for various pieces of hardware; it contained a comprehensive description of functional requirements that had to be met. As a consequence, any determination that one bidder's "equipment" is identical to that offered by any other bidder must take into consideration proposed support and service, as well as proposed hardware and software applications. Bid Evaluation Procedure Specified in the ITB As established at final hearing by the unrebutted testimony of MCI's expert in telecommunications service bid response preparation, DOC's ITB differed from those in many other states. Unlike the instant ITB, many ITBs from other jurisdictions provide for a determination that bids meet specified minimum requirements and then dictate the award of a contract to the responsive bid with the lowest price. Conversely, DOC's ITB specified a detailed procedure to be followed in evaluating the bids, including evaluation criteria, points to be assigned to each criterion, and an evaluation committee to conduct the evaluation of bids. Johnson, the DOC employee responsible for the preparation of the ITB, understood that the Contract would be awarded to the bidder with the highest number of points allocated in accordance with the evaluation scheme described in Section 8.0 of the ITB. The DOC includes in its ITB both general and special conditions and specifications. The ITB, by its own terms, provides that special conditions and specifications shall have precedence over general conditions. The ITB contains numerous special conditions and specifications, including the bid evaluation procedures under Section 8.0. The bid evaluation criteria which are described by these special conditions and specifications identify the areas of the state's interest which must be addressed by the bids, as well as the weight to be assigned to each. Section 8.3 of the ITB emphasizes that any information gleaned from post bid demonstrations will not be used to change bid responses. The bid evaluation scheme specified in the ITB provided for points to be awarded to each bid using the following weighted criteria: CRITERIA POINTS CORPORATE QUALIFICATIONS 15 REFERENCES 10 PROPOSED PROJECT STAFF 5 COMMISSION RATE 70 TOTAL POSSIBLE POINTS 100 The points awarded for "commission rate" were to be determined by using a formula specified in the ITB which initially gave 70 points to the bidder proposing the highest commission rate, with all other bidders receiving a lesser number of points, depending on how close they came to the highest proposed commission rate. The points awarded for all of the other criteria were to be determined by a seven-member Evaluation Committee, members of which were selected by Assistant Secretary Kronenberger for their experience with management and actual operation of inmate phone systems, both from the institutional perspective and the regional office perspective. Each bid was required to be independently evaluated. The DOC issued two addenda to the ITB. The first addendum was issued August 23, 1994, and advised potential bidders of a change in location for the pre-bid conference scheduled for September 7, 1994. At the pre-bid conference, the DOC explained the award process to potential bidders. Johnson, the DOC representative, advised potential bidders at the pre- bid conference that the contract award would not be determined solely on the strength of the commission rate quote. On September 22, 1994, the DOC issued Addendum Number Two to the ITB which, among other things, changed the evaluation procedure by adding a new criterion and re-allocating the weight among the expanded criteria as follows: CRITERIA POINTS CORPORATE QUALIFICATIONS 10 REFERENCES 10 PROPOSED PROJECT STAFF 5 TECHNOLOGICAL ENHANCEMENTS 10 COMMISSION RATE 65 TOTAL POSSIBLE POINTS 100 The addition of "technological enhancements" was made at the request of Deputy Secretary Thurber, who wanted to be sure that the DOC had an opportunity to see what features above and beyond the minimum features specified in the original ITB were available for an inmate pay telephone system. When technological enhancements were added as an evaluation criterion, the weight to be given the commission rate in the evaluation scheme was lowered from 70 to 65 points. The DOC officials who reviewed and approved Addendum Number Two determined that the reduced weight for proposed commission rates was appropriate. At 65 percent of the available points, the reduced weight for the proposed commission is still higher than the 45 percent to 50 percent weight typically given by the DOC to the revenue side of a bid. Bidder Preparation MCI relied on the representation in the ITB and assurances of DOC's representative, Michael H. Johnson, at the bid conference that DOC's decision would not be made solely on the basis of cost. As a consequence of DOC representations, MCI prepared its bid to address the specifications in the ITB and thereby maximize its overall points under the ITB's evaluation scheme, as opposed to submission of a bid package concerned solely with scoring the highest possible points for "commission rates." Bid Opening and Initial Review On October 21, 1994, bids were submitted to DOC by MCI, NAI, AT&T, TEI, Robert Cefail & Associates (RC&A), 21st Century, RC&A/21st Century, and LDDS Metromedia. At the Bid Opening, Johnson again explained the award process to bidders on behalf of the DOC, and advised bidders that the bid tabulation was strictly for the purpose of documenting responses and that nothing was to be inferred from the proposed commission rates. Bidders were again advised that commissions would be only one aspect of the award. Johnson's understanding at the time of the Bid Opening was that the Contract would be awarded based on points awarded pursuant to the bid evaluation scheme specified in the Section 8.0 of the ITB. Johnson participated in an initial review of the bids, reading each of the proposals to determine whether the mandatory requirements were satisfied. Of eight bids received, five, including the bids submitted by MCI and NAI were determined by the DOC to satisfy the mandatory requirements. The Evaluation Committee As required in the ITB, the DOC formed an Evaluation Committee to evaluate the bids. Selected by Assistant Secretary Kronenberger, members of the Evaluation Committee were: Jim Biddy, Chief of the Bureau of Finance and Accounting; Jerry Pilcher, Chief of Regional Administrative Services for Region II; Kermit Kerley, Superintendent of the Hardee Correctional Institution; Stan Czerniak, Superintendent of the North Florida Reception Center; Charles Mask, Superintendent of the Corrections Mental Health Institution; Charles Dennard, Business Manager for the Polk Correctional Institution; and Robert Sandal, General Services Manager for Region I. Members of the Evaluation Committee were selected from the DOC's business managers and superintendents on the basis that their participation would provide an overall perspective with respect to management and actual operation of the inmate phone system. Evaluation Committee's Recommendation All five of the bids determined by the DOC to be responsive were thoroughly reviewed by Evaluation Committee in accordance with the bid evaluation procedures specified in the ITB, including Addendum Number Two, in an almost day-long session in the DOC's Central Office on January 5, 1995. The total points awarded by each Committee member for all of the four evaluation criteria were averaged to establish each bidder's total Evaluation Points. Every member of the Evaluation Committee scored MCI's bid as their number one or number two choice. NAI was ranked no higher than third by anyone on the Committee and was ranked fourth by five of the Committee's members. No member of the Committee gave NAI a higher score than MCI on any of the evaluation criteria. Comments on a majority of the evaluation forms of the seven members of the Evaluation Committee reflect a general concern for the adequacy of NAI's proposed project support. Specifically, Mr. Biddy noted that "[p]roposed project staff consisted of only 17 people [and that it was] questionable whether this would be sufficient for site administration as well as contract management." Similarly, Mr. Kerley noted on the NAI bid evaluation form that "17 staff may not be enough to support [the] system." Mr. Pilcher's comments indicated that "[p]roject support was not as I expected or not explained very well." Mr. Dennard indicated that NAI's bid provided "no breakdown of [the] 17 staff to support [the] contract [and] no mention of site administrators." The NAI bid indicates that a total of 17 personnel will be made available to support the Contract with more to be "added if the schedule so indicates." NAI's bid does not specifically identify the number of persons to be involved in on-site administration. However, NAI has committed only 17 people in support the Contract as a whole, ten of whom are expressly identified as performing tasks other than on-site administration. While NAI's bid indicates provision of additional personnel if required by the schedule, ambiguity about whether NAI would expand the number of on-site administrators for the entire term of the contract is evident. The "installation requirements" described in the ITB refer to time-limited activities necessary to initiate operation of the inmate telephone system, as opposed to the ongoing nature of the commitment necessary for on-site administration. In its bid response, NAI also agreed to cooperate with the DOC "to insure the proper distribution of on-site administrators." This offer does not suggest, however, that the number of on-site administrators committed in support of the Contract will be augmented by NAI. Such assurance relates to location and not number of on-site administrators. Testimony of NAI presented at final hearing that additional on-site administrators will be provided is not credited, inasmuch as such testimony constitutes an impermissible attempt by NAI to modify its bid after the bid opening. Based upon the substantial disparity in the proposed levels of customer service, the MCI and NAI bids cannot be considered to be identical. NAI's assertion at hearing that its bid included other system features which do not appear on the face of its written proposal constitutes a prohibited post-bid-opening modification. Such modifications included PCs, keyboards, printers and color monitors at each facility. These items are included on the face of the MCI bid. MCI offered 28 personnel in support of the Contract, including an express commitment for 20 on-site administrators. MCI's proposal to provide 20 on-site administrators is one of the highest number of on-site administrators offered by any bidder and a very costly aspect of MCI's bid since all employee salary and benefits must be covered for each on-site administrator dedicated to the project. The assignment of points for each bidder's proposed commission rate (Commission Points) was based on a scale which assigned 65 points to the bid with the highest commission rate quote. A lesser number of points was assigned to all other bids pursuant to a formula specified in Section 8.2 of the ITB, as amended by Addendum Number Two. The highest commission rate quoted by any bidder was proposed by NAI at 56 percent. NAI was accordingly assigned 65 Commission Points. NAI was also awarded 22.143 Evaluation Points, which, when combined with NAI's 65 Commission Points, produced a total of 87.143 points. MCI proposed a 53 percent commission rate and, in accordance with the formula set forth in the ITB, earned 61.51 Commission Points. MCI was also awarded 30 Evaluation Points which, when combined with MCI's 61.51 Commission Points, produced a total of 91.51 points. When the Evaluation Committee's other scores were combined with the scores for commission rates obtained by applying the formula in the ITB, MCI's point total was higher than that received by any of the other bidders. The DOC officials later involved in the decision to award the Contract to NAI indicated that they had no reason to question the work of the Evaluation Committee. After reviewing the bid evaluation forms produced by the Evaluation Committee, and based on his continuing understanding that the Contract would be awarded to the bidder receiving the highest number of points under the evaluation scheme specified in the ITB, Michael H. Johnson prepared a memorandum for signature of his supervisor, Mr. Morris, to Assistant Secretary Kronenberger. Dated January 31, 1995, the memorandum recommended award of the Contract to MCI. Morris signed the January 31, 1995 memorandum and forwarded the same to Assistant Secretary Kronenberger. At prehearing deposition in this case on April 13, 1995, Kronenberger denied having received any recommendation from anyone regarding which company should be awarded the contract. Later at the final hearing following Johnson's testimony that he, Johnson, had been instructed to destroy the signed document by Morris (his supervisor), Kronenberger finally admitted that he had told Morris "we ought to pull that memo." These instructions were followed by Morris, who directed Mr. Johnson to destroy the January 31, 1995 memorandum recommending award of the Contract to MCI. Significantly, neither Morris, Kronenberger, nor Thurber--all DOC officials involved in the contract award decision--mentioned the existence of this document prior to Mr. Johnson's revelation on the witness stand that it had been destroyed. After-The-Fact Evaluation In a February 22, 1995 memorandum to Deputy Secretary Thurber, Kronenberger, after acknowledging that MCI received the highest number of points, formally recommended that the Contract be awarded to NAI. This memorandum was drafted by Morris at the direction of Kronenberger. Before making the recommendation to award the contract to NAI, Kronenberger had not read the ITB, the addenda to the ITB, or any portion of the bids. Morris was the only member of his staff with whom Kronenberger consulted. Kronenberger's decision was approved by Deputy Secretary William Thurber. Neither Kronenberger, Morris, nor Thurber read the bids at any time prior to the DOC's issuance of the notice of intended award to NAI. Kronenberger based his decision to recommend award of the Contract to NAI on his belief that NAI and MCI proposed to install "identical equipment," and that at least $1.1 million in additional revenue would be generated by the 3 percent higher commission rate offered by NAI over the three-year base term of the Contract. Although the February 22, 1995 Kronenberger memorandum states that the DOC could find no correlation between the proposed commission rates and equipment capabilities, the DOC officials who made the decision to award the Contract to NAI (Morris, Kronenberger and Thurber) performed no analysis of the proposals, did not complete a score sheet, did not talk with any of the members of the Evaluation Committee, and were unaware of the specific content of the bids and the proposed differences in staffing offered by the two bidders. In contrast to the assertion of the Kronenberger memorandum, the proof establishes a direct inverse correlation between the total average scores awarded by the Evaluation Committee to the top three bids and the commission rates offered in those bids. This inverse correlation proves that the bidders had to balance the cost of the hardware, software and support personnel aspects of their bids against the commission rate they could offer and that the cost of each hardware, software and support personnel aspect of a bid has a direct impact on the commission rate which could be offered. This balancing is precisely what is required by the ITB since all of these aspects of the bid were assigned specific weights in the specified evaluation scheme. Kronenberger's assumption, as set forth in his memorandum recommending award of the contract to NAI, that both NAI and MCI proposed to install identical "equipment" ignores the fundamental premise of the solicitation--that hardware, software and support were needed to provide a fully functioning, secure inmate phone system, as well as the fact that the vendors offered different approaches in responding to this requirement. System hardware proposed by MCI and NAI includes the Telequip System Automatic Call Processor ("ACP") 4000, a Dictaphone recording and monitoring system, and Philips & Brooks/Gladwin phone instruments. However, with regard to all aspects of the hardware offered, MCI's bid was more detailed and specific as compared with the NAI bid which generally identified system capabilities by referencing attached brochures. At best, NAI's bid is ambiguous as to whether it offered the same hardware component features. NAI's general references to the brochures in its bid failed to specify which features of a piece of equipment was being affirmatively offered. NAI's after-the-fact assertion at the final hearing regarding features to be provided cannot be credited since such constitutes an impermissible attempt to modify its bid after the bid opening. Software jointly developed by MCI and Telequip would permit operation of the attorney exception capability utilizing the Telequip ACP-4000 with the proposed Dictaphone recorder systems. Until MCI requested development of the necessary software, the attorney exception capability, which deactivates the automatic recording function when an inmate calls his or her attorney, was not available with the Telequip ACP-4000 when used in conjunction with the Dictaphone recorder. Software jointly developed by MCI and Telequip was also necessary to provide an international call capability because the standard Telequip ACP-4000 ordinarily utilizes a debit system to process international calls, and "the debit system is inherently incompatible with the PIN system and the allowed calling list feature that are requirements in the . . . ITB." The MCI bid offers more technological enhancements at no cost to the DOC, than does the NAI bid. Further, the items identified on MCI's list of technological enhancements do not appear anywhere on the face of the NAI bid. NAI's omission of the enhancements listed in the MCI bid adds further credence to the finding that the DOC had no reasonable basis to conclude that it would be getting those enhancements under the NAI bid at the time it was submitted. Moreover, the DOC's own synopsis of technological enhancements shows that it was aware of differences in the bids. Differences in the hardware, software and services offered in the MCI and NAI bids preclude a determination that the two bids offered "identical equipment." Monetary Considerations Revenue figures used by the DOC to project a $1.1 million difference in commissions were drawn from a period of time in late 1994 and early 1995 when the DOC's own summary reports indicate that NAI's billing exceptions range from 41 percent to 49 percent of all calls. Billing exceptions are the number of calls which exceed AT&T rates or could not otherwise be reviewed in monthly call detail reports. NAI's customer overcollections for telephone calls from inmates in the correctional facilities presently served by NAI provide an additional basis for uncertainty regarding the reliability of the projected $1.1 million difference in commissions. While the overcollections have not yet been quantified, NAI has admitted to the Florida Public Service Commission overcollections from customers receiving telephone calls from inmates under its current contract with the DOC in the amount of $394,318. Notwithstanding the ongoing PSC inquiry and reports of extensive billing exceptions under its existing contract with NAI, the DOC has no apparent incentive to closely scrutinize overcollections inasmuch as the more revenues billed by NAI, the greater the amount of commissions received by the DOC. Thus, while there is a 3 percent difference in the proposed commission rates between the two bidders, it cannot be determined from this record with any degree of certainty how that difference will translate into actual dollars to the DOC. In any event, the revenues generated by the contract for inmate pay telephones are placed in the Inmate Welfare Trust Fund, which does not support essential correctional facilities or services. Notice of Award and Protest On March 2, 1995, the DOC issued an intent to award the Contract to NAI. On March 8, 1995, within 72 hours of receipt of DOC's notice of intent, MCI timely filed a Notice of Protest. On March 20, 1995, within ten days of filing its Notice of Protest, MCI timely filed a Formal Written Protest pursuant to Section 120.53(5) and 120.57, Florida Statutes, and Rule 33-20.005, Florida Administrative Code. With its Formal Written Protest, MCI delivered to the DOC a cashier's check in the amount of $5,000. On April 10, 1995, the DOC served its Motion to Dismiss MCI's protest, alleging that MCI has no right to a formal administrative hearing on the award of the Contract. On April 12, 1995, the undersigned Hearing Officer, after consideration of the parties' pleadings and oral argument, ruled that MCI is entitled to a formal administrative hearing under Chapter 120, Florida Statutes, to determine whether the DOC's decision to award the contract to NAI was arbitrary, illegal, fraudulent, or dishonest. MCI has requested reasonable attorneys' fees and expenses pursuant to Section 120.57(1)(b)5, Florida Statutes, for costs incurred in responding to the DOC's Motion to Dismiss. The Hearing Officer has ruled on the motion by order issued concurrently with this recommended order.
Conclusions The Department adopts the Conclusions of Law contained in its Proposed Order, except for paragraph 189. The Hearing Officer's Conclusions of Law are also adopted, to the extent they do not conflict with the Department's. The following additional Conclusions of Law are now adopted into this Final Order. Service and personnel support were clearly part of the ITB, and were scored accordingly. Although Mr. Kronenberger considered service and support by recognizing the work already performed by Intervenor under its existing contract, sufficient consideration was not given for the $394,318 overcharge which Intervenor admitted to at the hearing. Since this overcharge was admitted to the Public Service Commission and not the Department, oversight is understandable. However, at this time the overcharge cannot be ignored. Certainly the significant amount of this overcharge has an impact on service provided. Although the Department still believes the equipment bid by Petitioner and Intervenor are "identical," service can no longer be considered the same due to the overcharge. Therefore, the award of the contract pursuant to the ITB should be made to Petitioner, MCI Telecommunications Corporation. RULING ON INTERVENOR'S EXCEPTIONS TO RECOMMENDED ORDER Intervenor's exceptions to paragraphs 46-50 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraph 51 are denied. Although the equipment are "identical," the Department does not, and did not at the hearing, maintain that the bids of Petitioner and Intervenor are identical in terms of support and service. Intervenor's exception to paragraph 70 of the Recommended Order is accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 71 of the Recommended Order is denied. The Hearing Officer is merely reciting the terms of the ITB, that service and support are also an important part of the bid. Mr. Kronenberger never denied the importance of service and support. Intervenor's exceptions to paragraphs 73-77 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exceptions to paragraphs 79 and 81 of the Recommended Order are accepted by the Department and incorporated into this Final Order. Intervenor's exception to paragraph 80 of the Recommended Order is denied to the extent it rejects the finding of fact that Intervenor admitted to an overcharge of $394,318. Intervenor did admit this fact. Intervenor's exception to paragraph 82 of the Recommended Order is accepted by the Department and incorporated into this Final Order. RULINGS ON PETITIONER'S FILINGS No response is provided to the Petitioner's Response to Intervenor's Exceptions. There is no provision for filing such response under Chapter 120, and the Department is not required to respond to such pleadings. The Department has reviewed Petitioner's Request for Official Recognition and Enforcement of Ex Parte Communications Prohibitions. No Department employee who has testified or been deposed in this matter has discussed the merits of this action with the agency head. However, the Department does not agree with Petitioner's contention in its Request for Recognition that section 120.66, Florida Statutes, prohibits the agency head from conversing with the Department employees listed therein. This order may be appealed within thirty days by filing a notice of appeal with the agency and the district court of appeal. Except in cases of indigence, the court will require a filing fee and the agency will require payment for preparing the record on appeal. For further explanation of the right to appeal, refer to Section 120.68, Florida Statutes, and the Florida Rules of Appellate Procedure. DONE AND ORDERED this 17 Day of July, 1995 in Tallahassee, Florida. HARRY K. SINGLETARY, JR, SECRETARY Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 (904) 488-2326 COPIES FURNISHED: Carloyn Raepple (via certified mail) Hopping Green Sams & Smith 123 South Calhoun Street Tallahassee, Florida 32314 Hume Coleman (via certified mail) Holland & Knight 315 South Calhoun Street Suite 600 Tallahassee, Florida 32302 Steven S. Ferst Department of Corrections Assistant General Counsel 2601 Blairstone Road Tallahassee, Florida 32399-2500 Mike Johnson Department of Corrections 2601 Blairstone Road Tallahassee, Florida 32399-2500 Don W. Davis, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed in the official records of the Department of Corrections on this 17th day of July, 1995. LORETTA L. LATSON, Agency Clerk
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a final order be entered which declines the award to NAI and takes into account the foregoing findings of fact and conclusions of law when deciding the future course of awarding the contract for hardware, software and support needed to provide a fully functioning, secure inmate telephone system. DONE AND ORDERED this 15th day of June, 1995, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1995. APPENDIX In accordance with provisions of Section 120.59, Florida Statutes, the following rulings are made with regard to purposed findings of fact submitted by the parties. Petitioner's Proposed Findings: 1.-30. Adopted. 31.-32. Adopted in substance. 33.-49. Adopted. 50.-54. Adopted in substance. 55.-58. Adopted. 59-63. Adopted in substance. 64-70. Adopted. 71. Rejected, unnecessary to result reached. 72.-82. Adopted. 83. Rejected, unnecessary. 84.-85. Adopted. Adopted in substance. Rejected, unnecessary to result. 88-92. Adopted. 93. Incorporated. 94.-96. Subordinate to HO findings. Respondent's Proposed Findings: Adopted. Rejected, unnecessary. 3.-5. Adopted. Adopted, not verbatim. Adopted. Rejected, redundant. Adopted. 10.-12. Rejected, subordinate. 13.-17. Adopted. 18.-22. Rejected, argumentative and subordinate. 23. Rejected, unnecessary. 24.-25. Rejected, weight of the evidence. 26. Rejected, subordinate. 27.-35. Rejected, weight of the evidence. 36.-43. Rejected, argumentative, weight of the evidence. 44.-52. Rejected, redundant, argumentative, subordinate. 53.-54 Rejected, argumentative, subordinate to HO findings. 55.-58. Rejected,Relevancy, weight of the evidence. 59.-63. Rejected, subordinate, weight of the evidence. Accepted. Rejected,Relevance. Rejected, weight of the evidence. Rejected, stands for proposition that an agency is not bound by terms of ITB at all, argumentative. Rejected,Relevance. Rejected, argument. 70.-71. Rejected, weight of the evidence. 72.-76. Rejected, argument. 77.-78. Rejected, argument, weight of the evidence. Adopted. Rejected, subordinate, authority is to award within perimeters of legality and the ITB. Rejected, comment on testimony. 82.-83. Rejected, subordinate to HO findings. 84. Rejected, legal conclusion. 85.-89. Rejected, subordinate to HO findings. 90.-91. Rejected,Recitation of documents. 92.-95. Rejected, argumentative. Rejected, subordinate. Rejected, recitation of documents. Rejected, relevance. 99.-107. Rejected, subordinate to HO findings. Intervenor's Proposed Findings: 1.-10. Accepted, though not verbatim. 11. Rejected, no record citation. 12.-14. Rejected, subordinate to HO findings. 15. Adopted, not verbatim. 16.-21. Rejected, subordinate to HO findings. 22. Rejected, no record citation. 23.-24. Rejected, subordinate. 25. Rejected, no record citation. 26.-29. Rejected, subordinate to HO findings. Adopted by reference. Rejected, subordinate. 32.-40. Rejected, subordinate to HO findings. 41. Accepted except for last sentence which is rejected on basis of relevance. 42.-43. Rejected, subordinate to HO findings. COPIES FURNISHED: Carolyn S. Raepple, Esquire Cheryl G. Stuart, Esquire Hopping Green Sams & Smith, P.A. 123 South Calhoun Street Tallahassee, FL 32301 Linda P. Armstrong, Esquire MCI Telecommunications Corporation 1133 19th Street, N.W. Washington, D.C. 20036 Steve Ferst, Esquire Florida Department of Corrections 2601 Blair Stone Road Tallahassee, FL 32399-2500 Hume F. Coleman, Esquire Holland & Knight 315 South Calhoun Street Tallahassee, FL 32302 Harry K. Singletary, Jr., Sec. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500 Louis A. Vargas, Esq. Dept. of Corrections 2601 Blairstone Rd. Tallahassee, FL 32399-2500
The Issue Whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in determining that Intervenor's bid was responsive.
Findings Of Fact On March 16, 1994, the Respondent issued an invitation to bid (ITB) for security guard services. The desired services were described in detail by the bid documents. Bids from eleven bidders, including a bid from Petitioner and a bid from Intervenor, were opened on April 13, 1994. After the bids were evaluated, the Respondent determined that Intervenor's and Petitioner's bids were responsive. Intervenor was determined to be the lowest bidder and Petitioner was determined to be the second lowest bidder. Respondent thereafter notified all bidders that it intended to award the bid to Intervenor. Pertinent to this proceeding, the bid document contained the following general condition: AWARDS; In the best interest of the School Board, the Board reserves the right to reject any and all bids and to waive any irregularity in bids received . . . [Emphasis has been added.] Pertinent to this proceeding, the bid document contained the following special conditions: G. OCCUPATIONAL LICENSE: Each bidder, by submitting a bid, certifies that they possess a Class B license issued by the State of Florida as well as town and county occupational license. ALL BIDDERS MUST SUBMIT PROOF OF THE ABOVE REFERENCED LICENSE WITH THEIR BID (PHOTOCOPY) IF IT IS TO BE CONSIDERED FOR AWARD. * * * J. QUALIFICATIONS: The bidder will have maintained continual work experience in security guard services for a period of three years prior to the bid date. Bidder must submit written documentation with bid or within three days upon request, substantiating experience requirement. The bidder will have a place for contact by the owner during normal working days. [Emphasis in the original.] Petitioner timely protested the intended award of the bid to Intervenor on the ground that the Intervenor did not have an occupational license issued by Palm Beach County at the time of its response as required by Special Condition G. Intervenor submitted with its bid a copy of its Class B license issued by the State of Florida, Division of Licensing, and a copy of its occupational licenses issued by Broward County. Because Intervenor did not have any business in Palm Beach County at the time it submitted its bid, it did not have an occupational license issued by Palm Beach County. Respondent determined that Special Condition G. was met when Intervenor submitted a copy of its Class B license. Respondent has the discretion to waive as a minor irregularity the fact that Intervenor did not have a Palm Beach County occupational license at the time it submitted its bid. There was evidence that Respondent waived similar irregularities in the occupational licenses of other bidders, including an irregularity pertaining to the Petitioner. There was no evidence that the Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in determining that Special Condition G. had been met. Intervenor was not afforded an unfair advantage in the bid process by this determination. Petitioner also timely protested the intended award of the bid to Intervenor on the ground that the Intervenor had not been incorporated for three years at the time of the bid and that it did not meet the experience condition contained in Special Condition J. The Intervenor was incorporated August 27, 1992. At the time of the bid, the Intervenor had been a viable business for more than two years but less than three years. Mr. Inyang, the president of the corporation, submitted documentation that established that his qualifications and experience exceeded the requirements of Special Condition J. Respondent acted within its discretion in determining that the experience of the president of the corporation satisfied the requirement that the bidder "... have maintained continual work experience in security guard services for a period of three years prior to the bid date" as required by Special Condition J. There was no evidence that the Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in making this determination as to Intervenor's experience. Intervenor was not afforded an unfair advantage in the bid process by this determination.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent dismiss Petitioner's bid protest. DONE AND ENTERED this 18th day of July, 1994, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 18th day of July, 1994. COPIES FURNISHED: Donald H. Neff, President Southern Star Event Services, Inc. 316 Flamingo Road West Palm Beach, Florida 33401 Robert A. Rosillo, Esquire Palm Beach County School Board 3318 Forest Hill Boulevard West Palm Beach, Florida 33406-5813 Robert E. Inyang, President Michael Graziano, Investigator Supreme Intelligence Agency, Inc. 4700 North State Road 7, Suite 120 Lauderdale Lakes, Florida 33319 Dr. C. Monica Ulhorn, Superintendent Palm Beach County School Board 3340 Forest Hill Boulevard West Palm Beach, Florida 33406-5869
The Issue : The issue to be resolved in this proceeding concerns whether the agency action in recommending award of the contract for a renovation of a National Guard Armory to Concrete Services, Inc. (CSI) was "clearly erroneous, contrary to competition, arbitrary or capricious." More specifically, it must be determined whether a specification requiring that all general and subcontractors visit the project site and examine the existing site conditions prior to bid submittal, and certifying to that fact, was a waivable or minor irregularity, not affecting the price of the proposal by giving an unfair competitive advantage to any bidder or proposed vendor.
Findings Of Fact The Department of Military Affairs (Department) issued an invitation to bid for certain renovation work at the National Guard Armory in Tallahassee. The invitation to bid was issued on March 2, 2008. It was accompanied by an advertisement number 207005 and addenda No. 1-3. These were the documents that defined the scope of the work proposed to be constructed by the Department and the various specifications, conditions, and criteria which were to guide and be relied upon by prospective vendors or bidders. The invitation to bid stated that the contract would be awarded to the lowest responsive and responsible bidder. The invitation to bid notified prospective bidders that the Department reserved the right to waive minor irregularities in a bid where they did not affect the price of the proposal. Thus, the Department stated in the Invitation to Bid "the Department reserves the right to accept or reject any or all proposals received and reserves the right to make an award with or without further discussion of the proposals submitted or accept minor informalities or irregularities in the best interest of the State of Florida, which are considered a matter of form and not substance and the correction or waiver of which is not prejudicial to other proposals." The reasons stated in the Invitation to Bid and Addenda for disqualification of a bidder did not include the failure of the contractor or subcontractors to visit the project site. Rather, the invitation to bid and advertisement list placed on the discriminatory business list, the submission of an electronic bid and employment of unauthorized aliens as irregularities that would result in disqualification of a bidder. The invitation to bid defines minor irregularities as "those that will not have an adverse effect on the DMA's interest and will not affect the price of the proposal by giving a proposer an advantage or benefit not enjoyed by all other proposers." The Department thus did not make failure of a contractor or subcontractor to visit the site of the project an event that would result in disqualification. The Department's intent rather was to place contractors on notice that failure to visit the site would be at the sole risk of the general contractor/bidder if failure to visit the site resulted in an unforeseen problem, cost, or risk. The Department stated at Addendum 1, D-9 the following: D-9 site examination by contractor: The general contractor and all subcontractors as listed on Exhibit Five, shall visit the project site and examine the existing conditions affected by this work prior to submitting a bid. Any bid submitted without prior examination of on-site existing conditions will be at the sole risk of the general contractor. The contractor shall submit on its letterhead the following at time of bid, certifying that he and his subs thoroughly examined the project site: 'I (name of general contractor), do hereby certify that all associated general and subcontractor entities have visited the project site and thoroughly examined the on- site existing conditions prior to the submittal of the bid.' Lt. Col. Keating is the contract officer and manager. His duties include reviewing the bids and making final determination on bid proposals submitted to the Department for projects such as this renovation project. He reviewed the entire package of bid submissions after the bid opening in Tallahassee. These are his duties concerning every bid opening of the Department. Lt. Col. Keating reviewed the failure of CSI to submit the Addendum D-9 letter and determined that the absence of the letter did not give CSI an unfair competitive advantage. He determined that this was a minor irregularity which was waivable. Mr. Hersey was the construction consultant for the Department for this project. Mr. Hersey reviewed the CSI file after the bids were submitted, noting that CSI's bid did not include all the verbiage required by Addendum One, D-9. He determined, however, that the proposed included the "Exhibit 4" document which stated that CSI had "visited the site of the proposed project and familiarized himself with the local conditions, nature, and extent of the work." Mr. Hersey brought this omission to Lt. Col. Keating's attention. Lt. Col. Keating considered the failure of CSI to submit the Addendum 1, D-9 letter language and determined that the omission did not give CSI an unfair competitive advantage over other bidders and therefore that it was a minor irregularity. He determined that the fact that there was language in the bid submittal of CSI to the effect that the contractor had visited the site and familiarized himself with conditions, nature, and scope of the work made the bid actually responsive. The failure to include the language required in Addendum 1, D-9 did not render the bid unqualified or non- responsive, but, instead, the failure to include that language would have the consequence of making CSI responsible for any loss caused by the failure to visit the project site or have the subcontractors visit the project site before bidding. If that omission caused any additional cost or unforeseen circumstances which had a cost attributable to them, CSI would have to bear the risk of paying for any such expense itself under the terms of the specifications. It was thus determined that the failure to visit the site had the consequence of making the contractor assume resulting risks but was considered by the Department to be a quality assurance measure in the specifications, instead of a determining or qualifying factor for award of the project. Lt. Col. Keating determined that the failure to submit the required language in the letter did not give CSI an unfair competitive advantage. CSI's bid was $1,866,212.00. The bid of the Petitioner, Warren Building Company, Inc., was $1,944,000.00. Thus, CSI's bid was $77,788.00 lower than the bid submitted by the Petitioner Warren. In preparing his bid submittal, the Petitioner had not been charged by his subcontractors for their visiting the Tallahassee project site. His entire cost of submitting the response to the invitation to bid on behalf of Warren, was $10,000.00 or less. Thus, the failure by CSI to have subcontractors visit the site and evaluate the work was clearly not shown to have saved CSI costs, in an amount anywhere approaching the total difference in the amounts of the two bids. Only if the avoidance of such costs represented by the visits of the contractor and subcontractors to the job site was greater than or at least approximately equal to the $77,788.00 difference between the two bids, would the failure of CSI to entirely comply with this specification result in a change in the relative competitive positions of the two bidders. Put another way, there was no evidence to show that had CSI completely complied with the disputed specification, that it would not still have much the lowest-priced responsible and responsive bid. It was thus determined by Lt. Col. Keating that the $1,866,212.00 bid submitted by CSI was the lowest responsible and responsive bid. He therefore determined that the award of the contract should be give to CSI and an Agency decision to that effect was posted on April 11, 2008. The subject protest and proceeding ensued.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Military Affairs, awarding the contract for renovation work at the National Guard Armory in Tallahassee, Florida (No. 207005) to Concrete Services, Incorporated. DONE AND ENTERED this 20th day of August, 2008, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of August, 2008. COPIES FURNISHED: Thayer M. Marts, Esquire 1105 Hays Street Post Office Box 1814 Tallahassee, Florida 32302 Kim F. Heller, II, Esquire Elizabeth C. Masters, Esquire Florida National Guard Post Office Box 1008 St. Augustine, Florida 32085-1008 Elizabeth C. Masters, Lt. Colonel Florida Army National Guard 82 Marine Street St. Augustine, Florida 32084
The Issue The issue presented for decision herein is whether or not the Intervenor, V.I.P. Painting and Sandblasting, is the lowest responsible bidder on state project numbers 73906-9004 and 76906-9004. FIMDINGS OF FACT 1..Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compiled herein, I hereby make the following relevant factual findings. 2..Petitioner, C-Line Coating, and the Intervenor, V.I.P. Painting and Sandblasting, submitted bids to perform work for the above-referenced projects, which consisted of cleaning and painting all structural steel located in the scale pit areas of the Flagler Beach and Palatka Scales on State Roads 9 and 100, respectively, in Flagler and Putnam Counties. Sealed bids were to be received in the downstairs conference room of the District Office, Department of Transportation, 719 S. Boulevard, Deland, Florida, on February 14, 1985. The bid opening was scheduled to occur at 9:30 a.m. (Deland local time). On February 14, 1985, the bid letting occurred pursuant to notice in an advertisement to prospective bidders. Respondent received bids on said projects from Petitioner and Intervenor prior to 9:30 a.m.; however, the bid from Intervenor was not opened until after the scheduled letting. Intervenor's bid was opened, after notice to all bidders, on February 25, 1985. Of the bids opened by Respondent on February 14, 1985, Petitioner was the apparent low bidder; however, upon later opening the bids submitted by the Intervenor, that bid was deemed the lowest responsible bidder by the Respondent, and the Respondent gave notice of its intent to award the contract to Intervenor. Pursuant to the Notice to Contractors issued by the Respondent, bids or proposals were to be delivered to or mailed to arrive at the Department office designated in the Notice to Contractors prior to the deadline set out in the Notice, which, in this case as stated, was February 14, 1985. The Department office designated on the Notice was 719 S. Boulevard, Deland, Florida. (Respondent's Exhibit 1) Intervenor mailed its bid by certified mail, return receipt requested, to the designated address on February 11, 1985. The U.S. Postal Service placed their first Notice of Receipt of Intervenor's certified envelope containing its bid in the Respondent's post office box on February 13, 1985 sometime after the morning pickup by the District office employee (Respondent). Respondent had Intervenor's bid in its possession on the morning of February 14, 1985, prior to 9:30 a.m., though it was not in the hands of the officer who conducted the bid letting (Thomas George) at the time the bids were opened. (Respondent's Exhibit 2) Lewis Santucci2 left the Deland District office at aprroximately 9:00 a.m. on February 14, 1985 to pick up the mail at the Deland Post Office. Santucci picked the mail up at approximately 9:15 a.m. and arrived back at the District office with the mail pouch at approximately 9':30 a.m. The mail, which contained the Intervenor's bid, was placed in the upstairs mailroom where all bids, etc. are placed at approximately 9:30 a.m. (Respondent's Exhibit 2) Petitioner contends that Intervenor's bid was not a responsible bid inasmuch as it was not placed in an outer envelope which designated the number of the project on the outside of the sealed envelope. In this regard, Mr. George related that Petitioner's bid also did not contain the number of the project involved when Petitioner submitted its bid. Mr. George, however, placed the project number of Petitioner's bid on the envelope which appeared to cure that minor problem. That minor omission, by both the Petitioner and Intervenor, did not cause any confusion in the bid letting and was, at most, harmless error.
The Issue The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?
Findings Of Fact On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.
Recommendation Based on the foregoing, it is RECOMMENDED: That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES. DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida. VERONICA D. DONNELLY 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 30th day of March, 1988. COPIES FURNISHED: Stephen Emens, President Naples Business Equipment and Systems, Inc. 859 4th Avenue South Naples, Florida 33940 Harry A. Blair, Esquire 2138-40 Hoople Street Ft. Myers, Florida 33901 Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard Cape Coral, Florida 33904 Karl Engel, Superintendent Lee County Public Schools The School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901
The Issue Whether Respondent's action to reject all bids submitted in response to ITB 13-803-205, relating to the removal and replacement of the public address system at Countryside High School, is illegal, arbitrary, dishonest, or fraudulent, as alleged in the Amended Petition.
Findings Of Fact On March 4, 2013, the ITB was issued by Respondent for work related to the removal and replacement of the public address system at Countryside High School in Clearwater, Florida. According to the Special Conditions portions of the ITB, the "scope" of the project is to "[p]rovide labor and materials to remove and replace the auditorium sound system as per plans and specifications by Keane Acoustics, Inc." The ITB was assigned bid number 13-803-205 by Respondent. Bids for the contract were to be submitted to Respondent by 3:00 p.m., April 11, 2013. Bids for the project were timely received from two companies. The first company, Becker Communications, Inc., d/b/a BCI Integrated Solutions (BCI), submitted a bid in the amount of $118,143.27. Petitioner submitted a bid in the amount of $108,000.00. There is a section of the ITB titled "special conditions." The special conditions provide in part that "[t]his is an ALL or NONE bid [and] [t]he entire contract shall be awarded to the lowest responsive and responsible bidder meeting the specifications." On April 22, 2013, Respondent posted a notice advising of its intent to award the contract to BCI. Although Petitioner submitted the lowest bid, Respondent determined that Petitioner's bid was non-responsive because the bid failed to include "proof of 5 years [of] experience with this type of work" as required by the special conditions of the ITB. Petitioner interpreted this provision as requiring five years of experience as a certain type of general contractor, which Petitioner had, whereas Respondent intended for the ITB to convey that five years of experience related to the removal and installation of audio equipment was the desired type of experience. Petitioner's failure to respond to the ITB in the manner contemplated by Respondent was a technical, nonmaterial irregularity.1/ Numbered paragraph six of the General Terms & Conditions of the ITB provides in part that Respondent "expressly reserves the right to reject any bid proposal if it determines that the . . . experience of the bidder, compared to work proposed, justifies such rejection." On April 24, 2013, Petitioner provided to Respondent a notice advising of its intent to protest the award of the contract to BCI. On May 3, 2013, Petitioner filed its formal protest challenging Respondent's intended action of awarding the contract to BCI. Petitioner's formal protest enumerated several grounds. Of particular concern to Respondent were Petitioner's assertions that the ITB was "inconsistent with Florida law since bidders [were] not required to submit a List of Subcontractors by the time of opening bid"2/ and that provisions of the ITB were ambiguous with respect to the type of experience required to qualify for bidding.3/ Prior to receiving Petitioner's protest, Respondent was unaware of the fact that its bid specifications governing the disclosure of subcontractors did not comply with Florida law. Upon consideration of Petitioner's grounds for protest, Respondent determined that the ITB, as alleged by Petitioner, failed to comply with section 255.0515, Florida Statutes (2012),4/ and that there was ambiguity in the language regarding the experience requirements for bidders.5/ Respondent refers to the problems with the ITB as "procedural errors." These procedural errors will be referred to herein as "irregularities" as this term is more in keeping with the nomenclature of this area of jurisprudence. Given the ITB's irregularities, Respondent decided to reject all bids. In explaining Respondent's rationale for rejecting all bids, Michael Hewett, Respondent's Director of Maintenance,6/ testified that "the [irregularities] were such that [they] potentially could give an unfair advantage to one bidder over another." As for the issue related to the requirements of section 255.0515, Mr. Hewett explained that neither of the two bidders submitted a listing of subcontractors. It would have been competitively disadvantageous to BCI if Petitioner were able to successfully argue that BCI should be disqualified for failing to provide a listing of subcontractors when Petitioner also failed to provide such listing. During the same approximate time that the ITB in the present case was issued, Respondent issued an ITB for nearly identical work to be performed at one of its other facilities (Palm Harbor). In all material respects, the Palm Harbor ITB was identical to the one at issue herein. Unlike the present case, BCI was the sole bidder for the Palm Harbor project and this distinguishing fact reasonably explains why Respondent did not reject BCI's bid for the Palm Harbor Project even though the ITB therein was plagued with the same irregularities found in the present case.7/
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED: That the Pinellas County School Board enter a final order finding that the rejection of all bids submitted in response to ITB 13-803-205 was not illegal, arbitrary, dishonest, or fraudulent, and dismissing Tamco Electric, Inc.'s instant protest. DONE AND ENTERED this 16th day of October, 2013, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 2013.
